Active: Appeal filed to protect property rights from regulatory takings

Some retirees consider the beach an ideal place to live out their remaining years. Not Mike Bordelon. Drawn to Alabama’s Gulf Shores, the retired computer engineer sees its beaches through an entrepreneur’s lens. So he decided to use his retirement savings for a new endeavor: vacation rental housing.

Mike started by renovating condos and existing homes and offering them as short-term rentals for a few years before selling them and using the proceeds to start anew. While he enjoyed transforming properties—one home, for instance, had been shuttered for four years due to bankruptcy—he was ready to pursue a new challenge and switched gears to new construction.

In 2015, Mike completed his first residence from the ground up, an 18-room, three-story waterfront duplex in Fort Morgan, Alabama. A one-lot, four-home project soon followed, along with a 12-bedroom, three-story home. By 2019, Mike and his firm, Breezy Shores, were preparing to build his fourth project on the beach—right next door to the duplex he had built four years earlier.

The plans, approved by Baldwin County regulators, included 14 residential units and—like the duplex—the new building would stand three stories tall. With building and land use permits in hand, Mike’s builders set out to buy materials and prep the land for construction.

Work crews were eight days into replacing old pilings at the site when the county surprised them with a Stop Work Order stating the land use permit was revoked because the building’s plans for “stacked” parking violated county zoning codes.

The code didn’t apply to residential developments. Nevertheless, Breezy Shores revised its parking plans and asked the county to rescind the order. The county not only refused, but took matters even further and reduced the zoning code’s height limit from three stories to two.

Unbeknownst to Mike or his builders, a neighboring property owner—who runs a two-story vacation rental home of his own across the street—heavily lobbied county officials to block the new development. Mike applied for a variance from the new height restriction, but driven in large part by the neighbor’s ceaseless objections, Baldwin County ultimately denied the request.

Once a government issues a building permit and land use certificate, they become property just as much as buildings and land, and just as protected by the Constitution. To renege on a permit is a taking for which compensation is owed. The government cannot take back an approved building permit just because someone else doesn’t like the development.

Mike filed a federal takings claim and, in a bench trial, the court agreed the county was completely out of line. That is, the approved permit gives Mike a vested right to construct the original three-story building. Also, no one committed any action that would trigger a Stop Work Order; therefore, the county had no power to issue the order or stop already-permitted development.

The court ordered the county to let the original development plans proceed and awarded Breezy Shores $764,000 just compensation for lost profits, increased construction costs, and the cost of already-completed site work.

The county instantly appealed, however, so Mike is defending his lower court win. Represented at no charge by PLF and local attorney Kris Anderson of Yates Anderson, Mike is asking the Eleventh Circuit Court of Appeals to protect his rightful just compensation, to affirm regulatory takings as unlawful property takings, and to elevate all courts’ respect for property rights.

What’s At Stake?

  • A government-approved building permit is just as much property as are a building and land, and just as protected by the Constitution. To renege on a permit is a taking for which compensation is owed. The government cannot take back an approved building permit just because it doesn’t like the development.
  • One crucial part of property rights is the ability to make reasonable and productive use of property you own. The government cannot weaponize its zoning power to defeat this right.

Case Timeline

January 26, 2024
Opinion
Eleventh Circuit Court of Appeals
April 05, 2023
Answering Brief
Eleventh Circuit Court of Appeals