OCEAN CONCRETE, INC. and GEORGE MAIB v. INDIAN RIVER COUNTY, BD. OF COUNTY COMMISSIONERS , 241 So. 3d 181 ( 2018 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
OCEAN CONCRETE, INC. and GEORGE MAIB,
Appellants,
v.
INDIAN RIVER COUNTY, BOARD OF COUNTY COMMISSIONERS,
Appellee.
No. 4D16-3210
[March 14, 2018]
Appeal from the Circuit Court for the Nineteenth Judicial Circuit,
Indian River County; Cynthia L. Cox, Judge; L.T. Case No.
312007CA011589.
Stephen B. Burch, Geoffrey D. Smith and Susan C. Smith of Smith &
Associates, Melbourne, for appellants.
Paul R. Berg of Vocelle & Berg, L.L.P., and Dylan Reingold, Vero Beach,
for appellee.
DAMOORGIAN, J.
Appellants, Ocean Concrete, Inc. and its principal, George Maib, appeal
a final judgment entered in favor of Indian River County (the “County”) in
Appellants’ property rights related lawsuit against the County. The
substance of this appeal is comprised of the following issues: (1) whether
the court erred in its conclusion that Appellants failed to prove entitlement
to relief under the Bert J. Harris, Jr. Property Rights Protection Act; 1 (2)
whether the court considered irrelevant factors in reaching its conclusion
that the County did not effectuate a regulatory taking of Appellants’
property interests; and (3) whether the court made certain evidentiary
rulings which require a retrial on Appellants’ procedural due process
violation claim. We affirm the second and third issues without further
comment. As for the first issue, we conclude that the trial court reversibly
erred and remand for further proceedings.
1 The Bert J. Harris, Jr. Property Rights Protection Act is codified in section
70.001 of the Florida Statutes (2008). For purposes of this opinion, it will be
referenced to as the “Harris Act.”
Factual Background
In 2002, Mr. Maib began formulating a plan to develop and run a
concrete batch plant in the Treasure Coast area. A key element of the plan
was acquiring a parcel of land with railway access which would allow him
to keep costs down by importing raw material in bulk via freight train.
With this is mind, Mr. Maib scouted the subject land, an 8.5+ acre parcel
located near the city limits of the City of Sebastian in Indian River County.
The parcel was zoned light industrial (“IL”) under the County’s zoning code
which, at that time, provided that concrete batch plans were an allowed
use in IL zoned districts. The lands surrounding the parcel, however, were
primarily zoned for residential and limited commercial use. An aerial view
of the parcel showed that the surrounding land was undeveloped.
In 2004, Mr. Maib entered into a contract to purchase the property for
$575,000 with a 120 day inspection period. Mr. Maib retained an engineer
to ascertain the feasibility of developing a concrete batch plant on the
property. The engineer testified that after reviewing all relevant
documents, he had no concerns about the feasibility of the project from
either an engineering or development standpoint. The engineer drafted a
conceptual, pre-application site plan for County review. Mr. Maib and his
engineer attended a meeting with County planning staff where the staff
represented that a concrete batch plant was a permitted use as a matter
of right under the zoning code and provided feedback about the project.
Mr. Maib and his engineer left the meeting believing that the development
of the plant was feasible and that none of the feedback from the planning
staff would prohibit the development. Based on the foregoing, Mr. Maib
purchased the property.
In 2005, Mr. Maib filed a site plan application for review by the County’s
Technical Review Committee (“TRC”). The TRC responded to the
application in writing by listing out several “discrepancies” which needed
to be addressed before moving forward with the application. The TRC’s
discrepancy letter also noted that a concrete batch plant was a permissible
use of the property as a matter of right, the discrepancies were not
significant, and that no second TRC meeting would be required for
reconsideration of the application. Mr. Maib then underwent efforts to
remedy those discrepancies and also began improving the property.
Specifically, Mr. Maib obtained permits to install storm water systems,
installed wells, cleared and graded the property, planted a landscape
buffer, and began to install a rail spur. He also formed Ocean Concrete,
Inc., began developing a detailed business plan, and sought out financing
for the project. During this process, Mr. Maib realized that it was going to
take an additional two years to meet all of the technical requirements for
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approval of the site plan. Therefore, he let the site plan application expire
in November of 2006 with the intent of filing a new site plan application
and requesting a one year extension. Mr. Maib filed a new site plan
application on December 6, 2006.
