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The Palm Coast City Council on Wednesday got warning from a developer that the city may soon face a lawsuit to make up for over $12 million in estimated losses from a council decision to limit a development to less than half the housing units applied for.
The developer, Byrndog PCP LC, submitted a claim to the city under the so-called Bert Harris Act, a state law that under certain circumstances enables financial compensation to developers who can prove that government has infringed their development and property rights. Developers are required to file such a claim before filing suit, giving the local government a chance to negotiate a resolution.
On this date a year ago, the Palm Coast City Council voted 3-1 to approve a subdivision of 416 single-family homes in a 375-acre development called Cascades near the south end of Seminole Woods Boulevard. The approval was for less than half the 850 units the developer had applied for, with apartments making up the balance of the units, now lost.
Only two months earlier the council on the strength of 4-1 votes had approved all 850 units in the rezoning application’s first reading. The public outcry was swift and furious. It largely focused on the apartment component in a city where a prejudice against apartment complexes near single-family residential zones has often resembled racial red-lining of old.
There would be additional aftershocks as the developer asked and got a re-hearing. That January hearing was noisier than its November kin. The outcome was no different, with Council member Theresa Pontieri, the chief opposition to the larger number of units, dueling with Byrndog attorney Michael Chiumento, just as she had dueled in November with Jeff Douglas, the developer.
“As the ordinance acknowledges, the limit of 416 dwelling units is a change from the Comprehensive Plan amendment as applied for and initially approved (and as recommended for approval by City Staff), establishing Byrndog’s entitlement to 850 dwelling units on the Property,” Steven Gieseler, the attorney filing the Bert-Harris claim on behalf of Byrndog, wrote Mayor David Alfin in a letter dated Nov. 6. (The attorney is from the Tampa-based Bartlett Loeb law firm.)
“The imposition of the 416 dwelling unit limit was a result not of considered expert review, nor of collaborative policy-making with Byrndog; rather, this unreasonable limit was concocted and first revealed at a public hearing as a result of (ostensible) political pressure seemingly invited and instigated by certain members of the City Council.”
Using the language common in property-right legalese, the attorney noted that the 850-unit was not the “highest and best use of the property to which Byrndog was entitled” when it was annexed into Palm Coast in 2023, but that Byrndog had consented to the cap in negotiations with the city. Based on the city’s assurance that “no limit lower than 850 dwelling units would be imposed,” Byrndog agreed to the annexation.
While city staff may make certain assurances to a developer, those assurances are not binding or immovable since city staff are not the policy-makers: the council is, and only the council’s ultimate decision carries. The Cascades development had been permitted as far back as 2005 as a planned unit development when it went through the county’s regulatory process. But it cleared that process at the 416-home limit, which “certain members of the City Council” seized on again to insist on the limit.
To Byrndog, the city “has inordinately burdened Byrndog’s existing use of the Property and Byrndog’s vested right to a specific use of the Property under the plain language of the Harris Act,” limiting the company’s ability to benefit from its investment. The Gieseler letter includes an appraisal of the Cascade property and a calculation of dollars lost, at fair market value. That sum is “in excess” of $12.19 million, according to the appraisal.
Bert-Harris claims are rare. Cities an counties prefer to avoid them. The Legislature passed the Bert J. Harris, Jr., Private Property Rights Protection Act in 1995. It’s been amended twice since, in favor of property rights. In simple terms, it provides for potential compensation of property owners over lost property rights at a lower threshold than does the takings (or just compensation) clause of the Fifth Amendment.
Judging from precedents, Bert-Harris law is not settled. In 2009, the First District Court of Appeal in a Jacksonville case “found no case in which an appellate court has affirmed relief granted pursuant to the [a]ct.” According to a Florida Bar summary on Bert-Harris, “While the courts extended protection since then, cases continue to indicate that the courts conservatively construe the act so as not to expose local government to a massive amount of liability. There is new legislation and recent court cases that will have a significant effect on the way Harris Act claims are handled in the judicial system. In addition, despite the amendments and various court opinions regarding the act, there appears to be a great deal of ambiguity as to what is protected under the act, how it should be applied, and what exactly constitutes a vested right, an existing use, or an inordinate burden.”
I other words, a Bert-Harris action is serious and intimidating, but its outcome is not a given: the ongoing example of Flagler County’s case against the Old Dixie motel’s owners, while not a Bert-Harris matter, is still a big window into a local judge’s interpretation of property rights and his deference to local government prerogatives. Byrndog’s case against Palm Coast, if it is ultimately filed in circuit court, would be intricate, expensive and an additional headache for a city with a growing list of litigation on its plate, but its outcome is not foretold.
Later this month Pontieri will be the sole surviving council member still seated from the meetings resulting in the Byrndog conflict. Cathy Heighter resigned last August, Nick Klufas was term-limited and lost a bid for a County Commission seat, Ed Danko (who supported Byrndog’s position) lost his bid for a County Commission seat after one term on the council (the resign-to-run law prevented him from running to retain his council seat), and Alfin was defeated in the primary.
Alfin will be replaced by Mike Norris, who focused his campaign largely on opposition to development, if without specifics. Charles Gambaro, appointed to the council on the strength of its pro-development majority, has not yet shown his hand on such matters. Newly-elected Ty Miller is expected to be in line with the previous pro-development majority, while Ray Stevens at this point can be said to be neither pro nor anti-development, though like Norris, he is sharply skeptical about the city administration.
