Dist Intown Prop Ltd v. DC , 198 F.3d 874 ( 1999 )

  •                   United States Court of Appeals
          Argued September 14, 1999   Decided December 17, 1999 
                               No. 98-7209
         District Intown Properties Limited Partnership, et al., 
                      District of Columbia, et al., 
              Appeal from the United States District Court 
                      for the District of Columbia 
                             (No. 96cv00569)
         Wallace A. Christensen argued the cause for appellants.  
    With him on the briefs was Stacey L. McGraw.
         Lutz Alexander Prager, Assistant Deputy Corporation 
    Counsel, argued the cause for appellees.  With him on the 
    brief were Jo Anne Robinson, Interim Corporation Counsel, 
    Charles L. Reischel, Deputy Corporation Counsel, and Melvin 
    W. Bolden, Jr., Counsel.
         John D. Echeverria, Paul W. Edmondson, Elizabeth S. 
    Merritt, and Laura S. Nelson were on the brief for amicus 
    curiae The National Trust for Historic Preservation and D.C. 
    Preservation League.
         Before:  Edwards, Chief Judge, Williams and Rogers, 
    Circuit Judges.
           Opinion for the Court filed by Chief Judge Edwards.
         Separate opinion filed by Circuit Judge Williams concur-
    ring in the judgment.
         Edwards, Chief Judge:  In 1961, District Intown Limited 
    Properties Partnership ("District Intown") purchased Cathe-
    dral Mansions South, an apartment building and landscaped 
    lawn on Connecticut Avenue across from the National Zoo.  
    District Intown subdivided this property into nine contiguous 
    lots in 1988.  In March 1989, all nine lots were declared 
    historic landmarks.  In July 1992, the Mayor of the District 
    of Columbia denied District Intown's request for construction 
    permits to build eight townhouses on eight of the nine lots, 
    finding that the construction was incompatible with the prop-
    erty's landmark status.  Alleging that the District of Colum-
    bia's denial constituted a taking, District Intown and its 
    general partners sued under 42 U.S.C. s 1983 (1994) for just 
    compensation under the Takings Clause of the Fifth Amend-
         Upon cross motions for summary judgment, the District 
    Court granted summary judgment for the District of Colum-
    bia.  See District Intown Properties Ltd. Partnership v. 
    District of Columbia, 
    23 F. Supp. 2d 30
     (D.D.C. 1998).  The 
    District Court held that the relevant parcel for the purposes 
    of determining whether a taking had occurred consisted of 
    the entire property, including the apartment building, not the 
    eight individual lots that District Intown sought to develop.  
    See id. at 35-36.  The court then analyzed the alleged taking 
    under the Supreme Court's holdings in Lucas v. South Car-
    olina Coastal Council, 
    505 U.S. 1003
     (1992), and Penn Cen-
    tral Transportation Co. v. City of New York, 
    438 U.S. 104
    (1978).  The District Court found that there was no categori-
    cal taking under Lucas, because District Intown had not been 
    deprived of all economic value in the relevant parcel.  The 
    trial court further held that District Intown could not make 
    out a claim under Penn Central, because its reasonable 
    investment-backed expectations had not been disappointed 
    and it continued to receive economic benefits from the prop-
         We hold that the District Court correctly found that the 
    relevant parcel for the takings analysis consisted of the entire 
    property held by District Intown, i.e., the property as it was 
    originally purchased in 1961 and as it was held for 27 years 
    prior to the 1988 subdivision.  All relevant objective and 
    subjective factors support this conclusion.  When the proper-
    ty is viewed as a single parcel, there is no doubt that it has 
    not been rendered valueless.  Indeed, even if each subdivided 
    parcel is considered separately, District Intown has not 
    shown a "total taking" under Lucas.  In addition, the record 
    here does not show that District Intown's investment-backed 
    expectations were disappointed.  This is not surprising, be-
    cause District Intown could not have had any reasonable 
    investment-backed expectations of development given the 
    background regulatory structure at the time of subdivision.  
    Accordingly, we hold that District Intown did not present any 
    genuine issue of material fact in support of a takings claim 
    under Penn Central or Lucas.  We therefore affirm the 
    District Court's judgment.
                              I. Background 
         In 1961, District Intown purchased in fee simple Lot 1 of 
    Subdivision Square 2106 on Connecticut Avenue, across from 
    the National Zoo.  The property was known as Cathedral 
    Mansions South and consisted of an apartment building and 
    adjacent landscaped lawns.  District Intown made no signifi-
    cant changes to the property until 1988, when it subdivided 
    Cathedral Mansions South into nine lots, designated as Lots 
    106 through 114.  The subdivisions were recorded on June 30, 
    1988.  Lot 106 contains the apartment building, and Lots 107 
    through 114 are each portions of the landscaped lawn.  The 
    record indicates that District Intown spent $2,819 to survey 
    the parcel and to record the subdivision.  The record does not 
    reflect any other expenses.
         On December 30, 1988, District Intown applied for permits 
    to build one townhouse on each of the eight landscaped lots.  
    The zoning and structural engineering divisions of the De-
    partment of Consumer and Regulatory Affairs approved the 
    permits on March 7, 1989.  However, because the property is 
    located across from the National Zoo, the permits were 
    referred to the Commission on Fine Arts.  See D.C. Code 
    Ann. s 5-410 (1994) ("Shipstead-Luce Act").  The Shipstead-
    Luce Act, in effect since the 1930s, empowers the Commission 
    on Fine Arts to communicate to the Mayor "recommenda-
    tions, including such changes, if any, as in its judgment are 
    necessary to prevent reasonably avoidable impairment of the 
    public values belonging" to various buildings and parks.  Id.  
    On March 31, 1989, the Commission on Fine Arts recom-
    mended against construction.
         Beginning in 1987, before the property was subdivided, a 
    movement developed in the Woodley Park community in 
    support of designating the property a historic landmark.  
    This culminated on March 2, 1989, when the group filed a 
    landmark designation petition.  This was five days before 
    District Intown received zoning approval for the construction.  
    The Historic Preservation Review Board ("Review Board") 
    approved the landmark designation on May 17, 1989.  Be-
    cause the landmark designation petition was pending when 
    District Intown's permits were approved for zoning, the per-
    mits were referred to the Review Board pursuant to the 
    District of Columbia's landmark laws, see D.C. Code Ann. 
    s 5-1001 et seq. (1994 & Supp. 1999), effective since 1979.  On 
    July 19, 1989, the Review Board recommended that the 
    construction permits be denied.  The permit applications 
    were dismissed without prejudice on December 20, 1991.
