Evidence did not support denial of permit for video casino

by Melanie Thwing

M.G. Oil Company v. City of Rapid City
(Supreme Court of South Dakota, January 26, 2011)

M.G. Oil Company, who owns and operates 25 local businesses, applied to the City of Rapid City, South Dakota for a conditional use permit (CUP) to operate a video lottery casino with an on-sale liquor establishment. This casino would be placed in a newly constructed strip mall that is zoned commercial. After correct completion of the application and notification process the Growth Management Department and other agencies including the police department reviewed the application. It was recommended for approval with stipulations about maintenance of the facility.

Although there is another video lottery casino just north of the property, the Growth Management Department stated that they found no undue concentration “which would cause blight or deterioration or diminish land values in the surrounding area;” standards required to be addressed by the Rapid City zoning ordinance.  Even given this Mario Rangel, a nearby property owner, appealed the decision.  Mr. Rangel stated he wanted the city to support “positive” development.  The issue was placed on the City Council’s agenda.  The matter was eventually sent to the Legal and Finance Committee so that the public would have additional time to comment.

At the next Legal and Finance meeting the applicant, six proponents, and two opponents commented on the proposal. One opponent spoke about safety concerns in the area, but was unsure if the increase of crime she experienced was directly related to the existing video casino located only a block away. To this claim M.G. Oil presented the security measures of the company. This included at least six security officers, with at least two having a history in law enforcement. Also, two women employees of M.G. Oil spoke on behalf of the effectiveness of the security.

Alderman Kroeger voiced his opinion that the area did not need a new casino a block away from an existing one, even though there were greater concentrations of casinos in other parts of town. Due to this, another alderman requested the police department present an analysis of the relation between calls to the police for service and casinos. The proposal was thus returned without recommendation to the City Council to allow time for this analysis. Ultimately, the police chief stated that the results for casinos were “statistically neutral.”

Before the proposal was voted on, the City Attorney told the council that they would have to make a finding based on the ordinance if they wished to deny the application. This falls under SDCL 11-4-4.1 which states:

“The approving authority shall consider the stated criteria, the objectives of the comprehensive plan, and the purpose of the zoning ordinance and its relevant zoning districts when making a decision to approve or disprove a conditional use permit.”

Given this, Alderman Kroeger again spoke on the issue, stating that he would deny the license because he believed it would cause blight and diminish property values but gave no facts to support this. Alderman Olson also stated she would vote to deny the CUP because the neighborhood was entitled to positive growth, and that as member of the City Council they were entitled to use discretion when determining an undue concentration, regardless of the fact that there were more casinos in other areas. The CUP was ultimately denied on the grounds that it would cause an undue concentration of casinos, resulting in blight and deterioration, and substantial diminution of property values.

M.G. Oil filed a writ of mandamus with the circuit court.  After noting that a writ of mandamus is an appropriate remedy to compel performance of discretionary functions when the particular entity (in this case, the City Council) abused its discretion, the circuit court reversed the decision of the City Council and ordered the city to approve the CUP. The court stated: (1) there was no evidence up0n which the City Council could make a determination that the CUP would substantially diminish or impair property values, (2) no evidence to prove blight, (3) the decision of the City Council was “arbitrary, capricious, and an abuse of discretion.”

The City appealed to the Supreme Court arguing that the circuit court abused its discretion when it found that the City Council acted arbitrarily and capriciously. The Supreme Court made the following observations concerning the circuit court’s analysis:

The Rapid City zoning ordinance states that a CUP, “must be issued if… the proposed use will not create an undue concentration of similar uses.” The circuit court found no evidence from the council meetings that approving the CUP would result in an undue concentration of video casinos. 

Although at the motion hearing the City Council had heard testimony about concerns of adding an additional establishment with a liquor license in the area, the circuit court could not find in the record that the City Council considered this when looking for a claim of undue concentration. All the record showed was Alderman Olson’s statement about discretion when determining an appropriate concentration for an area. There is no substantial evidence that the CUP would diminish property values, and even Alderman Kroeger, a realtor, never addressed this subject.

