Bureaucrats Cannot "Take" The Value Of Your Open Space Through Inaction

6/ “REGULATORY TAKINGS” CAN INCLUDE “REFUSALS TO AMEND”:  In 2004, Eagan had three competitive golf courses.  The Carriage Hills Golf Course reportedly was losing money, and since 2000 had been in negotiation with the city to make water, sewer, and road improvements to meet the city’s growing housing demand by converting the zoning for the course into “residential.”

Facing opposition from current home-owners, the City Council rejected the re-zoning request in 2004 and the golf course closed.

In 2005, the district court found that the City Council’s denial of the re-zoning request was a “regulatory taking.”  That was reversed by the Court of Appeals in 2006, concluding that the city had rational bases for denying the comprehensive plan amendment, and the property owner had no basis for a takings claim.

Then-Justice Gildea, writing for the Supreme Court, held: “The purpose of the Takings Clause “is to ensure that the government does not require ‘some people alone to bear public burdens which, in all fairness and justice, should be borne by the public.’”  This is precisely what the property owner is arguing in this case—that the denial of the comprehensive plan amendment will preserve open space for the benefit of the entire community while forcing the property owner alone to bear the economic burden.    

“It is well established that the government need not directly appropriate or physically invade private property to effectuate a taking.  In limited circumstances, government regulation of property may result in a taking.  The Supreme Court has observed that “government regulation involves the adjustment of rights for the public good,” and “[o]ften this adjustment curtails some potential for the use or economic exploitation of private property.”  In the context of government regulation, a taking may result when the government “goes ‘too far’ in its regulation, to unfairly diminish the value of the individual’s property, thus causing the individual to bear the burden rightly borne by the public.”  But as the Supreme Court recently noted, “[t]he rub, of course, has been—and remains—how to discern how far is ‘too far.’

 “Determining where a regulation ends and a taking begins “calls as much for the exercise of judgment as for the application of logic.”  Because the concepts of fairness and justice that underlie the Takings Clause “are less than fully determinate,” the Supreme Court has “eschewed any set formula for determining when justice and fairness require that economic injuries caused by public action be compensated by the government.”  Consequently, “the determination of whether a taking has occurred is highly fact‑specific, depending on the particular circumstances underlying each case.” 

“the Supreme Court identified “several factors that have particular significance” in the takings analysis.  “Primary among those factors are ‘[t]he economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment‑backed expectations.’  In addition, the ‘character of the governmental action’ may be relevant in discerning whether a taking has occurred.” 

After analyzing the facts of this case as they apply to economic impact, investment-backed expectations, and the character of the government action, Justice Gildea held that under a balancing of factors:  “The citizens of Eagan clearly value the open space that the golf course provides, but if the property owner is forced to leave the property undeveloped for the benefit of neighboring landowners without an opportunity to pursue a reasonable use of the property, the city is, in essence, asking the property owner to carry a burden that in all fairness should be borne by the entire community.  The city’s refusal to change the comprehensive plan designation places a substantial, uncompensated burden on a single property owner.”

She returned the case to the trial court to determine whether there was a “regulatory taking,” and if so, for a determination of the property owner’s damages and appropriate resolution.’’


READ THE FULL CASE DECISION: 

 Wensmann Realty, Inc., et al., Appellants, vs. City of Eagan, Respondent.

July 12. 2007     2007-094 

https://mn.gov/law-library-stat/archive/supct/0707/opa051074-0712.htm