         On January 31, 1992, District Intown filed new permit 
    applications identical in all respects to those previously dis-
    missed.  The permits were again referred to the Review 
    Board, which recommended denial because construction on 
    the lawn would be incompatible with its historic landmark 
    status.  Pursuant to D.C. Code Ann. s 5-1007(e), District 
    Intown requested a hearing before an agent designated by 
    the Mayor.  The hearing was held on July 22 and 24, 1992.  
    The Mayor's agent agreed with the Review Board, stating 
    that "any construction destroying the lawn" would be incom-
    patible with its landmark status.  Decision and Order of 
    Mayor's Agent p 61 n.1, reprinted in Joint Appendix ("J.A.") 
    368.  In addition, the agent purported to hold that the denial 
    of the construction permits did not work an economic hard-
    ship or constitute a taking, but the District of Columbia Court 
    of Appeals has since declared that the agent's holding was 
    outside his jurisdiction.  See District Intown Properties, Ltd. 
    v. Department of Consumer and Regulatory Affairs, 
    680 A.2d 1373
    , 1379 (D.C. 1996) (decision of the Mayor's agent regard-
    ing alleged economic hardship would have no preclusive effect 
    in any future proceeding in which District Intown might claim 
    an uncompensated taking).
         Thereafter, on March 22, 1996, District Intown filed this 
    s 1983 action.  On cross motions for summary judgment, the 
    District Court entered summary judgment for the District of 
    Columbia on September 25, 1998.  See District Intown Prop-
    erties Ltd. Partnership, 23 F. Supp. 2d at 39.  The court 
    found that the property (i.e., the "relevant parcel") for the 
    purposes of assessing whether a taking had occurred consist-
    ed of the original Lot 1 prior to its subdivision into nine lots.  
    See id. at 35-36.  Because District Intown continued to 
    receive significant economic benefits from use of the relevant 
    parcel, the court found that appellants failed to demonstrate 
    that their property had been rendered "valueless," and their 
    claim to a taking under Lucas failed.  See id. at 36-37.  The 
    court then turned to the ad hoc analysis elucidated by Penn 
    Central and found that none of the ad hoc factors support 
    District Intown's takings claim.  See id. at 37-39.  This 
    appeal followed.
                              II.  Analysis
    A.   Standard of Review
         This court reviews a grant of summary judgment de novo.  
    See Aka v. Washington Hosp. Ctr., 
    156 F.3d 1284
    , 1288 (D.C. 
    Cir. 1998) (en banc).  A party is entitled to summary judg-
    ment if the record reveals that there is no genuine issue as to 
    any material fact and that the moving party is entitled to 
    judgment as a matter of law.  See Fed R. Civ. P. 56(c).  In 
    deciding whether there is a genuine issue of material fact, the 
    court must assume the truth of all statements proffered by 
    the non-movant except for conclusory allegations lacking any 
    factual basis in the record.  See Greene v. Dalton, 
    164 F.3d 671
    , 675 (D.C. Cir. 1999).  Summary judgment may be grant-
    ed even if the movant has proffered no evidence, so long as 
    the non-movant "fails to make a showing sufficient to estab-
    lish the existence of an element essential to that party's case, 
    and on which that party will bear the burden of proof at 
    trial."  Celotex Corp. v. Catrett, 
    477 U.S. 317
    , 322 (1986).  As 
    the "party challenging governmental action as an unconstitu-
    tional taking," District Intown bears a "substantial burden."  
    Eastern Enterprises v. Apfel, 
    524 U.S. 498
    , 523 (1998).
    B.   The Takings Analysis
         The Takings Clause of the Fifth Amendment prohibits the 
    government from taking "private property ... for public use, 
    without just compensation."  U.S. Const. amend. V.  In a 
    regulatory takings case, the principal focus of inquiry is 
    whether a regulation "reaches a certain magnitude" in depriv-
    ing an owner of the use of property.  Pennsylvania Coal Co. 
    v. Mahon, 
    260 U.S. 393
    , 413 (1922);  see also id. at 415 (asking 
    whether the regulation "goes too far").  The Supreme Court 
    has indicated that most regulatory takings cases should be 
    considered on an ad hoc basis, with three primary factors 
    weighing in the balance:  the regulation's economic impact on 
    the claimant, the regulation's interference with the claimant's 
    reasonable investment-backed expectations, and the character 
    of the government action.  See Penn Central Transp. Co., 438 
    U.S. at 124.
         The meaning of the three factors identified in Penn Central 
    has been amplified by the Court, both in Penn Central and in 
    later cases.  The regulation's economic effect upon the claim-
    ant may be measured in several different ways.  See Hodel v. 
    481 U.S. 704
    , 714 (1987) (looking to the market value 
    of a property);  Keystone Bituminous Coal Ass'n v. DeBened-
    480 U.S. 470
    , 495-96 (1987) (looking to whether the 
    regulation makes property owner's coal operation "commer-
    cially impracticable");  Andrus v. Allard, 
    444 U.S. 51
    , 66 
    (1979) (looking to the possibility of other economic use be-
    sides sale, which was prohibited by the challenged regula-
    tion);  Penn Central Transp. Co., 438 U.S. at 136 (focusing on 
    the ability to earn a reasonable rate of return).  A reasonable 
    investment-backed expectation "must be more than a 'unilat-
    eral expectation or an abstract need.' "  Ruckelshaus v. Mon-
    santo Co., 
    467 U.S. 986
    , 1005-06 (1984) (quoting Webb's 
    Fabulous Pharmacies, Inc. v. Beckwith, 
    449 U.S. 155
    , 161 
    (1980)).  Claimants cannot establish a takings claim "simply 
    by showing that they have been denied the ability to exploit a 
    property interest that they heretofore had believed was avail-
    able for development."  Penn Central Transp. Co., 438 U.S. 
    at 130.  And the character of the governmental action de-
    pends both on whether the government has legitimized a 
    physical occupation of the property, see Loretto v. Tele-
    prompter Manhattan CATV Corp., 
    458 U.S. 419
    , 434-35 
    (1982), and whether the regulation has a legitimate public 
    purpose, see Keystone Bituminous Coal Ass'n, 480 U.S. at 
    485.  Finally, under all three of these factors, the effect of the 
    regulation must be measured on the "parcel as a whole."  See 
    Penn Central Transp. Co., 438 U.S. at 130-31.
         The Supreme Court has indicated that it will find a "cate-
    gorical" or per se taking in two circumstances.  The first 
    circumstance includes regulations that result in "permanent 
    physical occupation of property."  Loretto, 458 U.S. at 434-35.  
    This circumstance is not at issue in this case.  The second 
    circumstance includes regulations pursuant to which the gov-
    ernment denies all economically beneficial or productive use 
    of property.  See Lucas, 505 U.S. at 1015.  This so-called 
    "total taking" claim is at the heart of District Intown's 
    complaint here.  Unfortunately, the facial simplicity of the 
    "total taking" standard belies the difficulty in its application.  
