Community Planning Glitch Bill Headed to Gov. Scott's Desk

House Bill 7081 is headed to Governor Scott's desk after being passed by the Senate yesterday. The bill approves language settling Yankeetown v. DEO (37 2011 CA 002036). Yankeetown had asked the court to declare that the Community Planning Act, HB 7207 (ch. 2011-139, Laws of Fla.), was unconstitutional. The real rub for Yankeetown was that the Act did not grandfather previously-enacted local government comprehensive planning referendum requirements when it prohibited them. This glitch reportedly also affected Longboat Key, Key West, and Miami Beach.

The House staff analysis is available here. It notes some other effects of the bill:

• clarifying provisions relating to the coordination between local governments and military installations regarding local land use decisions;
• providing criteria for municipalities and the unincorporated area within a county to use in determining population projections;
• removing criteria that exempts certain municipalities from being signatories to the school interlocal agreement as a prerequisite to implementing school concurrency, because school concurrency is now optional, and restoring criteria to exempt certain municipalities from being a party to the school interlocal agreement; 
• extending the time for the state land planning agency and the Administration Commission to issue recommended and final orders, since the current time requirement is unworkable, and providing a time requirement for the state land planning agency to issue a notice of intent for a plan amendment adopted pursuant to a compliance agreement;
• deleting a required annual report by the Department of Economic Opportunity related to the optional sector plan pilot program.

Environmental and Land Use Considerations for Real Estate Transactions 2012

The Environmental & Land Use Law Section and the Real Property, Probate & Trust Law Section of the Florida Bar are jointly hosting an upcoming Continuing Legal Education Seminar that should interest real property attorneys. It will also be useful to attorneys involved at any stage of the development process who want to gain a better understanding of the environmental and land use components of that process.Past feedback from this CLE has been very positive.

The CLE, entitled "Environmental and Land Use Considerations for Real Estate Transactions 2012," will be April 20, 2012, at the Tampa Airport Marriott. The schedule is below. I am co-chairing this CLE program, so please email me if you have any questions.

8:00 a.m. – 8:30 a.m. Late Registration

8:30 a.m. – 8:45 a.m. Welcome & Case Study Introduction
Eleanor W. Taft, Eleanor W. Taft, P.A.
Jacob T. Cremer, Hopping Green & Sams, P.A.

8:45 a.m. – 9:30 a.m. Contract Issues for Land Transactions for Properties with Environmental & Land Use Concerns
Barry B. Ansbacher, Ansbacher & Associates, P.A.

9:30 a.m. – 10:15 a.m. Practical Considerations for Incorporating Sustainable Development into Real Estate Projects
Nicole C. Kibert, Carlton Fields

10:15 a.m. – 10:30 a.m. Break

10:30 a.m. – 11:15 a.m. Growth Management after the Community Planning Act
Adam J. Gormly, Hillsborough County Attorney’s Office

11:15 a.m. – 12:00 noon Local Government Land Use Hearings: What Does QuasiJudicial Mean, Anyway?
Laura B. Belflower, Laura B. Belflower, P.A.

12:00 noon – 1:15 p.m. Lunch (on your own)

1:15 p.m. – 2:00 p.m. Old & New: Bert Harris Issues and Property Rights Cases (Including Koontz)
Ronald L. Weaver, Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.

2:00 p.m. – 2:45 p.m. Who Controls Entitlements and Permits after Foreclosure?
Jason E. Merritt, Hopping Green & Sams, P.A.

2:45 p.m. – 3:00 p.m. Break

3:00 p.m. – 3:45 p.m. Wetlands Permitting Issues
Amy Wells Brennan, SWFWMD

3:45 p.m. – 4:30 p.m. Sovereign Submerged Lands Issues: Permitting & Leasing
Virginia C. Dailey, Hopping Green & Sams, P.A.

Legislation Settling Yankeetown Case Approved by House & Senate

I wrote back in December about the legislation that would settle the Yankeetown litigation. In Yankeetown v. DEO (37 2011 CA 002036), Yankeetown asked the court to declare that the Community Planning Act, HB 7207 (ch. 2011-139, Laws of Fla.), was unconstitutional.