Thereafter, the TRC issued another discrepancy letter identifying the
discrepancies in the site plan application which Mr. Maib was required to
address, in writing, before proceeding. This discrepancy letter again noted
that the “site is zoned IL, Light Industrial. Concrete batch plants are a use
permitted by right in the IL district” and that “the discrepancies do not
appear to be significant, therefore, no second TRC meeting will be required
for reconsideration of the proposal.” Mr. Maib continued to address the
discrepancies but, as he did, the project began garnering public and
governmental opposition.
The nearby City of Sebastian issued a resolution imploring the County
to deny approval for the proposed Ocean Concrete project. Around this
same time, a group of citizens formed an organization called “Stop Ocean
Concrete.” The leader of this organization appeared at a Board of County
Commissioners (“BCC”) meeting and asked the BCC to amend the zoning
code to eliminate heavy process uses from the IL zoning district. The BCC
then directed the planning staff to analyze the issue and shortly thereafter,
the County’s planning director issued a memo recommending that the
BCC change the zoning code to “restrict industrial uses such as concrete
plants and paper mills that process large quantities of materials, produce
dust and noise, and have outdoor activities to the IG (General Industrial)
district.” At its next meeting, the BCC voted to have the staff change the
zoning code as recommended.
Following the BCC’s vote, County staff began the process of amending
the zoning code. Inevitably, the impact of any changes on Mr. Maib’s
existing site plan application was a point of heavy discussion. A May 8,
2007 memo written by a senior planner noted:
The Ocean Concrete project is opposed by many residents of
Sebastian and the north county, as evidenced by petitions and
letters of objection submitted to staff. That project’s
application will expire on December 6, 2007 if it is not
approved by that date. Because that site plan application is
active, changes to the IL district regulations will not affect that
application unless special effective date provisions are added
to the amendment ordinance. At this time, the County
Attorney has not issued an opinion as to whether or not the
county can legally apply the proposed amendment to an
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existing application. The proposed changes will certainly
affect applications to develop IL zoned sites submitted after
the changes are adopted.
During this time and unbeknownst to Mr. Maib, the county attorney
and the planning director were engaged in a discussion about whether the
proposed change to the zoning code would apply to the Ocean Concrete
project. After the attorney opined that the change would apply to the
project, the Planning and Zoning Commission voted to recommend
approval of the changes to the zoning code. Thereafter, the BCC
unanimously voted to adopt the amendments to the zoning code “void of
any exception or merit for grandfathering of vested rights.”
Appellants filed a declaratory action in the circuit court seeking
clarification of their rights to proceed under the site plan application. They
also filed a request for a one year extension with the County on their
pending application. The County denied the extension and based on the
expiration of the application, denied Appellants’ application. Appellants
administratively appealed and amended their declaratory action complaint
to add a cause of action for violation of the Harris Act. Appellants’
administrative appeals were denied, causing Appellants to file a petition
for writ of certiorari with the circuit court sitting in an appellate capacity.
The circuit court determined that the County must either grant the
extension, state a valid reason for denial, or deny the site plan on its
merits. The BCC voted to grant Appellants a one year extension under the
“old code” provisions.
Following the reinstatement of Appellants’ application, the County staff
approved the site plan application under the old zoning code conditioned
on a finding by the Community Planning Director of a vested right of
development under the old code. The Community Planning Director,
found that there was no vested right and denied Appellants’ site plan
application under the new code. Mr. Maib appealed the denial to the
Planning and Zoning Commission but, while his appeal was pending, lost
the property to foreclosure. The Planning and Zoning Commission then
dismissed Appellants’ appeal as moot. At this point, Appellants added a
cause of action for a regulatory taking and violation of their due process
rights to the declaratory action.
The matter proceeded to a simultaneous bench/jury trial with the court
considering Appellants’ regulatory taking, Harris Act, and substantive due
process claims and a jury considering the procedural due process claim.
