Arroyo Grande - The New Land Department

It has been interesting to watch the transition in the State Land Department, whose long-standing mission has been "to enhance value and optimize economic return" for the State Land Trust.  In practice, the Department has simply sold trust land to the highest bidder at public auction, which historically have been developers.  Despite ongoing attempts at State Land Trust reform through the initiative process, it seems that the State Land Department has slowly begun to internalize changes as to how state trust lands are to be managed.

The Town of Oro Valley's proposed annexation of nearly 9,000 acres of State Trust Land known as "Arroyo Grande" is a case in point.  On November 19, 2008,the Town of Oro Valley voted 6-1 to adopt a general plan amendment, which will allow the process to begin for the possible annexation of Arroyo Grande.

Arroyo Grande will likely be a proving ground for the future of how the State Land Department manages the state trust lands.  Various stakeholders already have been very active in the process.  Interestingly, while Oro Valley initiated the annexation discussion with the Department, Pima County has effectively dictated much of the development of the conceptual plan.  Pima County, who has been the prime orchestrator of the Sonoran Desert Conservation Plan, has been openly critical of Oro Valley's commitment to preserving open space.  Pima County Administrator Chuck Huckelberry recently sent a memo to Oro Valley Town Manager David Andrews expressing concern over the absence of wording in the general plan ensuring that open space in Arroyo Grande and a wildlife corridor are sold for below-market value for conservation purposes.  Despite Pima County's desire to purchase some 6,000 acres of the Arroyo Grande, it recently abandoned such efforts.

Oro Valley's Andrews recently responded to such criticism by stating that "The preservation of open space in perpetuity is a deal breaker for the town."  The next phase - the pre-annexation development agreement - will prove the most interesting as the stakeholders hammer out what actually will be included in the final annexation agreement.  Whether Oro Valley is truly committed to the same goals as Pima County remains to be seen.  Nothing better than watching jurisdictions joust. 

Arizona State Land Trust - "The Highest & Best Use"

When Congress established the Territory of Arizona in 1863, Congress set aside sections 16 and 36 of each township of the Territory of Arizona for the benefit of the Common Schools, a practice first established by the Northwest Ordinance in 1787.  Congress recognized then the value of land and the importance of public schools to the developing nation.  In addition to the land set aside by Congress in 1863, the 1910 Arizona-New Mexico State Enabling Act, which allowed the Territory of Arizona to prepare for statehood, also set aside sections 2 and 32 of each township to be held in trust for the Common Schools.  The set aside for the Common Schools in Arizona currently totals approximately eight million acres. 

One of the early actions by the Arizona legislature after statehood was to create the State Land Commission, who were charged with assessing, evaluating, and making recommendations about the use of the state land trust .  The Commission, which later became the Arizona State Land Department, concluded that Arizona should not sell its Trust land outright, as other states had done.  Instead, it should put the lands to their "highest and best use."  This concept may well have been gleaned from the General Mining Act of 1872, which effectively states that mining on federal lands is deemed to be the "highest and best use" of that land.

The "highest and best use" concept has historically led the Arizona State Land Department to attempt to maximize the revenue for the designated beneficiaries of the trust, namely the Common Schools.  Increasingly, this concept has been criticized because it fails to incorporate any potential for conservation of those lands. 

Indeed, a 2006 initiative attempted to give the state of Arizona more power in managing the state land trust and also attempted to set aside over 600,000 acres of state trust land for conservation purposes.  However, that initiative failed.  A similar initiative will be on the ballot in 2008, which proposes setting aside some 570,000 acres of state trust land.  Undoubtedly, the competing interests of maximizing revenues for the state land trust and the pressure to conserve sensitive state trust lands will continue to play out in both the Arizona legislature and through the public initiative process.

The Rising Tide

Whether you believe in global warming or not, there is ample evidence that ocean levels are rising, which has created some very interesting legal issues, namely what happens when a public beach moves onto private property? This is precisely the issue in Surfside, Texas - a small beach town south of Houston. To read an article about the struggle of one homeowner dealing with this issue in Surfside, Texas, NPR has written an interesting article on it.

At issue in Surfside is private property rights and the provisions of the Texas Open Beaches Act, a 50 year old act, which was passed in order to protect the public's right for "free and unrestricted" access to state-owned beaches.

Enforcement of the Act has effectively resulted in the state and the lowers courts ruling that once land is on a public beach -- through erosion or another factor -- any private structure has to be moved. Enforcement of the Act has resulted in lawsuits over the state's ability to enforce the Texas Open Beaches Act. For example, Wayne and Janice Mikeska and Mose and Carol Smith filed a lawsuit against the City of Galveston for its refusal to grant permits for reconnection of their homes to utility services after Tropical Storm Frances.

Until 1998, when Tropical Storm Frances hit the coast of Texas causing erosion of the vegetation line, their homes were landward of the public beach. After Frances, their homes were entirely seaward of the vegetation line- i.e., the homes were completely situated on the public beach as defined by Texas law. Along with 105 other houses that were also fully positioned on the public beach, their properties were placed on the Texas General Land Office 100% List. The 100% List consisted of 107 homes on the Texas coast that, after Frances, were 100% seaward of the natural vegetation line and therefore considered encroachments on the public beach. The 100% List was submitted to the Texas Attorney General to decide whether the listed homes should be removed.

