Tuesday, June 3, 2014

Do Macroeconomic and Microeconomic Factors Matter in the Takings Analysis of Economically Beneficial Use?

Nope, according to Florida's Fifth District Court of Appeals. Ocean Palm Golf P'ship v. Flagler Beach, Case No. 5D12-4274 (May 30, 2014). Here's an excerpt:
We agree with Ocean Palm Golf that the government's refusal to act can constitute a total taking under some circumstances. See, e.g., Tollius v. City of Miami, 96 So.2d 122 (Fla.1957) (holding that the denial of property owner's request to rezone lots from residential to commercial was an abuse of discretion because the character of the area had changed greatly, rendering single-family residential use unsuitable); Kugel v. City of Miami, 206 So.2d 282 (Fla. 3d DCA 1968) (concluding that denial of rezoning request from residential to less restrictive zone constituted a taking of the property where what had been quiet residential area was now surrounded by tall buildings and parking lots). However, as the City correctly points out, the cases holding that a taking has occurred when the government refuses a request to change zoning, even though the character of the land surrounding the affected land has changed dramatically, are distinguishable from this case because, here, the character of the property surrounding the golf course parcel has remained largely the same for decades—it has long been used for single- and multifamily residences. Ocean Palm Golf replies that the changed circumstance on which it is relying is not a change to the surrounding properties, but rather is the change in market and demographic factors: the fact that golf courses across the country are no longer profitable due to the over-construction of golf courses, the aging golf population, and the increased expense involved in operating the golf course. We deem this to be a faulty argument, as it is based on Ocean Palm Golf's failed economic expectations. In effect, Ocean Palm Golf's position is that if a landowner buys a piece of property and the economy later takes a downturn, resulting in the frustration of the landowner's expectations, then the government must act as a guarantor for the landowner's investment after it becomes unprofitable due to, not the zoning regulations, but outside market forces. This is not the purpose of eminent domain law.
Id. at 16-17. I'll leave analysis for others, since the law firm of yours truly was on the case.