Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:The city of McKinney conditioned approval of a subdivision development on the payment of certain road construction costs. The developer’s assignees, Roger and Jennifer Sefzik, alleged the city imposed an improper exaction as a condition to obtaining a building permit to develop the land, thereby taking private property without providing adequate compensation in violation of Article I, �17 of the Texas Constitution. Both parties moved for summary judgment. The trial court denied the Sefziks’ motion and granted the city’s motion on the basis of waiver and estoppel. HOLDING:Reversed and remanded. The Texas Supreme Court has adopted a “rough proportionality” test to determine whether an exaction constitutes a taking: “[C]onditioning government approval of a development of property on some exaction is a compensable taking unless the condition (1) bears an essential nexus to the substantial advancement of some legitimate government interest and (2) is roughly proportional to the projected impact of the proposed development.” Town of Flower Mound v. Stafford Estates Ltd. Partnership, 135 S.W.620 (Tex. 2004). The government must make an “individualized determination that the required dedication is related both in nature and extent to the impact of the proposed development. Thus, the burden of proof is on the government to prove that the condition imposed meets the test. The city argues that Town of Flower Mound does not apply because Creek Point voluntarily entered into a facilities agreement and consented to the payment of fees. But in Town of Flower Mound, the developer also voluntarily accepted the benefits of the development plan approval by rebuilding the road and obtaining final approval of its development plan; only then did he challenge the exaction as an unconstitutional taking and sue for reimbursement. The Texas Supreme Court rejected the argument that the developer’s actions to obtain governmental approval barred its takings claim. The summary judgment evidence-viewed under the proper standard-shows the city imposed two alternate exactions as a condition to obtain its approval of the development-build a part of New Wilmeth Road now, or give the city the money now to build it later. By executing the facilities agreement, Creek Point chose one of the alternative exactions-it agreed to pay the city what it requested in lieu of building the road, and eventually it did so. But Creek Point’s execution of the facilities agreement does not compel the conclusion as a matter of law that it agreed to the imposition of the condition and waived any claims for a regulatory taking. The only difference between Town of Flower Mound and here is that here the city imposed two alternative exactions (build the road or pay) as opposed to the Town of Flower Mound, which gave the developer no alternative to constructing the road itself. “We consider this no basis for distinguishing the supreme court’s holding in Town of Flower Mound.” The court concludes that choosing between alternative exactions does not bar a later challenge to the government’s imposition of either exaction as being a regulatory taking. Because the supreme court rejected “acceptance of the benefits” as a bar to a takings challenge and the Sefziks brought forward evidence raising a fact issue as to whether Creek Point intentionally relinquished its right to challenge the “build or pay” requirement, the court concludes the trial court improperly granted the city’s motion for summary judgment on grounds of waiver. None of the city’s evidence identifies a false representation by the Sefziks, or detrimental reliance by the city on anything other than the facilities agreement. Thus, the city’s estoppel ground is based on the “acceptance of the benefits” argument, and the same authorities, which were argued to, and rejected by, the supreme court in Town of Flower Mound. The court concludes the trial court improperly rendered summary judgment in the city’s favor on grounds of estoppel. The court addresses the city’s cross points. Because the Sefziks alleged a takings claim, not a breach of contract claim, this suit is distinguished from the waiver of sovereign immunity requirements pursuant to General Services Commission v. Little-Tex Insulation Co., 39 S.W.3d 591 (Tex. 2001), and Freedman v. University of Houston, 110 S.W.3d 504 (Tex. App.-Houston [1st Dist.] 2003, no pet.). What is being challenged here is not an obligation to dedicate the corner of the subdivision for the future extension of New Wilmeth Road. Instead, it is the obligation to pay for the road construction itself now, either by building the road or putting up the money to build it later. Accordingly, the court concludes that summary judgment is improper on grounds that the road construction payment requirement was not a taking because it was a regulation of subdivision development pursuant to the police power. The city also relied on cases regarding regulatory takings such as Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978), and Mayhew v. Town of Sunnyvale, 964 S.W.2d 922 (Tex. 1996). This case is a development exaction takings case, not a regulatory interference takings case. Therefore, the tests stated in Penn Central and Mayhew do not apply here. OPINION:Jim Moseley, J.; Wright, Moseley and Lang, J.J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.