Eagan Economic Development Authority v. U-Haul Co. of Minnesota

787 N.W.2d 523, 2010 Minn. LEXIS 450, 2010 WL 2943477
CourtSupreme Court of Minnesota
DecidedJuly 29, 2010
DocketA08-767
StatusPublished
Cited by19 cases

This text of 787 N.W.2d 523 (Eagan Economic Development Authority v. U-Haul Co. of Minnesota) is published on Counsel Stack Legal Research, covering Supreme Court of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eagan Economic Development Authority v. U-Haul Co. of Minnesota, 787 N.W.2d 523, 2010 Minn. LEXIS 450, 2010 WL 2943477 (Mich. 2010).

Opinion

OPINION

ANDERSON, PAUL H., Justice.

In late 2002, the Eagan Economic Development Authority (EDA) filed a quick-take condemnation petition with the Dakota County District Court in an effort to obtain title to several pieces of private property, including property owned by respondents. The EDA sought to take the property as part of a redevelopment project in the Cedar Grove area of Eagan. The court granted the quick-take petition. The property owners appealed and the court of appeals reversed, concluding that the EDA exceeded the scope of its authority in condemning the property -without first securing a binding development agreement for the property. We reverse and remand to the court of appeals.

The City of Eagan is redeveloping the “Cedar Grove Redevelopment Area,” a 250-acre parcel of land east of the intersection of Cedar Avenue (Highway 77) and Highway 13. The City undertook the redevelopment project to “reawaken the spirit and vitality of [that] part of Eagan” and to “replac[e] a market obsolete regional shopping center.” The project includes plans to change the “core area” of the redevelopment area, which is in the southeast quadrant of Cedar Avenue and Highway 13, into a mixed-use development that includes retail establishments, restaurants, and housing.

Redevelopment Plans and Documents

The Eagan Economic Development Authority (EDA), appellant in this case, is responsible for furthering the Cedar Grove Redevelopment Project. It appears that at the time the Redevelopment Project was established, the Eagan City Council members also served as EDA commissioners. In an August 7, 2001 resolution, the EDA adopted two documents drafted by its financial consultant, Ehlers & Associates. These documents were the “Redevelopment Plan for the Establishment of the Cedar Grove Redevelopment Project Area” (Redevelopment Plan) and the “Tax Increment Financing Plan for the Establishment of Tax Increment Financing District No. 1 within the Cedar Grove Redevelopment Area” (TIF Plan). Of particular relevance to this appeal is Subsection 1-8 of the Redevelopment Plan, titled “Proposed Reuse of Property,” which states:

The Redevelopment Plan contemplates that the City may acquire property and reconvey the same to another entity. Prior to formal consideration of the acquisition of any property, the City will require the execution of a binding development agreement with respect thereto and evidence that Tax Increments or other funds will be available to repay the Public Costs associated with the proposed acquisition.

(Emphasis added.) Also relevant to the appeal is Subsection 1-12, titled “Property Acquisition.” This subsection states that “[t]he City may acquire such property, or appropriate interest therein, within the Redevelopment Project Area as the City may deem to be necessary or desirable to assist in the implementation of the Redevelopment Plan.” The TIF Plan does not contain the language found in Subsection 1-8 or a similar binding development agreement requirement.

The EDA’s approval of both the Redevelopment Plan and the TIF Plan was “[conditioned upon the approval thereof by the City Council.” On October 2, 2001, the City Council passed Resolution 01-63, which “approved, ratified, established, and adopted” both the Redevelopment Plan *526 and TIF Plan. Over a year later, on July 22, 2003, the Dakota County Treasurer-Auditor certified the TIF District. 1 Redevelopment in the Cedar Grove Redevelopment Area was expected to occur in stages over the next two to seven years.

After the EDA and the City Council both adopted the Redevelopment Plan and TIF Plan, the EDA began to acquire properties in the Cedar Grove Redevelopment Area through negotiation and purchase. The EDA initiated and completed some redevelopment in the area, including street intersection improvements and various residential projects and commercial remodeling projects, but much of the planned redevelopment never occurred. Several different developers submitted development proposals, and the EDA pursued those proposals, but the projects did not materialize because the developers withdrew their proposals.

Condemnation Proceedings

By July 2007, the City had acquired title to approximately 80 percent of the property in the core redevelopment area. At this time, one year remained in the five-year time period for expending TIF funds, which time period was by statute set to expire on July 22, 2008. See Minn.Stat. § 469.1763, subd. 3 (2002). In August 2007, the EDA passed a resolution determining that acquisition of the properties comprising the remaining 20 percent of the core area was “necessary to carry out the Redevelopment Plan.” In November 2007, the EDA gave notice to the remaining property owners within the core area of its intention to take possession of their property. The EDA then filed a quick-take condemnation petition in district court for the taking of thirteen properties.

The property owners of seven of the thirteen properties did not formally object to the condemnation and the district court granted the EDA’s petition with respect to those properties. The other six property owners objected and the court held an evidentiary hearing to consider the condemnation petition. At this hearing, the six property owners claimed that the EDA did not meet its burden of proof regarding public purpose, necessity, or authority for the taking, or its burden of proof regarding necessity of the quick take. In regard to the EDA’s authority for the taking, the property owners argued that Subsection 1-8 of the Redevelopment Plan requires the execution of a binding development agreement before the EDA can condemn property and that such an agreement did not exist.

At the evidentiary hearing, witnesses for the EDA acknowledged that the EDA did not have a binding development agreement with any developer but explained that the EDA was working with a certain developer to create a conceptual redevelopment plan. The district court found that the EDA had authority to take the property owners’ properties even though the EDA had not yet executed a binding development agreement. The court’s order states that the Redevelopment Plan “contemplatefs] that the EDA would be able to acquire the necessary properties in order to insure the appropriate implementation of the Redevelopment Plan,” and that “[Subsjection 1-8 of the Redevelopment Plan, when read in conjunction with other provisions of the *527 Plan, does not preclude the taking of property absent a binding development agreement.”

The district court also found that acquisition of the properties was necessary for a public purpose 2 and that utilization of quick-take procedures was appropriate because of the impending expiration of the five-year period for expending TIF funds. The court specifically found that if the “City” did not acquire the properties before July 2008, it would not be reimbursed under the TIF Plan for the estimated $3 million cost of the property acquisition. Based on these findings, the court granted the EDA’s condemnation petition and authorized the quick take.

Court of Appeals Decision

Three of the six objecting parties — respondents U-Haul Co.

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Cite This Page — Counsel Stack

Bluebook (online)
787 N.W.2d 523, 2010 Minn. LEXIS 450, 2010 WL 2943477, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eagan-economic-development-authority-v-u-haul-co-of-minnesota-minn-2010.