Rezoning application denial; 42 USC § 1983 action alleging a “regulatory taking”; Penn Cent Transp Co v City of NY; Substantive due process claim; Rational relationship to a public purpose

The court affirmed summary judgment for defendant-City of Worthington on plaintiff-Lifestyle Communities’ claim that the City committed a “regulatory taking” by denying Lifestyle’s rezoning application, holding that the claim failed under the Penn Central factors. Lifestyle bought property in the City, intending to build a mix of residential and commercial spaces. The City did not approve the development plan or the request to rezone. Lifestyle sued under various theories, but the district court ruled for the City on all claims. On appeal, as to the regulatory-taking claim, the court assumed without deciding that Lifestyles had a cognizable property interest. It then applied the Penn Central factors and held that the district court did not err in granting the City summary judgment. As to the economic impact of the regulation factor, “even a significant loss of property value, absent more, will not suffice to prove a taking.” As to the distinct investment-backed expectations factor, the City never promised Lifestyle “it would approve development consistent with the Comprehensive Plan.” Further, circumstances showed “that broad compliance with the Comprehensive Plan would be necessary, but not sufficient, to achieve rezoning approval. And even if the” City Council approved the “development, a referendum could still reverse that decision. Given this context, a reasonable investor would not expect that approval from Worthington and its residents was guaranteed.” The final factor, the character of the government action, also weighed against Lifestyle. The City’s actions did “not resemble a physical invasion” and also had “legitimate public purposes. Among other reasons,” City residents opposed Lifestyle’s “proposal due to its lack of greenspace and increased traffic to the area. Both are legitimate public purposes.” Further, there was no “unreasonable delay.” The court found that Lifestyle “may have suffered a loss in property value and had to endure a fairly typical bureaucratic waiting period. But as a matter of law, this is insufficient to establish a regulatory taking.” As to the dismissal of its due process claim, a “‘local zoning ordinance survives a substantive due process challenge if there exists a rational relationship between the terms of the ordinance and a legitimate governmental purpose.’” The complaint did not plausibly allege the property’s current zoning “bears ‘no rational relationship to any public purpose.’”