Potomac Development Corp. v. District of Columbia, 28 A.3d 531

Background

Appellants Potomac Development Corp., South Capitol Associates, and 1625 South Capitol Street S.W., LLC own two adjacent properties near Nationals Park (industrial warehouses).
In 2005 the District informed them that the Frederick Douglass Memorial Bridge would be replaced and their properties would be required for approaches under an Advance Acquisition program.
The District repeatedly delayed formal taking notices and eminent domain proceedings from 2006 through 2009, citing funding, planning, and approvals as reasons for delays.
Appellants alleged the delay prevented development, leasing, or sale, causing economic harm and forcing a long-term holding pattern with short-term leases.
The District hired and then replaced appraisers, delaying offers to purchase the properties; by 2009 the District had not yet initiated formal condemnation.
In 2010 the trial court dismissed the complaint for failure to state a take claim, and appellants appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether delay after a government announcement can constitute a taking under Penn Central.	Appellants claim extraordinary delay and harm show a de facto taking.	Delay without actual deprivation of all economic use is not a taking; Penn Central factors control.	No taking; delay not extraordinary or severe enough.
Whether the pleadings adequately allege extraordinary delay under Penn Central.	Allegations show years of delay and manipulation of appraisals to depress value.	Allegations are conclusory and do not show illegitimate or extraordinary delay; facts are insufficient.	Not adequately alleged; complaint dismissed on 12(b)(6) grounds.
Whether the pleadings adequately allege severe economic impact under Penn Central.	Delay deprived long-term investment-backed expectations and reduced income; values increased during delay.	Despite some impact, owners retained some use and profits; long-term gains offset harms.	No severe economic impact; not a Penn Central taking.
Whether appellants state a claim for inverse condemnation under federal or DC law.	Inverse condemnation exists where a taking occurs without formal proceedings or under DC law with broader remedies.	No federal claim; DC law provides no broader remedy than the Just Compensation Clause; sovereign immunity bars broader relief.	No inverse condemnation under federal or DC law.
Whether appellants state a due process claim for lack of pre-condemnation procedures.	Advance Acquisition lacked standards or timely proceedings; process not constitutionally adequate.	Mathews v. Eldridge balancing test requires flexible, case-specific procedures; no proven due process violation.	No due process violation; claims fail.

Key Cases Cited

Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978) (ad hoc Penn Central factors govern regulatory takings analysis)
Tahoe-Sierra Preservation Council v. Tahoe Regional Planning Agency, 535 U.S. 302 (2002) (delay duration and context inform whether taking is extraordinary)
Agins v. Tiburon, 447 U.S. 255 (1980) (pre-condemnation activity generally not a taking; value declines may be incidental)
First English Evangelical Lutheran Church v. County of Los Angeles, 482 U.S. 304 (1987) (temporary deprivation can constitute a taking if later invalidated regulation)
Lingle v. Chevron U.S.A. Inc., 544 U.S. 528 (2005) (distinguishes regulatory takings from business risk; framework for analysis)
Palazzolo v. Rhode Island, 533 U.S. 606 (2001) (partial takings analysis under Penn Central; not limited to full loss of value)
Bass Enterprises Production Co. v. United States, 381 F.3d 1360 (Fed. Cir. 2004) (delay factors in complex regulatory schemes; extraordinary delay depends on context)
Donnelly Associates v. District of Columbia Historic Preservation Review Board, 520 A.2d 270 (D.C. 1987) (due process considerations and balancing in administrative action)