Minnesota Appeals Court rules against impact fees for road construction

by Eric Christianson

Harstad v. City of Woodbury
(Minnesota Court of Appeals, September 18, 2017)

The City of Woodbury, Minnesota is a growing suburb of Saint Paul. To reduce the public burden of road construction to new subdivisions, the city passed an ordinance in 2016 which provides that the city may not approve a proposed subdivision if it is deemed “premature.” The city may deem a subdivision “premature” if streets “to serve the proposed subdivision” are not “available,” which is defined as streets “existing or readily extended and funded” as “consistent with the phasing in the comprehensive plan.”

However the city provides that a new development without existing road infrastructure may be deemed mature if the developer is willing to “pays its own way” and “all associated costs” for “public infrastructure” will “be the sole responsibility of the developing property owner.” To determine these associated costs, the city has allocated undeveloped land into three phases, each of which has an estimated associated cost per acre associated for “increased traffic and trips that are generated” by expected development in that area. This fee is referred to as a “major roadway assessment” or MRA and is used as the starting point for a negotiated agreement with developers.

Martin Harstad, of Harstad Hills Inc., submitted an application to to develop 77 acres of phase – two land into a 183 – home residential community called “Bailey Park on July 23, 2015. The city informed Harstad about certain deficiencies in the application. Harstad remedied the majority of them and was then informed by the city that the remaining deficiencies where relatively unimportant. This is significant because once the city receives a complete application under Minnesota law, if it does not deny that application with cause, it is automatically approved. After receiving the cost estimate from the city for the major roadway assessment, Harstad challenged the ability of the city to collect this fee in court. He also made a takings claim, arguing that the city had deprived him of use of his property without compensation. Finally he claimed that his application had already been approved as the statutory period that the city had to deny the claim had elapsed.

The district court found for the city on the latter two claims. The permit was not entirely complete, therefor the statutory period had never begun. The court also found that Harstads takings claims were immature as the permit had never been fully submitted nor had the fee been collected. The court did however find that the city had no power to collect fees to pay for road infrastructure.

The City of Woodbury appealed this decision to the Minnesota Court of Appeals.

The Minnesota Court of Appeals focused its analysis on the question of the power of Woodbury to collect a “major roadway assessment.” The City of Woodbury is a statutory city; thus, it “has no inherent powers beyond those expressly conferred by statute or implied as necessary in aid of those powers which have been expressly conferred.”

The city argues it has express authority to impose the MRA under the plain language of Minn. Stat. § 462.358, subd. 2a . Section 462.358, subdivision 1a, provides that “a municipality may by ordinance” regulate the subdivision of land to , among other things, facilitate “adequate provision for transportation.” Minn. Stat. § 462.35 8, subd. 1a . Subdivision 2a states , in relevant part:

The standards and requirements in the regulations [authorized by subdivision 1a] may address without limitation : the size, location, grading, and improvement of lots, structures, public areas, streets, [and] roads . . . . The regulations may prohibit the issuance of permits or approvals for any tracts, lots, or parcels for which required subdivision approval has not been obtained.

The regulations may permit the municipality to condition its approval on the construction and installation of sewers, streets , electric, gas, drainage, and water facilities, and similar utilities and improvements or, in lieu thereof, on the receipt by the municipality of a cash deposit.

The city maintains that subdivision 2a’s “open-ended language” unambiguously authorizes it to condition subdivision approval on a developer’s agreement to pay an MRA that funds necessary road improvements “without limitation on location.”

The Court disagrees. This section only authorizes city planning not the collection of a fee to cover road construction costs. The Court pointed out the legislature has explicitly authorized municipalities to assess water and sewer connection charges against developers to fund public water and sewer improvements made necessary by development. The legislature has never made similar provisions for roadways.

The court agreed with the district court finding that although the city had communicated with Harstad that the remaining deficiencies in his application were minimal, the fact that they were never corrected meant that the statutory period in which the city had to approve or deny the application never began.

Finally the court affirmed the district courts denial of Harstad’s taking claim. The permit has not yet been denied nor has the major roadway assessment been collected, so no taking could have occurred.

The City of Woodbury has appealed to the Minnesota Supreme Court which accepted to hear the case. A date for oral argument has not been set.

