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Court Rules That “Off-Site” Mitigation Can Be An Improper Permit Condition

Case involves a landowner, Mr. Koontz, who requested permits from St. John’s River Water Management District (WMD), in order to develop a greater portion of his commercial property than allowed by existing regulation.  To develop the property, Mr. Koontz sought a management and storage of surface waters permit to dredge 3.25 acres of wetlands.  WMD’s approval of the permits was conditioned on satisfaction of additional requirements, including deeding his excess land to a conservation area and “off-site” mitigation.  Mr. Koontz agreed to deed his excess land to a conservation area, however, he rejected the “off-site” mitigation condition.  Since not all conditions were agreed to, WMD denied the permit.

Mr. Koontz then brought an inverse condemnation suit claiming improper “exaction” (conditions attached to permit approval) by the WMD.  The issue in this case is what constitutes an exaction.  Is it only the taking of physical land?  If the disputed condition imposed does not involve a physical dedication of land, but instead a request for money to be spent to improve other property, does it qualify as an exaction?

The court based its decision on the Nollan/Dolan test (Nollan v. California Coastal Commission, 483 U.S. 825 (1987); Dolan v. City of Tigard, 512 U.S. 374 (1994)) and upon the U.S. Supreme Court’s decision in the later Ehrlich v. City of Culver Citycase (512 U.S. 1231 (1994)) in which a city conditioned a permit on payment of money to build tennis courts and purchase artwork (i.e., request for money to be spent to improve other property).  In Ehrlich, the U.S. Supreme court held that the exaction requested failed the “Dolan test”, in which there must be a “rough proportionality” between the condition required for permit approval and the impact of the proposed development.

Conclusion:Florida’s Fifth District Court of Appeal concluded that, like in Ehrlich, requests for  money may qualify as exactions, and thus must then satisfy the Nollan/Dolan test.  In this case, the trial court found that the imposed condition of “off-site mitigation” exceeded the Dolan’s “rough proportionality” threshold and that the conservation easement offered by Mr. Koontz was enough to off-set the proposed development.  In summary, the imposed condition of “off-site mitigation” was an exaction and was improper.

Case Name: St. Johns River Water Management District v. Coy a. Koontz, Jr. Et. Al., 5th District Court of Appeal, January 9, 2009.

Update: On March 20, 2009, the issue in this case was certified to the Florida Supreme Court.

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