    As the Court acknowledged in Lucas, its "rhetorical force ... 
    is greater than its precision, since the rule does not make 
    clear the 'property interest' against which the loss of value is 
    to be measured."  505 U.S. at 1016 n.7.
         Under both Lucas and Penn Central, then, we must first 
    define what constitutes the relevant parcel before we can 
    evaluate the regulation's effect on that parcel.  In the instant 
    case the question is:  Does the relevant parcel consist of the 
    property as a whole or do the eight lots for which construc-
    tion permits were denied constitute the relevant parcels?  
    This has been referred to as the "denominator problem."  
    E.g., Loveladies Harbor, Inc. v. United States, 
    28 F.3d 1171
    1179 (Fed. Cir. 1994).  State law may offer some guidance on 
    how to define the relevant parcel, but, as the Court has noted, 
    state law is not always determinative.  Compare Lucas, 505 
    U.S. at 1017 n.7 (suggesting that one may look to the influ-
    ence of the State's property law--whether and to what extent 
    the State has recognized and extended legal recognition to 
    the particular interest alleged to have been deprived of all 
    economic value--on the claimant's reasonable expectations), 
    with Keystone Bituminous Coal Ass'n, 480 U.S. at 500 (refus-
    ing to treat the support estate as a separate parcel of 
    property simply because Pennsylvania law recognizes it as 
    such and noting that "our takings jurisprudence forecloses 
    reliance on such legalistic distinctions within a bundle of 
    property rights").
    C.   The Relevant Parcel
         The definition of the relevant parcel profoundly influences 
    the outcome of a takings analysis.  Above all, the parcel 
    should be functionally coherent.  In other words, more should 
    unite the property than common ownership by the claimant.  
    Thus, a court must also consider how both the property-
    owner and the government treat (and have treated) the 
         The District Court used several factors to determine the 
    relevant parcel:  the degree of contiguity, the dates of acquisi-
    tion, the extent to which the parcel has been treated as a 
    single unit, and the extent to which the restricted lots benefit 
    the unregulated lot.  See District Intown, 23 F. Supp. 2d at 
    35 (citing Ciampitti v. United States, 
    22 Cl. Ct. 310
    , 318 
    (1991)).  An analysis focused on these factors is eminently 
    sound and it mirrors the approach taken by other courts in 
    regulatory takings cases.  See Forest Properties, Inc. v. 
    United States, 
    177 F.3d 1360
    , 1365 (Fed. Cir.) (stressing the 
    owner's treatment of property as a unit from the time of 
    purchase), cert. denied sub nom. RCK Properties v. United 
    120 S. Ct. 373
     (1999);  K & K Constr. Co. v. Depart-
    ment of Natural Resources, 
    575 N.W.2d 531
    , 537 (Mich.) 
    (stressing contiguity, unity of ownership, and a common 
    development plan), cert. denied, 
    119 S. Ct. 60
         Applying these factors, the District Court correctly deter-
    mined that all nine lots should be treated as one parcel for 
    the purpose of the court's takings analysis.  The lots are 
    spatially and functionally contiguous.  District Intown pur-
    chased the property as a whole in 1961 and treated it as a 
    single indivisible property for more than 25 years.  District 
    Intown presented no evidence that, even after subdivision, it 
    treated the lawn lots separately from Lot 106, the lot that 
    contains the apartment building, for the purposes of account-
    ing or management.  The intentional act of subdivision is the 
    only evidence produced by District Intown that it has treated 
    the lots as distinct units.  In fact, before the Mayor's agent, 
    District Intown did not come forward with evidence showing 
    that it had, for accounting purposes, treated the lawn mainte-
    nance fees separately from expenses associated with main-
    taining the apartment building.  See Decision & Order of 
    Mayor's Agent p 40, reprinted in J.A. 364. While there is a 
    dispute as to whether the adjacent landscaped lawn increases 
    the apartment building's value, this is immaterial.  Even if 
    Lot 106 were deemed to have the same value with or without 
    Lots 107 through 114, the application of the other three 
    factors strongly suggests that Lots 106 through 114 are 
    functionally part of the same property.
         Appellants argue that the District Court was wrong to 
    treat all the lots as a single parcel because it contradicts 
    Lucas and two Federal Circuit cases.  This argument falls 
    flat.  District Intown first argues that the Lucas Court 
    termed "extreme" and "unsupportable" a similar decision by 
    the state court in Penn Central to treat multiple holdings as a 
    single parcel for takings analysis.  See Brief for Appellants at 
    15-16.  This dictum, see Lucas, 505 U.S. at 1017 n.7, referred, 
    however, only to the state court's decision to treat all of Penn 
    Central's holdings in the vicinity of Grand Central Station as 
    part of the denominator for the purposes of deciding whether 
    plaintiffs could receive a reasonable return on their invest-
    ment in Grand Central.  See Penn Central Transp. Co. v. 
    New York, 
    366 N.E.2d 1271
    , 1278 (N.Y. 1977).  The Penn 
    Central Court had no need to address this holding.  The 
    Lucas dictum casts aspersions on the state court's elevation 
    of one factor, unity of ownership, over other factors in 
    determining the relevant parcel.  The District Court engaged 
    in no such "extreme" conduct here;  it did not look to all of 
    District Intown's holdings in the vicinity of Cathedral Man-
    sions South to evaluate the economic effect of the regulation 
    at issue here;  it looked to contiguous property that was 
    purchased and treated as a single unit by appellants.
         Similarly, the two Federal Circuit cases cited by District 
    Intown do not undermine the District Court's definition of the 
    relevant parcel.  See Brief for Appellants at 16 (citing Lovela-
    dies Harbor, 28 F.3d at 1171 and Florida Rock Indus., Inc. v. 
    United States, 
    791 F.2d 893
     (Fed. Cir. 1986)).  Neither of 
    these cases support appellants' position and, in fact, Lovela-
    dies Harbor supports the District Court's decision.  In Flori-
    da Rock Industries, the court reviewed the Army Corps of 
    Engineers' uncompensated rejection of the plaintiff's applica-
    tion to mine limestone on 98 acres of the plaintiff's wetland 
    property.  See Florida Rock Indus., 791 F.2d at 896.  The 
    Federal Circuit affirmed the trial court's decision to consider 
    the 98 acres as the relevant parcel separate from the adjacent 
    1,462 acres of wetland.  See id. at 904.  The Federal Circuit's 
    justification for this decision, however, was that all the evi-
    dence and the findings indicated that the Army Corps of 
    Engineers would have rejected mining on all of the property, 
    so there was no point to including all 1,560 acres in the 
    relevant parcel.  See id. at 904-05.  Thus, Florida Rock 
    Industries is not analogous to the instant case;  there is no 
    indication that the District of Columbia will prevent District 
    Intown from continuing to use its property to obtain income 
    from its apartment building.