Diesel repair business met all criteria for conditional use permit in agricultural zone

Hortian, et al., Relators vs Fischer and Wright County Planning Commission
Minnesota Court of Appeals, December 7, 2015

In 2006 the Wright County Planning Commission granted a CUP to Fischer to operate a diesel repair business as a home-extended business on property that is zoned General Agricultural (AG). Under this zoning classification home-extended businesses are allowed. The Hortians live on the neighboring property and complained about the business multiple times over multiple years. The Wright County Sheriff’s Department inspected the property and noted multiple violations. Fischer was told to file for an amended CUP, which he did. Fischer estimated that 40% of his business was agricultural and that his activities on the property still complied with the zoning classification. Realtors testified that Fischer’s business injured his neighbor’s properties. The Commission granted the amended CUP.

The Hortians appealed the Commission’s decision. On appeal, the Hortians must show that the Commission did not follow the standards for CUPs set forth in the zoning ordinance and that granting the CUP was an abuse of discretion.

The Hortians challenged the county’s interpretation of WCZO §741(3) which mandates that there should be “no outside storage of supplies, equipment or maintenance items; all work and work related items shall be kept in an enclosed structure.” They claim that customers’ cars parked outside of Fischer’s building waiting for repair qualify as “equipment” or “work-related items”.  The Commission instead determined that the cars were neither “equipment” nor “work-related items,” but were rather regulated by another part of the ordinance that only prohibits parking unlicensed or inoperative vehicles.  The Commission attached a specific condition to the amended CUP that “all vehicles and trailers on the property must have current registration and/or licensure unless otherwise exempt by law.” The court sided with the Commission. Considering these vehicles as “equipment” or “work-related items” is a narrow definition that would limit Fischer’s ability to work from home.

The Hortians claimed that the Commission made an error in granting the amended CUP because Fischer’s business is injurious to neighboring properties because of the additional wear on the roads, the high volume of sounds from the tools, and the bright lighting installed around the building. During a site visit the Commission found that none of these were true and that the operation complied with the ordinance.  The court did not dispute that finding, either.

The Hortians argued that Fischer’s business did not fit in an agriculturally zoned area. The Commission found that, while the business is industrial in nature, it serves an agricultural community and an agricultural purpose and therefore fit in the zoning classification.

The Commission did not err by granting the CUP.

Minnesota Environmental Protection Act requires EIS prior to issuance of certificate of need for oil pipeline

In the Matter of the Application of North Dakota Pipeline Company LLC for a Certificate and Permit for the Sandpiper Pipeline Project in Minnesota
Minnesota Court of Appeals, September 14, 2015

Friends of the Headwaters (FOH) challenged a decision by the Minnesota Public Utilities Commission (MPUC) to move forward on a final decision on a certificate of need for an oil pipeline by arguing that this violates Minnesota’s Environmental Protection Act (MEPA).

In 2013 North Dakota Pipeline Company LLAC (NDPC) applied for a certificate of need and a pipeline routing permit to connect oil pipelines in North Dakota to other pipelines in Minnesota and Wisconsin. In early 2014 MPUC approved the permits and allowed hearings and environmental review to move forward.

The Energy Environmental Review and Analysis unit (EERA) gathered 53 route alternatives and one system alternative through public outreach that were accepted by MPUC. Route alternatives are defined as, “a deviation from the [NDPC’s] proposed project with no apparent major engineering or environmental issues.” System alternatives are defined as, “a pipeline route that is generally separate or independent of the pipeline route proposed by [NDPC], and that does not connect to the specified Project endpoints.” MPUC decided to bifurcate the certificate of need and pipeline routing permit proceedings. MPUC told EERA to do an environmental evaluation of all of the systems alternatives to be used during the certificate of need proceedings, but that this would be used to develop a record and “not be equivalent in terms of the specificity and level of detail to a comparative environmental analysis undertaken in the route permit proceeding.”

The issue at stake is whether MEPA requires an environmental impact statement before MPUC can make a final decision on a certificate of need for an oil pipeline.

All parties acknowledge that MEPA environmental review must happen at some point during the approval process, but the question is when this must happen. When certificate of need and routing permit proceeding are conducted together Chapter 7852 of Minnesota administrative rules requires applicants to do a comprehensive environmental assessment for the pipeline routing permit. The Environmental Quality Board has allowed this assessment to take the place of a formal environment impact statement. FOH argues that making a decision on the certificate of need without a formal environmental review violates MEPA.

