Environmental Laws Constrain Landowners

Facing state and local development restrictions on its land, a Vermont ski resort sues for compensation

LONG before the first zoning regulation specifying house-lot size, governments put restrictions on what citizens could do with their own land. So-called ``nuisance'' ordinances, which forbid land uses that would damage or threaten neighbors' interests, hark back to English common law.

The influx of environmental laws in the United States over the past two decades has put private property under a whole new set of restrictions. A recent example of these constraints involves Killington Ltd., Vermont's largest ski-resort operator. On Aug. 27, Killington sued the state, charging that it effectively confiscated part of the company's land holdings when it designated 1,600 acres as critical bear habitat. The company also sued the town of Mendon, Vt., whose zoning law bans commercial development at altitudes above 2,500 feet.

Such cases raise a question: When does government regulation cross an ill-defined line and become a ``taking'' of private property? If a taking can be proved, the US Constitution's Fifth Amendment requires compensation for the owner.

Last year, the US Supreme Court ruled on a South Carolina case involving a landowner's contention that a state regulation restricting beach-front building had deprived him of any economic gain from his property and, thus, had effectively ``taken'' it. The state courts had ruled that the owner was not entitled to compensation. The high court, however, was sympathetic to the plaintiff's argument and ordered the case back to the lower courts for reconsideration of his claim.

The Supreme Court majority held that in a case like this, where all economic use of a piece of land is prohibited, compensation is required - unless the proposed use of the land would create a nuisance in the common-law sense of the term. This summer, in an out-of-court settlement, South Carolina paid the landowner, David Lucas, $1.5 million to buy his property.

In an ironic footnote to that case, the state decided to sell the land to make up for its outlay to Mr. Lucas.

The Lucas case underscored the difficulty of determining just when a taking has occurred. The Supreme Court has acknowledged the possibility of a ``regulatory taking'' - when state regulatory action so deprives an owner of economic use that it amounts to confiscation. But it hasn't defined just when this condition exists. Instead, the court has emphasized that the question must be decided on a case-by-case basis.

The number of such cases is increasing, according to Jerold Kayden, a senior fellow with the Lincoln Institute of Land Policy in Cambridge, Mass. A central factor, he points out, is whether owners have been deprived of all economic use of their land or just some of it. This issue is central to the Killington case. Supporters of Vermont's regulations, Mr. Kayden says, argue that the company could get some return on its investment by renting campsites, for example. But ``that kind of argument,'' he says, ``drives property owners absolutely ballistic.''

Frank Urso is an attorney for Killington. He says the ski operator's 10-year battle to get approval for such limited uses as selective logging and construction of a snow-making pond made it clear that the state's purpose was to ban all use and preserve an untouched bear habitat. At any elevation in the mountainous area, called Parker's Gore East, state officials found features indispensable to the bears, Mr. Urso says - whether wetlands, nut-producing beech trees, or undisturbed travel corridors.

The lawsuit, the attorney says, was ``the last resort we had.'' Killington is asking for ``just compensation equivalent to the highest and best uses'' of the property - a reference to its long-range plans to build a new alpine ski resort in the area.

That kind of compensation may be hard to attain. Kayden points out that, under current law, ``you're not entitled to the most profitable use of your property.'' He says there is ``a legion of landowners who've been denied hundreds of thousands, even millions, of dollars from their property.''

Mark Sinclair, a Vermont-based attorney with the Conservation Law Foundation, says that Killington has far from exhausted its options for the disputed land. The company might even be able to build condominiums on some of it, he says, if the development avoided the wetlands or stands of beech trees.

But attorney Urso says cutting trees and building roads are a prerequisite to any kind of economic use of the land, and those activities have already been ruled out by the state.

Mr. Sinclair, however, says there was never any chance of the kind of large-scale development envisioned by Killington on which the company bases its claim for compensation. The state's basic law regulating commercial developments, Act 250, was in place when Killington acquired Parker's Gore East in 1982, says Sinclair, who is a former assistant state attorney. The bear-habitat issue was a factor then as now, he says.

The Killington battle isn't the only one being fought in Vermont over the question of takings. Another case involves an alleged taking of private land under the federal ``rails-to-trails'' program, which converts abandoned railroad rights of way into hiking or bike paths.

The problem, says Patrick Hanifin, a lawyer at the New England Legal Foundation in Boston, is that the railroads typically acquired only an easement from an owner, usually a farmer, and the land is supposed to revert to the original ownership - or the heir to it - when the rail use ceases.

But the government's rails-to-trails law has no provision for compensating private owners of land, Mr. Hanifin says. The Vermont case, Preseault v. the United States, was remanded by the US Supreme Court to the Federal Claims Court, where the plaintiff lost. That decision is now under appeal.

Similar rails-to-trails cases have sprung up in the West, Hanifin says. And future reauthorization and strengthening of the federal endangered-species act could spur more litigation along the lines of the Killington case in Vermont. There's also the near certainty of new cases about takings under federal clean-water and wetlands laws, as well as state farmland-preservation statutes.

In ad hoc fashion, the parties in these cases will be trying to more clearly draw the line between reasonable regulation of private property and takings - a line left fuzzy by the courts. ``It's very unsatisfactory,'' Kayden says, ``but that's the state of the law.''

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