United States v. 8.929 Acres of Land in Arlington Cnty.

• Decision Date: 01 June 2022
• Docket Number: 21-1352
• Citation: 36 F.4th 240
• Parties: UNITED STATES of America, Plaintiff – Appellee, v. 8.929 ACRES OF LAND IN ARLINGTON COUNTY, VIRGINIA; Arlington County, Virginia, Defendants – Appellants, and FiberLight, LLC ; Verizon Business Network Services Inc.; Washington Gas; Verizon Virginia, LLC; Jones Utilities Construction, Inc.; Dominion Virginia Power ; Unknown Owners, Defendants.
• Court: U.S. Court of Appeals — Fourth Circuit

36 F.4th 240

UNITED STATES of America, Plaintiff – Appellee,

v. 8.929 ACRES OF LAND IN ARLINGTON COUNTY, VIRGINIA; Arlington County, Virginia, Defendants – Appellants,andFiberLight, LLC ; Verizon Business Network Services Inc.; Washington Gas; Verizon Virginia, LLC; Jones Utilities Construction, Inc.; Dominion Virginia Power ; Unknown Owners, Defendants.

No. 21-1352

United States Court of Appeals, Fourth Circuit.

Argued: March 10, 2022

Decided: June 1, 2022

ARGUED: James Michael Auslander, BEVERIDGE & DIAMOND PC, Washington, D.C., for Appellants. Allen M. Brabender, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: MinhChau Corr, Acting County Attorney, COUNTY ATTORNEY'S OFFICE, Arlington, Virginia; Gus B. Bauman, BEVERIDGE & DIAMOND, P.C., Washington, D.C., for Appellant. Todd Kim, Assistant Attorney General, Eugene N. Hansen, Environment and Natural Resources Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

Before AGEE, RUSHING, and HEYTENS, Circuit Judges.

Vacated and remanded by published opinion. Judge Agee wrote the opinion, in which Judge Heytens joined. Judge Rushing wrote an opinion concurring in the judgment.

AGEE, Circuit Judge:

By grant of summary judgment in favor of the United States, the district court held that the Government's provision of substitute facilities to Arlington County, Virginia ("the County") constituted just compensation for the taking of three parcels of property. The County appeals, contesting the district court's application of the summary judgment standard and raising several substantive arguments in support. Finding error in the district court's grant of summary judgment, we vacate the district court's ruling and remand for further proceedings consistent with this opinion.

I.

Absent expansion, the Arlington National Cemetery ("the Cemetery") is estimated to reach capacity by the early 2040s.¹ In an effort "to maximize interment space at [the Cemetery]," Congress authorized the Arlington National Cemetery Southern Expansion Project and the Defense Access Roads Project (collectively, "the Project") in 1999. Over the course of the following decades, the County and the Government engaged in negotiations over the Project, particularly as to its impact on "8.929 acres of land in Arlington County, Virginia owned by the County," J.A. 179—namely, Southgate Road, South Joyce Street, and a segment of Columbia Pike,² as depicted below:

J.A. 505.³ Relevant here, Southgate Road is part of a 4.23-acre property that substantially functions as a publicly accessible road to Joint Base Myer-Henderson Hall, with 3.6 acres of it apportioned for the road and parking, and the additional acreage "consist[ing] of a portion of the parking lot and some grassland." J.A. 181, 687. In contrast, Columbia Pike

is a primary route to the Pentagon. It's a primary connection between the whole Columbia Pike corridor and Pentagon City, Crystal City, Potomac Yard. It is the highest ridership bus line ... in Arlington, with connections to Metro stations. So there are as few connections as important to Arlington from an arterial street perspective.

J.A. 428–29. The County owned both Southgate Road and Columbia Pike in fee simple. Finally, South Joyce Street "is an extension of Southgate Road[ ] [that] passes beneath I-395 and connects Columbia Pike with Pentagon City," J.A. 286, over which the County owned an easement "for the operation and maintenance of a public right of way," J.A. 179.

A.

To frame our discussion of the parties' negotiations, as relevant to the appeal, we begin with an overview of the County's acquisition and ownership of Southgate Road.

The County acquired Southgate Road by separate deeds from the Government in 1956 and 1963. Although the 1956 deed appears to require that Southgate Road be used "to maintain the project constructed thereon," J.A. 549—which is presumably a reference to "the construction of the Navy Annex Access Road, Defense Access Project DA-NR-39" (as discussed earlier in the deed), J.A. 546—the County owned the parcel in fee simple prior to the date of the taking. Southgate Road also held an S-3A zoning designation under the Arlington County Zoning Ordinance, which "is very restrictive, and its permitted uses promote low-density housing or government/institutional uses." J.A. 276. In line with these zoning limitations, Southgate Road has been utilized only as a publicly accessible road since the late-1940s.

