IN COURT OF APPEALS
Concept Properties, LLP,
City of Minnetrista,
Hennepin County District Court
File No. AP 03-9919
Robert B. Bauer, Kristine K. Nogosek; Severson, Sheldon, Dougherty & Molenda, P.A., 7300 West 147th Street, Suite 600, Apple Valley, MN 55124 (for appellant)
George C. Hoff, Justin L.
Templin; Hoff, Barry & Kuderer, P.A., 1650 Flagship
Considered and decided by Minge, Presiding Judge; Wright, Judge; and Crippen, Judge.*
1. A municipality’s decision to redraw its Metropolitan Urban Services Area (MUSA) line as part of a comprehensive plan update is not unreasonable when the municipality predicates its decision on over 12 months of public meetings, bases its decision on the public commitment to rural character and an assessment of available resources, and reduces the MUSA to comply with the Metropolitan Council’s directives.
2. A municipality’s denial of an application to rezone and amend its comprehensive plan is not arbitrary or capricious when its decision is based on a desire to conform to the recently drafted comprehensive plan and the landowner does not present a compelling reason for amendment.
3. An agency may cure a violation of the simultaneous-written-findings requirement of Minn. Stat. § 15.99, subd. 2 (2002), by rendering a second decision with simultaneous written findings within the statutory or agreed-upon time limit as long as the agency’s decision-making process demonstrates an absence of bad faith.
This dispute arises from a series
of land-use decisions by respondent City of
On appeal, appellant argues that summary judgment was erroneously entered because the City acted arbitrarily (a) in staging the land for MUSA inclusion after 2020 as part of its 1998 comprehensive plan revisions when the land was formerly part of the MUSA; and (b) in denying appellant’s application to have the land returned to the MUSA and rezoned for development at urban densities. Appellant also argues that removing the property from the MUSA after collecting a sewer assessment from a former owner of the property (a) violates appellant’s vested right to connect to the city sewer; (b) is barred under the doctrine of equitable estoppel; (c) constitutes an unconstitutional taking, in violation of Minn. Const. art. 1, § 13; and (d) deprives appellant of substantive due process of law. Finally, appellant argues that the City failed to comply with Minn. Stat. § 15.99 (2002), thereby warranting automatic approval of appellant’s rezoning application. We affirm.
The parties agree that the facts are undisputed. Appellant Concept Properties owns approximately 48.7 acres of real property located at the southwest corner of Halstead Drive and County Road 110W (the subject property) in the city of Minnetrista.
1975, a former owner of the subject property paid a $28,020 sewer assessment to
the City for sanitary sewer trunk improvements as part of a project designed to
expand and improve the sanitary sewer system in the area west of
The MUSA is the designated portion of the metropolitan area in which governmental agencies support urban development by providing necessary public facilities and services, including sewer service. The subject property was represented to be in the MUSA in 1975 and again in the City’s 1981 Comprehensive Land Use Plan. In the mid-1980s, however, the City’s MUSA was reduced to meet requirements set by the Metropolitan Council. The 1992 comprehensive plan indicates that the subject property was zoned Residential Agriculture (RA), was “guided for rural use,” and was part of a “sewer-benefited area.” The record is unclear as to exactly when the subject property was removed from the MUSA, but as of January 27, 1998, the subject property was no longer within the MUSA.
In 1995, the Minnesota Legislature passed a law requiring all cities to update their comprehensive plans by the end of 1998. 1995 Minn. Laws ch. 176, § 9 (codified at Minn. Stat. § 473.864, subd. 2 (2004)). In 1997, the City began the process of updating its comprehensive plan. As part of this process, Wara Real Estate, the then owner of the subject property, asked the City Planning Commission to stage the subject property for inclusion in the MUSA in 1998. At a planning commission meeting on March 30, 1998, the Planning Commission noted, however, that the subject property was not slated for MUSA inclusion or residential development at urban densities until 2005. At the meeting, the Planning Commission voted 5 to 1 to delay urban development of the subject property until 2010, reasoning that inclusion of the subject property in the MUSA at an earlier date would be “too much, too soon.” During its June 15, 1998 meeting, the City Council concurred with the Planning Commission and designated the subject property “MUSA 2010-2015.” The City Council also decided that the subject property would retain its current RA zoning classification, which requires a minimum lot size of three acres.
