District Intown Properties Ltd. Partnership v. District of Columbia

Opinion for the Court filed by Chief Judge HARRY T. EDWARDS.

Separate opinion filed by Circuit Judge STEPHEN F. WILLIAMS concurring in the judgment.

HARRY T. EDWARDS, Chief Judge:

In 1961, District Intown Limited Properties Partnership (“District Intown”) purchased Cathedral Mansions South, an apartment building and landscaped lawn on Connecticut Avenue across from the National Zoo. District Intown subdivided this property into nine contiguous lots in 1988. In March 1989, all nine lots were declared historic landmarks. In July 1992, the Mayor of the District of Columbia denied District Intown’s request for construction permits to build eight townhouses on eight of the nine lots, finding that the construction was incompatible with the property’s landmark status. Alleging that the District of Columbia’s denial constituted a taking, District Intown and its general partners sued under 42 U.S.C. § 1988 (1994) for just compensation under the Takings Clause of the Fifth Amendment.

Upon cross motions for summary judgment, the District Court granted summary judgment for the District of Columbia. See District Intown Properties Ltd. Partnership v. District of Columbia, 23 F.Supp.2d 30 (D.D.C.1998). The District Court held that the relevant parcel for the purposes of determining whether a taking had occurred consisted of the entire property, including the apartment building, not the eight individual lots that District In-town sought to develop. See id. at 35-36. The court then analyzed the alleged taking under the Supreme Court’s holdings in Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), and Penn Central Transportation Co. v. City of New York, 438 U.S. 104, 98 S.Ct. 2646, 57 L.Ed.2d 631 (1978). The District Court found that there was no categorical taking under Lucas, because District Intown had not been deprived of all economic value in the relevant parcel. The trial court further held that District Intown could not make out a claim under Penn Central, because its reasonable in*877vestment-backed expectations had not been disappointed and it continued to receive economic benefits from the property.

We hold that the District Court correctly found that the relevant parcel for the takings analysis consisted of the entire property held by District Intown, ie., the property as it was originally purchased in 1961 and as it was held for 27 years prior to the 1988 subdivision. All relevant objective and subjective factors support this conclusion. When the property is viewed as a single parcel, there is no doubt that it has not been rendered valueless. Indeed, even if each subdivided parcel is considered separately, District Intown has not shown a “total taking” under Lucas. In addition, the record here does not show that District Intown’s investment-backed expectations were disappointed. This is not surprising, because District Intown could not have had any reasonable investment-backed expectations of development given the background regulatory structure at the time of subdivision. Accordingly, we hold that District Intown did not present any genuine issue of material fact in support of a takings claim under Penn Central or Lucas. We therefore affirm the District Court’s judgment.

I. Background

In 1961, District Intown purchased in fee simple Lot 1 of Subdivision Square 2106 on Connecticut Avenue, across from the National Zoo. The property was known as Cathedral Mansions South and consisted of an apartment budding and adjacent landscaped lawns. District In-town made no significant changes to the property until 1988, when it subdivided Cathedral Mansions South into nine lots, designated as Lots 106 through 114. The subdivisions were recorded on June 30, 1988. Lot 106 contains the apartment budding, and Lots 107 through 114 are each portions of the landscaped lawn. The record indicates that District Intown spent $2,819 to survey the parcel and to record the subdivision. The record does not reflect any other expenses.

On December 30, 1988, District Intown applied for permits to budd one townhouse on each of the eight landscaped lots. The zoning and structural engineering divisions of the Department of Consumer and Regulatory Affairs approved the permits on March 7, 1989. However, because the property is located across from the National Zoo, the permits were referred to the Commission on Fine Arts. See D.C.Code Ann. § 5^110 (1994) (“Shipstead-Luce Act”). The Shipstead-Luce Act, in effect since the 1930s, empowers the Commission on Fine Arts to communicate to the Mayor “recommendations, including such changes, if any, as in its judgment are necessary to prevent reasonably avoidable impairment of the public values belonging” to various buildings and parks. Id. On March 31, 1989, the Commission on Fine Arts recommended against construction.

Beginning in 1987, before the property was subdivided, a movement developed in the Woodley Park community in support of designating the property a historic landmark. This culminated on March 2, 1989, when the group filed a landmark designation petition. This was five days before District Intown received zoning approval for the construction. The Historic Preservation Review Board (“Review Board”) approved the landmark designation on May 17, 1989. Because the landmark designation petition was pending when District Intown’s permits were approved for zoning, the permits were referred to the Review Board pursuant to the District of Columbia’s landmark laws, see D.C.Code Ann. § 5-1001 et seq. (1994 & Supp.1999), effective since 1979. On July 19, 1989, the Review Board recommended that the construction permits be denied. The permit applications were dismissed without prejudice on December 20,1991.