As readers of this blog will recall, the parties reached a settlement agreement that required them to use their best efforts to pass legislation that would cure Yankeetown's main issue and allow it to continue to use its referendum process for its comprehensive plan amendments. Language that appears to meet the requirements of the settlement agreement has been passed in both chambers, although the chambers will have to settle the other diferences.

House Bill 7081 passed in the House on February 16th. Senate Bill 440 passed in the Senate yesterday. The bill was sponsored by Senator Bennett, one of the principal authors of the Community Planning Act. The relevant language in the bill, with additions underlined, reads:

163.3167(8) An initiative or referendum process in regard to any development order or in regard to any local comprehensive plan amendment or map amendment is prohibited. However, any local government charter provision that was in effect as of June 1, 2011, for an initiative or referendum process in regard to development orders or in regard to local comprehensive plan amendments or map amendments, may be retained and implemented.

The Governor will still have to approve this language for it to become law. Judging by the strong support in both chambers for it, it seems likely that he will. The status of his action on bills is here. Then the parties would have to go back before the court to finish the settlement process. Stay tuned for this and other legislative updates. I'll be watching as the 2012 legislative session winds down.

Green Leases: Something Old or Something New?

The American Bar Association's Smart Growth and Green Building Committee's newsletter recently published an article I coauthored with my colleague here at Hopping Green & Sams, Ralph DeMeo. The article introduces the risks, rewards, incentives, and costs of green leases. It's titled "Applying Old Methods to New Values: Considerations for Green Leases."

This accessible article recognizes that, as green building becomes more popular around the country and in Florida, leases of these green spaces-commonly called green leases-have become more popular. Ralph and I conclude that a successful green lease must give both the landlord and tenant incentives to conserve energy, reduce waste, increase recycling, and use environmentally friendly products and materials. The text is excerpted below.

APPLYING OLD METHODS TO NEW VALUES:

CONSIDERATIONS FOR GREEN LEASES

Am. Bar Ass’n Smart Growth & Green Buildings Committee Newsletter 18 (Jan. 2012).

            Commercial leasing firms and agents are becoming more adept at using the green building movement as a business strategy and marketing tool. Many companies report that their shareholders and customers are pressuring them to green their portfolios. By 2009, 82% of large American corporations were expected to have “greened” 16% or more of their real estate portfolios, and 18% were expected to have greened 60% or more of their real estate portfolios. Susan Coleman, Green Leasing, 569 PLI/Real 539, 541 (2009)(citations omitted).

Even in these slow economic times, the green building movement is still relevant because it can help landlords and tenants reduce building operating costs. Yet, even today, when advertisers call everything from coal to Barbie green, the green lease may seem like unfamiliar territory. Green leases, which are simply leases of space in green buildings, are after all based on new (and constantly changing) green rating systems. See Geoffrey White, Joshua Nichols, & Jeff York, Green Building Rating Systems and Green Leases, 41 Envtl. Rep. News & Analysis 10049, 10057 (2011).Upon closer examination, however, we see that, while the systems may be new, the methods are not. Green leases are actually surprisingly familiar: the position of the landlord vis-à-vis the tenant is the same as ever.

            Do green buildings and green leases lead to new or unsuspected liability on the part of landlords, builders, and others? A recent panel of knowledgeable attorneys convened by the U.S. Green Building Council was skeptical. Instead, the panel called green building liability “new wine in old bottles.” Liability could be limited through a combination of experiential knowledge and contracts – distinctly old-fashioned methods. Brendan Owens, Building Green: The Legal Risk in “Building Green”: New Wine in Old Bottles?, 565 PLI/Real 41 (2009).

I. Green Certification & Credentialing Systems

            Green leases are usually intended to function alongside a current or future green certification of a building.  Consequently, it is worth briefly considering those certification systems. Because construction methods, building materials, and architectural design are constantly evolving, green building is best understood as a malleable concept, rather than as a strict theme.  These systems measure performance by using benchmarks to evaluate the environmental impacts of development. The six most common benchmarks are site location, energy conservation, water conservation, material selection, indoor air quality, and building operations and maintenance.

