## Facts

- A partnership owned an undeveloped 2.85-acre sloped parcel fronting Avenida San Juan in San Clemente.
- When acquired (1980), the parcel’s zoning allowed multi-home residential development; the City approved a subdivision for four single-family homes and found no geologic barriers to safe development.
- After a nearby landslide and neighborhood pressure for open space, the owners did not build.
- In 1993 the City amended its General Plan to create a “Residential Very Low” (RVL) designation intended to preserve open space in canyons; the parcel was designated RVL while surrounding parcels remained “Residential Low” (RL).
- RVL allowed approximately one dwelling per 20 acres, effectively preventing residential development on a 2.85-acre parcel.
- In 1996 the City rezoned the parcel to RVL, asserting a purpose of preserving undeveloped, geologically unstable canyons.
- In 2006 the owners sought approvals and legislative changes to build four homes (including general plan and zoning amendments, a tentative map, and related permits/variances).
- The Planning Commission recommended denial; the City Council denied the application.
- In bifurcated trial proceedings, the court (1) granted mandate relief, finding the RVL designation as applied to the parcel was arbitrary spot zoning and voiding the 2006 denial; then (2) found a compensable regulatory taking under Penn Central and entered a conditional judgment allowing the City to either provide relief or pay $1.3 million in inverse condemnation damages.

## Issues

1. Whether maintaining RVL zoning on the parcel and denying the 2006 application was arbitrary, capricious, and impermissible spot zoning in light of surrounding RL zoning and the City’s stated purposes.
2. Whether the City’s refusal to lift RVL restrictions as applied to the parcel constituted a compensable regulatory taking under Penn Central.
3. Whether the owners’ claims were an untimely facial challenge to the 1993–1996 planning/zoning enactments or a timely as-applied challenge arising from the 2006 denial.
4. Whether the trial court properly entered a conditional “comply or pay” judgment and whether substantial evidence supported the $1.3 million valuation.

## Decision

- The Court of Appeal affirmed the mandate relief, holding the City’s refusal to lift RVL restrictions for this parcel and its denial of the 2006 application were arbitrary and capricious spot zoning.
- The court affirmed the finding of a regulatory taking under Penn Central, concluding the parcel was singled out for an ultra-low-density restriction imposing a disproportionate burden.
- The court held the action was timely because it was, in substance, an as-applied challenge to the 2006 denial, not a late facial attack on the RVL zoning program.
- The court affirmed the conditional structure of the judgment (City may grant relief or pay compensation).
- The court reversed in part and remanded for reconsideration of fair market value and resulting damages.

## Legal Principles

- A zoning decision may be set aside as arbitrary and capricious, including as impermissible spot zoning, when a single parcel is treated inconsistently with surrounding uses and lacks a reasonable relation to public health, safety, or welfare.
- Under Penn Central, an as-applied regulatory takings claim turns on: (1) economic impact, (2) interference with distinct investment-backed expectations, and (3) character of the government action, including whether the regulation imposes a special burden on one parcel for public benefit.
- A challenge to a land-use restriction can be timely as an as-applied claim when triggered by a later permit or rezoning denial applying the scheme to a particular parcel, even if the underlying zoning was enacted earlier.
- In regulatory takings litigation, a court may enter a conditional judgment giving the public entity a choice between rescinding the offending restriction (or granting relief) and paying just compensation, while valuation must be supported by substantial evidence.

## Conclusion

The court held the City unlawfully singled out the owners’ parcel for extreme downzoning functioning as uncompensated open space, affirmed mandate and Penn Central takings liability with a conditional “comply or pay” remedy, and remanded solely to reassess fair market value and damages.


Avenida San Juan Partnership v. City of San Clemente, 201 Cal. App. 4th 1256, 135 Cal. Rptr. 3d 570 (Cal. Ct. App. 2011)