At trial, Appellants presented expert testimony from a real property
appraiser and construction business valuators. Appellant’s experts valued
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the property with a completed concrete batch plant at $10 million. In turn,
the County presented its own experts who opined that market value of the
property before the zoning amendment was $1 million and that the change
in the zoning amendment only reduced the property’s value by 3.5%. The
County also presented evidence to support its contention that operating a
concrete batch plant on the property was not economically feasible.
At the conclusion of the trial, the jury found that the County did not
violate Appellants’ procedural due process rights. The trial court found
that Appellants did not prove that the County effectuated a regulatory
taking, violated the Harris Act, or violated Appellants’ substantive due
process rights. Holding that the court erred in finding no violation of the
Harris Act, we reverse and remand.
Analysis
The Harris Act was enacted by the Florida Legislature in 1995 as a
mechanism to protect and compensate any landowner whose property is
affected by government action not rising to the level of a taking.
§°70.001(1), Fla. Stat. (1995). To prevail under the Harris Act, the property
owner must prove that “a specific action of a governmental entity has
inordinately burdened an existing use of real property or a vested right to
a specific use of real property.” § 70.001(2), Fla. Stat. (2008). Accordingly,
when a claim under the Harris Act is presented for judicial review, the
court must first consider whether a claimed “existing use of the real
property” or a claimed “vested right to a specific use of the real property”
actually existed. If it finds either, it must next determine whether the
government action inordinately burdened the property. § 70.001(6)(a), Fla.
Stat. If the court also finds that that there was an inordinate burden, then
it must impanel a jury to determine the total amount of compensation to
the property owner for the loss caused by the inordinate burden to the
property. § 70.001(6)(b), Fla. Stat. The party seeking relief under the
Harris Act bears the burden of proof. See Town of Ponce Inlet v. Pacetta,
LLC, 120 So. 3d 27, 29 (Fla. 5th DCA 2013).
In this case, the court found Appellants did not establish that the use
of the property as a concrete batch plant was an existing use.
Alternatively, it found that the County’s actions did not inordinately
burden the property. We review these determinations de novo. City of
Jacksonville v. Coffield, 18 So. 3d 589, 594 (Fla. 1st DCA 2009).
a) Existing Use
The term “existing use” is defined by the Harris Act as:
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[1] an actual, present use or activity on the real property,
including periods of inactivity which are normally
associated with, or are incidental to, the nature or type of
use or activity or
[2] such reasonably foreseeable, nonspeculative land uses
which are suitable for the subject real property and
compatible with adjacent land uses and which have
created an existing fair market value in the property
greater than the fair market value of the actual, present
use or activity on the real property.
§ 70.001(3)(b), Fla. Stat. (2008) (spacing and numbers added).
Because a concrete batch plant did not exist on the property, the court
applied the second part of the “existing use” definition. Neither of the
parties contend that this was improper. With this parameter in mind, the
court then found that because a concrete batch plant was a permitted use
as a matter of right under the County’s old zoning code, it was a reasonably
foreseeable use of Appellants’ property. However, the court went on to find
that a concrete batch plant was not a non-speculative use. This finding
was rooted in economics, and more particularly, the court’s determination
that the project was not financially viable. The court also concluded that
the use was not compatible with adjacent lands. For the reasons set forth
below, we hold that the court’s non-speculative use and compatibility
analysis was legally incorrect.
i) Reasonably Foreseeable, Nonspeculative Use
Applying a plain language reading analysis to the statute leads us to
conclude that the term relates to whether the actual land use is
nonspeculative without concern to economics. The phrase
“nonspeculative” appears in the definition of “existing use” as follows:
“reasonably foreseeable, nonspeculative land uses . . .”
§ 70.001(3)(b), Fla. Stat. (2008).
The noun in the above phrase is “land uses.” The terms “reasonably
foreseeable” and “nonspeculative” are adjectives modifying the noun “land
use.” Thus, based on the grammatical structure, the key inquiry for the
court is whether a concrete batch plant, as a land use, was foreseeable
and nonspeculative at the time the County amended its zoning code.
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Notably, at least one appellate judge has arrived at the same conclusion.
