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The Town of Ponce Inlet v. Pacetta, LLC

Florida Court of Appeals, Fifth District

June 16, 2017

THE TOWN OF PONCE INLET, A FLORIDA MUNICIPALITY, Appellant,
v.
PACETTA, LLC, A FLORIDA LIMITED LIABILITY COMPANY, DOWN THE HATCH, INC., A FLORIDA CORPORATION, AND MAR-TIM, INC., A FLORIDA CORPORATION, Appellees.

         NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

         Appeal from the Circuit Court for Volusia County, Terence R. Perkins, Judge.

          Elliot H. Scherker and Brigid F. Cech Samole, of Greenberg, Traurig, P.A., Miami, and Kimberly S. Mello, of Greenberg Traurig, P.A., Tampa, and Clifford B. Shepard, of Shepard, Smith & Cassady, P.A., Maitland, and Noah C. McKinnon, Jr., and Abraham C. McKinnon, of McKinnon & McKinnon, P.A., Ormond Beach, for Appellant.

          Amy Brigham Boulris, Kenneth B. Bell and Lauren L. Purdy, of Gunster, Yoakley & Stewart, P.A., Miami, and Peter B. Heebner and John N. Upchurch, of Heebner, Baggett, Upchurch & Garthe, P.L., Daytona Beach, for Appellees.

          Nancy E. Stroud, Counsel for American Planning Association, Boca Raton, Amicus Curiae for Appellant.

          Mark Miller and Christina M. Martin, of Pacific Legal Foundation, Palm Beach Gardens, Amicus Curiae for Appellees.

          LAMBERT, J.

         The parties in this case make their third appearance before this court. In this appeal, the Town of Ponce Inlet ("Town") appeals a multi-million-dollar second amended final judgment entered following a jury trial on damages arising from an inverse condemnation claim as well as an earlier order resulting from a bench trial on liability ("liability order") that found in favor of the Appellees: Pacetta, LLC; Down the Hatch, Inc.; and Mar-Tim, Inc. (collectively "Pacetta"). To explain our decision today, we first chronologically discuss the factual and procedural history involving these parties as well as the significance and intertwinement of our two earlier opinions regarding these parties.

         The Town of Ponce Inlet is a small, mostly residential community in Volusia County, located on the southern tip of a peninsula south of Daytona Beach. The main peninsula of the town is bordered to the west by the Halifax River, to the east by the Atlantic Ocean, and to the south by the Ponce Inlet, connecting the river to the ocean. There is very little commercial development in the town, other than as described by the trial court as "some limited retail establishments." The primary commercial developments in the town are three riverfront enterprises, with Pacetta's property being the middle of the three riverfront enterprises.

         The origin of the dispute between the parties began in 2003. That year, Town adopted a Comprehensive Land-Use Plan, which was accepted and approved by the State of Florida. The plan created a "riverfront commercial" land-use category that placed limits on both the height and square footage of commercial buildings, and it also prohibited the construction of new marinas and the expansion of existing marinas. In January 2004, Town enacted a Riverfront Overlay District ("ROD"), which limited the use of dry stack boat storage facilities.

         In June 2004, Pacetta, through its two controlling principals, Lyder and Simone Johnson, purchased the first two parcels of property at issue, with parcel 1 being situated in the riverfront commercial zoned area and parcel 2 being located in an area zoned medium-density residential. The original intent for this purchase was to build a "dream home, " along with some possible other residential development.

         The following year, Pacetta, with encouragement from Town, decided to broaden its development into what the trial court described in its liability order as a "delightful mixed-use planned waterfront development." However, to do so required the acquisition of additional properties. To that end, in August 2005, Pacetta purchased parcels 3 and 4, and in March 2006, it purchased parcels 5-9, on which were situated the commercial establishments Sea Love Boat Works and the Down the Hatch restaurant. Finally, in May 2006, Pacetta purchased parcel 10, which was zoned multi-family and permitted for nineteen townhouses and an equivalent number of boat slips. As a result of these purchases, Pacetta's ten parcels were contiguous to each other and encompassed sixteen acres of land.