 In some cases, state and local governments mandate these performance standards in order to increase construction and operation of green buildings. For example, in 2008, Dallas adopted a green building ordinance that incorporates Leadership in Energy and Design (LEED), Energy Star, and American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE) standards.

                       

            By far, the most well-known system in the United States is the U.S. Green Building Council’s (USGBC) LEED program. LEED was developed in 1993 and updated in 2009 to version 3.0. It is a voluntary point-based system used internationally as a third-party green building verification system. It evaluates all six of the standards mentioned above by awarding points for various performance levels. LEED certification is achieved at different levels depending on points accumulated.

            LEED now encompasses a wide universe of services and procedures, including an appeals process for certification decisions, numerous professional certifications, and multiple issue-specific rating systems. LEED evaluates commercial and residential buildings, and it can be used through a building’s lifecycle—design, construction, tenant buildout, operation, and renovation. Recently, it has even been extended to neighborhood design by evaluating community planning & design.

Other important green building rating systems include:

• BREEAM, established in 1990 by the Building Research Establishment in the United Kingdom, which is similar to LEED but is more widely used outside the United States;
• Green Globes, an online building assessment tool used for new and existing residential and commercial structures developed in the United Kingdom and Canada, which is supported as a standard by the American National Standards Institute (ANSI);
• Energy Star, a system originally for rating appliances and electrical devices developed by the U.S. Environmental Protection Agency and the Department of Energy, which has been expanded to include whole-home and commercial building efficiency;
• GGHC, the leading green building initiative in the health care industry, created by the American Society for Healthcare Engineering in 2002, which is a self-certifying system that borrows from LEED; and
• Standard 90.1, a building energy-rating system, developed by the ASHRAE and other industrial organizations.

See White et al., at 10053-56. Another aspect of the green industry that may be relevant to a green lease is whether the professionals involved in the project have green credentials. Not only are buildings becoming greener, but lawyers, accountants, and other professionals are doing so, too. Although there is still a good deal of debate on the value of these credentials, by 2009 there were more than 100,000 LEED-certified professionals (by far the most important credentialing program). Real Life Leed, http://www.reallifeleed.com/2009/04/its-official-100000-leed-aps-worldwide.html (April 22, 2009).

            The LEED professional credentialing program has recently been overhauled. The most significant update is a membership system, where each tier has specific eligibility requirements and continuing education requirements. The new program is catching on quickly: within one year of its release, LEED certified more than 10,000 Green Associates. Green Bldg. Certification Institute, “GBCI Celebrates 10,000 LEED Green Associates,” http://www.gbci.org/org-nav/announcements/10-08-18/GBCI_Celebrates_10_000_LEED_Green_Associates.aspx (Aug. 18). There are three tiers:

• A LEED Green Associate demonstrates competence in understanding and supporting green design, construction, and operations.
• A LEED AP+ demonstrates depth of knowledge and experience in one of several particular fields, including commercial building design & construction, commercial operations & maintenance, commercial interiors, residential design & construction, and neighborhood development.
• A LEED AP Fellow demonstrates special leadership and longtime service in the green building and design field.

II. Green Leases

            Because most corporate space in the United States is leased, green leases are a natural consequence of the green building movement. Recall that a green lease is a lease of space in a green building. There is no legal definition of a green lease.  Generally, a successful green lease encourages green goals or objectives through cooperation.  Leases can be as simple as a boilerplate lease with a few sustainability concepts added, or they can be much more complex, adding measurable performance standards, allocating costs depending on which party acts to conserve energy costs,  and providing the parties with specific remedies if the other fails to perform its green obligations. See, e.g., Jonathan Cohen & Theodore I. Yi, Green Leasing from the Tenant’s Perspective: What to Look for and What to Avoid, 571 PLI/Real 315, 317 (2009).

