Thursday, October 9, 2008

$6.9 Million Awarded in Keys' Taking Case: Appeal May Delay Payment but, at 11% Interest Who Cares?

On October 8, 2008, Circuit Judge Luis Garcia entered judgments totaling $6,877,257plus costs and attorneys’ fees – as Just Compensation for two parcels on North Key Largo. The West heirs were awarded $5,050,000 plus $1,848,114 interest, for the State’s 2004 condemnation of 21 acres (+5.6 acres of submerged land). Richardson, et al., were awarded $450,000 plus $149,142 interest, for a 4-acre parcel. Yet neither parcel has had any development rights since 1983, when the County began a series of “rolling” development moratoria in the Keys. In 1986, the State and County adopted a “one-year” moratorium on all development on North Key Largo (except Ocean Reef, Anglers’ Club, and some subdivisions). The 1986 moratorium remains in effect today – over 22 years after it was imposed.

Judge Garcia agreed with our assertion that these government acts constitute Condemnation Blight, and ordered the State to appraise the properties as if no land use regulations had been adopted since 1983. The Fair Market Values (FMV) of the properties were to be determined as if they were as buildable today as they were on February 8, 1983.

When the State condemned the parcels in 2004, it had to deposit “good-faith estimates” of FMV into the registry of the Court. It deposited $550,000 for West and $80,000 for Richardson. This supports our position that the State is purchasing Keys’ land at unconscionably low prices. Comparing the jury verdicts – FMV as of 2004 – to the State’s good-faith deposits, the FMV of the West parcel was 9.2 times the State’s “good-faith estimate,” or 11 cents on the dollar. The FMV of the Richardson parcel was 5.6 times the State’s “good-faith estimate,” or 18 cents on the dollar. Combining the two yields 11-½ cents on the dollar – a ratio of FMV to purchase price of 8.7 to 1.

Keys’ landowners are clearly being snookered by government. To landowners who have so far resisted the governments’ offers of 10 to 15 cents on the dollar, we say stand pat; sit tight; do nothing. Ignore their offers. If the government does not begin condemnation proceedings, you can force the issue by suing the government for “inverse condemnation.”

If you must say something, say "condemn it"! There are four court decisions on my website,, that describe similar deceptive tactics by the United States government in the acquisition of Cape Cod National Seashore, Point Reyes National Seashore, Assateague Island National Seashore, and Voyageurs National Park. In the Voyageurs National Park scandal, the average FMVs reached by juries – when compared to the government’s appraisals and offers – averaged 8.85 times the amount the government offered before filing condemnation suits. In other words, the Government was “offering” only 11.3 cents on the dollar. Sound familiar?

The difference between the State of Florida's offers for undeveloped Keys properties, and their real Fair Market Value in condemnation proceedings, comes down to two words: Condemnation Blight. Owners of such properties -- who remain unconvinced -- should read Judge Garcia's Condemnation Blight Order in the West, et al. case discussed in this post. (This link takes you to my website.)

Landowners should also note that, in eminent domain proceedings ("condemnation"), attorneys fees and costs are paid to their lawyers on top of what the landowner is awarded by the Court -- which is usually bound by the jury verdict. There is no downside to an eminent domain proceeding, particularly when the government takes by a "quick-take" proceeding and has to pay interest on the jury verdict from the date of the quick-take. If the government sits on its hands and won't bring a condemnation proceeding, you can seek out a good inverse condemnation attorney and sue the government. You may bear some expense in that scenario, and the government may offer to settle by giving you a building permit. Once the current mortgage panic subsides, the demand for buildable land in the Keys should start rising again.

Addendum Dated Oct 30, 2008: The State filed its Notice of Appeal on both judgments today. During the appeal, interest will continue to run on the judgments, and on the separate costs and attorneys' fee awards, at the rate of 11% per annum. Under today's financial clouds, that's a pretty good investment.

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