Over the course of the underlying litigation, as more fully discussed below, the County discussed development of Southgate Road because, even though "there ha[d] not been a demonstrated market of sellers and buyers for land zoned S-3A," J.A. 276, it "makes final decisions on rezoning and re-planning of real property in Arlington County," J.A. 182. The County represents that "it is reasonable to expect that Arlington County would approve a rezoning and general land use plan amendment to allow for residential development at the Southgate Parcel." J.A. 337. After such re-planning and rezoning, Southgate Road would be "desirable to the private sector." J.A. 300.⁴

The County obtained an appraisal in June 2020 reflecting that Southgate Road held a determinable market value of approximately $21 million. As Andrew VanHorn, the County's commercial real estate development expert, opined:

The Southgate Parcel is highly marketable for development. The Southgate Parcel is a highly desirable parcel of land given its location proximate to a rapidly growing employment center in National Landing (within Pentagon City and Crystal City in Arlington County and Potomac Yard in the City of Alexandria)[,] multiple Metrorail stations (Pentagon and Pentagon City), and the existing residential townhome community of Foxcroft Heights. Townhome supply in Arlington is extremely limited while the townhome product is one of the most desirable housing products in Arlington due to the size and price point for buyers.

J.A. 334; see also J.A. 335 (VanHorn opining that "pricing indicates that there is significant demand for [townhome development], which remains a discount to new single family housing in Arlington County"). And the demand for such housing was only expected to increase with the anticipated completion of an Amazon.com, Inc. headquarters in the vicinity. The County thus obtained two development plans for Southgate Road, one involving the construction of 52 townhomes and another including 28 townhomes and 70 multifamily units.

The County contends it never pursued any such developments prior to the taking of Southgate Road by the Government because that parcel was "frozen for a number of years" due to the ongoing negotiations over the Project. J.A. 427.

B.

In 2008, the Government and the County discussed a land-exchange proposal to advance the Project, which involved the Cemetery subsuming Southgate Road ("the 2008 Proposal"). However, this arrangement did not come to fruition because the land the County was to receive in exchange for Southgate Road was transferred to the U.S. Army.

In 2013, the parties contemplated another land-exchange proposal related to Southgate Road ("the 2013 Proposal"). In that Proposal, the Government "offered the County a broader land exchange and road realignment agreement in which the County would receive a much greater amount of land on the south side of Columbia Pike." J.A. 603. These negotiations contemplated creating a new road (South Nash Street) to mitigate traffic concerns from closing Southgate Road and to provide replacement base access.⁵ The Government subsequently terminated negotiations because it "determined that a land exchange was not in the best interests of the United States." J.A. 508.

Abandoning the idea of a land-exchange agreement, the parties considered an alternative arrangement in or around 2014 in the form of substitute facilities as just compensation.⁶ To that end, they engaged in discussions over a conceptual design for the Project, which they envisioned would:

(1) realign [the County-owned portions of] Columbia Pike and South Joyce Street, (2) close portions of Southgate Road and South Joyce Street (and incorporate this land into the Cemetery), (3) construct a new north-south South Nash Street; (4) provide new on and off-ramps to Washington Boulevard, and (5) relocate the Cemetery's operations complex to south of the realigned Columbia Pike (near I-395).

J.A. 180. The following diagram details an aerial-view of this design plan:

J.A. 506.

The parties contemplated that the closure of Southgate Road would increase traffic flow on the roads in the neighboring Foxcroft Heights community and on Columbia Pike. The County did not favor such an outcome. See J.A. 449–50 (Dennis Leach, the County's Director of Transportation for the Department of Environmental Services, confirming that "it would not be desirable to have even more base traffic" on the Foxcroft Heights roads as a result of Southgate Road's closure"); J.A. 591 (the County asserting that "the closure of Southgate Road will force additional traffic on to, and further constrain, Columbia Pike").

To address this concern, the Proposal suggested adding South Nash Street to mitigate traffic flow through Foxcroft Heights and maintain direct base access. While the County initially "wanted" the Government to construct this road "prior to demolishing Southgate Road," J.A. 451, the County would later insist that it did not require the Government to quell the traffic implications in the Foxcroft Heights neighborhood. The County represented that it had "other traffic calming methods it could [have] implement[ed] to discourage traffic from using the ... streets in Foxcroft Heights to access the Base." J.A. 603. The County instead viewed South Nash Street as a "federal amenity," J.A. 98, that "[did] not address any need of the County, nor [did] it have any significance to the public interests of the County," J.A. 58, because South Nash Street would substantially serve...