Minn. Stat. § 116D.04, subd. 2a (2014), requires the responsible governmental unit to prepare a detailed EIS before engaging in any “major governmental action” that creates the “potential for significant environmental effects.” Subdivision 2b says that “a project may not be started and a final governmental decision may not be made to grant a permit, approve a project, or begin a project…” FOH argues that issuance a certificate of need qualifies as making a final governmental decision. The court agreed. The language of those statues is unambiguous and as applied to this situation means that when the MEPA complaint environmental review will not happen until after the certificate of need is issued, an environmental impact statement must be competed as part of the proceedings.

The Court of Appeals reversed the grant of a certificate of need and remands to the MPUC to complete an EIS before holding certificate of need proceedings.

Neighbor testimony sufficient evidence to support CUP denial

by Andrea Vaage

August v Chisago County Board of Commissioners
Minnesota Court of Appeals, August 17, 2015

Jeffrey August purchased a 20-acre tract of land in Sunrise Township, in Chisago County, Minnesota. August built a fenced-in arena and later an announcement system for mounted shooting events he hosted on the property. In 2013, August formed a club, Cowboy Mounted Shooting, which held competitions and clinics. Mounted shooting involves contestants on horseback who shoot .45 caliber blanks at balloons on posts in the middle of the arena. These competitions were held throughout the summer, typically starting in the afternoon and continuing until dusk. In 2014, the Chisago County zoning department inspected the property after hearing complaints. The department found the use of the property did not conform to its zoned agricultural use. The zoning department then recommended August apply for a conditional use permit (CUP). August complied and filed a request to allow a rural retail tourism/commercial outdoor recreation use.

Two entities provided recommendations on the CUP: Sunrise Township and Chisago County Planning Commission. Sunrise Township recommended denial of the CUP based on the excessive and disruptive noise. The County Planning Commission also recommended denial of the CUP based on comments at a public hearing that noise levels were high and consistent and a planning report which stated that, although the noise was below the allowed decibel limit, it was still clearly audible from neighboring properties.

The public hearing for the CUP was held on July 16, 2014. The County Board of Commissioners denied the permit based on that hearing and the recommendations provided by the Planning Commission. August appealed. At issue is whether the denial of the CUP was unreasonable, arbitrary, or capricious. The test to determine if a zoning board decision was sound is two-pronged: the reasons given for denial are legally sufficient and the reasons had a factual basis in the record.

The legal basis for denying the CUP was Section 4.15(D)(5) of the Chisago County Zoning Ordinance (CCO) regulating rural retail tourism. Pursuant to this section, a proposed rural retail tourism use will only be allowed if it “will not negatively impact the neighborhood by intrusion of noise, glare, odor, or other adverse effects.”

The Board established several facts in regards to the noise issue. The Board relied in part on neighbors’ testimony that there was a significant increase in noise and traffic on weekends when the mounted shooting events were held. The arena for these events was located within 500 feet of adjacent homes, and noise was heard by neighboring residents. Additionally, the planning commission members’ trip to the property confirmed the high levels of noise resulting from the gunfire.

August argued the Board cannot rely on neighbor’s testimony, however, the court relied on previous rulings that found that “a municipal entity may consider neighborhood opposition when it is based on something more concrete than non-specific neighborhood opposition.

August also argued that the CUP could only be denied if the noise levels exceeded decibel levels set by the Minnesota Pollution Control Agency (MCPA). The Court found that the county zoning ordinances were not in conflict with the MCPA standards because it regulates noise based on neighborhood intrusion, not decibel levels.

The County Board of Commissioners decided to deny the CUP based on sufficient legal and factual basis and was not unreasonable, arbitrary, or capricious. The Board’s decision is affirmed.

