City had legitimate reasons to deny zoning request so no inverse condemnation occurred

Appaloosa Development, LP and Lubbock Water Rampage v. City of Lubbock, Texas, 07-13-00290-CV (Tex. App. – Amarillo, August 11, 2014).

This is an inverse condemnation case where the Amarillo Court of Appeals affirmed a take nothing judgment against the Plaintiffs.

Appaloosa is a partnership which buys land for commercial development. Water Rampage is a waterpark but had several acres of undeveloped land Appaloosa purchased. After the purchase, Appaloosa applied for a zoning change to allow commercial development. While the P&Z recommended approval, the City Council denied the application. Appaloosa brought suit for inverse condemnation. After a bench trial, the trial court ruled in favor of the City and dismissed Appaloosa’s claims. Appaloosa appealed.

The court first determined there was no negative economic impact because the property could still be used for single family, the use permitted when Appaloosa purchased the property. While the value of the land would have increased if zoning changed, the proper standard is the value comparison of before the regulation and after.  The City’s regulation remained the same in this case. The court then noted that the “character of governmental action” was removed from the analysis under U.S. Supreme Court’s decision in Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 543 (2005).  However, since the Texas Supreme Court has not provided guidance, the court analyzed that factor as well. The City had legitimate reasons to keep the zoned uses since it received several objections to the rezoning application for neighbors based   on increased noise, traffic, and crime in their neighborhood; decreased property values; and ill effects from  increased urbanization. The court determined the City did not target Appaloosa since it did not initiate a regulation, but merely kept the zoning exactly the same. Appaloosa failed to establish the City somehow sought an unfair advantage to its own projects by denying the request. The evidence was factually sufficient to support legitimate governmental purposes for keeping the zoning the same. As a result, the trial court judgment was affirmed.

If you would like to read this opinion click here. Panel:  Justice Campbell, Justice Hancock and Justice Pirtle. Memorandum Opinion by Justice Hancock. The attorney listed for the City is Jeff Hartsell. The attorney listed for Lubbock Water Rampage and Appaloosa Development is Robert W. St. Clair.