Further, mere opinions presented through public comment do not, by themselves, satisfy the standards required in the zoning ordinance. The Supreme Court has always held, “[predictions] and prophecies by neighboring property owners that a building when completed will likely become a nuisance and annoyance… [cannot]  serve as a legal reason for [local governments] to deny a … permit to persons otherwise entitle thereto.”

Finally, there is no proof that the casino would cause blight. The casino itself was intended to be a high-end establishment, with a short bar to deter patrons from staying long periods of time and no alternate form of entertainment other than the video casino games. The court fails to see how this would cause blight.

City Council records prove that the criteria in ordinance SDCL 11-4-4.1 was only considered at the end of the discussion, and the language was merely repeated when the decision was issued.

The Supreme Court concluded that the factual record was insufficient to support the City Council’s decision. Based on this the circuit court was correct in their findings, and did not abuse its discretion.

Writ of mandamus appropriate to compel city to enforce its zoning ordinance

by Gary Taylor

Paulson v. City of Ventura and JBS Auto Parts
(Iowa Court of Appeals, October 6, 2010)

The Paulsons purchased Lots 2 and 3 in the Brad Smith subdivision in Ventura in 2006. They built a duplex on Lot 2 and live in the side next to Lot 1. Defendant JBS purchased the Dome Bait & Tackle property, which is adjacent to Brad Smith Lot 1, in 2005. Then in 2007 JBS purchased Brad Smith Lot 1.

In 2007 JBS sought a one-year “conditional use variance” in order to continue to use Lot 1 to store boat hoists, as had been done for years. At the hearing on the request, JBS requested that a conditional use instead be granted for eight years. The Ventura board of adjustment granted a two-year limited conditional use permit, with conditions that “the storage of the boat hoists shall be in such a manner, as to minimize the depreciation of the adjoining residential property,” and that “the owners of the adjoining residential property will each incur half the cost of planting a landscape screen between the two properties.”

The Paulson’s challenged the board’s actions, and the court annulled the board’s decision because it lacked any evidence that the conditions would be effective in alleviating the depreciation of Paulsons’ property.  Because it annulled the board’s conditional use permit the court stated that the city of Ventura “is not required to take any action against [the] use of Lot 1,” but Paulsons had suffered injury and, “in the event Ventura takes no action,” would continue to suffer irreparable injury without an adequate legal remedy.  Rather than grant an injunction as request by Paulsons, the court instead ordered JBS to install a natural barrier between Lots 1 and 2 at its sole expense if it continued to store boat hoists on Lot 1.  Neither party appealed from this ruling.

Paulsons then asked Ventura to enforce its zoning ordinance concerning Lot 1. Ventura considered the matter during one or two city council meetings, but took no action. Plaintiffs again requested action and raised additional concerns about parking and a portable restroom that had been placed on Lot 1. The city attorney responded by assuring that the city of Ventura “has and will continue to enforce all of its Ordinances including the Zoning Ordinance in an even-handed and appropriate manner” but that the council, “by inaction, directed that no specific action be taken with respect to the purported nonconforming use….. One of the considerations on which the [city council] apparently relied consists of the Court’s findings of fact in its ruling.”
Paulsons then filed their petition for writ of mandamus, seeking to compel Ventura to enforce its zoning ordinance and require JBS to remove all boat hoists and stop other commercial activity on Lot 1. The district court framed the issues as (1) whether Ventura had a valid zoning ordinance regulating the properties, (2) if there is a valid zoning ordinance, whether the current use of Lot 1 violates the ordinance, and (3) if the answers to (1) and (2) are affirmative, whether mandamus is the appropriate remedy.  The court found Ventura had a valid zoning ordinance, and JBS had “substantially altered and changed the use of lot one and now uses it exclusively for commercial purposes.” The court found “as a matter of fact and law” that JBS was in violation of Ventura’s zoning code. The court concluded Ventura had a duty to enforce its zoning ordinance and its discretion extended “only to determine what action to take to correct the violation.” It also determined plaintiffs have “a right to enjoyment of their property free from adjacent illegal use and also have the right to have Ventura enforce its Zoning Code. They have no other remedy.” The city appealed to the Court of Appeals.

