tag:buildonthis.com,2008://1 2008-06-26T17:10:42Z Movable Type 3.34 tag:buildonthis.com,2008://1.126 2008-06-26T17:08:12Z 2008-06-26T17:10:42Z

By: Eric J. Neuman, Esq., Buckingham Doolittle & Burroughs, LLP In Pugliese v. Pukka Development, 524 F.Supp.2d 1370 (S.D. Fla. 2007) the Federal U.S. District Court for the Southern District of Florida issued a decision that directly contradicts existing Florida...

Rana Gorzeck www.bdblaw.com By: Eric J. Neuman, Esq., Buckingham Doolittle & Burroughs, LLP In Pugliese v. Pukka Development, 524 F.Supp.2d 1370 (S.D. Fla. 2007) the Federal U.S. District Court for the Southern District of Florida issued a decision that directly contradicts existing Florida State caselaw regarding the impact of a developer’s qualifying for the so-called “Under 100 Lot” exemption from the Federal Interstate Land Sales Full Disclosure Act 15 U.S.C. 1701 et seq. (“ILSA”). Specifically, the Pugliese Court held that even where a project qualifies for the Under 100 Lot exemption under ILSA, a developer must nevertheless include in its purchase agreements certain ILSA mandated disclosures and provide for certain rights to purchasers. Such disclosures and rights include those that were previously required only on HUD registered ILSA developments (i.e., over 100 lots), such as allowance of a 20-day opportunity to cure a purchaser default and a limitation on the portion of a security deposit developers may retains in the event of a default by purchaser. In arriving at its conclusion, the Court in Pugliese acknowledged that it was breaking with established Florida law on this issue, previously established in Mayersdorf v. Paramount Boynton, LLC, 910 So.2d 887 (Fla. 4th DCA 2005), and contravening an opinion letter from HUD’s Office of RESPA and Interstate Land Sales. The decision in Pugliese is persuasive authority that has already been subsequently followed by the same District Court in its December 14, 2007 decision in Meridian Ventures, LLC v. One North Ocean, LLC, 538 F.Supp.2d 1359 (S.D.Fla. 2007) and its February 13, 2008 decision in Trotta v. Lighthouse Point Land Company, LLC, 2008 WL 413962 (S.D.Fla.). Such decisions are not controlling on the Florida State Courts, which are still bound by preexisting caselaw, nor are they binding on other Federal Courts. Nonetheless, these decisions creates a new gray area in the law on the implications of the Under 100 Lot exemption. If this new line of decisions survive appeal, they are sure to have an important impact on the ability to enforce existing contracts relying upon the Under 100 Lot exemption. Moreover, in light of these decisions, developers would be wise to reevaluate their form of purchase agreements and purchasers should reexamine their rights under pending contracts. tag:buildonthis.com,2008://1.125 2008-05-13T21:57:17Z 2008-05-13T22:00:54Z

Several of our clients who own shopping centers have expressed concern about the 2004 United States Supreme Court ruling of Kelo v. City of New London and its possible impact in Florida. In Kelo, the Supreme Court upheld the exercise...

Rana Gorzeck www.bdblaw.com Several of our clients who own shopping centers have expressed concern about the 2004 United States Supreme Court ruling of Kelo v. City of New London and its possible impact in Florida. In Kelo, the Supreme Court upheld the exercise of eminent domain power by a Connecticut city, New London, to take private property owned by residents of New London in furtherance of a private redevelopment plan. The Supreme Court ruled that the redevelopment plan was considered a public use, thereby justifying the city’s exercise of eminent domain. As initially predicted, Kelo, so far, has had no reported effect in Florida. The Florida Constitution forbids local governments from taking private property, except for a public purpose and with full compensation to be paid to the owners. Not only must the taking be justified by a public use, but the public use must be shown to be necessary. According to Florida Governor Charlie Crist, it is unlikely that a situation like the one in Kelo would happen in Florida. This is because unlike Connecticut laws, Florida’s eminent domain laws provide greater protection of property rights and explicitly prohibit the use of eminent domain for economic development except to eliminate “blight.” Florida law defines a “blighted” area as one in which there are a substantial number of deteriorated, or deteriorating structures, in which conditions, as indicated by government-maintained statistics or studies, are leading to economic distress or endanger life or property. Unless the shopping center meets the requirements of a “blighted” area, under Florida law, it cannot be taken by a local municipality for private redevelopment under eminent domain. Even if the shopping center is deemed blighted, the political agency exercising eminent domain authority must still establish public purpose and necessity, which, under Florida law, is a high hurdle to jump. tag:buildonthis.com,2008://1.124 2008-05-13T21:54:18Z 2008-05-13T21:56:13Z

Due to its excellent climate and favorable job opportunities, Florida typically attracts many new, permanent residents on a daily basis who bring Florida growth and additional income. As a result, many people believed that Florida was immune from the economic...

