Saturday, September 27, 2008

Florida Keys National Park? Are They Nuts?

As it's lead story, this morning's Florida Keys Keynoter announced that the Monroe County Administrator was planning to tell Florida Governor Christ and the other three "Cabinet" officials that the solution to the Florida Keys' land acquisition mess is to get Congress to designate the Keys a "national park." That, they surmise, would bring $1.2 billion to buy up all the Tier I and II land in these regulation-abused islands.

First, the County's $1.2 billion is off by nearly an order of magnitude. This is spelled out in the Amended Complaint we served yesterday in [Estate of] Lightner v Monroe County and the State of Florida, a Class Action that is pending before Judge Mark Jones in the 16th Judicial Circuit (Monroe County). Our analysis of the State's acquisition costs -- for Tier I properties on Big Pine and No Name Keys only -- revealed that the State acquired 204 such parcels, between January 2006 and July 2008, paying, on average, $40,321 per parcel (they were almost 100% "dry lots"). NOT ONE of these parcels was acquired by Eminent Domain.

Therein lies the problem. In eminent domain proceedings, a landowner has the right to raise the debilitating effect of Condemnation Blight -- which was the reason the West and Richardson plaintiffs in May of this year (2008) were able to recover nearly 10 times what the State was "offering" to purchase their moratorium-affected North Key Largo lands.

In an analysis carried out by real estate appraiser extraordinaire Bob Gallaher for our nearly $50 million in Bert Harris Act claims filed with Monroe County and the Governor's office this past Wednesday, Mr. Gallaher determined the average Fair Market Value (this term-of-art does not allow "sales to government" as evidence of Fair Market Value) of dry lots in the Lower Keys, as of January 2008, was $240,000. That is six times what the State paid for those 204 dry lots in the last 2.5 years. It does not take a rocket scientist to figure that the County's $1.2 billion figure could easily become $7.2 billion if the landowners refused to sell "voluntarily." While it's not $700 billion -- as Treasury Secretary Hank Paulsen is trying to extract from Congress -- $7.2 billion is not chump change. And, I should point out, Congress is going to be so worn out from the Wall Street debacles that it is highly unlikely Monroe County's "leaders" are going to see $1.2 billion, much less $7.2 billion, in this lifetime. QED.

It is time for someone to inform the owners of undeveloped land in the Florida Keys that they should simply refuse to sell -- and should either hold out for an eminent domain suit to be filed, or -- better yet -- just sue the County and State in inverse condemnation.

Wednesday, September 24, 2008

Say "Hello" to Bert (Harris, that is)

We served 41 Bert Harris Act petitions today on Monroe County and the State of Florida, seeking $46.7 million in compensation to the owners of 196 Florida Keys land parcels. These are only a tiny fraction of the number of parcels adversely affected by the Keys' recently-completed land-stealing pogrom (a/k/a "tier zoning"). Thirty-four claimants' properties are in Tier I, which are essentially unbuildable. Seven own Tier II property. For Tier I and II landowners to even compete for a permit, they would be forced to spend on the order of $235,000 for 20 points (Tier I) or $117,500 for 10 points (Tier II) just to begin with the same number of "points" a Tier III landowner starts with. AND they must acquire all but two of those 10 or 20 points by purchasing their neighbors' Tier I lots -- at 4 points apiece -- at the bargain basement prices the government has been paying. If this is not held unconstitutional -- and we will revisit that as each lawsuit is served -- I will eat my favorite hiking hat.

We strongly recommend Tier I, II, and III-A landowners refuse to sell their land at less than the Fair Market Value it would have if it had a building permit -- and flatly refuse to sell to any government agency. The purpose of the Tier pogrom is to force landowners to sell to government, or the other leeches (including the Tier I and II landowners themselves), at far less than the Fair Market Values they would receive in a Condemnation proceeding -- by invoking the legal doctrine known as Condemnation Blight. I have included some Fair Market Value information at the end of this post. If nobody offers that much -- do not sell! Either force the government to condemn, or bring your own inverse condemnation action. Either way, the government pays your costs, attorneys fees, and interest.

In May of this year, an Upper Keys jury awarded over $5 million to our clients, the West and Freeman families, four years (for which they will get another 10% interest/yr) after the State acquired their 20+ acres on North Key Largo for $550,000 in a "quick-take". (See my May 22, 2008 post). Just as in today's pogrom, the West-Freeman property was infected with Condemnation Blight building moratoria -- which allowed us to have the Judge instruct the jury to value the property as if the moratoria never existed. There is a more substantial analysis of Condemnation Blight on my website --

As it is now public record, I will share with you our appraiser's Fair Market Value analysis that we provided the County and State in several of the Bert Harris Act petitions. These are January 1, 2008, "generic" Fair Market Values -- that need to be adjusted if special conditions exist, such as too little lot area or the need to pay mitigation in order to place fill in a wetland -- for Upper and Lower Keys residential lots only.

Lower Keys Lots: Dry $240,000; Canal $320,000; Open Water $520,000
Upper Keys Lots: Dry $170,000; Canal $405,000; Open Water $610,000

Thursday, September 18, 2008

Statute of Limitations Decisions Remain Pending at Third DCA

Eleven weeks after the oral arguments, we are still awaiting the Third District Court of Appeal decisions in Collins v Monroe County & State of Florida and Shands v City of Marathon. No opinions in these cases were released this week. The Court did release its opinion in Bauknight v. Monroe County, a temporary taking case with at least one legal issue -- and a 2/3rds panel congruency -- in common with Collins and Shands.

