On June 25, 2013, the United States Supreme Court in Koontz v. St. Johns River Water Management District clarified and limited the power of a local governmental agency to deny a land use permit unless the applicant agreed to make a monetary payment or expenditure. The Supreme Court ruled 5-4 that such a required expenditure would trigger heightened constitutional scrutiny under both the “essential nexus” test enunciated in Nollan v. California Coastal Commission and the “rough proportionality” test enunciated in Dolan v. City of Tigard. The majority opinion, written by Justice Alito and joined by Chief Justice Roberts and Justices Scalia, Thomas and Kennedy, found no significant constitutional difference between a local government requiring a property owner to relinquish a property right as a condition of receiving a land use approval, such as the beach access easement at issue in Nollan or the property donation at issue in Dolan, and a local government denying a land use approval unless the applicant agreed to expend funds.
Koontz was a property owner who applied for permits to develop Florida land containing wetlands. Koontz offered to permanently preserve approximately three-quarters of his roughly 15 acres by conservation easement and to develop the remaining quarter. The St. Johns River Water Management District declined to approve Koontz’s proposal and stated instead that it would approve either a 1 acre development and 13.9 acre conservation easement or Koontz’s plan, so long as he also agreed to pay to replace culverts on one off-site parcel or fill in ditches on another, either which would have enhanced approximately 50 acres of District-owned wetlands. Koontz refused to accede and the Management District denied the application. Koontz sued, claiming that the District’s required off-site wetlands mitigation was grossly disproportionate to the actual environmental impacts of his proposed project.
The Supreme Court did not decide whether the specific wetland mitigation required by the Management District was constitutional. Rather, the Court clarified the tests that should be applied and did so over a vigorous dissent by Justice Kagan, which was joined by Justices Ginsberg, Breyer, and Sotomayor.
In recent years, off-site project mitigation has been utilized increasingly by local governments, especially as budgets for infrastructure tighten. Project applicants and municipalities now are on notice that the administrative record for a land use approval or denial, often principally an environmental impact statement and its associated findings, must contain sufficient evidence to confirm that the required expenditure can be sustained under the essential nexus and rough proportionality tests. For further information, contact Steven Barshov, SPR’s senior land use counsel.