Board of County Sup'rs of Prince William County, Va. v. U.S., 93-5099

• Decision Date: 21 February 1995
• Docket Number: No. 93-5099,93-5099
• Parties: BOARD OF COUNTY SUPERVISORS OF PRINCE WILLIAM COUNTY, VIRGINIA, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

Page 520

48 F.3d 520

BOARD OF COUNTY SUPERVISORS OF PRINCE WILLIAM COUNTY, VIRGINIA, Plaintiff-Appellant, v. The UNITED STATES, Defendant-Appellee.

No. 93-5099.

United States Court of Appeals, Federal Circuit.

Feb. 21, 1995.

Sharon E. Pandak, Prince William, VA, argued for plaintiff-appellant. With her on the brief were Lyndia M. Person and Gifford R. Hampshire.

Jacques B. Gelin, Atty., Environment & Nat. Resources Div., Dept. of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Myles E. Flint, Acting Asst. Atty. Gen., Environment & Nat. Resources Div., John A. Bryson, John S. Gregory and David O. Vollenweider, III.

Before PLAGER, Circuit Judge, COWEN, Senior Circuit Judge, and SCHALL, Circuit Judge.

PLAGER, Circuit Judge.

This is a takings case, involving the question of what is a compensable property interest within the meaning of the Fifth Amendment to the Constitution. ¹ The United

                States by legislative mandate took some 550 acres of land in Prince William County, for which just compensation was due.  The Board of County Supervisors of Prince William County, Virginia, (the "County Board" or "Board," sometimes "the County") sued for its share of the compensation awards, based on what it claimed were property interests owned by the County.  The Court of Federal Claims concluded that, whatever interests the County may have had in the land, they were not such as to entitle it to compensation for the taking. 2  The Board appeals that judgment to this court.  We affirm-in-part, reverse-in-part, and remand with instructions for further proceedings
                

BACKGROUND

In November 1988 Congress resolved a feud between a citizens coalition and a real estate developer regarding the future of some 550 acres of land, known as the William Center tract, ³ adjacent to the Manassas Battlefield Park, a historic Civil War site in Virginia. The owner of the tract, hereinafter "the developer," was in the process of constructing a large development on the land. ⁴ The development was planned to include up to 650 residential units and an initially authorized 2,910,000 square feet of nonresidential space. Two years earlier, pursuant to the County's statutory zoning and planning authority, the development had been approved and the necessary rezoning enacted by the County Board.

As part of the approval and rezoning process the developer gave to the Board a document entitled "Proffer," subsequently approved by the County's Office of Planning as the "Proffer/Development Plan." This document described the details of the proposed development, and set out a series of steps that the developer agreed to take as part of the development. These included: providing open space and buffers, particularly along adjacent roads, and preserving tree coverage; working with the National Park Service and nearby affected residents in evaluating appropriate screening measures; creating a property owners association; providing stormwater drains; providing a community trail system with a natural or all-weather surface; providing a community swimming pool/center, two tennis courts and two multi-purpose courts, and a ballfield, all "in fulfillment of County recreation requirements;" and undertaking various on- and off-site roadway improvements, or compensating the county for their construction. There was also a commitment to contribute a sum of money to the County for public school purposes, and to provide five acres for a fire station and a commuter parking lot or other public facility.

In addition to executing the "Proffer" document, the developer, as part of the rezoning approval process, conveyed to the County five parcels of land, aggregating 16.05 acres. The County needed these parcels for street improvements and related activities necessitated by the development.

The citizens coalition, having failed to convince the County Board of the undesirability of permitting such development adjacent to the national park, took its case to Congress. Congress agreed with the citizens group, and enacted the Manassas National Battlefield Park Amendments of 1988 (the "Act"), Title X of the Technical and Miscellaneous Revenue Act of 1988, Pub.L. No. 100-647, 102 Stat. 3342, 3810 (1988), codified at 16 U.S.C. Sec. 429b(b) (1988). That Act vested in the United States, as an addition to the Manassas Battlefield National Park, all right, title, and interest in and to, and the right to immediate possession of, the 550 acre William Center tract. The Act further obligated the United States to "pay just compensation to the owners of any property taken pursuant Separate suits were filed by the developer and the County in the Court of Federal Claims seeking the compensation claimed to be due them. The United States paid the developer a substantial sum of money for the land and the construction that had already occurred. However, the United States declined to pay the County anything for either the value of its 16.05 acres or for the value of the proffers.

to this [Act] and the full faith and credit of the United States is hereby pledged to the payment of any judgment entered against the United States with respect to the taking of such property." 16 U.S.C. Sec. 429b(b)(2)(B).

