SHUTE, MIHALY & WEINBERGER
Attorneys At Law
396 Hayes Street
San Francisco, CA 94102
Telephone: (415) 552-7272
Telecopier: (415) 552-5816

August 25, 1997

Mary Hobbs
Moss Beach, CA

Re: Supplemental Letter Concerning Legal Issues Which Might Be Raised By the Owners Of The McCracken-Byers Property

Dear Ms. Hobbs:

By letter dated August 15, 1997 I provided an evaluation of the effect of the "Park" designation on the McCracken-Byers property. Apparently, my letter prompted additional questions which are set forth in a letter dated August 17, 1997 to me from Steven Weissman. In this letter I will respond to the questions in the Weissman letter. However, due to the shortness of time (I understand a meeting concerning this issue will be held the evening of August 26, 1997) this response will provide summary answers to the additional questions but not extensive analysis or citation of cases.

The first question is whether the owners of the McCracken-Byers property would have a strong takings case if the County removed the Park designation but adhered to the existing zoning. [1] In this regard, I am asked to assume that 2-6 houses would be approved.

This is a mixed question of law and fact and I am unable to provide an unequivocal answer. Under the law, property owners are entitled to a reasonable use of their property. Government regulations which prevent a reasonable use are considered to constitute a taking. Usually the remedy adopted by the courts is requiring the government agency to pay interim damages as discussed in my August 15 letter.

In this regard, the owners of the McCracken-Byers property would very likely argue that the revenue which would be derived from building 2-6 homes would be exceeded by the cost of providing the necessary infrastructure for the homes. From this they would conclude that because costs would exceed revenues, they would not have been provided with a reasonable use of the property (a taking). The County would very likely argue that because of the location of the property, large estate homes could be built which could be sold at high prices such that the cost of infrastructure would be substantially exceeded by the sales revenue. From this the County would conclude that a reasonable use would have been provided (no taking). Witnesses who are experts in the subjects of costs of development and the real estate market in the area would be called by both sides to provide testimony on these points. It is impossible to predict how a court would resolve the conflicting testimony. Whether or not a court would find that a taking had occurred would depend in large part on which set of experts the court finds credible.

However, an observation may be helpful: The costs to both the owners and the County of this kind of fact intensive litigation are very high. Moreover, the outcome is uncertain for both sides. Usually this kind of circumstance leads to settlement discussions. If the County determined that it had a serious risk of having a money award granted against it, it might be tempted to settle by allowing additional homes. To carry out a settlement, the County would have to adjust the general plan and zoning. If this were to happen, it would open up the "rough and tumble" land use process I alluded to in my August 15, 1997 letter where the side with the most political power would come out the best.

The second question asks whether a citizens group would have a good lawsuit to require the County to stick with the Park designation or the low density zoning if the County allowed a substantial number of homes (in the range of 75). Amending a general plan or the applicable zoning ordinance involve legislative acts by the County. A court can only set aside legislative actions if they are arbitrary or capricious (having no rational basis). Further, under the separation of powers doctrine, a court can not order a County to enact or retain specific legislation.

I would not advise a citizens group to pursue such a case and in my opinion such a suit would not create much leverage for a favorable settlement. The County, working with the owners, would most likely be able to come up with a rationale for allowing 75 or so homes which would be sufficient to prevent a court from finding that the decision was arbitrary or capricious. As mentioned above, a suit to force the retention of the Park designation or the low density zoning would fail. The attorneys for the County and the owners would be aware of the weakness of a lawsuit urging these legal theories and would not take such a case very seriously.

I hope these answers are helpful.

Very truly yours,
SHUTE, MIHALY & Weinberger

(signed) E. Clement Shute, Jr.

  1. I have also been asked whether the owners might have other causes of action if this were to happen. It is very difficult to evaluate other potential claims since I have limited information about all of the applicable regulatory provision or the character of nearby development. However, the usual claims which are brought in similar circumstances include violations of substantive due process, violations of procedural due process, spot zoning, violation of state laws concerning the provision of housing and conspiracy to deny development. Usually, these claims brought by developers are unsuccessful. For purposes of this evaluation it can be assumed that no other cause of action would exist which has a high probability of success for the owners of the McCracken-Byers property.

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