The City Council adopted its 1998 comprehensive plan on June 29, 1998, subject to Metropolitan Council review. See Minn. Stat. § 473.858, subd. 1 (2004) (requiring city to submit completed comprehensive plan to Metropolitan Council for review). The Metropolitan Council rejected the City’s comprehensive plan, however, because it did not comport with the regional plan for the seven-county metropolitan area. The Metropolitan Council directed the City to revise the comprehensive plan to designate an “urban reserve” area and implement corresponding zoning ordinances.
The Metropolitan Council also required the City to reduce the MUSA’s rate of expansion because “the plan called for a MUSA more than double what would be needed to accommodate the forecasts.” Thus, at the direction of the Metropolitan Council, the City rezoned the subject property, along with approximately 75 other parcels, as an urban reserve area and redesignated it “beyond 2020 MUSA.” As part of the urban reserve area, the subject property is a staged development district (SDD), which requires a minimum lot size of ten acres, instead of the former three-acre minimum. As a result, the subject property cannot be developed for single-family residential use at urban densities until after 2020.
On April 22, 1999, the Commission held a public meeting to discuss the MUSA adjustments. Although notice of the meeting was sent to Chuck Alcon at Wara Real Estate and published in the local paper, no representative for the subject property attended the meeting. The City Council adopted the final comprehensive plan on May 17, 1999.
In October 1998, in the midst of the City’s revision of the comprehensive plan to incorporate the regional policies outlined by the Metropolitan Council, Concept Properties purchased the subject property from Wara Real Estate. Prior to Concept Properties’ purchase, the City represented to Concept Properties that, based on the comprehensive plan, the subject property would be included in the MUSA in 2005, without advising Concept Properties that the comprehensive plan would be undergoing further revisions.
In March 2002, after Concept Properties learned that it could not develop the subject property for single-family residential use until after 2020, Concept Properties submitted an application to the City to amend the comprehensive plan by placing the subject property in the MUSA. Concept Properties also requested that the subject property be rezoned from a SDD to a medium-density single-family residential district (R2), which would permit a 20,000-square-foot lot minimum rather than a 10-acre minimum.
The city engineer reviewed Concept Properties’ application and determined that “adequate infrastructure appeared to be in place” but a water tower would be necessary to serve the property. On April 22, 2002, the Planning Commission held a public hearing on the application. Members of the public voiced numerous concerns about developing the subject property, citing drainage, density, traffic, and safety issues. The Planning Commission voted to grant Concept Properties’ request to include the subject property in the MUSA, but it denied the rezoning request.
In May 2002, the City Council held additional public meetings on the application, at which the public raised similar concerns about increased density. Concept Properties granted the City several written extensions of the 60-day statutory deadline for zoning- application decisions to facilitate further research and additional consideration of the application. May 27, 2003, was the final deadline. The City Council resumed discussion of the application at its meeting on March 3, 2003, during which the mayor, council members, and landowners debated the merits of Concept Properties’ application.
On May 5, 2003, after more discussion, the City Council denied Concept Properties’ requests by oral vote of 3 to 2. A resolution with formal findings of denial was issued on May 19, 2003, in conjunction with a vote of 5 to 0 to deny the application.
In denying Concept Properties’ application, the City found in pertinent part that (1) the SDD zoning designation was consistent with the subject property’s status as “urban reserve” according to the comprehensive plan, and R2 zoning would be inconsistent with the comprehensive plan; (2) there was no compelling reason to amend the comprehensive plan; and (3) the City could not serve the subject property, if developed as requested, with an adequate supply of water for fire protection services unless the City constructed an additional water tower, which was not provided for in its capital improvement plan. On May 27, 2003, the City mailed a copy of the findings to Concept Properties’ representative.
Concept Properties brought an action in district court, alleging that the City’s decisions to shift the subject property to the “beyond 2020” MUSA category in the comprehensive plan and to deny its subsequent request to place the subject property back in the MUSA were arbitrary and capricious. Concept Properties also alleged that, by assessing the subject property for sewer improvements in 1975 and later removing the property from the MUSA, the City denied it procedural and substantive due process, impermissibly took property without just compensation, violated its vested right to connect to the sewer, and denied it equal protection of the law. Concept Properties further alleged violations of Minn. Stat. § 15.99 (2002). After the City filed notice to remove the action to federal court, Concept Properties voluntarily dismissed its federal constitutional claims.