Rana Gorzeck www.bdblaw.com Due to its excellent climate and favorable job opportunities, Florida typically attracts many new, permanent residents on a daily basis who bring Florida growth and additional income. As a result, many people believed that Florida was immune from the economic downturn afflicting the rest of the country. Due to higher energy and food costs and the bursting of the speculative real estate investment bubble across the country, however, Florida has been impacted. Most owners have seen a decline in their real property values. The question is--have we hit bottom and will real property values return to their pre-downturn values? Certain financial experts believe that, in Florida, that the “bottom is at hand”. Hank Fishkind, Ph.D., has advised the Palm Beach County Attorneys’ Real Estate Council that despite the collapse of the sub prime mortgage market, Florida’s housing market in late 2007 remained unchanged, thus indicating resilience. Dr. Fishkind says this is a good indication that the bottom has already been reached and the upward slope of recovery should begin. Recovery in Florida will depend upon continued population growth, job creation, volume of inventory and any changes in the national economy. Florida remains a national leader in tourism, health care, high technology and manufacturing. As long as Florida continues to lead in these industries and the population continues to grow, Florida’s current downturn should be reversed. The need for commercial real estate in Florida to accommodate Florida’s booming industries should also continue to grow. The Federal Reserve’s recent cutback of interest rates should also spur on the recovery. The commercial real estate market in Florida, as a result, should not suffer. The hope is that we will look back on this period as a short adjustment period. An optimistic outlook is possible, and the economic pendulum should swing back, just as it has done before. tag:buildonthis.com,2008://1.120 2008-04-14T21:05:05Z 2008-04-21T16:45:14Z

H.B. 190 (eff. Nov. 14, 2007) – Requires private contractors who work with a school district for a “regular period of time” to run background checks on all employees assigned to a district building or project. Public owners are beginning...

BDB H.B. 190 (eff. Nov. 14, 2007) – Requires private contractors who work with a school district for a “regular period of time” to run background checks on all employees assigned to a district building or project. Public owners are beginning to rely upon this newly enacted statute to require private contractors to obtain fingerprints and request both an Ohio Bureau of Criminal Identification and Investigation (“BCII”) and an FBI records check prior to assigning employees to work on district projects. Further, the background check must be repeated every five years for each employee, and private contractors hired by school districts must pay the cost of these checks. The new law, R.C. 3319.391, requires a criminal background check for any person, other than people transportation operators, who is: (1) Hired to work in a school district, educational service center or chartered non-public school; and (2) In any position that does not require a “license” issued by the state board of education. This definition can be applied broadly, to include groundskeepers, construction workers and others who enter school property to perform services. Pursuant to R.C. 3319.381(A)(2), an employee is ineligible to work on a school district project if that employee has ever been convicted of or plead guilty of an offence listed in R.C. 3319.39(B)(1). There is currently a movement aimed at adding an exception that would apply to private contractors that will not have access to children when performing work on a school district project. But currently, the law is in effect and applies to all private contractors on school district projects. Employees who were hired prior to the effective date of the law and who were not previously required to have background checks will have to be checked by September 5, 2008, as recently established by the Ohio Department of Education. tag:buildonthis.com,2008://1.119 2008-04-14T20:51:51Z 2008-04-14T20:59:39Z

Summary: When federal funds are involved on a local project, the local municipality needs to be very cautious when attempting to institute local hiring preferences. Courts will most likely side with the decision made by the federal agency provided that...

BDB Summary: When federal funds are involved on a local project, the local municipality needs to be very cautious when attempting to institute local hiring preferences. Courts will most likely side with the decision made by the federal agency provided that decision is not arbitrary or capricious.]]> Case: The issue before the Court was whether a city can mandate a certain percentage of city residents as workers on a road improvement project that is partially funded by federal money. The answer is “yes,” provided the city’s ordinance does not violate federal law or regulations. In preparing a bid package for a local project, the City of Cleveland included reference to its Lewis Law, a city ordinance that requires 20% of the work on the project to be performed by city residents. Upon reviewing the bid package, Ohio Department of Transportation advised the City that failure to remove the Lewis Law language would lead to the withdrawal of federal funds, as the City’s local hiring preference requirement violated certain federal laws. The City altered the bid package by removing reference to the Lewis Law. However, subsequently, the City’s contractual agreement with contractor incorporated the Lewis Law’s requirements. As a result, the applicable federal agencies withdrew their federal support. The City filed suit seeking a declaration that the application of the Lewis Law did not violate federal laws. Although the Court of Appeals agreed with the City that the substance of the Lewis Law itself did not violate federal law, the Court ultimately denied the City’s request reasonably that the withdrawal of funds was authorized under the discretion conferred by the federal agencies involved and by 23 U.S.C. §112(b), which prohibits contract requirements that are not expressly set forth in the advertised bid specification. ]]> tag:buildonthis.com,2007://1.115 2007-06-28T16:09:56Z 2007-06-28T16:14:38Z

The Ohio General Assembly approved a bill placing limits on the government's authority to take property for economic development purposes and governor Strickland is expected to sign the bill into law, reports the Columbus Dispatch. The bill includes a requirement...

