Real Estate & Property Law

2007 in Review: Private Agreements and Public Process

By rht

These seemingly unrelated court decisions were tied together with a common thread: private agreements for the most part are not substitutes for public processes, whether it is eminent domain, rezoning, or the granting of permits.   

Several courts determined that agreements in which government agreed with private parties to exercise eminent domain were invalid: 

• One case (in which I am involved as counsel for the property owners so won't comment in detail) involved a development agreement between the County of Hawaii and a developer to take property for a road.  The trial court struck down the attempt -- here is the court's Findings of Fact and Conclusions of Law.  More on the case here.

• In a similar vein, a Washington state court of appeals in HTK Mgm't, L.L.C. v. Rokan Partners, No. 58113-9-I (Wash. Ct. App., July 23, 2007) held that eminent domain "is an inherent power of the state and redelegations of that power to private parties are invalid."  The court struck down an assignment of rights allowing a private party to, in effect, exercise eminent domain, holding that by agreeing to do so, the government abandoned the attempt to take the property. 

• In Wheat Ridge Urban Renewal Auth. v. Cornerstone Group XXII, LLC, No. 06SC591 (Dec. 3, 2007), the Colorado Supreme Court refused to order a redevelopment agency to condemn private property and turn it over to a developer to build a Walgreen's store.  The court held that judges have no authority to compel an agency to take property even if the agency had entered into a contract with the developer in which it agreed to do so.  The court denied the developer's attempt to enforce specific performance of the contract.

This wasn't limited to eminent domain, and other courts applied a similar rationale to other land use areas: 

• In Neighbors in Support of Appropriate Land Use v. County of Tuolumne, No. F051690 (Dec. 7, 2007), a California District Court of Appeals held that a development agreement cannot be used to avoid zoning restrictions, and can't substitute for the rezoning process.  Development agreements are vested rights agreements only.

• In The League of Residential Neighborhood Advocates v. City of Los Angeles, No. 06-56211 (Aug. 21, 2007), the Ninth Circuit held that an agreement settling a RLUIPA claim can't override state law.  Details and analysis here and here.  The petition for rehearing/en banc review is posted here.

Full post as published by inversecondemnation on January 01, 2008 (boomark / email).