Contempt of Court Holding Affirmed in Minnesota Wind Turbine Case

by Andrea Vaage and Gary Taylor

City of Orono v Nygard
Minnesota Court of Appeals, June 1, 2015

Jay and Kendall Nygard constructed a wind turbine in their backyard in Orono, Minnesota in violation of the City’s zoning code, and after they were denied a permit to do so.  The Nygards challenged the denial in district court and lost; however, in a 2012 decision the Minnesota Court of Appeals reversed and remanded the district court’s decision, finding that list of permitted uses in the zoning code – which did not include wind turbines – was not exhaustive.  On remand the city sent the Nygards a series of questions designed to help the city determine the relevant provisions of the zoning code, which the Nygards refused to answer.  The city thus denied the permit again. The district court supported the denial and ordered the Nygards to remove the wind turbine, pole, and concrete pad supporting the structure. The Nygards refused to comply, whereupon the district court found them in constructive civil contempt of court. The Nygards attempted to stay the contempt proceedings, which the district court denied, leading to this appeal. The Nygards first argued the court lacked subject matter jurisdiction to find them in contempt because contempt proceedings arose from their failure to comply with the district court’s order in their permit dispute, and the district court lacked subject matter jurisdiction over that permit dispute.

Subject matter jurisdiction refers to the ability of a court to adjudicate a class of actions and the questions in those actions. In Minnesota, the party attacking subject matter jurisdiction must show the court lacked authority as well as prove one of three factors:  (1) The subject matter of the action was so plainly beyond the court’s jurisdiction that its entertaining the action was a manifest abuse of authority; (2) Allowing the judgment to stand would substantially infringe the authority of another tribunal or agency of government; or (3) The judgment was rendered by a court lacking capability to make an adequately informed determination of a question concerning its own jurisdiction and as a matter of procedural fairness the party seeking to avoid the judgment should have opportunity belatedly to attack the court’s subject matter jurisdiction.

The Court of Appeals found the Nygards never presented the district court with any evidence or argument to support the existence of any of the three factors, and the Court of Appeals therefore refused to consider the arguments for the first time on appeal.  The Nygards then argued the district court lacked subject matter jurisdiction because the Nygards failed to exhaust all administrative remedies by making an administrative appeal. However, Minnesota law only allows municipalities to make that defense, not the applicant.

The Court affirmed the district court’s judgment and ordered the Nygards to comply with the earlier order to remove the wind turbine and its components.

Minn Court of Appeals upholds new water quality standards for rivers and streams

by Gary Taylor

Minnesota Environmental Science and Economic Review Board, et al v. Minnesota Pollution Control Agency
Minnesota Court of Appeals, August 10, 2015

[For background, an article on the case can be found here.]

Petitioners in this case included the Minnesota Environmental Science and Economic Review Board (a coalition of cities believed to be most affected by the agency rules in question), The Coalition of Greater Minnesota Cities, the League of Minnesota Cities and the Minnesota Soybean Growers Association.  They brought this suit against the Minnesota Pollution Control Agency (MPCA) to challenge the rulemaking process (not the scientific basis for the rules) for adopting new numeric water quality standards (WQS) for certain pollutants to limit eutrophication** of rivers and streams.  The Court of Appeals addressed two issues raised by the parties: (1) the standing of the petitioners to bring suit, and (2) MPCA’s response to public comments on the proposed rules during the rulemaking process.

Standing.  MPCA argued that the petitioners lacked standing because they failed to specify any specific rights with are currently affected by he rulemaking process, and that their potential harms “were too tenuous and rely on too many indeterminate assumptions to establish standing.”  The Court of Appeals disagreed, finding that “petitioners are challenging a rule that created numeric standards, not merely the inclusion of certain rivers on a list that would eventually lead to numeric standards.  Petitioners are among the class of persons who would be affected by a change in WQS; the petitioning groups represent municipalities, wastewater-treatment facilities, sanitary sewer districts, and farming operations, all of which have a more particularized interest than the general citizenry.”  The Court of Appeals concluded that petitioners indeed did have standing.

Response to public comments. Petitioners alleged that MPCA did not comply with statutory rulemaking procedures because it failed to adequately respond to petitioners’ comments during the rulemaking process.  They argued that MPCA relied on outdated studies and failed to make the studies it relied on part of the public record.  Petitioners relied on federal caselaw for the proposition that agency responses to comments must be “meaningful”; that is, the agency must respond in a manner that states the main reasons for its decision and explains why the agency reached the decision it did.

