
    CITY OF TAMPA, Appellant, v. Joseph R. REDNER, Appellee.
    No. 2D02-120.
    District Court of Appeal of Florida, Second District.
    March 28, 2003.
    Rehearing Denied Aug. 8, 2003.
    
      James D. Palermo, City Attorney, Jerry M. Gewirtz, and Jorge I. Martin, Assistant City Attorneys, Tampa, for Appellant.
    Luke Lirot of Luke Charles Lirot, P.A., and Jennifer D’Angelo, Tampa, for Appel-lee.
   DAVIS, Judge.

The City of Tampa appeals the final judgment entered by the trial court that awards Joseph R. Redner $493,256.15 in damages for the wrongful temporary taking of Redner’s property right by improperly rezoning Redner’s real property from “wet” to “dry.” The City argues that the trial court improperly instructed the jury as to the measure of damages. We agree and reverse the final judgment.

Redner owns a certain parcel of real property in the City of Tampa. Prior to his obtaining title, the property was zoned wet, allowing for the sale of alcoholic beverages. Redner obtained title through a complicated series of business transactions that need not be reviewed for purposes of this appeal. However, after Redner obtained title, but prior to his actually taking possession of the property, the city improperly rezoned the property dry, thus disallowing the use of the property as a bar. Redner sued the City, arguing that the rezoning was improper and amounted to a taking of his interest in the property. The trial court agreed and ordered the City to restore the wet zoning. That final summary judgment was appealed, and this court affirmed the trial court’s decision. See City of Tampa v. Redner, 778 So.2d 288 (Fla. 2d DCA 2000).

The trial court then held a jury trial to determine Redner’s damages for the loss of eight years of wet zoning. The City, arguing that the measure of Redner’s damages should be governed by Wheeler v. City of Pleasant Grove, 833 F.2d 267 (11th Cir.1987), proposed a jury instruction which tracked the language of that decision:

Accordingly, in this case, if you find that the City of Tampa is liable for damages to Joseph Redner, Mr. Redner’s damages should be the market rate of return, computed over the period of the temporary taking, on the difference between the property’s fair market value with wet zoning and its fair market value without wet zoning at the time of the taking.
You should not award additional compensation for lost profits or increased costs of development because the relevant fair market values by definition reflect a market estimation of future profits and development costs with respect to this property.

The trial court determined that Wheeler did not apply to this case and refused to give the City’s proposed instruction. Instead, the trial court gave the following instruction requested by Redner:

This measure of compensatory damages can be determined as the loss in income producing potential suffered over that period of time during which the Plaintiffs civil rights were deprived.

The trial court’s summary final judgment found that the City improperly took from Redner a “zoning entitlement.” Although the land with the improperly imposed dry zoning would generate less income than if the property were zoned wet, there was no claim that the dry zoned property was without any value whatsoever nor that it could not produce some income. Accordingly, the proper measure of damages is the reduction in the income producing potential, not the amount of all income lost while the property sat vacant for a period of time. This reduction in income producing potential is measured by subtracting the annual income potential of the property as zoned dry from the annual income potential of the property as zoned wet, multiplied by the number of years the property was improperly zoned. See Wheeler, 883 F.2d 267. The annual income potential would be the expected percentage of return on investment multiplied by the fair market value of the property. For example, if the fair market value of the property zoned dry is $250,000 and the expected percentage of return on the investment is ten percent, the annual income producing potential for the dry property is $25,000. If the fair market value of the property when zoned wet is $300,000, then the annual income producing potential for the wet property is $30,000. The annual loss in income producing potential due to the improper zoning would be $5,000 and the total loss would be eight times that amount, or $40,000.

Although Redner presented evidence of other costs he incurred, those expenses are not recoverable. See Wheeler, 833 F.2d at 270. Specifically, Redner is not entitled to lost income from a lease agreement that had been conditioned on the restoration of the wet zoning; to the costs he incurred for taxes, utilities, and insurance on the property during the temporary taking; or to engineering, architectural, and construction costs incurred remodeling the premises for his personal use as an office building.

The large dollar amount of the verdict against the City, $493,256.15, reflects that the jury improperly awarded the total of Redner’s loss of rental income under the lease agreement calculated over the time of the taking and a significant portion of the costs of maintaining and developing the property. The trial court’s instruction on damages failed to properly instruct the jury as to the appropriate award of damages. Accordingly, we reverse the final judgment and remand for a new trial.

Reversed and remanded.

KELLY, J„ Concurs. .

GREEN, OLIVER L., Senior Judge, Dissents with opinion.

GREEN, OLIVER L., Senior Judge,

Dissenting.

