APA Minnesota State Planning Conference
St. Cloud, Minnesota
September 30, 2011
Jean Coleman, Attorney/Planner
CR Planning, Inc.
jcoleman@crplanning.com
Planners are good guys. Right?
 We want the best for our community
 We try to balance community goals
with private property owner’s rights
 We write zoning ordinances so the
development process is
 Predictable
 Consistent
 Fair
So why do we so often get
accused of
“taking” people’s property
rights?
When you own
land,
you have rights,
but the
community also
has rights
4
Federal Takings Clause
U.S. Constitution – Fifth Amendment
“No person shall be held to answer for a capital, or otherwise
infamous crime, unless on a presentment or indictment of a Grand
Jury, except in cases arising in the land or naval forces, or in the
Militia, when in actual service in time of War or public danger; nor
shall any person be subject for the same offence to be twice put in
jeopardy of life or limb; nor shall be compelled in any criminal case
to be a witness against himself, nor be deprived of life, liberty, or
property, without due process of law; ….
nor shall private property be taken for
public use, without just compensation.
Federal Takings Clause
U.S. Constitution – Fifth Amendment
“No person shall be held to answer for a capital, or otherwise
infamous crime, unless on a presentment or indictment of a Grand
Jury, except in cases arising in the land or naval forces, or in the
Militia, when in actual service in time of War or public danger; nor
shall any person be subject for the same offence to be twice put in
jeopardy of life or limb; nor shall be compelled in any criminal case
to be a witness against himself, nor be deprived of life, liberty, or
property, without due process of law; ….
nor shall private property be taken for
public use, without just compensation.
Straight up eminent domain
Government takes title or an easement
Public use of the property
 Roadways
 Trails
 Parks
 Public buildings
Government pays landowner fair
market price
Not so straight up eminent domain
 Government takes private land and gives it
to another private entity to develop
 Public benefit is higher tax revenues or a
“better” use
 Kelo v. City of New London, 545 U.S. 469
(2005)
 Held that New London's economic
development plan qualified as a public use
 Not a taking
Post Kelo legislative changes
 Minnesota Legislature responded by passing
Laws of Minnesota 2006, chapter 214
 "eminent domain may only be used for a
public use or public purpose“
 Clarifies that "public benefits of economic
development, including an increase in tax
base, tax revenues, employment, or general
economic health, do not by themselves
constitute a public use or public purpose"
A Minnesota twist
Removal of nonconforming uses
 2006 change - Minn. Stat. § 117.184.
 Local government must compensate the owner of a
nonconforming use if the local government requires its
removal as a condition of granting a permit, license, or
other approval for a use, structure, development, or
activity.
 Does not apply if the permit, license, or approval is for
construction that cannot be done unless the
nonconforming use is removed
But a regulation doesn’t
take property for a public
use? Does it?
The case that started it all
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922)
 State law said you can’t mine coal so as to cause a
persons’ home to fall down
 USSC case established regulatory takings doctrine
 Holding - a mere restriction by government on the
use of land, in the absence of any physical
occupation or appropriation of land, can trigger a
Fifth Amendment right to compensation.
 If a regulation "goes too far" it is a taking
The case that started it all
Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (1922)
 State law said you can’t mine coal so as to cause a
persons’ home to fall down
 This USSC case established the regulatory takings
doctrine
 Holding - a mere restriction by government on the
use of land, in the absence of any physical
occupation or appropriation of land, can trigger a
Fifth Amendment right to compensation.
 If a regulation "goes too far" it is a taking
The “easy” takings cases
When the loss of use or loss of value is total
 Categorical taking – compensation is
required when a regulation requires a
physical invasion of the property Loretto v.
Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)
 Per se taking - regulation denies the owner
of all economically viable use of the property
Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)
But what if the loss of use or value
is not total?
Penn Central Transportation Co. v. New York City, 438
U.S. 104 (1978)
 Grand Central Terminal designated an historic
landmark
 NYC denied application for 55-story office building
 USSC denied the takings claim
 Established a balancing test – Balance the interest
of the state in regulating against the private loss
How do we know if it goes too far?
Penn Central Transportation Co. v. New York City, 438
U.S. 104 (1978)
 Applied when there is less than total loss of value
 Three part balancing test
 the character of the regulation – is there a legitimate
state interest
 the economic impact on the landowner
 the extent of interference with investment-backed
expectations
“Rule of thumb”
regulatory takings flow chart
Does the
regulation
further a valid
public
interest?
NO
Stop,
could
be a
Taking
YES
Does the
alleged taking
affect the
entire parcel?
