Facts: A developer obtained a discretionary Conditional Use Permit (CUP) from a county to build a storage facility. During the approval process, county voters passed a growth-control measure prohibiting the development of storage facilities in the project area. The measure exempted developments which obtained the required discretionary permits before the measure took effect. After the measure took effect, the developer applied for administrative grading and building permits to implement the land uses permitted under the discretionary CUP. The county denied the developer’s administrative permit applications, citing incompleteness. The original CUP expired, and the county denied the developer’s application to renew the discretionary CUP on the basis it was prohibited by the growth-control measure, and ordered work on the project stopped.
Claim: The developer sought money losses for lost profits, claiming the county’s wrongful delay of the project was a regulatory taking requiring just compensation, since the project was exempt from the growth-control measure as the developer obtained the required discretionary CUP before the measure took effect.
Counterclaim: The county claimed it was not liable for the developer’s money losses,claiming the denial was not an unjust regulatory taking since the exemption provision did not apply to the proposed development as the developer had not obtained all permits required to complete the project with the CUP issued before the measure’s enactment.
Holding: A California Appeals Court held the county was liable for the developer’s money losses, since the county’s suspension of the project was an unjust regulatory taking as the growth-control measure’s exemption provisions unambiguously protected the developer’s right to proceed as the project obtained the requisite discretionary permit before the measure took effect. [Lockaway Storage v. County of Alameda (2013) __CA4th__]
Editor’s note – The developer purchased the property only after obtaining the CUP with the county’s assurance development of the facility may proceed under the CUP. However, the later county made several attempts to creatively interpret the exemption language of the growth-control measure. The Appeals Court found the county’s reinterpretations indefensible, since the language of the provision exempts projects which obtained all required discretionary permits prior to the measure’s enactment. Their attempt to construe that language to include the subsequent administrative permits as a requirement for exemption did not win over the court.
The county’s “about-face,” as well as their failure to consider the exemption provisions of the growth-control as they applied to the project, indicated the arbitrary denial advanced no legitimate public or governmental purpose. Thus, the county’s temporary regulatory taking of the developer’s rights entitled the developer to just compensation for the period of the delay.