The Court of Appeals refused to second-guess the agency’s use of, or reliance on its chosen scientific or technical sources.  Agency decisions enjoy “a presumption of correctness.” Agencies must at times

make judgments and draw conclusions from suspected, but not completely substantiated relationships between facts, from trends among facts, from theoretical projections from imperfect data, from probative preliminary data not yet certifiable as fact, and the like.

The MPCA responded to all of the written comments received after each public hearing, including a summary of the comment and a response with citations to the documents or sources that provided the basis for the response.  Although petitioners did not agree with the rules adopted, the Court concluded that the MPCA sufficiently explained the reasons for their adoption and provided sufficient supporting documentation.  This met the test for “meaningful” response.

The Court declared the new water quality rules to be valid.

 

**Eutrophication is a syndrome of ecosystem responses to nitrogen and phosphorus, often leading to changes in animal and plant populations such as algae blooms and the proliferation of rooted plants.

Winona, MN rental ordinance case dismissed as moot by Minnesota Supreme Court

by Andrea Vaage and Gary Taylor

Dean v City of Winona
Minnesota Supreme Court, August 5, 2015

This is an update on the Winona, MN case from last year, which can be found here. To recap, homeowners wishing to obtain a rental license in Winona cannot do so if 30% of the properties on their block are already rental properties. The question before the court was whether the 30% rental rule was a valid exercise of the city’s police power, and whether the ordinance was a violation of their equal protection rights under the Minnesota Constitution. The district court granted summary judgment to the City of Winona and the court of appeals affirmed. The applicants then filed a petition for review, which was granted in May 2014.

The City moved to dismiss the appeal for lack of jurisdiction, arguing that the case was moot. Minnesota courts have established “an appeal should be dismissed as moot when a decision on the merits is no longer necessary or an award of effective relief is no longer possible.”  Of the three original plaintiffs in the lawsuit, two no longer owned their properties, and the third received a rental license from the city.  While acknowledging that their claims were technically moot, they nevertheless argued that they fell within either or both of two narrow exceptions to the mootness doctrine: (1) that the issue being litigated is capable of repetition, yet likely to evade review, and/or that the case is “functionally justiciable” and of “statewide significance.”

The first argument was quickly dispatched by the court since the ordinance, which is continuing to be enforced by the city, is open to challenge at another time.  The claims against the ordinance, therefore, are still capable of being reviewed by the courts.

As for the second argument, the Court concluded that the case is not of statewide significance.  Although other cities do have rental ordinances they do not all operate in the same manner as the Winona ordinance. While the right to rent is an important property interest, the only population affected in this case was the homeowner’s pursuing a rental license in this one municipality, hardly an urgent or impactful case calling for the application of a narrow exception to the mootness rule.

The appellants’ claims were considered moot and the case was dismissed.

Denial of conditional use permit not unreasonable. Concurring opinion suggests consideration of the comprehensive plan in CUP cases misplaced

by Gary Taylor and Hannah Dankbar

RDNT, LLC v City of Bloomington
Minnesota Supreme Court, March 18, 2015

RDNT owns Martin Luther Care Campus in Bloomington. The campus consists of two buildings that offer a variety of services, including assisted living, memory care, skilled nursing, adult day care and transitional care. In September 2011 RDNT applied for a conditional use permit from the City of Bloomington to add a third building to the campus. The additional building would result in a 26 percent increase in the number of rooms on the campus, an 8 percent increase in employees, and an overall increase in building square footage on the campus of 62 percent. People in the community opposed the permit because they worried about an increase in traffic.

The Planning Commission unanimously voted to recommend denial of the permit.  It concluded that the proposed addition would violate the comprehensive plan in three ways: (1) it is not adjacent to an arterial or collector street; (2) it is not in close proximity to transit, amenities, and services; and (3) it would not preserve the character of the surrounding low density, single family neighborhood. The Planning Commission also determined that the proposed use violated the City’s conditional use permit ordinance because it would be injurious to the surrounding neighborhood through increased traffic, density and design of the building. This conclusion was based on estimated increases in traffic and on the size, density and design of the proposed building.

The City Council met to consider the recommendations of the Planning Commission.  The Council listened to the neighboring landowners that spoke both for and against the proposal, and also reviewed traffic studies from two different experts estimating the future traffic volume that would be generated by the proposed expansion.  Ultimately the Council voted four to three to deny the application for the permit, finding that the project would conflict with different comprehensive plan provisions, and also that the project would render the Campus “incompatible with the scale and character of the surrounding low density, single family neighborhood” in violation of the conditional use permit ordinance.

