SAN ANTONIO — In a few weeks, Pasco County attorneys will try to get the 11th Circuit Court of Appeal to reverse a ruling last year declaring the county’s right-of-way ordinance unconstitutional.
But in the meantime, the county and Florida Department of Transportation have quietly paid the owners of Hillcrest Preserve $4.7 million to settle the takings claim that arose from the federal lawsuit. Pasco County’s portion of the settlement was $1.5 million.
Hillcrest had offered to settle the case in July for $5.9 million — an offer the county rejected. Hillcrest attorney David Smolker said his clients are happy with the three-way agreement. “They feel like they got paid fairly for their troubles,” Smolker said.
Hillcrest founder Mike Kass and his business partner George Karpay sued the county in 2010 after officials demanded they donate 140 feet of right-of-way fronting their property on State Road 52 as a condition of approval for a shopping center. They said the right-of-way amounted to 28 percent of their commercial property.
Judge Steven Merryday called the 2005 ordinance, which let the county demand land in exchange for zoning and development rights, an illegal “land grab.” Karpay, who owned the controlling interest in the property, died four days before Merryday issued his ruling.
The settlement also required Hillcrest to dedicate 100 feet of right-of-way to FDOT, which is widening the state highway and the S.R. 52 interchange. Smolker said the transaction closed on Jan. 31.
“The property was needed to widen the road, but they didn’t need 140 feet,” Smolker said.
Pasco commissioners changed the policy after the Merryday ruling so the county could require the right-of-way dedication only if the applicant’s project would generate enough traffic to warrant a future road improvement.
Although it was in effect, the county relied on the right-of-way ordinance to acquire thousands of acres of land free, saving taxpayers untold millions of dollars. Merryday called it “an unmistakable, abusive and coercive misapplication of governmental power, perpetrated to cynically evade the Constitution.”
The Appeals Court has scheduled oral arguments on the case for March 7 in Jacksonville.
One argument the county hopes to prove is that the ordinance was constitutional because it allowed property owners to request a waiver from the exaction or reduce the amount of right-of-way. “Indeed, the record demonstrates that 26 such variances were granted between 2006 and 2009,” County Attorney Jeffrey Steinsnyder wrote in a brief.
The owner of A Plus Fireplaces on Ridge Road received one of those waivers. Attorney Jim Hellinger said the appeal delayed the project by a year and cost the owner $50,000. Smolker estimated it would have cost Hillcrest more than $120,000 to utilize the procedures set out in the ordinance.
The Pacific Legal Foundation, a nonprofit law firm that won a landmark property rights case before the U.S. Supreme Court last year, filed a “friend of the court” brief supporting Merryday’s finding that the appeal process improperly put the burden and expense on the property owner rather than the county.
PLF attorney Alan Deserio wrote that “the scheme is nothing more than an attempt to force acquiescence to the ordinance’s exaction, since many applicants will find it prohibitively expensive and time-consuming to commission expert studies and reports disproving the exaction’s connection to the project’s impact.”