Landlords are interested in implementing green leases for a number of reasons, including marketing efforts, increased rental income, claiming tax or carbon credits, receiving government subsidies, or complying with state and local energy conservation laws. Because of these interests, landlords will want build out (i.e., completion) standards that ensure the building’s eligibility for green certification, maintenance and repair obligations that comply with certification standards, and cost-sharing for green certification or conversion to alternative energy sources and other conservation measures.

Green lease tenants face a number of issues that could put them at odds with a landlord. Generally, tenants want the lease to give standards for how the building or space will be delivered, to explain how the tenants’ actions affect green ratings or credentialing, to require cost-sharing for installation and operation of any special monitoring equipment, and to allow for self-help remedies if the landlord fails to achieve or maintain specified sustainability standards. On the other hand, tenants usually will want to avoid the disproportionate pass through of building-wide sustainability costs, requirements to obtain utilities from the landlord, and allowing the landlord to limit its obligation to ensure that the building and its systems meet sustainability standards. See Cohen & Yi, supra, at 318-20.

            As these different interests make clear, the biggest challenge to both parties in implementing a green lease is to align incentives properly. For example, the pure (or triple) net lease, which is especially common in commercial real estate and passes on the costs of real estate taxes, building insurance, and maintenance to the tenant, does not encourage the landlord to invest in conservation measures because the landlord will not share in the savings. On the other hand, a pure gross lease encourages the landlord to lower operating costs because the landlord pays all those costs, but the tenant is not encouraged to moderate or conserve use. To solve this problem, many green leases use a modified gross lease that sets a base cost, which the landlord pays, and the tenant pays the increment above that base cost.

            Enforcement of green leases may also be problematic. Some leases are accused of being “greenwashed,” where they simply provide a tenant with a green how-to handbook, with no performance standards or enforcement mechanisms. But how can a green lease have enough teeth to correct a wayward party? Consider that, although a tenant’s breach could result in the loss of green certification, a green tax credit, or business goodwill, traditional legal remedies would have to suffice for the landlord because courts seem unlikely to consider many green lease provisions as serious enough to warrant an eviction remedy. See Ronald W. Ruth, In the Spotlight: Enforcing the Green Lease, 22(5) Comm. Leasing L. & Strategy 1, 1 (2009). As a solution, a lease might prescribe its own dispute resolution mechanisms to correct the tenant’s actions. A simple lobby wallboard showing, tracking, or ranking various utilities or other statistics may be effective. For some disputes, liquidated damages or “additional rent” could be assessed against a green security deposit. For more serious disputes, a pre-determined, impartial third party sharing green values could be used to review disputes and facilitate compliance.

            Like any lease contract, landlord and tenant wish lists may not prove practicable because they are oftentimes not in the interests of both parties. There are, however, some practices that both parties will probably want to include in a robust green lease:

• Use of sustainable materials, cleaning products, and maintenance procedures
• Recycling requirements, where the landlord must provide a system and the tenant must participate
• Specify who pays for green building insurance, or for the increment above standard property insurance
• Flexibility to account for the seemingly ever-changing certification standards
• Milestones for re-evaluation of conservation goals and achievements

See generally Ellen Sinreich, The Greening of the Retail Lease: 10 Tips for Landlords and Tenants, 573 PLI/Real 143 (2009).

III. Conclusion

            This brief article has introduced the risks, rewards, incentives, and costs of green leases. The normal tensions in the landlord-tenant relationship mean that green lease provisions can be written best by applying old methods to society’s new green values. Clarity of forethought still reduces the frequency and consequences of problems.  In the end, a successful green lease must give both the landlord and tenant incentives to conserve energy, reduce waste, increase recycling, and use environmentally friendly products and materials.

Ralph A. DeMeo is a partner and Jacob T. Cremer is an associate at Hopping Green & Sams, P.A. in Tallahassee, FL. Their practices include environmental and land use law, including assisting clients in consideration of green and sustainability issues.

Fourth Quarter 2011: Recent Florida Environmental and Land Use Case Law

Continuing my Florida environmental and land use case law updates, I summarized the cases below with my co-author in the latest newsletter of the Florida Bar's Environmental and Land Use Law Section.

