When it comes to preserving trees and other greenery of the area, municipalities are between a rock and a hard place. At least, they are now after the Sixth Circuit Court of Appeals ruling in F.P. Dev., LLC v. Charter Twp. of Canton, Michigan, 16 F.4th 198 (6th Cir. 2021). In this case, the Court challenged Canton’s exaction ordinance requiring payment for the removal of trees performed by FP Development (“FP”) in order for FP to continue to develop, use, or sell the property.
In this case, FP split a parcel that they owned into two lots so they could sell one of the lots. In order to do so, FP removed a substantial number of trees from the lots without applying for a permit, as required under the Canton ordinance. Another section of the ordinance requires that for every tree removed, the developer must either plant a certain number of trees or pay a fee to the township. In this case, FP either had to plant 187 trees or pay $47,898 into Canton’s tree fund. FP sued claiming the ordinance was illegal.
The Court ultimately held that the ordinance imposed an unconstitutional condition by coercing FP into giving up its right to just compensation for the township’s taking of trees in exchange for a permit. It was an illegal exaction.
The Court used the “essential nexus” and “rough proportionality” test to determine (1) whether or not Canton has a legitimate interest in forest and greenery preservation and the permit conditions and (2) whether the degree of exactions demanded by the ordinance’s permit conditions bears the required relationship to the projected impact of FP’s development.
Canton failed to do so merely by saying that a certain number of trees need to be replanted (either by FP or by Canton, at FP’s cost). The Court noted that Canton provided no information on the actual damage or environment degradation that would occur due to the loss of these trees, nor did Canton take into consideration any of the positive environmental effects that may occur from some of the other work FP did in developing and maintaining the property.
The future is unclear. Despite ruling in favor of FP, the Court did not find that these types of ordinances are automatically invalid, only that the ordinance and implementing government must pass the “essential nexus” and “rough proportionality” test. This means that the government may have to do an individual assessment for each potential development. This can be a difficult analysis for any government or potential developer.
If you are concerned about an ordinance and how it may affect your property or development project, you should reach out to an attorney to discuss your options.
The full text of the case can be found at:
https://law.justia.com/cases/federal/appellate-courts/ca6/20-1466/20-1466-2021-10-13.html