I respectfully dissent. The theory of the majority regarding the proper measure of damages is based on Wheeler v. City of Pleasant Grove, 833 F.2d 267 (11th Cir.1987). The facts of Wheeler are as follows:

In 1978, Cliff Development Corp. (Cliff Development) contracted with Joseph and Clarice Wheeler (the "Wheelers) to buy a parcel of land in Pleasant Grove, Alabama[,] for the sum of $160,000. Cliff Development planned to build a 120-unit apartment complex on the site. Pursuant to the contract, Cliff Development made a downpayment of $1,000 to the Wheelers. After finding that the proposed land use complied with applicable zoning ordinances, the Pleasant Grove Planning Commission issued a budding permit. ■ Cliff Development paid the city $6,165 for the permit and commenced work in preparation for construction.
Strong community opposition to the proposed development soon arose. Two mass public meetings were held, followed by a referendum in which a majority of the citizens of Pleasant Grove expressed opposition to construction of the apartments. In the wake of the referendum, the City Council in July 1978 passed Ordinance No. 216, which outlawed construction of apartment complexes in Pleasant Grove.
Cliff Development and the Wheelers brought suit in the district court against the City of Pleasant Grove and seven city officials, alleging violations of the fifth and fourteenth amendments. They sought damages as well as declaratory and injunctive relief.

838 F.2d at 268 (footnote omitted).

The court in Wheeler was dealing with the claim of owners of undeveloped land. In the instant case, we have a lost income claim founded on an existing business. If the apartment complexes in Wheeler had already been built and leased when their use was barred by rezoning, the situation would have been similar to the one at hand. In such a circumstance, it is hard to imagine that the Eleventh Circuit would not have based the measure of damages on the existing leases, which could no longer be honored.

The Wheeler court determined that the measure of the landowners’ damages was the “market rate return computed over the period of the temporary taking on the difference between the property’s fair market value without the regulatory restriction and its fair market value with the restriction.” Id. at 271. The court concluded that this method incorporated lost rental profits. Any loss under the apartment leases was purely speculative since the apartments had not been built. Thus, the market rate return theory makes sense in a situation such as Wheeler where the land was undeveloped.

At trial, the City of Tampa requested, based on Wheeler, that the jury be instructed that the measure of Mr. Redner’s damages “should be the market rate of return, computed over the period of the temporary taking, on the difference between the property’s fair market value with wet zoning and its fair market value without the wet zoning at the time of the taking.” Using this theory, the City’s appraisal expert, Lee Pallardy, testified that Mr. Redner’s damages for eight years’ deprivation amounted to the sum of $10,700. The City objected to the trial court’s instruction to the jury that the measure of damages “is the loss of income producing potential” over the period of the wrongful rezoning.

The majority agrees that the market rate of return is not the proper method of calculating damages in the instant case. However, the majority holds that the measure of damages is not “the amount of all income lost while the property sat vacant for a period of time” but, rather, the “reduction in the income producing potential.” This is, in essence, the same measure of damages as the “loss in income producing potential” instruction given by the trial court. The majority then comes up with an artificial method for determining the reduction in the income producing potential.

On appeal, the City argues that the trial court’s “loss of income producing potential” instruction was error and that the trial court should have given the market rate of return instruction. The City did not argue that the evidence was insufficient to support the damages awarded under the “loss of income producing potential” theory but, rather, that this was the wrong measure of damages. The City did not make the argument that the theory for calculating the reduction in income producing potential enunciated by the majority was the correct measure of damages under the instruction given by the trial court. Any such argument was waived by the City, and I disagree with the majority’s providing relief to the City and reversing and remanding for a new trial on damages based on a theory that was never raised.

I fail to see that the majority’s theory for calculating damages is authorized by Wheeler. The theory appears to be over-elaborate where, in this case, the one-year lease with a five-year option for the property in question was introduced into evidence. The lessee backed out of the lease upon learning that the wet zoning had been revoked. The lessee, Richard Cal-derone, testified that the bar that had been operating on the property was a very successful enterprise. He indicated that he would have acted on the opportunity to run it.

In Department of Agriculture & Consumer Services v. Mid-Florida Growers, Inc., 570 So.2d 892, 895 (Fla.1990) (an inverse condemnation suit and not a regulatory taking as is the case here), the supreme court, in regard to the methodology for just compensation, had this to say: “As this Court stated in Dade County v. General Waterworks Corp., 267 So.2d 633, 639 (Fla.1972), ‘[t]he conclusion to be drawn is simply that the proper valuation method or methods for any given case are inextricably bound up with the particular circumstances of the case.’ ”

Mr. Redner testified that he was unable to successfully rent the property and that he eventually converted it to offices. For my part, given the particular circumstances of this case, I feel that the “loss of income producing potential” can be calculated by the amount lost on the lease over the time period in question minus the amount by which Mr. Redner was able to minimize his damages by renting the property. It is not unreasonable to assume that the lessee would have taken up the lease option since he testified that the bar business was successful. Mr. Redner also had to pay for the maintenance and upkeep of the property that would have been paid for by the lessee.

In sum, because the theory upon which the majority granted relief was not argued by the City and because the majority’s theory of damages is not appropriate, I would affirm. 
      
      . The City also argues that the damages award is improper because the rezoning of the property was not a compensable taking. The City further argues that even though this issue was not raised below, it is fundamental and can be raised for the first time on appeal. Although we agree that the argument may be fundamental, it should have been raised on the appeal of the final summary judgment that affirmed the trial court's determination that the City did make such a taking. Since it was riot raised at the earlier appeal, we consider it waived.
     
      
      . These numbers are chosen for illustrative purposes only and do not reflect the testimony presented in this case.
     