A special referee has ruled that Richland County’s protective flood regulations did not unfairly take away developers’ use of a huge tract of riverfront property just outside Columbia.
Judge John Hamilton Smith agreed that investors Columbia Venture — who planned the fabled “Green Diamond” project — did experience “a significant decrease in value” in their 4,460 acres after regulators changed the lines predicting floodwaters.
But Smith, in his 74-page ruling, said the county should not be held responsible for developers’ $18 million gamble on riverfront property. They knew they were taking a risk, he said.
Burroughs & Chapin, which bought the property in 1999, planned to build houses, shopping complexes, golf courses, hotels and nature areas on the property, near I-77 and Bluff Road. The company later created Columbia Venture when it was recruiting additional investors in the project.The company sought reimbursement for lost property value, plus development costs and lawyer fees.
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“We just fought off a claim for $43 million,” said Mullen Taylor, the county’s lawyer, with McAngus Goudelock & Courie.
At the time of purchase, the owners knew most of the property was going to be designated a floodway, according to court papers.
In February 2002, Richland County adopted a new flood-insurance map placing 70 percent of the Green Diamond property within an undevelopable floodway.
The company filed suit in 2004. The lawsuit dragged on in part because Columbia Venture first battled it out with FEMA, the federal agency that determines where flooding is likely.
It went on so long that the witness list included several people no longer working in Richland County, including two former administrators and a land-use planner.
Councilman Greg Pearce, one of the council’s longest-serving members, said Tuesday the ruling could have been crippling. “We believed we were right but, beyond that, had we been proved wrong, I don’t know how we would’ve paid for it.”
Columbia Venture has 15 days to decide whether to appeal the decision.
Manton Grier of Haynsworth Sinkler Boyd, representing Columbia Venture, had no comment Tuesday except to say he was still reviewing the order, dated Monday.
Pearce said the county expects that, “likely as not,” the company will appeal.
The regulatory takings case placed a heavy burden on Columbia Venture, which had to prove it was wronged.
The judge analyzed three elements: whether county regulations caused the company significant economic loss; whether the property owner had reasonable investment expectations; and whether the county’s regulations have a legitimate purpose.
Smith agreed the company lost money, but sided with the county on the remaining points.
In a key passage, he wrote that “... at the outset, Columbia Venture’s investment-backed expectations of extensive development on a floodplain are necessarily diminished by the backdrop of uncertainty, risk, and regulatory limitations associated with floodplain development.”
The non-jury circuit court case went before the special referee in July, generating more than 3,000 pages of trial transcript and hundreds of pages of evidence.
Some of the company’s land has since been sold for farmland, its historical use.