• Miami-Dade Cnty. v. Torbert, 
• 36 Fla. L. Weekly D1674a 
• (Fla. 3d 
• DCA Aug. 3, 2011), holding that plat restrictions must be incorporated and reference into a deed to be valid.
• St. Johns River Water Mgmt. Dist. v. Molica, 2011 WL 3627412 (Fla. 5th DCA Aug. 19, 2011), declaring that Water Management Districts have the power to create an administrative rule requiring environmental resource permits (ERP) for dredging and filling of surface water and wetlands.
• Bush v. Mexico Beach, 2011 WL 4345169 (Fla. 1st DCA Aug. 31, 2011), confirming previous case law requiring comprehensive plan consistency challenges after a local government hearing to be brought in de novo proceedings in circuit court, but allowing challenges to the hearing based on other reasons to be brought as certiorari proceedings.
• Mickel v. Norton, 2011 WL 4415353 (Fla. 2d DCA Sept. 23, 2011), holding that property owners do not have a riparian right to an unobstructed view of the water body unless the property directly borders it.
• 1000 Friends of Fla., Inc. v. Palm Beach Cnty., 2011 WL 4577746 (Fla. 4th DCA Oct. 5, 2011), stating that comprehensive plans are to be interpreted using the same rules of construction as statutes.
• West Palm Beach v. Roberts, 2011 WL 4949795 (Fla. 4th DCA Oct. 19, 2011), affirming a decision holding a city liable for inverse condemnation where it demolished a structure without giving the owner adequate notice.
• Pembroke Ctr., LLC v. Fla. Dep’t of Transp., 64 So. 3d 737 (Fla. 4th DCA 2011), denying an inverse condemnation claim where there were mere "planning activities" but no loss of activities.

You can detailed description in this quarter's newsletter. Please email me new cases we should review.

Property Owners Ask U.S. Supreme Court for the Right to Challenge EPA Compliance Order in Court

Today, the U.S. Supreme Court heard Sackett v. EPA, a case with important implications to anyone owning property with wetlands--or something close enough to wetlands to attract the the Environmental Protection Agency's (EPA) attention.

In the case before the Court, EPA stopped the Sacketts from building on a residential lot they owned. Because the EPA alleged the Sackett's lot contained protected wetlands, it issued a compliance order. If the Sacketts did not comply, they would have been subject to fines of up to $37,500 per day, or more. So far, the Sacketts have been denied review of the compliance order:

Stymied, the Sacketts sought a hearing to contest the EPA's order. They insisted the half-acre lot, which they had bought for $23,000, was not wetlands. But their hearing request was turned down by a federal judge in Idaho and by the 9th Circuit Court of Appeals in San Francisco. 

Agreeing with the EPA, the judges said the compliance order was like a warning to the landowners that they were violating the law. They weren't entitled to a hearing under the law until the agency had imposed a fine on them, the appeals court said.

The Sacketts, with the help of the Pacific Legal Foundation, have had to take their case all the way to the U.S. Supreme Court, just to try to get the right to have a court review EPA's actions. Thus, the question before the Supreme Court is this:

When the Environmental Protection Agency believes that a landowner is engaged in a violation of environmental laws, it may issue an administrative compliance order requiring the landowner to take certain actions and seek judicial enforcement of the order if the landowner does not comply. May the landowner challenge the administrative compliance order in court before the EPA seeks judicial enforcement?

At oral argument, many of the justices seemed skeptical of what Justice Scalia called EPA's "high handed" approach and attitude. Robert Thomas found the most telling quote of the day: Justice Alito asked, "Don't you think most ordinary homeowners would say this kind of thing can't happen in the United States?" 

The New York Times wrote that a win for the Sacketts would be a win for those who want to "evade the requirements of the Clean Water Act." But what's so difficult about requiring the EPA to support its actions before a judge?

