In a narrowly decided case that could have consequences in Minnesota and other wetlands-heavy states, the U.S. Supreme Court on Tuesday sided with a Florida property owner who asserted that demands from local government in exchange for developing environmentally sensitive land were unreasonable.
“I don’t want to get emotional in a manner unbecoming to counsel,” said Michael Welch, whose law firm represents wetlands regulatory agencies, “but this one’s pushing me, man. The impact could be incredibly far-reaching.”
The central question was whether a government could require developers to make monetary concessions, such as paying to improve wetlands elsewhere, in exchange for permission to develop wetlands on their own property. Such trade-offs are common in Minnesota.
Attorneys for cities and other regulatory authorities warned that the net result could easily be a boomerang effect, in which local governments simply clamp down on developing valuable wetlands rather than offer the kind of compromise that got the Florida agency in trouble.
“The tendency, in Nancy Reagan’s phrase, is going to be to ‘Just say no,’ ” said John Baker of the Greene Espel law firm, who teaches land use law at the William Mitchell College of Law in St. Paul.
Baker said the court “repeatedly tried to debunk a twisted, turned-upside-down version” of the defendants’ case, while offering “cheap-shot, dismissive criticisms of their weakest arguments.”
Attorney Peter Coyle, who represents Twin Cities homebuilders, disagreed.
“The court,” he said, “clearly saw as extortion — my word, not theirs — the attempt by the watershed authority here to demand things that were not clearly related to this project, as a price of approving it. And that issue is one that developers here confront all the time.”
Opens door to suits
Both sides agree that the case carries special force in states like Florida and Minnesota in which wetlands are prevalent and often get in the way of development.
The case before the Supreme Court — Coy Koontz vs. the St. Johns River Water Management District — stems from a dispute near Orlando in which a landowner sought permits to develop wetlands. State law requires applicants to offset the resulting environmental damage.
Koontz offered to give the district a conservation easement on nearly three-quarters of his property. The district insisted he either reduce his development and enlarge the district’s easement, or pay for improvements to other wetlands several miles away. He then accused the agency of an “unreasonable exercise of the state’s police power constituting a taking without just compensation.”
The high court majority agreed it was unfair, and said that stricter limits on such monetary demands “will not work a revolution in land use law or unduly limit the discretion of local authorities to implement sensible land use regulations.”
John Jaschke, executive director of the Minnesota Board of Water and Soil Resources, said the 5-4 Koontz decision won’t have an immediate effect on Minnesota’s wetland management, because it was a Florida law in question. But, he said, it does open the door to similar lawsuits in Minnesota that might force the issue here.
“It has that potential,” he said.
Minnesota law provides three options for property owners who want to remove or develop wetlands. They can do mitigation on their own property by adding or improving wetlands; they can do the same for another property owner within the same watershed; or they can buy wetland credits and add to the state’s inventory of wetlands through a banking system.
Ours is an era, said Welch, of the Smith Partners firm, in which there’s a growing tendency to prefer large-scale, well-managed wetlands complexes vs. just scattered and often degraded ones that are often in the way of development. So there’s logic behind asking developers to help maintain other wetlands, even far from the original site.
“What is under siege here,” he added, is a system in which “developer and regulator sit down and talk through and figure out a way to make these things work,” while also enabling economic development, jobs and tax base.
But Coyle, of the Larkin Hoffman law firm, said the problem is that oftentimes neighbors seize on any legal argument they can find to stop projects that threaten landscapes and views that they cherish but don’t own.
“Property owners are squeezed, as the pressure to get something approved all too often causes them to just concede because time is money. It happens frequently in our western suburbs.”
The Koontz case is not over yet: It has been sent back to the lower courts for further proceedings.