The U.S. Supreme Court's decision last year in Koontz v. St. John's River Water Management District received quite a bit of national coverage in the development world. If you'll recall, Koontz held that the nexus and proportionality standards that apply to the government's attempt to exact land in exchange for a land use permit similarly apply to monetary exactions. While the decision may have caused a change in the entitlement process in other states, this was generally already the rule in California under the Mitigation Fee Act. So deciphering just how Koontz would impact California was a bit uncertain. My partner, John Erskine, who specializes in representing developers through the entitlement process, recently wrote a great article on Koontz' effects locally -- from a real-world, on the ground perspective.
The article, Did Koontz Stop Illegal Development Exactions?, concludes that Koontz really isn't doing anything to change the development landscape in California, because "even with the procedural boost provided by the Mitigation Fee Act in California, most developers are reluctant to sue unless the illegal exaction is so significant in amount that it is considered project-threatening . . . ."
As John so aptly concludes, "obtaining project approvals while avoiding illegal exactions is a tight-rope walk, and Koontz unfortunately appears to be a rather porous net. Local government officials are not avoiding discussions with developers . . . nor are they getting any less creative in converting potential project revenue into municipal budget supplements."
Give the article a read if you're interested in hearing more.
Brad Kuhn, Chair of Nossaman's Eminent Domain & Valuation Group, guides private and public sector clients through complex real estate development and infrastructure projects – particularly with eminent domain/inverse ...
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