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Am. Furniture Warehouse Co. v. Town of Gilbert - 7/10/2018

Arizona Court of Appeals Division One holds that a municipality does not violate the Takings Clause by imposing a generally applicable legislative fee as a condition of obtaining a land development permit.


A business sought a development permit from the Town of Gilbert to build a commercial facility on its own land.  By ordinance, the Town requires any developer of a new commercial facility to pay a traffic signal system development fee.  The business sued, claiming that the fee was an unconstitutional taking.  The superior court granted summary judgment in favor of the Town. 

The Court of Appeals affirmed that the fee is not an unconstitutional taking.  The business invoked the analytical test established by the United States Supreme Court in Nollan v. California Coastal Commission, 483 U.S. 825 (1987), and Dolan v. City of Tigard, 512 U.S. 374 (1994).  Under the Nollan/Dolan test, a government may not impose a condition for the development of one’s own property unless (1) an “essential nexus” exists between the condition and a legitimate state interest and (2) the condition is “roughly proportional” to the projected impact of the development.

The Arizona Supreme Court, however, has stated that the Nollan/Dolan test applies only to a government’s “adjudicative” decisions, not its “legislative” decisions.  Home Builders Ass’n of Cent. Ariz. v. City of Scottsdale, 187 Ariz. 479, 486 (1997).  An “adjudicative” decision is “tailored to the particular circumstances of an individual case,” whereas a “legislative” decision is “generally applicable.”  Id.  The Arizona Supreme Court has also distinguished the Nollan/Dolan cases as involving particularly invasive government-imposed conditions, such as requiring the landowner to cede property to the government, as opposed to more benign conditions such as imposing a fee.  Id.

Here, the Court of Appeals held that the Town’s traffic signal system development fee, imposed by ordinance, is a “generally applicable legislative fee” as described in Home Builders and therefore not subject to constitutional scrutiny under the Nollan/Dolan test.

Chief Judge Thumma delivered the opinion; Presiding Judge Howe and Judge Jones joined.

Posted by: Josh Whitaker.

Posted On: 7/13/2018