Regulation authorized by
statute that sufficiently frustrates the rational expectations of investors in land capital can
amount to a “taking” even if it serves an important public purpose. New York wants to
protect historic buildings! Penn Central owns Grand Central and they want to build an
office building on top. The Court goes through two stages of analysis. First, the Court
asks whether the landmarks statute is constitutional on its face. Since it is, the Court asks
whether the statute is constitutional in its particular application to Penn Central.