Sufficient evidence to support denial of permit for additional moorings

by Melanie Thwing

Eagle Nests Townhome Association v. Aitkin County Planning Commission
(Minnesota Court of Appeals, December 21, 2010)

In 1998, Aitkin County, Minnesota granted Eagle Nests Townhome a conditional use permit (CUP). This was intended for a 16-unit planned unit development (PUD) on Big Sandy Lake. This CUP would allow Townhome to build nine mooring sites for boats, which was in compliance with the zoning and shoreland ordinances that were in effect at the time.

Then, in 2001 Townhome applied to the Board of Adjustment (BOA) for a variance that would allow them to increase the number of mooring sites to 16. Even though this request was denied, sometime after 2003 Eagle Nests constructed seven more illegal but permanent mooring sites. In 2008 Townhome applied to the BOA for an after-the-fact variance for the mooring sites. This request was granted.

With this variance granted, Eagle Nests applied to the planning commission, seeking to amend the CUP to allow for 16 mooring sites. After a public hearing the application was denied because it would be injurious to the environment or use of other properties, it was not consistent with the pattern of development for the area, and finally requirements of the ordinance were not met.

Eagle Nests appealed, claiming that the planning commission improperly denied the application. The court must decide whether the decision was unreasonable, arbitrary, or capricious for Eagle Nests’ claim to be legitimate. If at least one reason is rational the decision cannot be arbitrary.

The shoreland ordinance at the time required that 70% of the natural habitat be kept intact. Although Eagle Nests had made steps to implement shoreland restoration, at the time the application for the variance was submitted the properties were in violation of the ordinance. The court looks to Aitkin County, Minnesota Shoreland Ordinance § 3.43(6) which states, “a CUP shall be granted only if the commission finds among other things, ‘[t]hat other applicable requirements of this ordinance…have been met.’” The court finds that the violation of the ordinance was a rational reason to deny the amendment, despite the fact that the BOA later granted the after-the-fact variance.

Further, after concerns of overcrowding and density on the shoreline the planning commission in 2005 introduced  § 7.53 (B), which reduced the first tier density multiplier from 50% to 25%. This allowed Townhome only the original 9 mooring sites. The planning commission, when denying the application, stated that granting the CUP would not have been consistent with this, and would negatively impact the shoreline. On this issue, the court found that if the CUP had been granted it would be a 166% multiplier, which would directly contradict the desired pattern of development. The planning commission’s reasoning was again rational.

Also, the chair of the Aitkin County planning commission serves on several other-lake related associations, and at the time of the application stated that the pattern of development was not to increase the density on the shoreline. The planning commission relied on his knowledge to reach agreement. The law in Minnesota allows for city councils to consider opinions of residents as long as the opinions were concrete and based on observations, which is the case here. It was reasonable for the planning commission to rely on the information provided.

Finally, the planning commission was concerned about the impact of granting the application for other plans for moorings that were similar to that proposed by Eagle Nests. Again, granting this application or any others would not be consistent with the development goals of the county. These reasons were adequate reasons for the planning commission’s denial, and the decision of the planning commission was upheld.

Issues of fact exist in takings claims over airport regulations

by Melanie Thwing

Interstate Companies, Inc v. City of Bloomington
(Minnesota Court of Appeals, November 9, 2010)

The Galarneau’s own two separate properties in Bloomington, Minnesota. These properties are leased to Interstate, Inc. and are used for office space, service repairs and other various things. These properties are located next to the Minnesota-St. Paul International Airport, and close to the Mall of America and the light rail line.

The airport itself has specific areas zoned as “safety zones,” which regulate buildings and building height to insure the safety of the airport as well as individuals. Originally the Galarneau’s buildings were zoned in Safety Zone C, which is not as restrictive as others. However, in 2004 construction of a new airport runway was proposed and the Joint Airport Zoning Board adopted a new zoning ordinance. This ordinance re-assigned the Galarneau’s property to Safety Zone B, which is more restrictive. Further, the buildings currently occupied by Interstate, Inc now fall only 2,500 feet from the completed runway, which causes disruptions in business operations.

The true effect of the new zoning ordinance was felt in 2005, after the appellants sought to build a hotel on their property. The permit was denied because the new structure would violate height restrictions. The Galarneau’s brought two issues to the district court: 1.) Whether the zoning amendment to reclassify the property to Safety Zone B was regulatory taking, 2.) Whether the Minnesota Airport Commission’s (MAC) use of its property amounted to an inverse condemnation or a taking through deprivation of practical enjoyment of the Galarneau’s property.  The district court granted summary judgment in favor of MAC, and the Galarneau’s appealed to the Minnesota Court of Appeals

Under the first issue, both the United States and Minnesota Constitutions explicitly state that no private property can be taken without just compensation. Further, the Minnesota Constitution specifies property cannot be taken, destroyed or damaged without compensation. Precedent in Penn Central states the Court must look at the economic impact of the zoning ordinance for the individuals.  Following the Penn Central precedent, under  McShane v. City of Fairbault the Minnesota needs to examine if there was a substantial decline in market value because of an ordinance to benefit, “a specific public or governmental enterprise.” If so, then compensation is required. Although at the district court hearing a market study was presented which showed a significant lose in market value, the district court rejected it.