Bauknight involved two Big Pine Key landowners who received building permit allocations -- but no building permits -- in 1996, and a third landowner who was similarly stiffed in 1997. By 2002, there were 23 Big Pine Key landowners in this inane limbo and, smelling "taking" lawsuits, Monroe County initiated a "beneficial use determination" (BUD) hearing on their behalf. Lo and behold, the BUD Special Master concluded the 23 had been "deprived of all beneficial use" of their properties, and recommended their permits be issued. The County Commission ratified the Special Master's recommendation in June 2002. Eventually, building permits were issued to the Bauknight plaintiffs.

The Bauknight Complaint was filed September 24, 2004, two years after the County's final BUD decision -- but eight years after the permit "allocations" were granted (seven in the Bauknights' case). Following a March 7, 2007 hearing (after Judge Audlin's dismissals of Collins and Shands on statute of limitation grounds), Sixteenth Judicial Circuit Judge Luis Garcia dismissed the case. Judge Garcia's remarks during that hearing indicated his concern that the Plaintiffs could delay filing their lawsuits for seven or eight years -- and just allow the damages to pile up year after year.

In the Third DCA's Bauknight opinion, the panel acknowledged -- as Williamson County held in 1985 -- that a regulatory taking claim does not arise until after the landowner ripens the claim, stating: "The owners were obligated to pursue relief under the beneficial use ordinance ... before the owners’ taking claims were ripe." As to whether a temporary taking claim can accrue before the BUD process is completed, the Bauknight panel held it cannot. The panel does, however, agree that the Bauknight plaintiffs' taking claims -- if they had any -- were ripe following the BUD decision in 2002. ("As a preliminary matter, the owners’ taking claims are ripe for judicial consideration.")

The difference between Bauknight and the Collins and Shands claims lies in the fact that the Collins and Shands plaintiffs were not granted building permits following their BUDs. The 11 Collins plaintiff-landowners received BUDs stating that they had been "deprived of all beneficial use of their property" and were "entitled to just compensation." However, neither the County nor the State commenced eminent domain proceedings to acquire the properties, and "just compensation" was never paid. In Shands, the City of Marathon's BUD Special Master recommended the City issue a building permit in order to avoid paying just compensation, but the City Council told the landowner to pound sand -- and then stuck its collective head in said sand.

The Bauknight panel consisted of Chief Judge David Gersten and District Judges Gerald Cope and Richard Suarez. Judges Gersten and Suarez also sat on the panel that heard oral arguments 11 weeks ago in Collins and Shands, along with District Judge Juan Ramirez. We are confident the Gersten-Suarez-Ramirez panel will reverse Judge Audlin's erroneous dismissals in Collins and Shands in the not-too-distant future.

Click here to see the latest Third DCA opinions, including the Bauknight decision posted yesterday (the Court's opinions are posted at 10:45 AM on Wednesdays).

Wednesday, September 10, 2008

Uppity Landowners Hand Defeats to "the Village with no Character"

In 2002, the Florida Keys village of Islamorada enacted a land use ordinance that prohibited "formula restaurants" [read "Starbucks"] and limited the frontage and square footage of "formula retail" establishments [read "Walgreens"] -- so that no national chain business could operate in the "quaint little village" [or so the Council thought]. In 2002, Glenn and Virginia Saiger, owners of Island Silver & Spice -- an "independent" retailer -- had a contract to sell their store to a developer that planned to build -- Ohmigosh! -- a Walgreens! In Islamorada! (Islamorada already had a CVS drugstore....) Absolutely Not! Said the sage village Council. Not in our fair village! Never! The Saigers sued in U.S. District Court.

In 2005, Joseph Cachia received an offer to buy his existing retail store -- also independent -- from a corporation that wanted to build a Starbucks in Islamorada. Oh, my! Not a Starbucks! Said the village Council, essentially telling Mr. Cachia to pound sand. Mr. Cachia also sued in U.S. District Court.

Mr. Cachia, unluckily, drew U.S. District Judge Michael Moore (of the FEMA list, for those who own undeveloped Keys land), who bounced Mr. Cachia out of court on a motion to dismiss. Judge Moore held that, as a matter of law, the ordinance was supported by a legitimate state interest. The Saigers, on the other hand, drew Senior (formerly Chief) Judge James Lawrence King -- for whom the Miami federal courthouse is named. Judge King came to the opposite conclusion, writing one of the funnier opinions of his career, and held that Islamorada had violated the United States Constitution's "Dormant Commerce Clause." In his opinion, Judge King observed the village of Islamorada had no "small town community" interest to protect.

Mr. Cachia appealed Judge Moore's dismissal, and Islamorada appealed Judge King's decision in favor of the Saigers. The appeals went to the 11th U.S. Circuit Court of Appeals, in Atlanta, where they were consolidated for oral argument before Circuit Judges Tjoflat and Black, and a visiting judge, Judge Restani. Oral argument was on June 3, 2008. Both appeals were decided two days ago, September 8, 2008.

The 11th Circuit panel affirmed Judge King's decision in Island Silver & Spice v. Islamorada, while reversing Judge Moore's decision in Cachia v. Islamorada. The Island Silver & Spice opinion can be read and downloaded on the 11th Circuit's website here, and the Cachia opinion here.

$$$, anyone? Judge King awarded substantial money damages, plus attorneys' fees, against Islamorada, and the 11th Circuit awarded additional attorneys' fees to both Island Silver & Spice and Mr. Cachia. Mr. Cachia's case will now be returned to Judge Moore for a trial on damages. We can be certain that Islamorada will be handing over sums well in excess of $1 million -- all of which will come from the village taxpayer's wallets! (Maybe they'll start thinking about their wallets when election time rolls around.)

All in all, a splendid job well done. Congratulations are due to local counsel John Jabro; to Jim Hendrick for taking off his government hat long enough to support these landowners; and to Joel Perwin, appellate counsel for both landowners.