RDNT filed a complaint in district court.  The district court ruled for RDNT, finding that the Council “misapplied certain standards, misrepresented the impact of certain studies, and appeared to ignore evidence to the contrary.”  On appeal, however, the Court of Appeals sided with the City, holding that the City properly exercised its discretion.  RDNT then appealed to the Supreme Court.

The Supreme Court did not address the issues related to compatibility of the proposal with the comprehensive plan, instead limiting its review to the claim that the proposed use would violate the conditional use ordinance.  Noting that a court “will reverse a governing body’s decision regarding a conditional use permit application if the governing body acted unreasonably, arbitrarily, or capriciously” the Supreme Court broke this inquiry down into two parts:  (1) whether the reasons provided by the city were legally sufficient and, if so, (2) whether the reasons had a factual basis in the record.

Criteria 5 of the conditional use permit ordinance requires the Council to make a finding that “the proposed use will not be injurious to the surrounding neighborhood or otherwise harm the public health, safety and welfare.”  Although noting that this standard is imprecise, the Court recognized that it has long held that cities have the right to deny conditional uses “if the proposed use endangers the public health or safety or the general welfare of the area affected or the community as a whole.”  Thus the Court concluded that the ordinance standard is legally sufficient.

Regarding the second step, neighbors gave concrete testimony about how the increase in traffic would damage their quality of life. Bloomington relied on multiple traffic studies, data from their City Engineer and detailed factual complaints from residents to determine that this project will injure public health and welfare. The City determined that street capacity alone was not dispositive as to whether an increase in traffic would injure the neighborhood or otherwise harm the public health, safety, and welfare. “The fact that a street could physically handle more traffic does not determine whether the neighborhood or the public could handle more traffic. To paraphrase one of the City’s planners: this is not a capacity issue, it is a livability issue.” The Court, therefore, could not conclude that the City acted unreasonably, arbitrarily, or capriciously.

Based on the record, Bloomington did not act unreasonably, arbitrarily or capriciously when it denied the permit.

Concurring Opinion

Justice Anderson agreed with the majority’s conclusion, but addressed the “alarming argument” advanced by the City “that the City may properly deny a conditional use permit when the proposed use is in conflict with its comprehensive plan.”   Justice Anderson believes there is “significant uncertainty in our statutory framework and confusion in our case law concerning the role of comprehensive plans,” and that “constitutional implications [lurk] behind the insistence of the City that a conditional use permit may be denied for any comprehensive plan violation.”  After a lengthy historical review of caselaw and legislative amendments to Minnesota’s planning and zoning statutes, Justice Anderson observes that both the courts and legislature have “made hash out of the intersection of comprehensive planning, zoning and property rights law.”  He suggests that “comprehensive plans are too long and too general (too “comprehensive”) to provide a reasonable standard” for denying a conditional use permit. Additionally, a conditional use ordinance does not create a “standard” by requiring compliance with the entire comprehensive plan as a prerequisite to obtaining a permit “because a comprehensive plan does not provide sufficiently specific standards to measure compliance.”  Finally, Justice Anderson finds it “difficult to envision … how any applicant could comply with the entire comprehensive plan.”  He points to several goals in the City’s plan that lend support to RDNT’s project, but believes that “the City, looking for any port in the storm to deny the RDNT application, now weighs these goals as less important than other goals.” In his opinion this “demonstrates the poor standard the comprehensive plan provides and the inherent arbitrariness that exists when the plan is relied upon to make these types of decisions.”

MN county ordinance required formal adoption of planning commission findings on the record at a meeting

by Hannah Dankbar

Bio Wood Processing, LLC v. Rice County Board of Commissioners
Minnesota Court of Appeals, April 13, 2015

Bio Wood Processing recycles wood products into bedding for animals and mulch. Its facility is located in Rice County, near the City of Faribault. The area of the facility is zoned as urban-reserve, and any agriculture businesses must obtain a conditional use permit (CUP). Bio Wood received a CUP in 2011 that restricted the hours they could grind wood.