On January 31, 1992, District Intown filed new permit applications identical in all respects to those previously dismissed. The permits were again referred to the *878Review Board, which recommended denial because construction on the lawn would be incompatible with its historic landmark status. Pursuant to D.C.Code Ann. § 5-1007(e), District Intown requested a hearing before an agent designated by the Mayor. The hearing was held on July 22 and 24, 1992. The Mayor’s agent agreed with the Review Board, stating that “any construction destroying the lawn” would be incompatible with its landmark status. Decision and Order of Mayor’s Agent ¶ 61 n.l, reprinted in Joint Appendix (“J.A.”) 368. In addition, the agent purported to hold that the denial of the construction permits did not work an economic hardship or constitute a taking, but the District of Columbia Court of Appeals has since declared that the agent’s holding was outside his jurisdiction. See District Intown Properties, Ltd. v. Department of Consumer and Regulatory Affairs, 680 A.2d 1373, 1379 (D.C.1996) (decision of the Mayor’s agent regarding alleged economic hardship would have no preclusive effect in any future proceeding in which District Intown might claim an uncompensated taking).

Thereafter, on March 22, 1996, District Intown filed this § 1983 action. On cross motions for summary judgment, the District Court entered summary judgment for the District of Columbia on September 25, 1998. See District Intown Properties Ltd. Partnership, 23 F.Supp.2d at 39. The court found that the property (i.e., the “relevant parcel”) for the purposes of assessing whether a taking had occurred consisted of the original Lot 1 prior to its subdivision into nine lots. See id. at 35-36. Because District Intown continued to receive significant economic benefits from use of the relevant parcel, the court found that appellants failed to demonstrate that their property had been rendered “valueless,” and their claim to a taking under Lucas failed. See id. at 36-37. The court then turned to the ad hoc analysis elucidated by Penn Central and found that none of the ad hoc factors support District Intown’s takings claim. See id. at 37-39. This appeal followed.

II. Analysis

A. Standard of Review

This court reviews a grant of summary judgment de novo. See Aka v. Washington Hosp. Ctr., 156 F.3d 1284, 1288 (D.C.Cir.1998) (en banc). A party is entitled to summary judgment if the record reveals that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Fed R. Crv. P. 56(c). In deciding whether there is a genuine issue of material fact, the court must assume the truth of all statements proffered by the non-movant except for conelusory allegations lacking any factual basis in the record. See Greene v. Dalton, 164 F.3d 671, 675 (D.C.Cir.1999). Summary judgment may be granted even if the movant has proffered no evidence, so long as the non-movant “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). As the “party challenging governmental action as an unconstitutional taking,” District Intown bears a “substantial burden.” Eastern Enterprises v. Apfel, 524 U.S. 498, 523, 118 S.Ct. 2131, 141 L.Ed.2d 451 (1998).

B. The Takings Analysis

The Takings Clause of the Fifth Amendment prohibits the government from taking “private property ... for public use, without just compensation.” U.S. Const. amend. V. In a regulatory takings case, the principal focus of inquiry is whether a regulation “reaches a certain magnitude” in depriving an owner of the use of property. Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 413, 43 S.Ct. 158, 67 L.Ed. 322 (1922); see also id. at 415, 43 S.Ct. 158 (asking whether the regulation “goes too far”). The Supreme Court has indicated that most regulatory takings cases should *879be considered on an ad hoc basis, with three primary factors weighing in the balance: the regulation’s economic impact on the claimant, the regulation’s interference with the claimant’s reasonable investment-backed expectations, and the character of the government action. See Penn Central Transp. Co., 438 U.S. at 124, 98 S.Ct. 2646.