David Lindner Columbus Dispatch. The bill includes a requirement that at least 70 percent of properties in a targeted area be deemed "blighted" before the government can take the land. A companion constitutional amendment failed to garner the votes needed to appear on the November ballot.]]> tag:buildonthis.com,2007://1.113 2007-06-26T18:16:32Z 2007-06-26T18:22:37Z

Real estate attorney David Lindner reports that the Ohio General Assembly is now considering H.B. 220, which would establish Ohio's first planned community law. The proposed law would clarify and expand the powers of homeowners' associations. Check back for further...

David Lindner H.B. 220, which would establish Ohio's first planned community law. The proposed law would clarify and expand the powers of homeowners' associations. Check back for further updates as the bill proceeds through the legislative process.]]> tag:buildonthis.com,2007://1.112 2007-06-18T23:02:32Z 2007-06-18T23:06:33Z

The Cleveland Plain Dealer reports that developer Scott Wolstein, the Cleveland-Cuyahoga County Port Authority, and all but one property owner have reached a settlement in the eminent domain case pending in the Cuyahoga County Probate Court. Owner James Kasouf refused...

David Lindner The Cleveland Plain Dealer reports that developer Scott Wolstein, the Cleveland-Cuyahoga County Port Authority, and all but one property owner have reached a settlement in the eminent domain case pending in the Cuyahoga County Probate Court. Owner James Kasouf refused to settle, arguing that his property is worth substantially more than he was offered in settlement. The trial will resume on August 1 to resolve his claim.]]> tag:buildonthis.com,2007://1.111 2007-06-01T15:41:36Z 2007-06-01T15:48:42Z

The Ohio Senate passed a pair of measures yesterday that could severely limit the power of a city to take property for economic development. The first measure provides a definition for the term "blight," which is a prerequisite for a...

David Lindner Click here for additional information from the Plain Dealer.]]> tag:67.15.211.14,2007:/~buildont//1.110 2007-05-09T14:02:34Z 2007-05-14T14:02:55Z

The Cleveland-Cuyahoga County Port Authority is suing to take nine properties by eminent domain for a planned redevelopment project by developer Scott Wolstein. The case will be heard in Cuyahoga County Probate Court and several weeks of testimony are expected,...

Cleveland Plain Dealer. If the court finds that the taking is justified, the value of the properties will be determined by a jury. Opponents contend that the use of eminent domain in this case is not for the benefit of the public, but for the benefit of a private developer. Proponents argue that the redevelopment of the run-down east bank of the Flats will benefit the entire city.]]> tag:67.15.211.14,2007:/~buildont//1.109 2007-05-03T14:01:54Z 2007-05-14T14:02:19Z

The Supreme Court of Ohio will determine whether the city of Cincinnati can bypass low bidders on a construction project in favor of small and minority owned businesses, reports the Cincinnati Enquirer. Cleveland Construction sued the city after its low...

Cincinnati Enquirer. Cleveland Construction sued the city after its low bid was rejected in favor of a higher bid from a contractor that used small business and minority subcontractors.]]> tag:67.15.211.14,2007:/~buildont//1.108 2007-05-01T14:01:15Z 2007-05-14T14:01:39Z

The Cleveland Plain Dealer reports that Cuyahoga County Probate Judge John Donnelly ruled in favor of the city of South Euclid, which sought to obtain a portion of the Cedar Center shopping center for redevelopment. Four tenants contested the city's...

Cleveland Plain Dealer reports that Cuyahoga County Probate Judge John Donnelly ruled in favor of the city of South Euclid, which sought to obtain a portion of the Cedar Center shopping center for redevelopment. Four tenants contested the city's right to take the property. The city will now proceed with selecting a developer to rehabilitate the South Euclid portion of the shopping center.]]> tag:67.15.211.14,2007:/~buildont//1.107 2007-04-30T14:00:12Z 2007-05-14T14:00:46Z

By James Simon and Donald Leach In late 2006, the Ohio General Assembly passed H.B. 694, a sweeping reform of Ohio’s campaign finance laws that affects all public contractors and design professionals. This new law severely constrains public contractors’ and...