         Loveladies Harbor lends support to the District Court's 
    decision to treat Lots 106-114 as one parcel.  The plaintiff in 
    Loveladies Harbor sought to develop a total of 12.5 acres of 
    land, consisting of 11.5 acres of wetlands and one acre of filled 
    upland.  See Loveladies Harbor, 28 F.3d at 1180.  The Army 
    Corps of Engineers refused to grant the permit required to 
    fill the wetlands acreage.  See id. at 1174.  In reviewing 
    whether this denial constituted a taking the Federal Circuit 
    found that the trial court correctly concluded that the rele-
    vant parcel was the entire 12.5 acres, not just the 11.5 acres 
    to which the permit denial applied.  See id. at 1181.  Thus, 
    Loveladies Harbor argues against treating the property bur-
    dened by the regulation separately from contiguous property.
         Moreover, the Loveladies Harbor Court emphasized that a 
    "flexible approach, designed to account for factual nuances," 
    guides its analysis of the denominator problem.  Id.  These 
    factual nuances include "whether there remained substantial 
    economically viable uses for plaintiff's property after the 
    regulatory imposition," id. (citing Deltona Corp. v. United 
    657 F.2d 1184
     (Ct. Cl. 1981)), and "the timing of 
    transfers in light of the developing regulatory environment."  
    Id.  Both of these factors support our conclusion in the 
    instant case that Cathedral Mansions South as a whole consti-
    tutes the relevant parcel.
         Finally, Penn Central is instructive where, as here, appel-
    lants own a single piece of property that is divisible into 
    several legally recognized entities.  Indeed, the Court was 
    rather blunt in saying that
         "[t]aking" jurisprudence does not divide a single parcel 
         into discrete segments and attempt to determine whether 
         rights in a particular segment have been entirely abro-
    Penn Central Transp. Co., 438 U.S. at 130.  The Court also 
    made it clear that a party may not "establish a 'taking' simply 
    by showing that they have been denied the ability to exploit a 
    property interest they heretofore had believed was available 
    for development."  Id.  The Court found this suggestion to be 
    "simply untenable."  Id.
         On the basis of the foregoing authority, it seems clear here 
    that we must analyze District Intown's property not as sepa-
    rate, potentially divisible and transferable parcels, but as one 
    contiguous parcel.  Appellants note that the District of Co-
    lumbia has taxed Lots 107 through 114 at a higher rate since 
    subdivision, reflecting the District of Columbia's assessment 
    that these lots are vacant developable land.  They contend 
    that it is inconsistent for the District of Columbia to speak 
    from both sides of its mouth in this regard, claiming for tax 
    purposes that the lots are developable, but refusing to permit 
    development on the lots.  We simply note that appellants 
    retain the right to recombine the parcels and treat them as 
    one property for the purposes of taxation, so no further 
    disadvantage will befall them on this score.
         We are perplexed by our concurring colleague's criticism of 
    our approach to evaluating a takings claim.  As the concur-
    ring opinion correctly notes, at bottom, the approach that we 
    follow and the result that we reach are in accord with 
    Supreme Court case law.  Unless and until the Court in-
    structs otherwise, we are obliged to judge within the bounds 
    of established precedent.
    D.   Analysis Under Lucas
         Given that Lots 106 through 114 should be treated as a 
    single parcel, the District Court's denial of summary judg-
    ment on District Intown's Lucas claim is unremarkable.  To 
    come within Lucas, a claimant must show that its property is 
    rendered "valueless" by a regulation.  Lucas, 505 U.S. at 
    1009.  District Intown presented no evidence to show that the 
    regulation deprived the property as a whole of all economical-
    ly beneficial use.
         Even were we to view Lot 106 as distinct from Lots 107 
    through 114, it seems plain that the District Court should 
    have granted appellees' motion for summary judgment.  
    Drawing all inferences in favor of District Intown, the record 
    does not support the conclusion that Lots 107 through 114 are 
    rendered "valueless" by the regulation at issue.  The record 
    contains a finding by the Mayor's agent that any construction 
    that destroyed the lawn would be incompatible with the 
    lawn's status as a historic landmark.  See Decision & Order 
    of Mayor's Agent p 61 n.1, reprinted in J.A. 368.  District 
    Intown argues from this that its case fell on all fours within 
    Lucas.  District Intown seeks to extend Lucas beyond its 
    reach.  The Lucas Court consciously recognized that it was 
    drawing an arbitrary line between total destruction of eco-
    nomic value and something marginally less than total destruc-
    tion.  See 505 U.S. at 1019 n.8 (pointing out that while the 
    line establishing a categorical deprivation as requiring a 
    complete diminution in value is arbitrary as it relates to 
    someone who only suffers a 95% deprivation in value, the 
    person whose deprivation is "one step short of complete" may 
    still seek compensation under the Penn Central balancing 
    test).  District Intown propounded no evidence that the 
    lawns' economic value was totally destroyed as is required by 
    Lucas, nor did District Intown offer evidence of the plots' fair 
    market value after its construction permits were denied.  Cf. 
    Florida Rock Indus., 791 F.2d at 905 (reversing the trial 
    court's finding that denial of permit constituted an uncompen-
    sated taking because the court failed to consider the proper-
    ty's fair market value after regulation).
         The concurring opinion misconstrues the opinion for the 
    court when it suggests that, pursuant to our analysis, no 
    compensable taking could ever be found.  As noted in the 
    foregoing discussion, we simply intend to highlight the limited 
    nature of the Lucas inquiry, and note that there would be no 
    "categorical" taking even were we to view the parcels as 
    separate under Lucas.  We do not pass on how the parcels 
    would fare separately under Penn Central's ad hoc analysis.
    E.   Analysis under Penn Central
         There are three main factors to be considered in Penn 
    Central's ad hoc inquiry:  the character of the government 
    action, the regulation's economic effect on the claimant, and 
    the effect on investment-backed expectations.  District In-
    town does not appear to argue that the character of the 
    governmental action counsels finding a taking;  this is not a 
    permanent invasion, but rather a general regulation with a 
    legitimate public purpose.  As to the economic effects, Dis-
    trict Intown offered no evidence that this regulation rendered 
    Lots 106-114 unprofitable to maintain;  there is nothing in the 
    record to suggest that the apartment building does not bring 
    in a sufficient return for District Intown, and a claimant must 
    put forth striking evidence of economic effects to prevail even 
    under the ad hoc inquiry.  See Penn Central Transp. Co., 438 
    U.S. at 131 (reviewing the Court's decisions upholding regula-
    tions despite diminution in a property's value of more than 
         Finally, District Intown did not present sufficient evidence 
    that it had a reasonable investment-backed expectation to 
    develop the lawns into apartment buildings.  Here, as in 
    Penn Central, the regulation does not interfere with District 
    Intown's "primary expectation" concerning the use of the 
    parcel, because it "not only permits but contemplates that 
    appellants may continue to use the property precisely as it 
    has been used" for the past 28 years.  Penn Central Transp. 