During the course of the litigation with the County, the United States moved for dismissal of that part of the suit involving the proffers. The court granted the motion, holding that the proffers accepted by the County were not "property" for purposes of the takings clause of the Fifth Amendment. Board of County Supervisors v. United States, 23 Cl.Ct. 205 (1991). Subsequently, the court ruled that the County was not entitled to compensation for the 16.05 acres which the developer had previously transferred to the County. Board of County Supervisors v. United States, 27 Fed.Cl. 339 (1992). The County Board appeals both rulings to this court.

DISCUSSION

As did the trial court, we will consider the case as involving two separate claims, one for the value of the "proffers," and the other for the value of the 16.05 acres, title to which was in the County. At the outset, we point out that there is no question about the liability of the United States for the property it took under the 1988 Act; as noted earlier, the Act (not to mention the Fifth Amendment) obligated the United States to pay for any property interests taken by the United States as a consequence of the legislative declaration. The question for us is whether, among the compensable property interests taken by the United States, were there any owned by the County?

I.

Efforts by local governments to control land development blossomed in the 1920's when the idea of land use zoning, blessed by the federal government, ⁵ spread rapidly across the country. Not long after, regulation of large scale residential (and later, nonresidential) developments through planning and subdivision control ordinances followed. However euphemistically described, it has now become common practice for local government units with zoning and planning authority to exact from developers various concessions as a condition to granting the necessary zoning changes and planning code approvals for proposed developments. These exactions range from requiring the developer initially to install at the developer's own cost the roads and sewers needed to serve the development, to dedicating land for public recreation facilities and other public needs, to making cash payments to local schools as recompense for the additional students generated by the development.

When first this practice surfaced, it was attacked on several grounds. It was argued that, since the local unit negotiates individual terms with each developer, this practice amounted to zoning by contract which was unconstitutional because government may not contract away the police power. See generally, Robert R. Wright and Morton Gitelman, Land Use 801-12 (4th ed. 1991). Accord, Mumpower v. Housing Authority of Bristol, 176 Va. 426, 452-55, 11 S.E.2d 732, 742-44 (1940). Another ground for objection was that, in the absence of specific enabling legislation, it is ultra vires for local government to impose conditions on land use that are not part of the standard provisions contained in the local government's zoning and planning ordinances. See, e.g., Hylton Enterprises, Inc. v. Board of Supervisors of Prince William County, 220 Va. 435, 258 S.E.2d 577 (1979); cf. Board of County Supervisors of Prince William County v. Sie-Gray Developers, Inc., 230 Va. 24, 334 S.E.2d 542 (1985) (developer may obligate itself to perform conditions which local authority was not empowered to require).

Over time, state legislatures addressed the question of whether local governments could impose these development exactions. In Virginia, a statute now authorizes certain counties (of which Prince William is one) to impose, in addition to the requirements provided for the zoning district by the ordinance, "reasonable conditions" for a grant of rezoning based on a landowner's proffers made in conjunction with a request for rezoning. Va.Code Ann. Sec. 15.1-491(a) (Michie 1994). "Once proffered and accepted as part of an amendment to the zoning ordinance, such conditions shall continue in effect until a subsequent amendment changes the zoning on the property covered by such conditions." Id.

In this case, the validity of the development exactions is not before us, but the nature of such exactions is. The County argued that the accepted proffers gave the County contract rights against the developer, and that contract rights are "property" under the Fifth Amendment. The County is correct that contract rights are property, but the trial court was correct in rejecting the County's argument here. The fact that, in some cases, the process by which proffers become incorporated into the zoning system may involve a degree of negotiation does not convert an exercise of the police power into an exercise in contract. ⁶...