Real Estate & Property Law

Must A Property Owner Seek A Change In The Law In Order To Ripen A Takings Claim?

By Robert Thomas (inversecondemnation.com)

In a notable case worth following, the Hawaii Intermediate Court of Appeals is considering a new appeal involving whether a per se regulatory takings claim is ripe under Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985), and whether in order to ripen a takings claim, a property owner is obligated to seek a legislative change to the regulations applicable to the property.

In Leone v. County of Maui, No.29696, the trial court refused to consider a property owner's claim that state law and local regulations resulted in a regulatory taking of beachfront property on the south shore of Maui. The Opening Brief filed by the property owner is available here.

The case involves an undeveloped 1/2 acre beachfront parcel, one of 11 similarly-situated lots. The zoning on the property is ?Hotel-Multifamily,? which permits residential use. The Community Plan (Maui County?s General Plan) designates the property as ?Park? because in the 1980?s, the County sought to condemn the 11 parcels for a public beach park. After acquiring two of the parcels, however, the County ran out of money and the other 9 remain in private ownership, and several of them are fully or partially developed.

The entirety of the property is within the Special Management Area, a special zone subject to an additional layer of regulation under the Hawaii Coastal Zone Management Act, Haw. Rev. Stat. § 205A-1, et seq. The CZMA requires plan-zone consistency, meaning that before any "development" within the SMA can go forward, the zoning must be consistent with the Community Plan. See GATRI v. Blane, 962 P.2d 368 (Haw. 1998). The CZMA exempts a single-family residence from the definition of "development" for which a SMA permit is needed, unless the home will have a "cumulative impact, or a significant environmental or ecological effect" on the SMA. Haw. Rev. Stat. § 205A-22.

The CZMA is administered by the counties, and if a Maui property owner believes a proposed use is exempt, under the local rules she must seek an exemption determination from the county planning department and request a ruling that no SMA permit is required. Under Maui's administrative rules, an application for development cannot be processed unless the zoning is consistent with the Community Plan. Consequently, when the property owner filed a request for a determination that a SMA permit was unnecessary, the county refused to process it.

Williamson County requires that property owners initially file their regulatory takings claims in state court, and the property owner did so, asserting the regulations permitted no economically beneficial use of the land. The trial court granted summary judgment to the County, holding among other things, that in order to ripen the takings claim, the property owner had an obligation to change the Community Plan. To change the Community Plan designation on a parcel requires the County Council to enact an ordinance (in other words, it is a legislative act), and requires the production of an Environmental Impact Statement.

The appeal presents several issues, including:

• Whether the County has made a final determination of the use the owners can make of the property.

• Whether there are any "effective remedies" which the owners might seek.

• If there are remedies, whether those remedies are futile.

The County's brief is due 40 days after the filing of the Opening Brief, so look for it in late August or early September.

Full post as published by inversecondemnation on July 20, 2009 (boomark / email).