         Pacetta then began to prepare a plan to develop all ten parcels as a waterfront project to be known as the Villages of Ponce Park. As found by the trial court, Pacetta anticipated that "it would be entitled to build and sell a series of townhomes on the south end of the acreage, would be able to continue to run and expand the restaurant, " Down the Hatch, "and would be able to build and operate a dry slip stacked storage facility on the north end of the property in an area historically dedicated to boat building, maintenance and repair." However, Pacetta's proposed development was not consistent with, and in fact was forbidden by, the Town's 2003 Comprehensive Land-Use Plan and the 2004 ROD. This was significant because "[a] local comprehensive land use plan is a statutorily mandated legislative plan to control and direct the use and development of property within a county or municipality." Citrus Cty. v. Halls River Dev., Inc., 8 So.3d 413, 420 (Fla. 5th DCA 2009) (citing § 163.3167(1), Fla Stat. (2005); Machado v. Musgrove, 519 So.2d 629, 631-32 (Fla. 3d DCA 1987)). The plan is similar to a constitution for all future development within the government boundary. Id. at 420-21 (citing Machado, 519 So.2d at 632). Where, as here, a Comprehensive Land-Use Plan has been adopted, "'all development undertaken by, and all actions taken in regard to development orders by, governmental agencies in regard to land covered by such plan' must be consistent with that plan." Id. at 421 (quoting § 163.3194(1)(a), Fla. Stat. (2005)). Therefore, in order to proceed with its planned waterfront development, Pacetta needed Town to amend its Comprehensive Land-Use Plan and to essentially relax the existing ROD zoning. Town began taking necessary steps to amend its plan to accommodate Pacetta's development project. In return, Town had certain requirements of Pacetta for the project, which were amenable to Pacetta. Pacetta invested significant time, effort, and money in its attempt to implement the project. As found by the trial court, "between June of 2004 and 2008, there does not appear to be any meaningful dispute that [Pacetta] and the Town had a harmonious convivial relationship that might even be described as pacesetting. While some cracks began to form in late 2007, the cooperation between [Pacetta] and the Town [toward developing this project] was unprecedented."

         What occurred in 2007 was the result of a growing movement by some of Town's officials and other citizens opposing Pacetta's project. In August 2007, Town passed an ordinance proposing an amendment to its town charter to allow "citizens' initiatives . . . in conjunction with land actions." On October 17, 2007, Town then passed a year-long moratorium on any building. Despite the foregoing, in March 2008, Town's council approved an amendment to its Comprehensive Land-Use Plan that deleted the square foot limits on commercial buildings and allowed both wet and dry boat storage in the riverfront commercial area, two requirements essential for Pacetta to proceed with the waterfront project. As it was required to do, Town submitted the Comprehensive Land-Use Plan amendment to the State of Florida Department of Community Affairs ("DCA") for review.[1] The DCA thereafter provided Town with its objections, recommendations, and comments. After the plan was modified to address the DCA's objections, it was submitted back to the town council for a second reading and for final approval of the amendment to the Comprehensive Land-Use Plan.

         In the meantime, during the fall of 2008, an election for town council seats was held. The ballot also included a referendum resulting from a citizens' initiative petition to amend the town charter so that land-use restrictions already in place would be elevated to the status of an immutable charter provision that, in this case, would effectively bar or restrict Pacetta's effort to construct and operate dry boat storage facilities on its property. This prohibition was significant to Pacetta because the operation of a large dry stack boat storage facility on portions of its property made the entire project economically feasible. Pending the results of the referendum vote, on October 15, 2008, the Town adopted a second year-long moratorium on building.

         The referendum passed by a 62-38% vote. Additionally, three citizens who were opposed to the Pacetta project were elected to the town council. The outgoing town council rejected, on its second reading, the previously acceptable amendment to the Comprehensive Land-Use Plan. Thereafter, pursuant to the aforementioned vote, Town adopted a revised plan and conforming ordinance that incorporated the charter amendment from the citizens' initiative, effectively prohibiting Pacetta's development project.

         Pacetta sued Town to invalidate the town charter amendment and the ordinance that amended the Comprehensive Land-Use Plan to include these restrictions. Pacetta argued that the charter amendment and the conforming ordinance affected only its singular sixteen-acre parcel of property and, thus, violated section 163.3167(12), Florida Statutes (2008), which, at that time, prohibited local initiatives or referenda in regard to development orders or comprehensive plan amendments affecting five or fewer "parcels, " as that term is defined by section 163.3164(16). See Preserve Palm Beach Political Action Comm. v. Town of Palm Beach, 50 So.3d 1176, 1179 (Fla. 4th DCA 2010) ("Section 163.3167(12) rightfully protects the small landowner from having to submit her development plans to the general public and ensures that those plans will be approved or not, instead, by the elected officials of the municipality in a quasi-judicial process."). The trial court granted summary judgment in favor of Pacetta, invalidating the town charter amendment and conforming ordinance because it improperly affected five or fewer parcels of property.

         In Town of Ponce Inlet v. Pacetta, LLC, 63 So.3d 840 (Fla. 5th DCA 2011) ("Pacetta I"), this court affirmed the final summary judgment. We first addressed whether Pacetta's sixteen acres of land were properly considered as ten separate parcels or one parcel. Pacetta I, 63 So.3d at 840-42. Section 163.3164(16), Florida Statutes (2008), defined a "parcel of land" as:

any quantity of land capable of being described with such definiteness that its locations and boundaries may be established, which is designated by its owner or developer as land to be used, or developed as, a ...

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