The meaning of the three factors identified in Penn Central has been amplified by the Court, both in Penn Central and in later cases. The regulation’s economic effect upon the claimant may be measured in several different ways. See Hodel v. Irving, 481 U.S. 704, 714, 107 S.Ct. 2076, 95 L.Ed.2d 668 (1987) (looking to the market value of a property); Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470, 495-96, 107 S.Ct. 1232, 94 L.Ed.2d 472 (1987) (looking to whether the regulation makes property owner’s coal operation “commercially impracticable”); Andrus v. Allard, 444 U.S. 51, 66, 100 S.Ct. 318, 62 L.Ed.2d 210 (1979) (looking to the possibility of other economic use besides sale, which was prohibited by the challenged regulation); Penn Central Transp. Co., 438 U.S. at 136, 98 S.Ct. 2646 (focusing on the ability to earn a reasonable rate of return). A reasonable investment-backed expectation “must be more than a ‘unilateral expectation or an abstract need.’ ” Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005-06, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984) (quoting Webb’s Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 161, 101 S.Ct. 446, 66 L.Ed.2d 358 (1980)). Claimants cannot establish a takings claim “simply by showing that they have been denied the ability to exploit a property interest that they heretofore had believed was available for development.” Penn Central Transp. Co., 438 U.S. at 130, 98 S.Ct. 2646. And the character of the governmental action depends both on whether the government has legitimized a physical occupation of the property, see Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 434-35, 102 S.Ct. 3164, 73 L.Ed.2d 868 (1982), and whether the regulation has a legitimate public purpose, see Keystone Bituminous Coal Ass’n, 480 U.S. at 485, 107 S.Ct. 1232. Finally, under all three of these factors, the effect of the regulation must be measured on the “parcel as a whole.” See Penn Central Transp. Co., 438 U.S. at 130-31, 98 S.Ct. 2646.

The Supreme Court has indicated that it will find a “categorical” or per se taking in two circumstances. The first circumstance includes regulations that result in “permanent physical occupation of property.” Loretto, 458 U.S. at 434-35, 102 S.Ct. 3164. This circumstance is not at issue in this case. The second circumstance includes regulations pursuant to which the government denies all economically beneficial or productive use of property. See Lucas, 505 U.S. at 1015, 112 S.Ct. 2886. This so-called “total taking” claim is at the heart of District Intown’s complaint here. Unfortunately, the facial simplicity of the “total taking” standard belies the difficulty in its application. As the Court acknowledged in Lucas, its “rhetorical force ... is greater than its precision, since the rule does not make clear the ‘property interest’ against which the loss of value is to be measured.” 505 U.S. at 1016 n. 7, 112 S.Ct. 2886.

Under both Lucas and Penn Central, then, we must first define what constitutes the relevant parcel before we can evaluate the regulation’s effect on that parcel. In the instant case the question is: Does the relevant parcel consist of the property as a whole or do the eight lots for which construction permits were denied constitute the relevant parcels? This has been referred to as the “denominator problem.” E.g., Loveladies Harbor, Inc. v. United States, 28 F.3d 1171, 1179 (Fed.Cir.1994). State law may offer some guidance on how to define the relevant parcel, but, as the Court has noted, state law is not always determinative. Compare Lucas, 505 U.S. at 1017 n. 7, 112 S.Ct. 2886 (suggesting that one may look to the influence of the State’s property law — whether *880and to what extent the State has recognized and extended legal recognition to the particular interest alleged to have been deprived of all economic value — on the claimant’s reasonable expectations), with Keystone Bituminous Coal Ass’n, 480 U.S. at 500, 107 S.Ct. 1232 (refusing to treat the support estate as a separate parcel of property simply because Pennsylvania law recognizes it as such and noting that “our takings jurisprudence forecloses reliance on such legalistic distinctions within a bundle of property rights”).

C. The Relevant Parcel

The definition of the relevant parcel profoundly influences the outcome of a takings analysis. Above all, the parcel should be functionally coherent. In other words, more should unite the property than common ownership by the claimant. Thus, a court must also consider how both the property-owner and the government treat (and have treated) the property.

The District Court used several factors to determine the relevant parcel: the degree of contiguity, the dates of acquisition, the extent to which the parcel has been treated as a single unit, and the extent to which the restricted lots benefit the unregulated lot. See District Intown, 23 F.Supp.2d at 35 (citing Ciampitti v. United States, 22 Cl.Ct. 310, 318 (1991)). An analysis focused on these factors is eminently sound and it mirrors the approach taken by other courts in regulatory takings cases. See Forest Properties, Inc. v. United States, 177 F.3d 1360, 1365 (Fed.Cir.) (stressing the owner’s treatment of property as a unit from the time of purchase), cert. denied sub nom. RCK Properties v. United States, — U.S. —, 120 S.Ct. 373, — L.Ed.2d — (1999); K & K Const., Inc. v. Department of Natural Resources, 456 Mich. 570, 575 N.W.2d 531, 537 (Mich.) (stressing contiguity, unity of ownership, and a common development plan), cert. denied, — U.S. —, 119 S.Ct. 60, 142 L.Ed.2d 47 (1998).