Congress Stays NPDES Permitting for Forest Roads

In a move that gives forest landowners a bit of comfort, Congress has stayed NPDES permitting for forest roads until October 1, 2012 through its Omnibus Appropriations Bill. The move was necessary because of a Ninth Circuit Court of Appeals decision that has been extremely unpopular, prompting legislators on both sides of the aisle to support action reversing it. Observers in the Ninth Circuit reported on the case below:

The Ninth Circuit [decision] will effectively require many timberland owners and logging companies to obtain permits for stormwater runoff from logging roads in the western U.S. The case, Northwest Environmental Defense Center (NEDC) v. Brown, involved two Oregon logging roads where stormwater runoff is collected in systems of ditches, channels, and culverts, and then discharged into adjacent rivers. The Ninth Circuit initially issued its decision in August 2010...On May 17, the court withdrew its earlier opinion and reissued a revised version. 

In the reissued opinion, the Ninth Circuit reiterated that the stormwater collection systems at issue unambiguously constitute “point sources” under the Clean Water Act (CWA), and that such discharges therefore require permits under the CWA’s National Pollutant Discharge Elimination System (NPDES) program. In so holding, the court significantly limited a decades-old regulation that had historically been viewed as excluding logging road runoff from the NPDES program and charged EPA with developing a general permit to handle the discharges.

The Ninth Circuit's decision could have big implications for forest landowners, and not just on the West Coast. EPA would likely develop forest roads permits for the entire country. This would be extremely difficult:

But while legal and Congressional challenges to the Ninth Circuit’s decision play out, the owners and users of forest roads in the western states (those within the Ninth Circuit’s jurisdiction) still must cope with the court’s holding that their discharges of channeled runoff fall under EPA’s Phase I stormwater regulations. The Ninth Circuit closed its opinion by saying “we are confident, given the closely analogous NPDES permitting process for stormwater runoff from other kinds of roads, that EPA will be able to” establish permitting for forest road discharges “effectively and relatively expeditiously.” That confidence does not appear to be well placed. 

To date, no general permits have been developed that are specifically tailored to channeled discharges from forest roads. Individual permits also are a theoretical possibility, but are unlikely to be developed given the resource commitments they would require for forest road owners and regulatory agencies. Absent a simpler solution, the discharges may have to fit within an existing general permit, although the effluent limits and discharge monitoring required by those permits are unlikely to be well suited to forest roads, and must be carefully evaluated. A closer examination of road networks with an eye toward whether runoff, even though channeled at some point, actually discharges to U.S. Waters from a point source may reduce somewhat the regulatory burden of the court’s decision. These and other regulatory strategies will likely be deployed if the court’s decision withstands the current challenges.

This comes just after the U.S. Supreme Court asked for the Solicitor General's position on the Ninth Circuit case. Forest landowners across the country are hoping the Supreme Court will accept the case and reverse the Ninth Circuit's opinion.

New Legislation May Allow Yankeetown to Keep Its Referedum Requirement

New comprehensive planning legislation that may interest my readers has been filed. For those who are not as familiar with comprehensive plans, the legislative staff analysis of one the bills that have been filed explains them briefly:

The Local Government Comprehensive Planning and Land Development Regulation Act (the Act), also known as Florida’s Growth Management Act, was adopted by the 1985 Legislature. The Act requires all of Florida’s counties and municipalities to adopt local government comprehensive plans that guide future growth and development. Comprehensive plans contain chapters or “elements” that address future land use, housing, transportation, water supply, drainage, potable water, natural groundwater recharge, coastal management, conservation, recreation and open space, intergovernmental coordination, capital improvements, and public schools. The state land planning agency that administers these provisions is the Department of Economic Opportunity. 

A local government may choose to amend its comprehensive plan for a host of reasons. It may wish to: expand, contract, accommodate proposed job creation projects or housing developments, or change the direction and character of growth. Some comprehensive plan amendments are initiated by landowners or developers, but all must be approved by the local government. The first step in the process is for the local government to develop a comprehensive plan amendment proposal. Public participation is a critical part of the comprehensive planning process. Citizens often want to be a part of planning their communities and landowners need to be aware of changes that could affect their property. A local government considering a plan amendment must hold at least two advertised public hearings on the proposed comprehensive plan or plan amendment. Notice must be published in a newspaper of general paid circulation in the jurisdiction of interest. The procedure for transmittal of a proposed or adopted comprehensive plan amendment requires the affirmative vote of a majority of the members of the governing body present at the hearing. 

