William C. Haas & Co., Inc. v. City and County of San Francisco, Cal.
| Decision Date | 04 October 1979 |
| Docket Number | No. 77-2486,77-2486 |
| Citation | 605 F.2d 1117 |
| Parties | WILLIAM C. HAAS & CO., INC., Appellant, v. CITY AND COUNTY OF SAN FRANCISCO, CALIFORNIA, Respondent. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Herman M. Shaffer, Kansas City, Mo., argued, for appellant.
Burk E. Delventhal, Deputy City Atty., San Francisco, Cal., argued and on brief, for respondent.
Appeal from the United States District Court for the Northern District of California.
Before HUFSTEDLER and GOODWIN, Circuit Judges, and JAMESON, * District Judge.
William C. Haas & Co., Inc. ("Haas") brought this diversity action against the City and County of San Francisco ("City") claiming that the City's rezoning of its property and the imposition of other land use restrictions so far diminished the value of its property as to constitute a taking for which it is entitled to just compensation protected by the Fourteenth Amendment. The district court granted summary judgment in favor of the City, and Haas appeals. We uphold the district court because we conclude that (1) the land use restrictions imposed by the City upon Haas' property were not unconstitutional as applied to that property, and (2) the impairment of the economic value of the property, although substantial, was not sufficient to give rise to a constitutional claim to just compensation.
This controversy has a long history, punctuated by years of litigation before administrative agencies, and federal and state courts. On June 28, 1971, Haas entered a land purchase agreement to buy a large parcel of unimproved land in the Russian Hill neighborhood of San Francisco. The agreement was conditioned upon Haas' procurement of a valid site permit from the requisite city agency. When Haas first applied to the San Francisco Planning Commission for a site permit, on July 7, 1971, the property was zoned R-5, permitting the high-rise development that Haas proposed. The City Planning Commission denied the permit on the ground that the project would have a detrimental effect on the City as a whole and upon the residents and property of the neighborhood. The Commission also relied upon an "Urban Design Plan," containing general environmental policies for the City developed over several years to be included in the City's Master Plan. Haas appealed to the Board of Permit Appeals on August 13, 1971. Two weeks later, while the appeal was pending, the Commission formally adopted the Urban Design Plan as part of the Master Plan of San Francisco. On August 26, 1971, the Commission adopted interim controls establishing height and bulk restrictions which, among other things, limited the maximum height to 300 feet. Haas withdrew its appeal, and on November 9, 1971, submitted new plans for approval by the Commission. The new plans as amended complied with the 300-foot height restriction as well as the bulk restriction. After a public hearing, the Commission approved the application for the site permit on the revised plans. The neighbors' efforts to stop the high-rise project failed when the Board of Permit Appeals, approving the permit, denied a petition for rehearing on April 10, 1972.
Pursuant to Haas' contract to purchase the land within seven days after the site permit became final, Haas paid $1,650,000 to the vendor of the property, and it also paid brokers' commissions, real estate taxes, and other fees of more than $165,000.
Haas immediately broke ground and commenced the construction project. The Russian Hill Improvement Association was equally prompt in taking steps to halt the project. On April 20, 1972, the Association filed a petition for writ of mandate in the Superior Court in San Francisco. Haas won the first round in the trial court, but the California Court of Appeal overturned the Superior Court and issued the writ on the ground that the permit was invalid for failure to comply with the California Environmental Quality Act of 1970 and the 1972 amendments thereto (Pub. Resources Code §§ 21000-21174). The California Court of Appeal held that Haas was not protected by the grandfather clause because Haas had not undertaken substantial construction and incurred substantial liabilities for construction in good faith reliance upon the issuance of a permit prior to the commencement of judicial proceedings. (Russian Hill Improvement Association v. Board of Permit Appeals (1974) 44 Cal.App.3d 158, 164, 118 Cal.Rptr. 490.) Haas' efforts to foreclose application of the environmental laws to it on constitutional grounds failed in the California judiciary and in the United States Supreme Court. (William C. Haas & Co., Inc. v. Russian Hill Improvement Association (1975) 422 U.S. 1030, 95 S.Ct. 2646, 45 L.Ed.2d 687 ().)
With the invalidation of its site permit, Haas had to start all over again. By this time, however, Haas faced insurmountable barriers to its high-rise project because, in the interim, the City Planning Commission had adopted a 40-foot height limitation, promulgated density controls, and rezoned the property from R-5 to R-3.
Haas filed this case in the federal district court in April, 1975, in which it challenged the constitutionality of the rezoning and other land use restrictions as applied to its Russian Hill property, contending that the combined impact of the restrictions destroyed the value of the property and that it was entitled to over ten million dollars to compensate it for both the diminution in the value of the property and consequential damages flowing from frustration of its planned development.
Because we hold that, on the undisputed facts, Haas, as a matter of law, could not successfully maintain its inverse condemnation action, we do not reach any other issue in the case. It is therefore unnecessary for us to discuss the extent to which the judgment in the Russian Hill...
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