The City of Galveston then condemned their homes, disabling a number of important utilities including electricity, sewer, and water services. Although the Attorney General concluded that their homes did not require removal, the Attorney General's office notified the homeowners by letter that it was deferring any questions as to the reconnection of utilities services to the City. The owners submitted a number of requests for the reconnection of their electricity, water, and sewer lines. As to the sewer lines, the homeowners requested connection to the City's newly constructed line. Their requests, along with those from five others were rejected.

The homeowners subsequently filed suit in federal court seeking both a preliminary injunction to force the City to allow the restoration of utility services and compensatory damages. The district court granted the preliminary injunction request, and the appellants pursued their suit for money damages, averring that the City violated their substantive due process and equal protection rights under the color of state law.

On the City's motion for summary judgment, the district court dismissed the owners' complaint. According to the district court, the City's actions were rationally related to the protection of open access to the public beach (substantive due process) and to the City's obligation to follow state law to "protect the public beaches from interference" (equal protection). The homeowners filed an appeal in the Fifth Circuit Court of Appeals.

The owners argued to the appeals court that neither the City's persistent denial of the appellants' requests for utility connections nor its differential treatment of appellants' homes vis-a-vis similarly situated houses was rationally related to any legitimate governmental interest.

The appeals court ruled that the City must conform its discretionary actions to its constitutional obligations; because the City did not demonstrate the requisite rational relationship to sustain a motion for summary judgment at this stage of litigation, the court vacated the district court's determination as to the substantive due process claim.

The homeowners' equal protection claim was based on their contention that there are a number of other similarly situated homes that were allowed reconnection of their utility services. In contrast to a due process action, which looks solely to the government's exercise of its power vis-a-vis the appellants, an equal protection claim asks whether a justification exists for the differential exercise of that power. To bring such an equal protection claim for the denial of zoning permits, they had to show that the difference in treatment with others similarly situated was irrational. The appeals court ruled that city's actions indeed were irrational.

This case, along with the ongoing "just compensation" issues raised by the Porters in the NPR article, perhaps foreshadow the various legal issues that may well occur as coast lines continue to encroach on private property.

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Stucco vs Equines

A recent article in the Arizona Daily Star discussed and highlighted an increasingly controversial land use issue: what happens when the suburbs run into rural land uses, namely small horse ranches. Interestingly, I represent one of the landowners in the article that is facing the opposite situation - what happens when a horse owner alters a property for horse uses in a residentially zoned property? The issues my clients are facing are slightly different that the encroachment cases, which have an interesting legal history in Arizona, and are discussed below.

Seeking a place to ride their horses and enjoy the relative quiet of a more rural existence, historically, horse owners located well outside Tucson's city limits. However, the increasing pressures of suburban sprawl have resulted in some contentious disputes between the once rural dwellers and their new suburban neighbors.

Obviously, many horse owners never had to concern themselves with their neighbors either because their neighbors were located some distance away or shared a similar lifestyle. Now, the encroaching neighbors are none too excited at the prospect of horse corrals and the potential for manure and flies.

A classic Arizona land use case, Spur Industries, Inc. v. Del E. Webb Development Co, 108 Ariz. 178 (1972), dealt with the issue of what happens when suburban development runs into a prior existing use. In Spur, an action was brought by Del Webb to enjoin Spur Industries' cattle feeding operation. Spur Industries' predecessor began operating the cattle ranch about 15 miles outside of Phoenix in 1956. In 1959, Del Webb began the construction of the community now known as Sun City. While Del Webb was not initially concerned about the odors from the cattle operation, Del Webb later had trouble selling lots near the southern edge of the feed lot.

Del Webb's filed a lawsuit against Spur Industries, complaining that the feeding operation was a public nuisance because of the flies and the odor which were drifting or being blown by the prevailing south to north wind over the southern portion of Sun City. Del Webb's suit to enjoin the alleged nuisance was an equity claim, which allows the courts to use their broad powers to reach an fair and reasonable solution. Indeed, the courts have long recognized a special responsibility to the public when acting as a court of equity:

This case dealt with what is known as "coming to the nuisance." The courts have held that the residential landowner may not have relief if he knowingly came into a neighborhood reserved for industrial or agricultural endeavors and has been damaged thereby. In other words, a party cannot justly call upon the law to make that place suitable for his residence which was not so when he selected it.

The court described the case as an example where a business established at a place remote from population is gradually surrounded and becomes part of a populous center, so that a business which formerly was not an interference with the rights of others has become so by the encroachment of the population.

The court found that Spur Industries was required to move, not because of any wrongdoing on the part of Spur Industries, but because of a proper and legitimate regard of the courts for the rights and interests of the public. However, the court went on to say that Del Webb is not blameless in the matter, because it brought people to the nuisance to the foreseeable detriment of Spur Industries, and Del Webb must indemnify Spur Industries for a reasonable amount of the cost of moving or shutting down.

The issues addressed in Spur are alive and well in the context of the Arizona Daily Star article. How the courts choose to deal with the inevitable clash between competing land uses remains to be seen. However, it is clear that these issues will remain contentious going forward.

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