James Simon and Donald Leach In late 2006, the Ohio General Assembly passed H.B. 694, a sweeping reform of Ohio’s campaign finance laws that affects all public contractors and design professionals. This new law severely constrains public contractors’ and design professionals’ ability to make political contributions to officeholders that award bid or unbid public contracts valued over $500. Its impact is not limited to construction related contracts as affected public contracts include all those let by the state, state agencies and political subdivisions, including local governments and appointed boards, agencies and commissions. H.B. 694 imposes harsh sanctions, including criminal prosecution and contract rescission, for contractors that violate its limits. The provisions of H.B. 694 affect all contributions made after January 1, 2007. Under the new law an officeholder (and all boards, agencies or commissions the officeholder appoints) cannot award a public contract if the officeholder received campaign contributions exceeding $1,000 during the preceding two years from an individual owner, member, partner, 20% shareholder or professional corporation shareholder of a public contractor. The limit includes contributions by owners’ spouses and minor children.]]> Further, an officeholder (and all boards, agencies or commissions the officeholder appoints) cannot award a public contract to a contractor or design professional if the officeholder received campaign contributions exceeding $2,000 during the preceding two years from all of a public contractor’s partners, members, 20% shareholders (of a general corporation), or professional corporation shareholders (including owners’ spouses and minor children), and any “affiliated PAC.” The burden of proving compliance with H.B. 694 rests on the contractor or design professional. Before being awarded a public contract, the contractor or design professional must certify compliance with H.B. 694. False certifications are punishable as fifth degree felonies. The same limits apply from the award of a contract until one year after its completion. Further contributions over the limits after the award of a contract can result in fines and rescission of the contract. Under H.B. 694, seemingly nominal support of an officeholder from a contractor or design professional or their owners can disqualify the contractor and design professional from receiving public contracts or may result in the loss of already-awarded contracts. Therefore, it is important for every contractor and design professional involved in public construction to closely monitor the political contributions it makes and the contributions made by its owners and any affiliated PAC. tag:67.15.211.14,2007:/~buildont//1.106 2007-04-26T13:58:45Z 2007-05-14T13:59:35Z

Construction law and business litigation attorney Mark F. Craig reports that the Ohio Supreme Court upholds a “no damages for delay” clause in Dugan & Meyers Constr. Co., Inc. v. Ohio Dept. of Adm. Servs., 2007-Ohio-1687. Plaintiff Dugan & Meyers...

Dugan & Meyers Constr. Co., Inc. v. Ohio Dept. of Adm. Servs., 2007-Ohio-1687. Plaintiff Dugan & Meyers (“D&M”) was terminated on a public project at the Ohio State University and was assessed liquidated damages for 188 days of delay in completion, apportioned between D&M and three subcontractors. D&M brought suit in the Court of Claims to recover its cost overruns, alleging that the additional costs were due to inaccurate plans and specifications provided by the public owner. The referee in the Court of Claims agreed, finding that under the 1918 U.S. Supreme Court decision, Spearin v. United States, D&M was entitled to rely on the accuracy of owner-provided plans and specifications. The Court of Claims agreed with the referee’s recommendations and granted judgment in favor of D&M. ]]> The state appealed to the 10th District Court of Appeals, who reversed the judgment on the basis that all of D&M’s cost overruns were a direct result of delays on the project, which were precluded by D&M’s failure to give contractual notice, thereby waiving any damages arising from the delay. The Court of Appeals also held that D&M failed to provide competent evidence of actual damages. The Ohio Supreme Court affirmed the 10th District’s ruling, holding that the “no damage for delay” clause was enforceable because the contract clearly provided that “time is of the essence” and provided a specific procedure to be followed in the event of a delay, which was not followed by D&M. The Court noted that the contract pre-dated the “Fairness In Contracting Act” of 1998 in which the Ohio State Legislature made such clauses void and unenforceable as against public policy in most instances. R.C. 4113.62(C). The 1998 legislation includes specific language stating that its provisions do not apply “to any contracts, agreements, or understandings entered into before the effective date of this act.” The Court also noted that Spearin involved the existence of a site condition that precluded completion of the construction project and distinguished this case on the basis that “the case before us concerns the allocation of damages flowing from delay in completion of a construction project due to plan changes.” “[W]e decline the opportunity to extend the Spearin Doctrine from job-site-condition cases to cases involving delay due to plan changes.” tag:67.15.211.14,2007:/~buildont//1.104 2007-04-19T13:53:05Z 2007-05-14T13:57:25Z

Cleveland City Council is likely to renew the current residential tax abatement program, rejecting Mayor Jackson's proposal to limit the term of the abatements, reports the Plain Dealer. The Mayor favors reducing most abatements to seven years from 15, with...

Plain Dealer. The Mayor favors reducing most abatements to seven years from 15, with 12 year abatements for environmentally-friendly design. Many developers believe the abatement program is essential to building new housing in Cleveland.]]>