In 2013 Bio Wood asked to amend its CUP; this included an expansion of its hours of operation. The planning commission allowed longer wood grinding hours, but reduced the total hours of operation. In 2014 Bio Wood applied for another amendment that asked for a new set of conditions that did not include any restrictions on hours of operation. After hearing from company representative and community members who live near the facility, the planning commission took a voice vote and decided to recommend denial of the application.

Between May 1 and 13, 2014 a written document entitled “Findings of Fact” was written with notes from the Planning Commission meeting to pass along to the Board of Commissioners. The Board of Commissioners followed the recommendation and denied the application. Bio Woods appealed.

Bio Woods claimed that the county erred in judgment in multiple ways; (1) the planning commission failed to make findings of fact on the record, (2) the board failed to engage in reasoned decision-making, (3) the board’s findings are not supported by the factual record and (4) the board treated applicants who are similarly situated differently.

Bio Woods claimed that the Planning Commission did not meet the requirements of the county ordinance, which states in part that “the report from the planning commission to the County Board shall take the form of formal findings on the record.” The county argued that nothing in the ordinance required them to write the findings themselves or read them out loud on the record. A notary public did certify a portion of a transcript, but not the section that mentions findings of fact. The court found the plain meaning of the ordinance required the commission to make formal findings in the course of a public meeting, either by stating them orally or by approving a previously prepared document that includes written findings. The court determined that the county did not satisfy the plain meaning of the county ordinance because county staff prepared written findings from a meeting after the meeting happened and submitted the written findings to the County Board without the Planning Commission ever formally adopting them  “on the record.”

The court reversed the Board of Commissioner’s decision to deny the CUP. The matter went back to the county to make valid findings in this case.

Minnesota Buy-the-Farm statute gives landowner discretion in determining size of parcel to be condemned

by Hannah Dankbar

Great River Energy v David D. Swedzinski
Minnesota Supreme Court, March 4, 2015

Great River Energy (GRE) is part of the CapX2020 project, which involves installing a high-voltage transmission line from South Dakota to Minnesota. GRE sought easements of land from Minnesota landowners following Minn. Sta. §216E.12, which gives public utilities the power of eminent domain for their projects. Dale and Janet Tauer are landowners of one of the affected properties (218.85 acres) that they have leased out for farming.

In 2012 GRE first notified the Tauers about its intent to condemn a permanent 8.86-acre easement and a temporary 3.38-acre easement. The Tauers elected to compel GRE to purchase the entire property under Minn. Stat. § 216E.12, subd 4, also known as the “Buy-The-Farm” statute.  The statute gives landowners subject to condemnation proceedings the option to compel the utility to condemn a fee interest in the landowner’s entire parcel of contiguous, commercially viable land, which would make GRE the outright owner of the entire 218 acres.

The relevant section of the Buy-The-Farm statute reads:

When private real property that is an agricultural or nonagricultural homestead, nonhomestead agricultural land, rental residential property, and both commercial and noncommercial seasonal residential recreational property, as those terms are defined in section 273.13 is proposed to be acquired for the construction of a site or route for a high-voltage transmission line with a capacity of 200 kilovolts or more by eminent domain proceedings, the owner shall have the option to require the utility to condemn a fee interest in any amount of contiguous, commercially viable land which the owner wholly owns in undivided fee and elects in writing to transfer to the utility within 60 days after receipt of the notice of the objects of the petition filed pursuant to section 117.055.

GRE did not need, nor want to own the entire parcel in fee simple and so argued to the district court that when the court rules on a landowner’s election under the Buy-the-Farm statute the court must consider other factors in addition to the factors listed in the statute, including the overall reasonableness of the election.

The Minnesota Supreme Court acknowledged that it utilized a “requirement of reasonableness” in a prior case under the statute; however, the Court noted that since that case was decided there have been amendments to the statute. Those amendments limit the factors for courts’ consideration to whether the parcel is “contiguous, commercially viable, and nonhomestead agricultural land.”  Courts cannot inject a “reasonableness” test, nor can the courts consider whether the landowner lives on the parcel, as GRE also argued.  Furthermore, the “in any amount” language leaves the parcel size determination up to the landowner, and does not give the Court discretion to determine the reasonableness of the amount for condemnation.

The Supreme Court affirmed the lower courts’ rulings in favor of the Tauers.

 

 

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