Further, under Penn Central the court must look at the investment-backed expectations of the Galarneaus. This would be the primary expectation of Galarneaus regarding the use of their property when the property was first purchased. The Galarneaus argue that because of the high level of residential and industrial use when the property was bought they expected to develop along these same lines. The Court of Appeals states that there was a reasonably different expectation when the property was located in the original safety zone.

Finally under Penn Central the court must decide whether the new regulations place a burden on only a few landowners. McShane explains that enterprise regulations are placed specifically for the government enterprise, which gives benefit to the general public, but burdens on a few individuals. If, in fact, the burden is falling on a few landowners the Supreme Court of Minnesota held that the public has then essentially acquired a free easement. The Court of Appeals ultimately found that there was a large decline in market values,

Considering the questions raised under the Penn Central analysis, the Court of Appeals found the district court’s summary judgment inappropriate.

On the second claim, the appellants argue that the district court erred in finding that MAC’s use of the property could not be a taking through deprivation of practical enjoyment. For this claim to hold true, there must be a substantial invasion of property rights and measurable lowering of market value. The district court held that the appellants failed to prove substantial invasion, even though they turned in records of noise, disruption to telephone calls, and employee fears from low flying air-crafts. According to the Court of Appeals it was inappropriate for the district court to grant summary judgment on this issue because disputed questions of fact existed. 

The Court of Appeals reversed the district court’ summary judgment on both claims, and remanded the case back to the district court.

Issuance of building permit by Minneapolis planner a discretionary function

by Melanie Thwing

Harmsen v. City of Minneapolis
(Minnesota Court of Appeals, Aug 24, 2010)

The Harmsens own numerous rental properties near the University of Minnesota campus in Minneapolis. Wishing to build more rentals, they purchased a single family home and filed for a demolition permit as well as a building permit for a new duplex to be built in its place.

City planners in Minneapolis approve 1-4 unit dwellings, which for building permits requires the planners to complete a checklist. Required criteria include the site plan, zoning classification and interior/exterior plans. The Harmsen’s plans met the checklist, and McCartney, who is a senior city planner approved both permits; however, according to the Minneapolis zoning ordinance duplexes must be constructed on a lot with at least 10,000 square feet, unless an existing duplex is being replaced.  The lot that was purchased did not meet this requirement, but McCartney did not check into the existing structure before issuing the permits.  The existing structure was demolished and a foundation for the duplex was poured.  Soon after, neighborhood groups contacted the city with concerns. On May 29th the city revoked the permit via letter (the letter was dated May 8th ) and on May 30th a stop-work order was posted.

After the Harmsen’s request for a variance was denied, they filed suit in district court. Summary judgment was granted for the city on the grounds of the doctrine of discretionary immunity.  The district court determined there was a lack of evidence sufficient to support Harmsen’s claim of equitable estoppel. The Harmsens then appealed to the Court of Appeals, arguing that the district court erred in granting summary judgment.

Discretionary immunity is given for discretionary functions, which typically include planning-level decisions involving weighing social, political, and economic factors. This however, does not include day-to-day ministerial functions of the government. Previous Minnesota caselaw has affirmed that the issuance of a building permit is a discretionary function because an employee must “make a judgment as to whether plans submitted in support of the application for the permit constitutes a permissible use of the property in the area involved.”  The Harmsen’s argue that use of a checklist does not constitute the use of discretion. After reviewing the checklist the Court concluded that city planners are trusted to make a number of discretionary decisions in the permit granting process. 

The Harmsens pointed out that a narrow exception to the rule was articulated by the Minnesota Supreme Court in Snyder v. City Minneapolis.  Under Snyder, “ city employees do not have the discretion to approve permits in clear violation of the law, and an applicant cannot reasonably be charged with knowledge of violation if the city maintains an unwritten policy contrary to published law.” The Harmsen’s first argue under Snyder that the city was negligent when it issued the permits and that thus this was not a discretionary function. Further the Harmsen’s argue that there are unwritten guidelines when approving certain permits that allow a little bit of latitude on lot sizes. The Court of Appeals found that the Harmsens did not present any evidence to to substantiate this clam. Further § 546.410 had been in place since 1995, and the Harmsen’s own many properties in the area. Again, the court rejects the precedent from Snyder and the city maintains its discretionary immunity.

Finally the Harmsen’s argue that the city should be equitably estopped from denying the permit because they relied in good faith on the city. An equitable estoppel may be given when the owners “(1) rely in good faith (2) upon some act or omission of the government, (3) and have made such a substantial change in position or incurred such extensive obligations and expenses that it would be highly inequitable and unjust to destroy the rights which he ostensibly had acquired.”  For this claim, the Harmsen’s sole claim of municipal misconduct was that the city held the revocation letter from May 8th when it was dated, to May 29th when it was sent.  McCartney testified, however, that she did not learn of the problem until shortly before the letter was sent. Electronic evidence also proved this. The Court of Appeals found that this alone was not a sufficient showing of malfeasance to warrant equitable estoppel. The Court of Appeals affirmed the judgment of the district court.

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