YES
Stop,
could
be a
Taking
Does the
alleged taking
Probably
severely
not a
reduce the
taking
NO
NO
value?
YES
Does the regulation
Probably
interfere with
not a
reasonable
taking
investment backed NO
expectations?
YES
Stop,
could
be a
Taking
Can a moratoria get us in trouble?
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Reg.
Planning Agency, 535 U.S. 302 (2002)
 USSC held that a temporary regulation that denies
all economically viable use of property is not a per
se taking
 Since not per se, then the Court applies the Penn
Central factors to determine if the regulation
amounts to a compensable taking
We need to be able to do our job
 USSC held that a landowner has the right to a
reasonable use over a reasonable period of time,
and the mere loss of the present right to use land is
not a taking
 “Moratoria are an essential tool of successful
development” and a rule that required
compensation for any deprivation of all economic
use, no matter how brief in time, might lead to
hasty decision making
Exactions
 Exaction - a government requirement that a
landowner dedicate land or a property interest as a
condition for granting a permit
 Dolan - permit to expand a store conditioned on
the dedication of a portion of the property for a
greenway pedestrian/ bicycle path Dolan v. City of Tigard,
512 U.S. 374, 391 (1994)
 Nollan - permit to build a larger residence on
beachfront property conditioned on dedication of
an easement for public to cross a strip of property
Nollan v. California Coastal Comm’n, 483 U.S. 825, 831-832 (1987)
Exactions
 USSC held an exaction may be a taking unless:
 There is an essential nexus between a legitimate
government interest and the condition exacted
 And there is a rough proportionality between the
planned development and the required dedication.
 “No precise mathematical calculation is required,
but the city must make some sort of individualized
determination that the required dedication is
related both in nature and extent to the impact of
the proposed development.” Dolan
Exactions
 In 2004 Minnesota amended statute to
incorporate the essential nexus and
rough proportionality terms used in
Dolan
 For municipal park and utility dedications
 Minn. Stat. § 462.358, subds. 2b and 2c
Minnesota Takings Clause
Minnesota Constitution, Article l, Section 13
“Private property shall not be taken,
destroyed or damaged for public use
without just compensation therefor, first
paid or secured.”
A Minnesota perspective
 Very few regulatory takings cases reviewed by
MN Supreme Court under Minnesota
Constitutional takings clause
 A regulation that diminishes property value
alone does not constitute a taking
 Minnesota’s uses a government enterprise or
arbitration test
A Minnesota perspective
 It may be a regulatory taking if the regulation
 Benefits a government enterprise such as an
airport
 And it results in a substantial diminution in value
McShane v. City of Faribault, 292 N.W.2d 253 (Minn. 1980)
 It may be a regulatory taking if the regulation
 Arbitrates between competing uses
 And it deprives the property of all reasonable
uses
Concept Properties, LLP v. City of Minnetrista, 694 N.W.2d 804, 823 (Minn. App.
2005 rev. denied)
MN Government Enterprise case
DeCook v. Rochester International Airport Joint
Zoning Board, 2011 WL 1135459 (Minn.
3/30/2011)
 Disagreement about whether state or federal
takings clause should be applied
 Disagreement about what test to apply to
determine if the regulation resulted in a taking
Airport Zoning
 240 acre property
 In 1989 when purchased only 19 acres were
subject to airport safety zone A
 2002, zone A extended and permitted land
uses restricted
 Jury in the trial court found a reduction in
value of $170,000
 3.5-6% of market value
Airport Zoning
 The MN Supreme Court held that the controlling law
was that of McShane v. City of Faribault, 292 N.W.2d
253 (Minn. 1980)
 Because it arose from an airport safety zone ordinance and
airports are “government enterprises”
 The “broader” MN constitutional takings clause governed –
covers “damage” caused by regulation
 Held that when a land use regulation benefited “a specific
governmental purpose” then compensation is owed if the
there is a “substantial and measurable decline in market
value”
 3.5-6% decline in value was substantial
What does this mean to me?
 Very few Minnesota regulatory takings cases
 DeCook is Being interpreted as a narrowly applying to
airport zoning only because it is clearly a government
enterprise
 Landowners may be emboldened
 Don’t change your perspective on regulatory takings
based on this one case
“I feel a chill”
Someone stands up a tells me that
I can’t stop them from doing what
they want on their land
When accused - Remember
First, take a deep breath
In general, a regulation that
diminishes property value alone
does not constitute a taking
Very, very, very few regulatory
takings cases are successful
When accused - Respond
“No, it is not a taking”
The community can, within
reasonable bounds, put limits on
how you use your property
This is a community decision, it is
not me arbitrarily saying you can’t
do what you want