January 10, 2013

Koontz oral argument: armor against government extortion

By Christina M. Martin Attorney

This Tuesday, PLF attorney Paul Beard will ask the U.S. Supreme Court to protect property owners from unfair government demands made during the permitting process. PLF’s client, Coy Koontz, Jr., is fighting a Florida agency’s decision that conditioned issuance of land use permits upon Koontz agreeing to pay for improvements on public lands located miles away from Koontz’s property.  The case asks whether the Constitution places limits on an agency’s ability to demand excessive amounts of money from a land use applicant in exchange for a permit to build on his property.

Unsurprisingly, the Florida agency and its supporting amici have asked the Court to adopt an extremely deferential — indeed, almost non-existent — standard when reviewing  extortionate permit demands.  In fact, as colleague Lana Harfoush explained yesterday, the government insists that demands for money are not provided the same protection as other private property under the Constitution’s Takings Clause.

Such an argument is unsurprising coming from government agencies that thrive by exacting large permit development fees from property owners. The brief by the National Governor’s Association, et al., takes the argument even further asserting that there is no need for such Constitutional protections because “conscientious local officials work hard on a daily basis to fairly balance the numerous competing demands they confront in the regulatory process.”  In other words, the Governor’s Association argues that the Court should “just trust us, we won’t do any harm.”  That argument, however, is refuted  by examples of government abuse in the amici brief by our friends at the Cato Institute and Institute for Justice, which recounts stories of unreasonable demands made by local governments across the country, like this one:

For Muhammed Ahmad and Jozette Banzon, who wanted to build a single-family home worth about $500,000 on a corner lot they owned in Elk Grove, the [permit] fee added up to nearly half the cost of the home. In exchange for the development permit, city officials demanded the couple pay $240,347 for “road improvements” around the rural property. Ahmad and Banzon were eventually able to negotiate the fee down to about $10,000, but only after a public-interest firm took their case and sued the city.

PLF represented Ahmad and Banzon. Although we were able to successfully negotiate that fee to a less horrific level, many other property owners are less fortunate.

Recently, I spoke to a young father in Florida who purchased an acre of land where he hoped to build his family a modest home. In exchange for a building permit, a government agency demanded that he dedicate 75 percent of the land as a conservation area and pay an additional $40,000 mitigation fee. For this firefighter who’d already lost thousands of dollars navigating the application process, the demand was the end of his dream. He couldn’t pay or afford to sue and is now losing his property to the bank. He didn’t know about help like PLF until it was too late.

Fortunately, Mr. Koontz was able to fight. The Supreme Court will hear his story of government abuse of the permitting process. If Mr. Koontz wins his case, property owners everywhere will have a defense against extortionate demands for outrageous development fees and conditions.

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St. Johns River Water Management District v. Koontz

Coy A. Koontz sought to develop commercial land, most of which lies within a riparian habitat protection zone in Orange County, Florida. He applied for a dredge and fill permit with the St. Johns Water Management District, which  agreed to grant the permit only on the condition that he place a conservation easement over his land, and perform mitigation off-site by replacing culverts and plugging certain drainage canals on distant District-owned properties. When Koontz refused to perform the off-site mitigation, St. Johns denied the permit. PLF successfully represented Koontz before the U.S. Supreme Court, which held that a land-use agency cannot condition a permit on the payment of a mitigation fee to be used to pay for facilities that have no connection to the impacts of the permitted development.

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