In his dissent in City of Jacksonville v. Smith, 159 So. 3d 888, 913 (Fla. 1st
DCA 2015), 2 Judge Makar wrote:
The point of subsection 2 [within the existing use definition]
is not to preclude “speculation” in the financial sense; if that
were the case, no privately-held real property would qualify
because land ownership always involves an element of
financial risk. Instead [the definition] is designed to limit
possible future land uses to only those that are within reason,
i.e., “reasonably foreseeable” and “nonspeculative.” Stated
differently, future uses that are merely theoretical or
hypothetical do not qualify; they are speculative in the sense
of these two terms.
The plain language of the Harris Act is clear: the term “nonspeculative”
refers to the land use and, therefore, a “nonspeculative use” analysis really
only comes into play when a party is arguing that it may have been able
to use its land in the future for a purpose not expressly provided for by the
zoning code at the time of the government action. Conversely, when the
use was expressly provided for, as it was here, there is no need for a
speculation analysis. Accordingly, based on the plain language of the Act,
the court erred in concluding that a concrete batch plant was not a
nonspeculative land use when making its “existing use” determination. 3
2 Our citation to the dissent in Smith is in no way meant to distinguish the
majority holding as it not applicable to the instant case. In Smith, the majority
held that a landowner whose property abutted a vacant lot rezoned to allow a fire
station was not entitled to relief under the Harris Act because the landowner’s
property “was not itself subject to any governmental regulatory action.” 159 So.
3d at 889. Based on this holding, the court did proceed to engage in an existing
use or inordinate burden analysis under the Harris Act.
3 See David L. Powell, Robert M. Rhodes & Dan R. Stengle, A Measured Step to
Protect Private Property Rights, 23 Fla. St. U. L. Rev. 255 (1995). Discussing the
definition of the term “existing use” at play in the Harris Act the authors (who
happened to work on the legislation), stated:
As a legal concept for an existing land use, the alternative definition
is well-grounded in the law of eminent domain. In a condemnation
proceeding, valuation of the property is based upon the highest and
best use. The highest and best use is not limited to those uses
authorized under the existing land development regulations. If on
the date of taking there is a reasonable probability of a land use
change, that probability may be taken into account in determining
valuation. An important factor in determining the highest and best
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ii) Compatible with Adjacent Land Uses
In addition to finding that Appellants did not meet the “nonspeculative
land use” prong of the “existing use” definition under the Harris Act, the
court also found that Appellants failed to establish that a concrete batch
plant was compatible with adjacent land uses at the time the code was
amended. The court’s conclusion was based on the fact that the land west
of the property and half of the land south of the property was zoned for
residential use. Although much of that land remained vacant, the court
concluded that based on east to west wind patterns, the residential areas
would experience noise and dust pollution from the property if it was
developed into a concrete batch plant. The court also gave weight to the
County’s determinations during the code amendment process that “heavy
process uses such as concrete plants which involve outdoor storage and
handling of large quantities of material that result in noise and dust
impacts are more compatible with and appropriately located in IG [General
Industrial] districts, removed from concentrations of residential areas and
separated from commercial uses and light ‘clean’ industry.”
It is axiomatic that if an area is zoned for a particular use, that use is
deemed compatible with surrounding uses. See Nostimo, Inc. v. City of
Clearwater, 594 So. 2d 779, 781 (Fla. 2d DCA 1992) (holding that use of
property was compatible with surrounding or adjacent uses because it was
a permitted use under the zoning code). Before the County amended the
code, concrete batch plants were a permitted use on Appellants’ property.
Therefore, the use of the property as a concrete batch plant was per se
compatible with the surrounding land uses. With this in mind, none of
the County’s evidence established that anything about the adjacent land
uses changed between the time the old IL zoning description was created
use of property is whether the property is suitable for that proposed
future use. However, such a future use may not be wholly
speculative. . . .
The proof necessary to establish that a future land use is reasonably
foreseeable could come from such authorities as an adopted local
comprehensive plan, local land development regulations, or a
credible appraisal which relies at least in part on nonexisting but
reasonably expected future uses.
Id. at 267−68 (footnotes omitted).