Ventura contended the court erred in making a determination that the use of Lot 1 by JBS is in violation of the zoning code. The city argues that question was not before the court in the mandamus action because “a writ of mandamus is not to establish a legal right, but to enforce one” already established.  The Court of Appeals found clear evidence that the lot is zoned residential and that JBS was using the lot for commercial purposes, and that the city’s own action in considering and granting the conditional use request acknowledged the current use did not fit within the allowed uses in a residential zone. After the district court annulled the conditional use permit, the commercial use of Lot 1 remained, but without any pretense of being a permissible or legal use of the lot under the zoning code.

The city next argued that mandamus is inappropriate because zoning enforcement is discretionary – that mandamus is limited to occasions “where an official or entity has a duty to act.” The city argued it has discretion in whether to take action, pointing to a section of its zoning code that provides the city “may institute appropriate action or proceedings to enjoin a violation” and Iowa Code 414.20, which provides the city, “in addition to other remedies, may institute any appropriate action or proceedings” to deal with violations of its zoning code. The Court of Appeals concluded that it need not determine whether the enforcement of the zoning code is ministerial, because mandamus is also proper if the city “acted arbitrarily or capriciously in denying the request” for enforcement of its zoning code, and the city council’s decision to take no action was an abuse of discretion and arbitrary and capricious. “It is well settled that [a writ of mandamus] may issue to correct an abuse of discretion, . . . or such an evasion of positive duty, as to amount to a virtual refusal to perform the duty enjoined, or to act at all, in contemplation of law; and in such a case a mandamus would afford a remedy where there was no other adequate remedy provided by law.

JBS further contended mandamus was not appropriate because alternative remedies existed; specifically that the Paulsons have a remedy through the political process… they could seek to have officials sympathetic to their position elected who would exercise their discretion to bring an enforcement action to abate the use. The Court of Appeals dismissed this notion by stating that while the suggested remedies may be “competent to afford relief” eventually, JBS cannot reasonably contend they would be “equally convenient, beneficial and effectual. The commercial use of lot one is harming plaintiffs now. Ventura decided to take no action to enforce its zoning code. Mandamus is proper to compel the city to act.”

City not liable for structures in alley

by Gary Taylor


ALLEN V. CITY OF PANORA (link to case here)

(Iowa Court of Appeals, June 17, 2009)


City not liable in nuisance for obstructions in alley.  Landowners could not compel city to order structures removed from alley.


In 1988 the Allens purchased property in Panora. Property to the north of the Allens is owned by the Dungans.  Between the two properties is a sixteen-foot-wide alley that was platted and dedicated to the city in 1901.  At the time the Allens purchased their property an electrical access box, telephone pedestal, and cable television pedestal were located in the alley, in the same place they are now.  A decorative fence was placed in the alley in 1998 or 1999.


In the summer of 2003, a survey revealed that the utility structures and the fence were seven feet into the alley. The Allens claimed this was the first they were aware of this fact.  They requested the city order the structures moved and when this did not happen, the Allens filed suit against the city to (among other claims) compel the city to remove the utility structures and fence, and to recover damages for nuisance and injury to their property.  The district court denied all of the Allens’ claims and entered judgment for the city.  


The Court of Appeals affirmed the district court on all counts.  It found that the Allens failed to prove a nuisance under Iowa Code 657.2(5) because they have always had reasonable and convenient access to their property from the street, nine feet of the alley was not affected by the utility structures, and the alley still provided them reasonable secondary access to their property. The Court also reasoned that the City has taken no action that would limit access to the Allens’ property to any greater extent than the access they had when they purchased the property in 1988.


The Court of Appeals went further to observe that even if there was a nuisance, a writ of mandamus would not be appropriate.  Mandamus is not available to control a city’s discretionary authority, and the decision as to whether to seek to abate a nuisance is discretionary with the city.  Under Iowa Code 364.12 “a city shall keep all . . . alleys . . . free from nuisance . . . .” but also provides “a city may require the abatement of a nuisance, public or private, in any reasonable manner.”  





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