    Co., 438 U.S. at 136.
         District Intown suggested at oral argument that it has 
    satisfied the requirement of demonstrating reasonable invest-
    ment-backed expectations because it purchased property that, 
    at the time of purchase, was subdividable.  This is not 
    sufficient to establish the existence of reasonable investment-
    backed expectations.  In this case, where the development 
    District Intown proposes departs from the property's tradi-
    tional use, and the moment of purchase is so attenuated from 
    the moment of subdivision, the claimant surely must point to 
    some action beyond mere purchase to establish the reason-
    ableness of its expectations.
         Appellants also argue that their expectations of the proper-
    ty's use between the moment of purchase and the moment of 
    subdivision could have reasonably changed.  This may be, but 
    when appellants subdivided they surely knew that the legal 
    regime had changed since they first bought their property.  
    Moreover, they knew that any subdivided parcel would be 
    subject to that regime.  Lucas teaches that a buyer's reason-
    able expectations must be put in the context of the underlying 
    regulatory regime.  See 505 U.S. at 1030 (stating that the 
    Takings Clause does not require compensation when the 
    restriction is proscribed by background state law rules or 
    understandings).  District Intown purchased and subdivided 
    its property subject to an existing regulatory regime that 
    establishes that District Intown could have had no reasonable 
    expectations of development at the time it made its invest-
         At the time of purchase, District Intown could have reason-
    ably expected the Shipstead-Luce Act to affect its rights of 
    development.  For approximately 60 years, the Shipstead-
    Luce Act has restricted development on properties that, like 
    Cathedral Mansions South, abut or border upon the National 
    Zoo.  See D.C. Code Ann. s 5-410.  Were that not sufficient, 
    after 1979, D.C.'s historic landmark laws additionally limited 
    expectations of development.  See id. s 5-1001 et seq.  Thus, 
    at the time District Intown subdivided the property, it knew, 
    or should have known, that the property was potentially 
    subject to regulation under the landmark laws.  Cf. Amicus 
    Curiae Brief at 15 (pointing out that almost the entire length 
    of Connecticut Avenue from M Street to almost a mile north 
    of District Intown's property is either landmarked or within a 
    historic district).  Businesses that operate in an industry with 
    a history of regulation have no reasonable expectation that 
    regulation will not be strengthened to achieve established 
    legislative ends.  See Concrete Pipe & Prods. v. Construction 
    Laborers Pension Trust, 
    508 U.S. 602
    , 645 (1993).  In this 
    case, District Intown was in the real estate business, with a 
    history of restriction of development for the purpose of 
    preserving historic sites.  Similarly, the Supreme Court re-
    jected a company's claim of reasonable expectations that the 
    Environmental Protection Agency would maintain trade se-
    cret confidentiality where the industry had long "been the 
    focus of great public concern and significant government 
    regulation" and the "possibility was substantial that the Fed-
    eral Government ... would find disclosure [of trade secrets] 
    to be in the public interest."  Monsanto Co., 467 U.S. at 
    1008-09.  Prior to and after subdivision, this particular prop-
    erty was the subject of increasing public activity devoted to 
    restricting development through landmark designation.  See 
    Good v. United States, 
    189 F.3d 1355
    , 1361-63 (Fed. Cir. 
    1999) (finding the claimant had no reasonable expectations 
    where he purchased the land subject to environmental regula-
    tion and watched as public concern for the environment 
    increased and the applicable regulations became more strin-
    gent before seeking approval for development).
         District Intown also argues that the District Court's finding 
    that the regulation did not have a significant economic impact 
    was erroneous.  District Intown bases this argument on the 
    assertion that they presented undisputed evidence that the 
    lawns, absent development, add nothing to the value of the 
    apartment building.  See Brief for Appellants at 24-25.  This 
    argument misunderstands the substantial burden District In-
    town faced in District Court.  District Intown had to produce 
    evidence showing that its entire property, including Lot 106, 
    no longer provided a reasonable rate of return given the D.C. 
    regulation.  Whether the lawns add value to the apartment 
    building is irrelevant to whether the property as a whole can 
    be operated at a sufficient profit even with the regulation.  In 
    short, none of the Penn Central factors support District 
    Intown's claim of a compensable deprivation of property.
                             III. Conclusion
         For the reasons stated above, we affirm the District 
    Court's grant of summary judgment in favor of the District of 
                                                          So ordered.
         Williams, Circuit Judge, concurring in the judgment:  The 
    District of Columbia's Historic Preservation Board imposed 
    historic landmark status not only on an apartment building 
    named Cathedral Mansions South but also on a substantial 
    stretch of adjacent lawn bordering the sidewalks of Connecti-
    cut Avenue.  District Intown, the owner of both, claims that 
    as applied to the lawn the landmarking effects a taking of its 
    property in violation of the Takings Clause of the Fifth 
    Amendment.  The majority's disposition is--with one impor-
    tant exception--in general accord with the current opinions of 
    the Supreme Court.  Those decisions are of course binding.  
    At the same time, however, it is not inappropriate to identify 
    ways in which the prevailing analysis elevates formal concepts 
    over economic reality and tends to strip the Clause of its 
    potential for fulfilling the framers' likely purposes.
         The economist's justification for the Takings Clause is that 
    it provides a check on government's likely tendency to waste 
    resources by treating private property as a free good.  See 
    Richard A. Posner, Economic Analysis of Law 58 (4th ed. 
    1992) ("The simplest economic explanation for the require-
    ment of just compensation is that it prevents the government 
    from overusing the taking power.").  This is just an applica-
    tion of the general principle that if a firm can externalize 
    costs (e.g., the health costs of polluting the air), it will use 
    more of the unpriced resource (in this example, air as a waste 
    sink) than it would if required to pay.  And it will tend to 
    overproduce the goods or services whose production uses the 
    superficially "free" good--i.e., it will produce them at a level 
    where the true value of the extra inputs exceeds the true 
    value of the extra output.  See generally Robert Cooter & 
    Thomas Ulen, Law and Economics 45-46 (1988).  As applied 
    to government regulation, similar oversupply can be expect-
    ed--here, production of regulations that impose more costs 
    than they afford benefits, that do more harm than good.
