Was this Mississippi developer represented by Greedy Associates? Court rejects ESA-related 5th Amendment claim.
Schooner Harbor Ventures v. U.S., No. 06-87L, 2008 WL 1765482 (Fed. Ct. Claims., April 15, 2008)
Introduction (excerpt of opinion):
The Mississippi Sandhill Crane, a nonmigratory subspecies of the sandhill crane, was added to the United States' List of Endangered Native Fish and Wildlife on June 4, 1973. See38 Fed.Reg. 14,678 (June 4, 1973). In 1975, the United States Fish and Wildlife Service ("FWS") acquired 1,708 acres to establish the Mississippi Sandhill Crane National Wildlife Refuge ("Refuge") in Gautier, Mississippi… On July 29, 1977, the FWS designated a Critical Habitat for the Mississippi Sandhill Crane, in Jackson County, Mississippi, pursuant to Section 7 of the Endangered Species Act of 1973, 16 U.S.C. § 1536… In 1998, the plaintiff in this case, Schooner Harbor Ventures, Inc., entered into an option contract to purchase property is located within the boundaries of the Mississippi Sandhill Crane's Critical Habitat, as designated in 1977… The plaintiff planned to market the property as an industrial park.... Beginning in late 2000, the U.S. Department of the Navy ("Navy") identified approximately thirty undeveloped properties, referred to as "sites," in Jackson County, Mississippi, for future development of 188 housing units ("Project") for Navy personnel ... The plaintifffs property, identified as Site 28, was among the sites... On May 3, 2002, plaintiff, by warranty deed, transferred the property to the United States, acting by and through the Navy.
The plaintiff bought and sold the property without contacting FWS to ascertain whether any subsequent proposed developments or alterations to the property would impact any federally listed species, including the Mississippi Sandhill Crane. Further, the plaintiff has never applied to the FWS for an incidental take permit, in accordance with Section 10 of the Endangered Species Act of 1973, 16 U.S.C. § 1539, regarding the property... Nevertheless, Plaintiff Schooner Harbor Ventures, Inc. filed a complaint in this court alleging that the United States Fish and Wildlife Service ("FWS") had engaged in a taking, in violation of the plaintifff's Fifth Amendment and Fourteenth Amendment rights under the United States Constitution, by requiring that the plaintiff expend money to facilitate the sale of property to the United States Department of the Navy ("Navy"). The plaintiff asserted that the FWS effectively had deprived the plaintiff of all productive and beneficial use of the property and had interfered with the plaintiff's investment-backed expectations.
Plaintiff Schooner Harbor's interest in selling the property to the government without the need to obtain mitigation property at additional cost to the plaintiff is similarly a collateral interest to the plaintiff's physical ownership in the property. The court does not disagree with the plaintiff's assertion that as a fee simple owner of the property, "[p]laintiff had the right to sell and develop the Property." The court also does not dispute the plaintiff's assertion that "[t]hese development rights were an integral part of the Property's title and value." The plaintiff's argument fails in that the plaintiff is asserting that it had the right to sell its property to the government, without conditions imposed, in this instance to meet regulatory burdens imposed on the Navy, by obtaining the mitigation parcel. Whereas, the right to alienate the property is a cognizable property interest, the right to sell the property to the government at a particular price and without conditions is not a cognizable property interest which is protected by the Fifth Amendment.
The Plaintiffs bought critical habitat -- after it had been designated -- and then complained when the Navy paid $1.9 million for the property. Specifically, the Plaintiffs disliked the Navy's terms of sale, and the Navy's requirement that the Plaintiffs include mitigation lands so that the Navy could comply with its duty to "insure that actions authorized, funded, or carried out by them do not adversely affect this Critical Habitat." Perhaps, in the absence of this requirement, even more money would have been made by the landowner, but as the Federal Court of Claims held: "In an arms-length transaction, the mitigation parcel was the buyer's condition that the seller needed to comply with in order to induce the government, in its proprietary capacity, to purchase the property from the plaintiff. The government was under no obligation to purchase the plaintiff's property in particular, nor was the seller obligated to sell to a particular buyer if the buyer imposed conditions on the sale. The plaintiff cannot now rewrite the terms of the agreement through a takings claim."
Even the Federal Court of Claims, sometimes viewed as a "landowner friendly" court, saw through this case: "Although not necessary to arrive at the court's conclusion on the defendant's motion, it somewhat stretches the credulity of the court that plaintiff, as a real estate developer, did not do due diligence and was not aware of the protected status of the land at issue."
Consider this: the landowner bought the land for $962,000 in 1998, sold portions in 2000, for $430,000, and sold another portion to the Navy for $1.9 million, when the developer still held a loan for $854,000. Yet the landowner had the nerve to pursue 5th amendment takings claims when he was required to spend $315,000 for the mitigation lands in order to realize those profits? In other words, the developer made well over $1 million, realizing a doubling in property values, and nearly 10 times the capital outlay of $110,000 or so.
He that maketh haste to be rich shall not be innocent. Proverbs 28:20
Pair of Mississippi sandhill cranes on the National Wildlife Refuge, photo by FWS