As you may recall, as a part of last year's landmark growth management legislation, the Community Planning Act, ch. 2011-139, Laws of Fla. (HB 7207), prohibited referenda requirements. Yankeetown's charter requires it to hold a referendum for approval of any comprehensive plan changes, and Yankeetown wanted to keep the requirement. Consequently, Yankeetown filed a lawsuit alleging that the Community Planning Act was unconstitutional. St. Pete Beach later intervened in the case to protect its own referendum that had eliminated its referendum requirement (after years of court battles), and the state moved to dismiss Yankeetown's complaint.

On November 9, while the state's motion to dismiss was still pending, the parties filed a joint motion and settlement. The motion, which was approved by the court, holds the litigation while all parties use their best efforts to pass legislation to amend section 163.3167(8), Florida Statutes. The proposed legislation would allow Yankeetown's referendum requirement to stand, while banning other local governments from taking it up. If the required legislation is not passed, the litigation will likely continue.

Senator Mike Bennett has already filed the implementing legislation, SB 842. He was one of the principal authors of the Community Planning Act. The relevant language in the bill, with additions underlined, reads:

163.3167(8) An initiative or referendum process in regard to any development order or in regard to any local comprehensive plan amendment or map amendment is prohibited. However, any local government charter provision that was in effect as of June 1, 2011, for an initiative or referendum process in regard to development orders or in regard to local comprehensive plan amendments or map amendments, may be retained and implemented.

Note that the language is quite strict: not only must local governments have already adopted their referendum requirements, but the requirements must also have adopted them as part of their charters. Charters are generally much more difficult to amend than simply passing an ordinance.

SB 440, also filed by Senator Bennett, contains the same language and appears to be moving through the committee structure even faster than SB 842. There is not yet a House companion bill.

For those interested, you can track SB 842 and SB 440 online.

In Florida, Exactions Limitations Apply Only to Real Property, Not Personal Property

In a recent case, the Florida Supreme Court held that the law of exactions--a part of takings law--only applies to the dedication of real property for public use. St. Johns River Water Mgmt. Dist. v. Koontz, No. SC09-713 (Fla. Nov. 3, 2011). This case has important implications for landowners and city planners in Florida.

The Koontz Decision

In Koontz, a landowner requested permits from his local water management district to develop a greater portion of his commercial property than was authorized under existing regulations. The district agreed to grant the permit if the landowner would deed the remainder of the parcel into a conservation easement and pay for offsite mitigation measures unrelated to the landowner's property. The landowner agreed to the easement term but rejected the offsite mitigation. Consequently, the district denied the permit. The landowner sued, alleging a taking. After more than a dozen years in the Florida courts, the case ended up before the Florida Supreme Court.

The takings clause in the Florida Constitution is more or less equivalent to, or "coextensive" with, the takings clause in the U.S. Constitution. Id. at *2. Therefore, decisions by the U.S. Supreme Court about takings are the law in Florida. The Koontz case implicated two important U.S. Supreme Court decisions: Dolan v. Tigard, 512 U.S. 374, 384 (1994), and Nollan v. California Coastal Commission, 483 U.S. 825, 831-32 (1987). In a post at the Land Use Prof Blog on the Koontz decision, Ken Stahl of Chapman University provided background on Nollan and Dolan:

Some brief background on Nollan and Dolan for those who are not takings geeks: Taken together, the [they] hold that when a regulatory entity demands a condition in exchange for authorizing a use of land that would otherwise be prohibited (known as an "exaction") the condition imposed must have an "essential nexus" with (Nollan) and "rough proportionality" to (Dolan) some anticipated impact of the proposed use of land. Both Nollan and Dolan involved situations where the regulatory authority demanded the landowner physically dedicate some portion of his or her land for public use, and the Court in both cases emphasized that the condition demanded by the regulatory authority required the landowner to forfeit the sacrosanct "right to exclude." As a result, many commentators believed that Nollan and Dolan were limited to circumstances where the "exaction" was a requirement that real property be dedicated for public use, and did not extend, for example, to requirements that landowners pay an "impact fee" or other type of monetary payment in exchange for development permission. 