         The framers, though not articulating the purpose of the 
    Clause in economic terms, evidently did view it as aimed at 
    correcting the incentives of the political branches.  There is 
    evidence, for example, that James Madison saw electoral 
    power slipping into the hands of a non-landholding majority, 
    which in a "leveling" mode could be expected to invade 
    landowners' rights.  See William Michael Treanor, The Origi-
    nal Understanding of the Takings Clause and the Political 
    Process, 95 Colum. L. Rev. 782, 849 (1995).  Late twentieth 
    century America, of course, displays a far greater range of 
    purposes than "leveling" for reallocation of rights.  While the 
    resulting proposals are naturally advanced in the name of the 
    public good, many are surely driven by interest-group pur-
    poses, commonly known as "rent-seeking."  Among these 
    proposals, at least some inflict aggregate costs considerably 
    outweighing their aggregate benefits, paralleling the wasteful 
    production associated with private firms' externalization of 
    costs.  The Takings Clause serves to curb such inefficiencies.  
    See, e.g., Richard A. Epstein, Takings:  Private Property and 
    the Power of Eminent Domain 281 (1985) ("[T]he Takings 
    Clause is designed to control rent seeking and political fac-
    tion.  It is those practices, and only those practices, that it 
         A Takings Clause construction that was dedicated without 
    qualification to preventing such government externalization 
    would require compensation whenever regulation reduced the 
    value of anyone's property, however slightly.  Balanced 
    against that goal is an array of considerations.  Most obvious 
    is the cost of calculating and administering compensation, 
    which would tend to sink many a beneficent statute.  "Gov-
    ernment hardly could go on if to some extent values incident 
    to property could not be diminished without paying for every 
    such change in the general law."  Lucas v. South Carolina 
    Coastal Council, 
    505 U.S. 1003
    , 1018 (1992) (quoting Pennsyl-
    vania Coal Co. v. Mahon, 
    260 U.S. 393
    , 413 (1922)).  (The 
    compensation cost itself would be only a weak countervailing 
    factor, for most beneficent regulation would presumably gen-
    erate gains large enough to pay the losers if identification and 
    calculation were costless.)  My goal here is not to pinpoint 
    the appropriate balance between these competing consider-
    ations, much less to suggest that the correct reading is one 
    under which all regulation materially adversely affecting a 
    property's value would be compensable.  Rather, it is simply 
    to note the ways in which modern interpretation of the 
    Takings Clause, as exemplified in today's decision, impairs its 
    role as a disincentive to wasteful government activities.
                                  * * *
         The majority applies an apparent presumption that contig-
    uous parcels under common ownership should be treated as 
    one parcel for purposes of the takings analysis.  This pre-
    sumption tends to reduce the likelihood that courts will order 
    compensation.  The larger the parcel, the greater the chance 
    that the regulated land will retain an economically viable use.  
    Where no such use remains, there is a "total taking" and the 
    government can "resist compensation only if the logically 
    antecedent inquiry into the nature of the owner's estate 
    shows that the proscribed use interests were not part of his 
    title to begin with," Lucas, 505 U.S. at 1027;  where an 
    economically viable use survives regulation, the best the 
    owner can hope for is "partial" takings analysis.  Under the 
    latter courts will determine whether to award compensation 
    by looking to "the economic impact of the regulation, its 
    interference with reasonable investment backed expectations, 
    and the character of the governmental action," Kaiser Aetna 
    v. United States, 
    444 U.S. 164
    , 175 (1979);  see also Eastern 
    Enters. v. Apfel, 
    118 S. Ct. 2131
    , 2146 (1998);  Lucas, 505 U.S. 
    at 1019 n.8, and will generally deny compensation so long as 
    the restriction "substantially advance[s] legitimate state inter-
    ests," Agins v. City of Tiburon, 
    447 U.S. 255
    , 260 (1980);  see 
    also Dolan v. City of Tigard, 
    512 U.S. 374
    , 385 (1994).  Few 
    regulations will flunk this nearly vacuous test.  In fact, the 
    Supreme Court has only once found a partial taking to be 
    compensable, and even then only a plurality applied the 
    partial takings analysis.  See Eastern Enters., 118 S. Ct. at 
    2149;  see also id. at 2154-60 (Kennedy, J.) (rejecting the 
    plurality's takings analysis and finding invalidity on other 
         The Supreme Court has offered several justifications for 
    this distinction between partial and total takings.  See, e.g., 
    Lucas, 505 U.S. at 1017-18 (suggesting that "from the landowner's 
    perspective," a total taking is tantamount to a physical taking, 
    and that from the government's perspective the concern that 
    an obligation to compensate for any incidental value diminu-
    tion would impede effective functioning cannot apply in the 
    "relatively rare situations" of total takings).  From the per-
    spective of ensuring that the government not engage in 
    wasteful behavior, however, the focus on the uses of the land 
    that remain is misplaced:  "[W]hat is decisive is that which is 
    taken, not that which is retained."  Epstein, Takings, supra, 
    at 58.  Whether the landowner is left with a limited use of the 
    land or none at all is hardly relevant to that issue.  And as 
    the regulating government delineates the scope of regulation, 
    the opportunity for strategic behavior is obvious.
         The majority's cursory application of the Penn Central 
    factors further broadens the gap between the two modes of 
    analysis, reinforcing the seemingly predetermined conclusion:  
    in partial takings cases, the government wins.  The majority 
    states that District Intown has not shown the land "unprofit-
    able to maintain," Maj. Op. at 14;  it is unimaginable, howev-
    er, absent an extraordinary tax liability, that a parcel could 
    retain an economically viable use yet have a net negative 
    value.  The majority goes on to say that District Intown has 
    failed to show that the land does not "bring in a sufficient 
    return," id., but does not answer the all-important question:  
    a return on what?  on out-of-pocket costs?  on initial pur-
    chase price?  on fair market value?  Moreover, the majority 
    provides no guidance as to how "sufficient" the return must 
    be, except to cite Penn Central, in which the Court found that 
    a 75% diminution in value did not constitute a compensable 
    taking.  See id.
