Alto Eldorado Partners v. City of Santa Fe

Decision Date11 March 2009
Docket NumberNo. CIV 08-0175 JB/ACT.,CIV 08-0175 JB/ACT.
Citation644 F.Supp.2d 1313
PartiesALTO ELDORADO PARTNERS, Rancho Verano, LLC, Cimarron Village LLC, Dennis R. Branch and Joann W. Branch, Plaintiffs, v. The CITY OF SANTA FE and The County of Santa Fe, Defendants.
CourtU.S. District Court — District of New Mexico

Ronald J. VanAmberg, VanAmberg Rogers Yepa & Abeita, LLP, Santa Fe, NM, for Plaintiffs.

Karl H. Sommer, Karl H. Sommer & Associates PA, Santa Fe, NM, for Prospective Intervenor-Plaintiff Santa Fe Area Home Builders Association, Inc. Frank D. Katz, Santa Fe City Attorney's Office, Santa Fe, NM, and Donna M. Connolly, John C. Bienvenu, Rothstein Donatelli Hughes Dahlstrom, Schoenburg & Bienvenu LLP, Santa Fe, NM, for Defendant City of Santa Fe.

Stephen C. Ross, Santa Fe County Attorney's Office, Santa Fe, NM, Mark A. Basham, Basham & Basham, P.C., Santa Fe, NM, and Robyn B. Hoffman, French & Associates, P.C., Albuquerque, NM, and Robert H. Freilich, Miller Barondess, LLP, Los Angeles, CA, for Defendant County of Santa Fe.

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on Defendant County of Santa Fe's Motion to Dismiss Plaintiffs' Complaint and Memorandum in Support, filed May 19, 2008 (Doc. 31). The Court held a hearing on January 8, 2009. The primary issues are: (i) whether the Plaintiffs' takings claim is ripe for adjudication; (ii) whether their other federal claims are subsumed under their takings claim and must be premature if the takings claim is premature; and (iii) whether the Court should dismiss the pendent state law claims. Because the Court concludes that the Plaintiffs' takings claim is premature and that the Plaintiffs' other constitutional claims are subsumed under the claim, the Court will dismiss the Plaintiffs' federal claims on jurisdictional grounds. Because the Court thus lacks a basis on which to exercise supplemental jurisdiction, the Court will also dismiss the remaining state claims for lack of subject-matter jurisdiction.

FACTUAL BACKGROUND

This case concerns challenges under both the United States and New Mexico Constitutions, as well as New Mexico state law, to the County Ordinance and to the City of Santa Fe's similar affordable housing ordinance (the "City Ordinance"), the latter of which the Court has dismissed because the Plaintiffs lack standing to challenge the City Ordinance under the United States Constitution. See Memorandum Opinion and Order at 44, entered March 11, 2009 (Doc. 79). The Plaintiffs are developers active in the City and County of Santa Fe. They contend that the City and County Ordinances are legally invalid on a variety of theories. In essence, however, their claims are that the Ordinances deprive developers of their property by forcing them to set aside significant portions of their developments for affordable housing, at a loss to the developers.

The Court will focus here on the facts relevant to the County Ordinance. Because this is a motion to dismiss, the Court will assume that the Plaintiffs' factual allegations are true, although the Court notes that a number of the allegations in the Complaint are essentially assertions of law or mixed questions of law and fact that the Court does not assume are true.

Three of the Plaintiffs, Alto Eldorado Partners, Ranch Verano, LLC, and Cimarron Village, LLC, (collectively, "County Plaintiffs"), "own parcels of land in Santa Fe County which have master plan approval and these Plaintiffs intended to proceed with the development of their properties but are being impacted by the" County Ordinance. Complaint for Injunctive Relief for Violation of Civil Rights and New Mexico State Law ¶ 7, at 2, filed February 15, 2008 (Doc. 1)("Complaint"). The bulk of the Complaint discusses the City Ordinance, and then notes that the County Ordinance is similar and describes what the Plaintiffs view as the key differences between the two Ordinances. The Court will therefore lay out most of the allegations involving the City Ordinance, but refer to the County and to the County Ordinance.

The County Ordinance requires that upwards of thirty percent of the lots in a subdivided development be affordable housing lots to be sold to qualified buyers. These set-aside lots must be sold at below market value. See Complaint ¶ 12, at 2-3. This scheme effectively requires property owners not only to dedicate some of their property to others, but requires property owners to become home builders. See Complaint ¶ 23, at 3.1

In lieu of providing affordable housing, owners may, at the County of Santa Fe's discretion, pay money to the County. See id. ¶ 13, at 3. The Plaintiffs acknowledge that the County Ordinance allows for density bonuses—which permit an owner to add more lots or units—and fee waivers, but state that the waivers defray only some of the losses owners suffer. See Complaint ¶ 15, at 3. The density bonuses are a more complicated story. While allowing for more lots, decreased lot sizes may depreciate the overall value of a subdivision, push the subdivision into a category requiring more extensive infrastructure, or even not be given at all because of neighborhood opposition or other legal restrictions. See id.

