5th DCA - Landmark Takings Case: Off Site Exaction a Taking under Nollan/Dolan Where Applicant Refused Permit Due to Condition

This one came out in early January, and I'm surprised that I didn't hear the gnashing of teeth in Palatka all the way down here in Sarasota.

In what is now pretty much an epic, decade long battle, the 5th DCA in St Johns Water Management District v. Koontz, handed the water management district a major defeat and, in the process, put all government entities on notice that predatory exaction policies may create takings liability.

In the very short version, the water management district conditioned a permit for Koontz property to require significant off-site mitigation in the form of improving drainage facilities. The mitigation was supposedly to offset impacts to a small portion of the property that is within a "Riparian Habitat Protection Zone". Koontz refused to accept the condition, and the District denied the permit.

I don't think a short recap can do the facts justice; you have to read the case - and the four other opinions that have been generated on the way. The long and the short of it is that the circuit court didn't buy that the off site exaction was in any way rationally related to any demonstrable impacts to the protected property, and found that that the exaction violated the Nolan/Dolan nexus and was therefore not just an unconstitutional condition, but one that resulted in a taking of Koontz' property.

The District appears to have had three arguments: First, that the Nollan/Dolan rule didn't apply because (1) only money, not land, was involved, and (2) the exaction was offsite. The court pretty quickly (and I think correctly) did away with that argument.

The second claim was that Koontz couldn't complain because he refused the permit. This took a little longer to address, and its the part that everyone needs to read very carefully.

The third argument went something like "we could have denied the permit anyway, so there wasn't any damages." This took the court a long time to address, and completely got the dissent tangled up. The majority held, in effect, that once the government put the demand on the table, it was stuck with it. But the court got tangled up in the "right to the permit" argument in a way that reflects wrong thinking.

Everyone seems to have taken the position that the District could have denied the permit and there would have been no issue; that Koontz had "no right to the permit." But that's not really true. In Florida, there's a right to use property in any lawful manner. When the government adopts regulations and requires permits, it does not remove the underlying right - it subjects it to regulation. That is, the existence of regulations on the use of land does NOT convert the right to use land into a license from the government - something that the landowner is allowed to do by the grace of the government.

So while it's one thing to suggest that a property owner must demonstrate compliance with regulations, it's another thing altogether to suggest that a local government or agency has the right to simply deny permits where the criteria are otherwise met. And if the criteria are not met, the government really has an obligation to be able to state specifically why not, so that the landowner can comply.

Recognition of this fundamental aspect of the regulation of land might have saved both the majority and the dissent a great deal of confusion and circular logic.

And to anyone who thinks this opinion goes way too far, I suggest you read the other Koontz opinons to get a flavor for what the District has been demanding and the fact that it has been held repeatedly to be unjustified - this history plays out what would happen in many concurrency and environmental exaction cases if the landowner had the time and money to keep fighting.

IMPLICATIONS:
This case has huge and immediate implications for every land use permitting process, especially those where the local government routinely extracts commitments far in excess of what would legally be proper in order.

But perhaps most important, this may discipline the "concurrency moritoria" extortion racket that many local governments have been practicing. Core issue: many local governments have adopted levels of service - particularly for roads- that they cannot maintain and achieve based on the adopted CIP (which now should be "financially feasible" meaning that LOS's will be met - but they are not). This creates "concurrency moratoria" - areas where the planned improvements in the 5 year (or long range) CIP don't create enough capacity to allow development that is otherwise consistent with the comp plan and LDRs to be approved.

The concurrency management system itself generates and proves the "demand" for the excessive exaction - the ordinances already say that the development can't be approved without concurrency, and the concurrency system requires a proportionate share or development agreement that provides all the improvements needed, whether or not it's proportionate.

And most governments have not adopted "proportionate share" concurrency regulations that address it and guarantee that the development only has to pay a proportionate share of the needed improvements. Lots of reasons, but mostly that they want to create a moratorium and address it through - ta dah - a development agreement or a condition in a development approval that requires the developer to pay more than a proportionate or fair share.


After this decision, any local government that has been doing that - or does it in the future- is at significant risk. Back in the early 90's, everyone was convinced that this risk would be from "temporary concurrency moratoria" under a combination of Lucas and First English. Now, they're back under Nolan/Dollan and the clear over-reaching of the government.