         Similarly, in its consideration of District Intown's "reason-
    able investment-backed expectations," the majority's analysis 
    begs the question whether any landowner, in a world where 
    zoning regulations are prevalent, could ever argue that a 
    particular regulation was "unexpected."  The presumption is 
    insurmountable:  "Businesses that operate in an industry with 
    a history of regulation have no reasonable expectation that 
    regulation will not be strengthened to achieve established 
    legislative needs."  Maj. Op. at 15.  Although the 1931 
    Shipstead-Luce Act might have put District Intown on notice 
    that some regulation of architectural design might be expect-
    ed, it is farfetched to conclude that District Intown, merely 
    because of its proximity to the zoo, should reasonably have 
    anticipated an absolute ban on construction;  the city's coun-
    sel, under questioning at oral argument, failed to identify any 
    uses, or even attempted uses, of the Shipstead-Luce Act to 
    support a complete construction veto.  Although the Takings 
    Clause is meant to curb inefficient takings, such a notion of 
    "reasonable investment-backed expectations" strips it of any 
    constraining sense:  except for a regulation of almost unimag-
    inable abruptness, all regulation will build on prior regulation 
    and hence be said to defeat any expectations.  Thus regula-
    tion begets regulation.
         Although the presumption in favor of looking at the parcel 
    as a whole, and in turn the increased reliance on the partial 
    takings mode of analysis, is at odds with the underlying 
    principle of the Takings Clause, it is perhaps the best con-
    struction of the Supreme Court's limited guidance.  The 
    Court has never squarely addressed the question of how 
    courts should define the relevant geographic parcel of land, 
    also known as "horizontal severance."  Marc R. Lisker, Regu-
    latory Takings and the Denominator Problem, 27 Rutgers 
    L.J. 663, 705 (1996).  In Nectow v. City of Cambridge, 
    277 U.S. 183
     (1928), the Court considered whether the city council 
    had effectuated a taking of plaintiff's land by zoning as 
    "residential" a 100-foot strip on plaintiff's 140,000 square foot 
    parcel.  Although the Court appeared to treat the relevant 
    parcel as encompassing only the fractional strip, this was in 
    no respect relevant to the Court's decision.  In Penn Central 
    Transportation Co. v. New York City, 
    438 U.S. 104
     (1978), the 
    Court applied a very weak form of horizontal severance, 
    focusing exclusively on the landmarked building itself without 
    treating the owner's neighboring--but not adjacent--proper-
    ty as part of the greater parcel, as had the New York Court 
    of Appeals.  See Penn Central Transportation Co. v. New 
    York City, 
    366 N.E.2d 1271
    , 1276-77 (N.Y. 1977).  But Penn 
    Central tells little, as the properties were not all contiguous, 
    had been put to different uses, and had never been treated as 
    a unified whole by the owners or the City.
         Penn Central's handling of "vertical severance," however, is 
    informative, if only by analogy.  Using language seemingly 
    broad enough to encompass horizontal severance, the Court 
    made clear that it would not consider the air rights above 
    Grand Central separately from the land rights:  " 'Taking' 
    jurisprudence does not divide a single parcel into discrete 
    segments and attempt to determine whether rights in a 
    particular segment have been entirely abrogated."  Penn 
    Central, 438 U.S. at 130;  see also Keystone Bituminous Coal 
    Ass'n v. DeBenedictis, 
    480 U.S. 470
    , 496-502 (1987) (refusing 
    to regard either coal that statute required miners to leave in 
    place (about 2% of total coal), or the "support estate," as 
    distinct property for ascertaining whether statute denied 
    owners all economically viable uses).
         The Court has expressed similar reluctance to engage in 
    "conceptual severance" more generally (i.e., the treatment of 
    any specific property right as a single unit).  In Andrus v. 
    444 U.S. 51
     (1979), the Court refused to treat extinc-
    tion of the right to sell any part of a lawfully killed bald eagle 
    as a total taking.  See id. at 65-66 ("At least where an owner 
    possesses a full 'bundle' of property rights, the destruction of 
    one 'strand' of the bundle is not a taking, because the 
    aggregate must be viewed in its entirety.").  The Court 
    arguably evidenced a retreat from this strong position in 
    Hodel v. Irving, 
    481 U.S. 704
    , 717-18 (1987), in which it found 
    a taking in legislation that "completely abolished" certain 
    landowners' rights to dispose of their property by descent or 
    devise, even though they retained complete rights to possess 
    and to make inter vivos transfers.  The Court has not, 
    however, reached agreement on the scope of this retreat.  
    Compare id. at 719 (Scalia, J., concurring) (saying the deci-
    sion "effectively limits Allard to its facts"), with id. at 718 
    (Brennan, J., concurring) (saying that the case was "unusual" 
    and thus had no impact on Allard).  Overall, I think the 
    majority is correct in its implicit understanding that the 
    Supreme Court is reluctant to carve a landowner's parcel into 
    smaller units for which compensation might be more likely.
         But the factors that the majority applies in making the 
    decision, drawn from decisions of the Federal Circuit and 
    Claims Court and characterized by the majority as "eminent-
    ly sound," Maj. Op. at 9, strike me as uninformative and 
    largely irrelevant.  The factors considered are:  (1) whether 
    the neighboring parcels are contiguous, (2) whether they were 
    acquired simultaneously, (3) whether they have been treated 
    as a single unit, and (4) the extent to which the restricted lot 
    benefits the neighboring lot.  Maj. Op. at 8-9.
         The first factor, contiguity, is clearly necessary but in no 
    way sufficient.  The next two factors--simultaneity of acquisi-
    tion and unity of use--are more troublesome.  Both elevate 
    history--either the historical purchase or the historical use--
    over the real-world present relationship between the tracts.  
    Compare Laura M. Schleich, Takings:  The Fifth Amend-
    ment, Government Regulation, and the Problem of the Rele-
    vant Parcel, 8 J. Land Use & Envtl. L. 381 (1993) (proposing 
    that courts look to the "moment of regulation" when defining 
    the relevant parcel).  The majority's focus on the property's 
    use prior to regulation tells us nothing about the value-
    producing opportunities foreclosed at the time of regulation.  
    "It is, of course, irrelevant that [the government] interfered 
    with or destroyed property rights that [plaintiff] had not yet 
    physically used.  The Fifth Amendment must be applied with 
    'reference to the uses for which the property is suitable, 
    having regard to the existing business or wants of the com-
    munity, or such as may be reasonably expected in the imme-
    diate future.' "  Penn Central, 438 U.S. at 143 n.6 (Rehn-
    quist, J., dissenting, quoting Boom v. Patterson, 
    98 U.S. 403
    408 (1879)).