When affordable housing units are resold, the difference between the resale price and the original affordable housing price is split between the County of Santa Fe and the qualified buyer. See id. ¶ 16, at 4. This provision effectively denies the original developer any profit after the developer builds the home at a personal loss. See id. ¶ 17, at 4. All funds the County receives under the Ordinance go into a trust fund that is to be used exclusively for affordable housing purposes. See Complaint ¶ 2 1, at 4.

To make projects viable, developers are forced to increase prices on the non-affordable housing lots—or market lots—to recover losses the County Ordinance forces on them, helping drive housing prices out of the reach of the middle class. See Complaint ¶¶ 19-20, at 4. Additionally, the County Ordinance limits the amount of rent certain owners may charge for rental units. See Complaint ¶ 22, at 5.

One difference between the City and County Ordinances is that, for small projects, the County Ordinance requires that sixteen rather than thirty percent of the development be set aside for affordable housing, although the requirement is raised to thirty percent if a density bonus is sought for a smaller project. See Complaint ¶ 23, at 5. The County Ordinance also defines qualified buyers as a larger set of the population: "those who have incomes up to one hundred twenty-one percent (121%) of the ordinance-defined average median income and who may have up to $125,000 in assets." Complaint ¶ 24, at 5. The Plaintiffs state the County Ordinance is more burdensome than the City Ordinance, because minimum lot sizes in the County are larger—ranging from two-and-a-half acres to twelve-and-a-half acres depending on the hydrologic properties of the zone in which the lot lies and whether a County-approved water system services the lot—see Complaint ¶ 25, at 5, and also because road and infrastructure costs are greater for these larger lots, see id. ¶ 26, at 5. If a development remains economically viable under the County Ordinance, the property owner will usually make payments in lieu of providing affordable housing. See Complaint ¶ 27, at 5-6. For a one-hundred lot subdivision, the fee is $4,960,000.00. See id.

The Plaintiffs maintain that the County Ordinance amounts to an unconstitutional taking because the Ordinance lacks any reasonable nexus between the activity of developing property and the problem of providing affordable housing, because it places disproportionate burdens on owners, because it requires property owners to sell property at below-market rates, because it transfers resale profits to buyers or to the County, and because it may in some cases requires direct payment to the County. See Complaint ¶¶ 30, 32-40, at 7-8. Property owners are not compensated for these effects. See id. ¶ 41, at 8. The Plaintiffs also maintain that the County Ordinance singles out property owners wishing to develop or to subdivide property without any rational basis for doing so, and is an arbitrary exaction. See Complaint ¶¶ 43-46, 48-50, at 9-10. The Plaintiffs further assert that the County Ordinance effectively taxes property owners without any legal authority and without being uniformly applied in a rational manner. See Complaint ¶¶ 58-62, at 11. Finally, the Plaintiffs acknowledge that the County Ordinance does not specifically impose rent controls, but maintain that administrative interpretations of the Ordinance require rent controls in violation of N.M.S.A.1978 § 47-8A-1. See Complaint ¶¶ 65-67, at 12.

PROCEDURAL BACKGROUND

The Plaintiffs filed this lawsuit challenging both the City and County Ordinances. Their Complaint raises six counts: (i) unconstitutional taking of property under the Fifth Amendment; (ii) equal protection; (iii) substantive due process; (iv) injunctive relief under 42 U.S.C. § 1983 and attorneys' fees under § 1988; (v) taxation without authorization and in violation of article VIII of the New Mexico Constitution; and (vi) illegal rent control in violation of N.M.S.A.1978 § 47-8A-1. The Plaintiffs request that the Court declare the City and County Ordinances invalid, enjoin the Defendants from enforcing their respective ordinances, and grant the Plaintiffs their costs and attorneys' fees. The Court has dismissed the lawsuit against the City of Santa Fe for lack of standing to bring the federal claims.

The County of Santa Fe moves the Court to dismiss the case against it under rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. The County raises two main grounds for dismissal of the Fifth-Amendment takings claim: (i) that the claim is not ripe because the Plaintiffs have not sought and been denied just compensation in an inverse-condemnation proceeding in ...

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4 cases
  • N. New Mexicans Protecting Land Water & Rights v. United States
    • United States
    • U.S. District Court — District of New Mexico
    • 30 Enero 2016
    ...was not ripe because the Tucker Act was available as a remedy for any uncompensated taking); Alto Eldorado Partners v. City of Santa Fe, 644 F.Supp.2d 1313, 1342–43 (D.N.M.2009) (Browning, J.)(concluding that plaintiffs may pursue injunctive relief in some takings claims, but not where they......
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  • Lewis v. United States
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    • 25 Septiembre 2019
    ...taking actions", notwithstanding the lack of a Tucker Act money takings claim. (Doc. 28, p. 6 (citing Alto El Dorado Partners v. City of Santa Fe, 644 F.Supp.2d 1313, 1327 (D. N.Mex. 2009))). Plaintiffs conclude their address of the jurisdictional issue by stating, "The worse that can be sa......
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    • 19 Diciembre 2014
    ...Just compensation is generally the appropriate remedy for a Takings Clause violation. See Alto Eldorado Partners v. City of Santa Fe, 644 F. Supp. 2d 1313, 1330 (D.N.M. 2009)(Browning, J.), aff'd by 634 F.3d 1170 (10th Cir. 2011). If the Court were to find that the Ordinance constitutes a t......

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