Daily Development for
Monday, June 16, 1997

by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law

CONSTITUTIONAL LAW; TAKINGS; EXACTIONS; BENEFIT: Development fee statute that requires a fee resulting in a benefit to developer is constitutional even though benefit is not set forth in unchangeable and concrete immediate plans.

Homebuilders Association v. City of Scottsdale, 930 P.2d 993 (Arizona, 1997).

The Supreme Court of Arizona, sitting en banc, held constitutional the City of Scottsdale's proposed charge of a fee to purchase water. The fee varied depending upon the size and type of proposed new use was . The city provided ample evidence that it needed new water and that it had several plans to obtain it. The benefits conferred on the developer included availability of water and availability of more area for new development. Although plans for obtaining such water were not concrete at the time such fee was imposed, the Arizona Supreme Court held that even in light of some uncertainty regarding the benefit, under Dolan the fee was not unconstitutional.

Comment: One interesting aspect of this case is that the court, in a dictum, states that money exactions are more benign than required dedications of land. In the Dolan case, the Court was unclear on this issue. In Ehrlich v. Culver City, the California Supreme Court held that money exactions are subject to the Dolan analysis and rule just as much as land dedications. The Arizona court is not so sure. I think this issue will continue to develop as more state courts struggle with Dolan. (Comment is by Professor Mort Gittleman at the University of Arkansas, Fayetteville.)

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1-6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Stacy Walter at the ABA. (312) 988 5260 or stacywalter@staff.abanet.org

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