The Law and Your Business

In a recent reported case, the South Seas Resort District (SSRD) is a zoning in Florida. The County created the district in a 1973 zoning resolution, on the application of the South Seas Resort developer. The resolution limited the district’s development density to three dwelling units per acre. In 2002, the County issued an administrative interpretation finding that, of the 912 allowed units, thirty-five remained undeveloped.

There was a dispute in 2002 and the SSRD parties settled in 2003 with a mediated settlement agreement providing, in relevant part:“The total number of dwelling units on South Seas Resort is limited to 912.
No building permits may be issued by County for dwelling units within South Seas Resort that will cause that number to be exceeded at any time. In 2023, the County adopted an ordinance amending the Lee County Development Code, which, in relevant part, excepted SSRD from the three-unit-per-acre density limitation. In 2024, the Association sued the County again, seeking a judgment declaring the 912-unit building permit limitation in the 2003 settlement agreement permanent and enforceable against the County.

Ultimately the appellate court held that the permanent 912-unit limit was unenforceable against the County as an ultra vires contracting away of the exercise of the County’s police power.”The power, which in its various ramifications is known as the ‘police power, ‘ is an exercise of the sovereign right of the state to enact laws for the protection of the lives, health, morals, and comfort and general welfare of the people.

It is a”long established principle” that a local government”cannot contract away the exercise of its police powers.” Specifically,”the adoption of an ordinance is the exercise of municipal legislative power. In the exercise of this governmental function a city cannot legislate by contract. The City does not have the authority to enter into such a contract, which effectively contracts away the exercise of its police powers.”.

The Florida Local Government Development Agreement Act, §§ 163.3220-163.3243, Fla. Stat., first enacted in 1986, authorizes local governments temporarily freeze zoning regulations by entering into”development agreements” with developers in aid of”promoting a stronger commitment to comprehensive facilities planning, insuring provision of adequate public facilities, reducing the economic cost of development, promoting certainty in the approval process, and combating escalation of housing costs and development.

There is a limit to what a Florida governmental entity can contract or legislate consistent with the exercise of its police powers.