Applying these factors, the District Court correctly determined that all nine lots should be treated as one parcel for the purpose of the court’s takings analysis. The lots are spatially and functionally contiguous. District Intown purchased the property as a whole in 1961 and treated it as a single indivisible property for more than 25 years. District Intown presented no evidence that, even after subdivision, it treated the lawn lots separately from Lot 106, the lot that contains the apartment building, for the purposes of accounting or management. The intentional act of subdivision is the only evidence produced by District Intown that it has treated the lots as distinct units. In fact, before the May- or’s agent, District Intown did not come forward with evidence showing that it had, for accounting purposes, treated the lawn maintenance fees separately from expenses associated with maintaining the apartment building. See Decision & Order of Mayor’s Agent ¶ 40, reprinted in J.A. 364. While there is a dispute as to whether the adjacent landscaped lawn increases the apartment building’s value, this is immaterial. Even if Lot 106 were deemed to have the same value with or without Lots 107 through 114, the application of the other three factors strongly suggests that Lots 106 through 114 are functionally part of the same property.

Appellants argue that the District Court was wrong to treat all the lots as a single parcel because it contradicts Lucas and two Federal Circuit cases. This argument falls flat. District Intown first argues that the Lucas Court termed “extreme” and “unsupportable” a similar decision by the state court in Penn Central to treat multiple holdings as a single parcel for takings analysis. See Brief for Appellants at 15-16. This dictum, see Lucas, 505 U.S. at 1017 n. 7, 112 S.Ct. 2886, referred, however, only to the state court’s decision to treat all of Penn Central’s holdings in the vicinity of Grand Central Station as part of the denominator for the purposes of deciding whether plaintiffs could receive a reasonable return on their investment in *881Grand Central. See Penn Central Transp. Co. v. New York, 42 N.Y.2d 324, 397 N.Y.S.2d 914, 366 N.E.2d 1271, 1278 (N.Y.1977). The Penn Central Court had no need to address this holding. The Lucas dictum casts aspersions on the state court’s elevation of one factor, unity of ownership, over other factors in determining the relevant parcel. The District Court engaged in no such “extreme” conduct here; it did not look to all of District Intown’s holdings in the vicinity of Cathedral Mansions South to evaluate the economic effect of the regulation at issue here; it looked to contiguous property that was purchased and treated as a single unit by appellants.

Similarly, the two Federal Circuit cases cited by District Intown do not undermine the District Court’s definition of the relevant parcel. See Brief for Appellants at 16 (citing Loveladies Harbor, 28 F.3d at 1171 and Florida Rock Indus., Inc. v. United States, 791 F.2d 893 (Fed.Cir.1986)). Neither of these cases support appellants’ position and, in fact, Loveladies Harbor supports the District Court’s decision. In Floñda Rock Industries, the court reviewed the Army Corps of Engineers’ uncompensated rejection of the plaintiffs application to mine limestone on 98 acres of the plaintiffs wetland property. See Florida Rock Industries, 791 F.2d at 896. The Federal Circuit affirmed the trial court’s decision to consider the 98 acres as the relevant parcel separate from the adjacent 1,462 acres of wetland. See id. at 904. The Federal Circuit’s justification for this decision, however, was that all the evidence and the findings indicated that the Army Corps of Engineers would have rejected mining on all of the property, so there was no point to including all 1,560 acres in the relevant parcel. See id. at 904-05. Thus, Florida Rock Industries is not analogous to the instant case; there is no indication that the District of Columbia will prevent District Intown from continuing to use its property to obtain income from its apartment building.

Loveladies Harbor lends support to the District Court’s decision to treat Lots 106-114 as one parcel. The plaintiff in Lovela-dies Harbor sought to develop a total of 12.5 acres of land, consisting of 11.5 acres of wetlands and one acre of filled upland. See Loveladies Harbor, 28 F.3d at 1180. The Army Corps of Engineers refused to grant the permit required to fill the wetlands acreage. See id. at 1174. In reviewing whether this denial constituted a taking the Federal Circuit found that the trial court correctly concluded that the relevant parcel was the entire 12.5 acres, not just the 11.5 acres to which the permit denial applied. See id. at 1181. Thus, Lovela-dies Harbor argues against treating the property burdened by the regulation separately from contiguous property.