         The majority mentions but brushes aside a fourth factor--
    the extent to which the regulated parcel benefits the neigh-
    boring lot.  Maj. Op. at 9.  Yet this appears the most 
    relevant.  The more a burdened tract in its regulated use 
    benefits contiguous property, the less likely that the regula-
    tion has a net negative impact.  In the extreme case a 
    property interest may be worthless except in conjunction with 
    another.  Thus in Keystone Bituminous Coal Ass'n, the 
    Court pointed out that the "support estate" had "value only 
    insofar as it protects or enhances the value of the estate with 
    which it is associated [i.e, the mineral estate]," 480 U.S. at 
    501, and therefore refused to treat the "support estate" as a 
    separate interest at all.  Similarly, small parcels of land, 
    either in the interior or around the edges of greater parcels, 
    commonly are valuable only when they combine with the 
    greater parcel to create a more valuable whole;  for regulation 
    of the exterior (such as setback requirements), then, it makes 
    sense to measure the impact in conjunction with the "pri-
    mary" parcel.  Looking to the property owner's benefit from 
    these internal synergies parallels use of "average reciprocity 
    of advantage," Pennsylvania Coal Co. v. Mahon, 
    260 U.S. 393
    , 415 (1922), which considers the benefit that each bur-
    dened owner--as in ordinary zoning or historic districting--
    receives from the similar restriction of his neighbors.
         Of course there will be some synergy between almost any 
    two neighboring parcels under common ownership, since uni-
    fied ownership creates options for the sole owner that multi-
    ple landowners could achieve only by contracting.  But syner-
    gy is a matter of degree, and mere contiguity should not be 
    enough.  One commentator proposes a rather demanding 
    synergy test, arguing that the regulated tract should be 
    considered as its own parcel so long as not all of its value 
    derives from synergies with neighboring land;  in such cases, 
    the parcel would have an independent economically viable 
    use, which if destroyed by regulation would be compensable 
    under Lucas.  See John E. Fee, Comment, Unearthing the 
    Denominator in Regulatory Taking Claims, 61 U. Chi. L. 
    Rev. 1535, 1557-58 (1994).  One need not go so far to see the 
    skimpiness of the synergy here.
         To be sure, Cathedral Mansions is more than several 
    contiguous parcels.  According to the decision of the Historic 
    Preservation Review Board, "The buildings are sited imagina-
    tively to provide the greatest possible integration of living 
    space with well-landscaped open space."  Joint Appendix 
    ("J.A.") 320.  (Passersby who observe the rather bare lawn 
    will have to reach their own judgments on the adjective "well-
    landscaped.")  Integration there doubtless is--almost any 
    lawn around a building will manifest a degree of integration.  
    But there is no explicit showing that these synergies depend 
    on the entire lawn remaining undeveloped.  The proposed 
    townhouses would cover only the portion of the lawn abutting 
    Connecticut Avenue, still leaving the interior portion, approxi-
    mately half the lawn, undeveloped.  Common sense would 
    suggest that at some distance from the building marginal 
    synergies created by extra lawn space become slight, and 
    thus that the part of the lawn beyond that line should be 
    treated as its own parcel for takings purposes.  Further, 
    although District rent-control law evidently allows the owner 
    to earn a return on the tax-assessed value of land in a single 
    tract with a rent-controlled building (here the owner could 
    apparently recover that status by undoing the formalities of 
    subdivision), that value is likely to be only a tiny fraction of 
    the value absent the historic landmarking.
         In fact, it may well be completely different synergies--ones 
    between the lawn and adjacent Connecticut Avenue--that 
    have driven the landmarking decision.  The Board observed 
    that the lawn "contributes significantly to the unique open 
    space character of Connecticut Avenue."  J.A. 320.  A cynic 
    might suspect that the alleged relationship between the lawn 
    and the Cathedral Mansions apartments is little more than a 
    cloak by which the citizens of Upper Northwest Washington 
    have secured some parkland on the cheap.  Parks are good, 
    but the Fifth Amendment says that taking them is not.
         Of course, there is another synergy between the two par-
    cels and adjacent Connecticut Avenue, namely the historical 
    value that inheres in the preservation of a building as it was 
    initially constructed (i.e., with an expansive lawn beside it).  
    Uncompensated landmark preservation seems to rest on this 
    synergy.  The Court in Penn Central embraced the view that 
    "the preservation of landmarks benefits all New York citizens 
    and all structures, both economically and by improving the 
    quality of life in the city as a whole."  438 U.S. at 134.  This 
    broad language seems to redefine "reciprocity of advantage" 
    in such a way that no government act could ever require 
    compensation, as the afflicted owner would be a member of 
    the taking polity and thus in receipt of offsetting advantages, 
    artificially presumed to be adequate.
         Apart from obliterating takings law, such a view has pecu-
    liarly perverse effects in the realm of historic preservation.  
    Although such laws try to preserve for society the positive 
    externalities created by buildings like Cathedral Mansions, 
    inflicting the entire cost on the creator of the landmark (or 
    his successor in interest) is bound to discourage investment in 
    first-class design.  Moreover, while insurance markets can 
    achieve the risk-spreading (or anti-"demoralization") goals 
    that some attribute to the Takings Clause, compare Posner, 
    Economic Analysis of Law, supra, at 58, they cannot offset 
    non-compensation's disincentive to good design.  Historic 
    landmark preservation, after all, is imposed selectively on 
    those who went out of their way to secure architectural 
    distinction.  The higher the quality, the higher the premium 
    for takings insurance;  the disincentive is inescapable.
         Having found that the lawn and apartment parcels should 
    be treated as a unit, the majority nevertheless considers 
    whether compensation would be due even if the lawn were 
    analyzed separately;  in doing so, it gratuitously takes an even 
    harsher stance against compensation than does present law.  
    The majority finds that District Intown has failed to offer 
    evidence that the regulation denies it "economically viable use 
    of [the] land," Lucas, 505 U.S. at 1016, even though the 
    Mayor's own agent found that "any construction that de-
    stroyed the lawn would be incompatible with the lawn's status 
    as an historic landmark."  Maj. Op. at 13.  Thus, so long as 
    the lawn is untouched, "economically viable" uses are permis-
    sible.  It is hard to imagine what "economically viable" use 
    that constraint leaves, unless the majority means that the 
    very barest thread of value, yielded by some thoroughly 
    bucolic use, is enough to defeat a total takings claim.  By this 
    standard, no regulation can ever effect a total taking, and at 
    best will be tested only under the far weaker partial takings 
                                  * * *
         The prevailing Federal Circuit-Claims Court method of 
    defining the relevant parcel, followed by the panel here, 
    focuses on marginal issues and largely overlooks the more 
    critical concern of synergies;  the focus on the landowner's 
    historical, rather than proposed, use further skews the analy-
    sis.  But the Supreme Court's general approach seems to 
    militate in favor of looking to the parcel as a whole.  Similar-
    ly, although resting uncompensated landmark preservation on 
    the idea of reciprocal advantage stretches the concept into 
    meaninglessness, and the denial of compensation discourages 
    ex ante what it hopes to foster ex post, the current cases give 
    these arguments little purchase.  Accordingly, I concur in the 
    majority's decision to affirm.