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and the time it was amended. Accordingly, the court erred when it
concluded that a concrete batch plant was not an “existing use” for the
property because a concrete batch plant was not compatible with adjacent
land uses at the time the code was amended.
b) Inordinate Burden
The Harris Act provides that the terms “inordinate burden” or
“inordinately burdened” mean:
[T]hat an action of one or more governmental entities has
directly restricted or limited the use of real property such that
the property owner is permanently unable to attain the
reasonable, investment-backed expectation for the existing
use of the real property or a vested right to a specific use of
the real property with respect to the real property as a whole,
or that the property owner is left with existing or vested uses
that are unreasonable such that the property owner bears
permanently a disproportionate share of a burden imposed for
the good of the public, which in fairness should be borne by
the public at large. . . .
§ 70.001(3)(e), Fla. Stat. (2008).
Here, although the court denied Appellants relief under the Harris Act
based on its existing use analysis, it also cursorily addressed the
inordinate burden prong of a claim under the Act, ruling that Appellants
could not demonstrate a “reasonable, investment-backed expectation.”
The court’s ruling on this point referenced its takings ruling, wherein the
court found that Appellants did not establish that they had a reasonable,
investment-backed expectation in developing a concrete batch plant
because the “property contained site-specific conditions that entailed
significant practical and financial impediments to its development as a
concrete batch plant.”
There are only two reported cases interpreting the phrase “reasonable,
investment-backed expectations” in the specific context of the Harris Act.
This Court’s opinion in Palm Beach Polo, Inc. v. Village of Wellington, 918
So. 2d 988 (Fla. 4th DCA 2006), provides the most guidance. In that case,
a developer made a Harris Act claim with respect to a wetland nature
preserve which a local government required the developer to “restore,
enhance, and preserve” as part of a Planned Unit Development. Id. at 990.
On appeal, we held that the developer’s claim under the Act was “frivolous”
because, based on the physical characteristics and regulatory history of
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the preserve, there could be no reasonable expectation that the preserve
would be used for anything other than conservation. Id. at 995. Citing
our holding in Palm Beach Polo, Inc., the First District later found that a
landowner did not have a “reasonable, investment-backed expectation” of
developing a parcel of land into a multi-family development after he
learned that the only road leading to and from the property was being
permanently closed. Coffield, 18 So. 3d at 595, 599. These cases establish
that whether a landowners expectations for development are “reasonable”
and “investment-backed” depends on the physical and regulatory aspects
of the property.
Despite the foregoing authority, the court relied on case law from the
takings context when analyzing whether Appellants had a “reasonable,
investment-backed expectation” of developing the property as a concrete
batch plant. The court did so because the term “investment-backed
expectations” is found in the test articulated by the United States Supreme
Court for regulatory takings. Penn Cent. Transp. Co. v. City of N.Y., 438
U.S. 104, 123 (1978). Although, based on the foregoing, it would seem
reasonable to rely on takings cases, the Harris Act itself proclaims that it
is “separate and distinct . . . from the law of takings” and, to that end, also
provides that “[t]his section may not necessarily be construed under the
case law regarding takings if the governmental action does not rise to the
level of a taking.” §§ 70.001(1); 70.001(9), Fla. Stat. (2008). Thus, we hold
that the court’s reliance on federal takings cases as opposed to Florida law
interpreting the Harris Act was misplaced.
Applying the applicable law, nothing about the physical or regulatory
aspects of the property at the time of the government regulation made
Appellants’ expectations for the development of a concrete batch plant
unreasonable. A concrete batch plant was a permitted use under the
zoning code as a matter of right and throughout the site-plan approval
process, Mr. Maib was led to believe that approval was inevitable. Further,
Mr. Maib obtained the services of an expert engineer who told him that the
development was feasible. Finally, the property abutted a railroad and Mr.
Maib was able to install a spur to facilitate the importation and exportation
of materials. That the overall undertaking may have been expensive and
a significant task does not invalidate the fact that, based on the property
itself, Appellants’ investment-backed expectations were reasonable.
Based upon the foregoing, we reverse and remand this matter for a trial
on damages suffered by Appellants under the Harris Act.
Affirmed in part, reversed in part and remanded.
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TAYLOR AND MAY, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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