Moreover, the Loveladies Harbor Court emphasized that a “flexible approach, designed to account for factual nuances,” guides its analysis of the denominator problem. Id. These factual nuances include “whether there remained substantial economically viable uses for plaintiffs property after the regulatory imposition,” id. (citing Deltona Corp. v. United States, 228 Ct.Cl. 476, 657 F.2d 1184 (Ct.Cl.1981)), and “the timing of transfers in light of the developing regulatory environment.” Id. Both of these factors support our conclusion in the instant case that Cathedral Mansions South as a whole constitutes the relevant parcel.

Finally, Penn Central is instructive where, as here, appellants own a single piece of property that is divisible into several legally recognized entities. Indeed, the Court was rather blunt in saying that

“[tjaking” jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated.

Penn Central Transp. Co., 438 U.S. at 130, 98 S.Ct. 2646. The Court also made it clear that a party may not “establish a ‘taking’ simply by showing that they have been denied the ability to exploit a proper*882ty interest they heretofore had believed was available for development.” Id. The Court found this suggestion to be “simply untenable.” Id.

On the basis of the foregoing authority, it seems clear here that we must analyze District Intown’s property not as separate, potentially divisible and transferable parcels, but as one contiguous parcel. Appellants note that the District of Columbia has taxed Lots 107 through 114 at a higher rate since subdivision, reflecting the District of Columbia’s assessment that these lots are vacant developable land. They contend that it is inconsistent for the District of Columbia to speak from both sides of its mouth in this regard, claiming for tax purposes that the lots are developable, but refusing to permit development on the lots. We simply note that appellants retain the right to recombine the parcels and treat them as one property for the purposes of taxation, so no further disadvantage will befall them on this score.

We are perplexed by our concurring colleague’s criticism of our approach to evaluating a takings claim. As the concurring opinion correctly notes, at bottom, the approach that we follow and the result that we reach are in accord with Supreme Court case law. Unless and until the Court instructs otherwise, we are obliged to judge within the bounds of established precedent.

D. Analysis Under Lucas

Given that Lots 106 through 114 should be treated as a single parcel, the District Court’s denial of summary judgment on District Intown’s Lucas claim is unremarkable. To come within Lucas, a claimant must show that its ■ property is rendered “valueless” by a regulation. Lucas, 505 U.S. at 1009, 112 S.Ct. 2886. District Intown presented no evidence to show that the regulation deprived the property as a whole of all economically beneficial use.

Even were we to view Lot 106 as distinct from Lots 107 through 114, it seems plain that the District Court should have granted appellees’ motion for summary judgment. Drawing all inferences in favor of District Intown, the record does not support the conclusion that Lots 107 through 114 are rendered “valueless” by the regulation at issue. The record contains a finding by the Mayor’s agent that any construction that destroyed the lawn would be incompatible with the lawn’s status as a historic landmark. See Decision & Order of Mayor’s Agent ¶ 61 n.1, reprinted in J.A. 368. District Intown argues from this that its ease fell on all fours within Lucas. District Intown seeks to extend Lucas beyond its reach. The Lucas Court consciously recognized that it was drawing an arbitrary line between total destruction of economic value and something marginally less than total destruction. See 505 U.S. at 1019 n. 8, 112 S.Ct. 2886 (pointing out that while the line establishing a categorical deprivation as requiring a complete diminution in value is arbitrary as it relates to someone who only suffers a 95% deprivation in value, the person whose deprivation is “one step short of complete” may still seek compensation under the Penn Central balancing test). District Intown propounded no evidence that the lawns’ economic value was totally destroyed as is required by Lucas, nor did District Intown offer evidence of the plots’ fair market value after its construction permits were denied. Cf. Florida Rock Indus., 791 F.2d at 905 (reversing the trial court’s finding that denial of permit constituted an uncompensated taking because the court failed to consider the property’s fair market value after regulation).

The concurring opinion misconstrues the opinion for the court when it suggests that, pursuant to our analysis, no compensable taking could ever be found. As noted in the foregoing discussion, we simply intend to highlight the limited nature of the Lucas inquiry, and note that there would be no “categorical” taking even were we to view the parcels as separate under Lucas. *883We do not pass on how the parcels would fare separately under Penn Central’s ad hoc analysis.

E. Analysis under Penn Central

There are three main factors to be considered in Penn Central’s ad hoc inquiry: the character of the government action, the regulation’s economic effect on the claimant, and the effect on investment-backed expectations. District Intown does not appear to argue that the character of the governmental action counsels finding a taking; this is not a permanent invasion, but rather a general regulation with a legitimate public purpose. As to the economic effects, District Intown offered no evidence that this regulation rendered Lots 106-114 unprofitable to maintain; there is nothing in the record to suggest that the apartment building does not bring in a sufficient return for District Intown, and a claimant must put forth striking evidence of economic effects to prevail even under the ad hoc inquiry. See Penn Central Transp. Co., 438 U.S. at 131, 98 S.Ct. 2646 (reviewing the Court’s decisions upholding regulations despite diminution in a property’s value of more than 75%).