That interpretation, however, was rejected by one of the most significant lower court decisions to date dealing with Nollan and Dolan, the California Supreme Court's ruling in Ehrlich v. City of Culver City, 911 P.2d 429 (Cal. 1996). There, the court held that Nollan and Dolan did apply to certain types of impact fees, specifically fees imposed on a discretionary, individualized basis. The court emphasized what it saw as the underlying policy rationale of the Nollan/Dolan doctrine, to prevent regulatory authorities from using their monopoly power over the land use permitting process to extort concessions from politically powerless developers. This policy concern, the court noted, would apply equally regardless of whether the exaction was a physical dedication or an impact fee.

After a relatively brief analysis, the Florida Supreme Court concluded that Nollan and Dolan only apply to physical dedications of real property because (1) those cases only involved physical dedications and (2) regulatory agencies would by hamstrung and would likely deny more permits rather than face the uncertainty of negotiations.

The Implications

In the near future, this means that the protections of exactions law do not apply when governments and agencies request personal property, rather than real property, as a condition preceding development. As Robert Thomas pointed out in his blog, Inverse Condemnation, exactions are an important and topical issue these days.

The U.S. Supreme Court recently declined certiorari review of an Oregon case, where a city required a developer to pay money and for infrastructure costs. The developer wanted the city's requirements to be subject to the heightened standard of review set out by the U.S. Supreme Court in Nollan and Dolan. Although there were arguments that Oregon law supported the developer's position, after the case bounced into and out of the federal courts, the Oregon Supreme Court ruled otherwise in its West Linn decision. Just before Supreme Court of the United States denied certiorari, the developer filed a supplemental brief pointing out the Koontz decision here in Florida:

The Florida Supreme Court's decision in Koontz underscores the importance of the issue posed by the petition in this case. Moreover, it demonstrates the deepening divide between the courts such as the Supreme Courts of California and Texas which perceive no principled reason to distinguish between disproportional exactions of personal as opposed to real property and those Courts such as the Supreme Courts of Oregon and Florida, as well as the Ninth Circuit, that erroneously perceive in this Court's decision in Lingle an unstated intent to limit Nollan and Dolan. Only this Court can decide this important conflict and bring clarity to this area of Constitutional law.

The supplemental brief points to the heart of the matter: why should there be any distinction between exactions of personal property and exactions of real property? Unfortunately, because case was denied, we'll have to wait for the U.S. Supreme Court to clarify whether exactions law extends to personal property, as well as real property. Here in Florida, a motion for rehearing was filed on November 18 in the Koontz case. While rarely granted, a rehearing would give the Florida Supreme Court a chance to clarify its decision, which commentators have already said lacks clarity.

DCA files motion to dismiss Community Planning Act legislation

I've been following the Yankeetown v. DCA (37 2011 CA 002036) litigation. So far, I've written on Yankeetown's complaint alleging that the Community Planning Act is unconstitutional and on St. Pete Beach's motion to intervene in the litigation against Yankeetown.

The Department of Community Affairs was recently substituted in the litigation by its new administrative iteration, the Department  of Economic Opportunity. Just before that, DCA filed a motion to dismiss Yankeetown's complaint. DCA argues that officers of the state and state agencies must presume that laws affecting their duties are valid. Because the validity of the law must be assumed, the public officer is not given standing to challenge the law. That is, public officers are expected to uphold their office, not fight about it. Because this line of case law has been applied previously to both local governments and to growth management law, DCA argues, it should applied in this case.

If Yankeetown responds to the motion in writing before the hearing, I will post a summary here.