Finally, District Intown did not present sufficient evidence that it had a reasonable investment-backed expectation to develop the lawns into apartment buildings. Here, as in Penn Central, the regulation does not interfere with District Intown’s “primary expectation” concerning the use of the parcel, because it “not only permits but contemplates that appellants may continue to use the property precisely as it has been used” for the past 28 years. Penn Central Transp. Co., 438 U.S. at 136, 98 S.Ct. 2646.

District Intown suggested at oral argument that it has satisfied the requirement of demonstrating reasonable investment-backed expectations because it purchased property that, at the time of purchase, was subdividable. This is not sufficient to establish the existence of reasonable investment-backed expectations. In this case, where the development District Intown proposes departs from the property’s traditional use, and the moment of purchase is so attenuated from the moment of subdivision, the claimant surely must point to some action beyond mere purchase to establish the reasonableness of its expectations.

Appellants also argue that their expectations of the property’s use between the moment of purchase and the moment of subdivision could have reasonably changed. This may be, but when appellants subdivided they surely knew that the legal regime had changed since they first bought their property. Moreover, they knew that any subdivided parcel would be subject to that regime. Lucas teaches that a buyer’s reasonable expectations must be put in the context of the underlying regulatory regime. See 505 U.S. at 1030, 112 S.Ct. 2886 (stating that the Takings Clause does not require compensation when the restriction is proscribed by background state law rules or understandings). District Intown purchased and subdivided its property subject to an existing regulatory regime that establishes that District Intown could have had no reasonable expectations of development at the time it made its investments.

At the time of purchase, District Intown could have reasonably expected the Shipstead-Luce Act to affect its rights of development. For approximately 60 years, the Shipstead-Luce Act has restricted development on properties that, like Cathedral Mansions South, abut or border upon the National Zoo. See D.C.Code Ann. § 5-410. Were that not sufficient, after 1979, D.C.’s historic landmark laws additionally limited expectations of development. See id. § 5-1001 et seq. Thus, at the time District Intown subdivided the property, it knew, or should have known, that the property was potentially subject to regulation under the landmark laws. Cf. Amicus Curiae Brief at 15 (pointing out that almost the entire length of Connecticut Avenue from M Street to almost a mile north of District Intown’s *884property is either landmarked or within a historic district). Businesses that operate in an industry with a history of regulation have no reasonable expectation that regulation will not be strengthened to achieve established legislative ends. See Concrete Pipe & Products v. Construction Laborers Pension Trust, 508 U.S. 602, 645, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993). In this case, District Intown was in the real estate business, with a history of restriction of development for the purpose of preserving historic sites. Similarly, the Supreme Court rejected a company’s claim of reasonable expectations that the Environmental Protection Agency would maintain trade secret confidentiality where the industry had long “been the focus of great public concern and significant government regulation” and the “possibility was substantial that the Federal Government ... would find disclosure [of trade secrets] to be in the public interest.” Monsanto Co., 467 U.S. at 1008-09, 104 S.Ct. 2862. Prior to and after subdivision, this particular property was the subject of increasing public activity devoted to restricting development through landmark designation. See Good v. United States, 189 F.3d 1355, 1361-63 (Fed.Cir.1999) (finding the claimant had no reasonable expectations where he purchased the land subject to environmental regulation and watched as public concern for the environment increased and the applicable regulations became more stringent before seeking approval for development).

District Intown also argues that the District Court’s finding that the regulation did not have a significant economic impact was erroneous. District Intown bases this argument on the assertion that they presented undisputed evidence that the lawns, absent development, add nothing to the value of the apartment building. See Brief for Appellants at 24-25. This argument misunderstands the substantial burden District Intown faced in District Court. District Intown had to produce evidence showing that its entire property, including Lot 106, no longer provided a reasonable rate'of return given the D.C. regulation. Whether the lawns add value to the apartment building is irrelevant to whether the property as a whole can be operated at a sufficient profit even with the regulation. In short, none of the Penn Central factors support District Intown’s claim of a com-pensable deprivation of property.

III. Conclusion

For the reasons stated above, we affirm the District Court’s grant of summary judgment in favor of the District of Columbia.

So ordered.