The City moved for partial summary judgment on the issue of the City’s compliance with Minn. Stat. § 15.99, which was granted. The City and Concept Properties later filed cross-motions for summary judgment on Concept Properties’ remaining claims, and the district court granted summary judgment in favor of the City. This appeal followed.
II. Was respondent-City’s reliance on its comprehensive plan a sufficient legal basis for its decision to deny appellant’s application to revise the MUSA to include the subject property and to rezone the subject property to allow 20,000-square-foot lots?
III. Does appellant possess a vested right to connect to the city sewer based on a prior landowner’s payment of an assessment for sewer improvements?
IV. Is respondent-City estopped from denying a request for the subject property to be included in the MUSA when respondent-City collected a sewer assessment from a prior landowner for sewer improvements?
V. Did respondent-City impermissibly take appellant’s property without just compensation by designating the subject property for inclusion in the MUSA after 2020, when a sewer assessment had been paid?
VI. Did respondent-City violate appellant’s right to substantive due process by designating the subject property for inclusion in the MUSA after 2020, when a sewer assessment had been paid?
VII. Did respondent-City violate Minn. Stat. § 15.99, subd. 2 (2002), by failing to state the reasons for denial at the time of its oral decision to deny a rezoning application and by failing to send the subsequent written findings of denial to appellant before the deadline for the decision?
On appeal from summary judgment, we determine whether any
genuine issues of material fact exist and whether the district court erred as a
matter of law. State by Cooper v. French, 460 N.W.2d 2,
Concept Properties argues that the following three decisions of the City were arbitrary and capricious: (a) adopting the 1998 comprehensive plan, which designated the subject property for inclusion in the MUSA after 2020; (b) denying the request to reinstate the subject property in the MUSA; and (c) denying the request to rezone the subject property for development at urban densities.
In challenging the City’s 1998 comprehensive plan, Concept Properties argues that the City’s decision to designate the subject property for inclusion in the MUSA after 2020 was unjustified in light of the subject property’s prior inclusion in the MUSA. Although property owners rarely challenge a decision made in the process of creating a comprehensive plan, this is a cognizable challenge. Hay v. City of Andover, 436 N.W.2d 800, 805 (Minn. App. 1989) (reviewing challenge to comprehensive plan decision); cf. Sun Oil Co. v. Village of New Hope, 300 Minn. 326, 334-35, 220 N.W.2d 256, 261 (Minn. 1974) (reasoning that, where a city’s refusal to rezone was based on a comprehensive zoning ordinance, it was proper to attack the comprehensive ordinance as arbitrary and capricious).
Citing Sun. Oil Co., Concept Properties contends that the City must demonstrate a mistake in the subject property’s prior MUSA designation to justify its decision to designate the subject property as beyond 2020 MUSA in the City’s 1998 comprehensive plan. Because the City failed to demonstrate a mistake, Concept Properties argues, the City acted arbitrarily in changing the MUSA designation as part of the comprehensive plan update.
Properties, however, ignores the fundamental tenet that a municipality acts in
a legislative capacity under its delegated police powers when it adopts or
amends a zoning ordinance or adopts a comprehensive plan. Sun Oil Co., 300
the proper standard of review, we must determine whether the City’s decision,
as part of its 1998 comprehensive plan revisions, to defer the subject
property’s inclusion in the MUSA until after 2020 had a rational basis. Hay, 436 N.W.2d at 805; see also
Kehr v. City of
the broad discretion of local officials in land-use decision-making, we will
reverse only when a decision lacks a rational basis or the city’s actions are
“arbitrary, capricious, discriminatory, or illegal.” Sun Oil
Although Minnesota caselaw does not
specifically address when a city’s land-use decision to change a property’s
MUSA designation is arbitrary or capricious, in Manke Lumber Co. v. Central Puget Sound Growth Mgmt. Hearings Bd., the Washington Court of Appeals rejected
an argument that a former characterization of a parcel as an Urban Growth Area
compels the same characterization in a subsequent comprehensive plan. 53 P.3d 1011, 1018-19 (Wash. Ct. App.
2002). With deference to a local
government’s broad discretion in developing comprehensive plans to fit local
conditions, the Manke Lumber Co. court
determined that the county’s selection and alteration of Urban Growth Area
locations was not arbitrary and capricious.
Here, in revising its comprehensive plan pursuant to the Minnesota Legislature’s statutory mandate, the City Council was formulating land-use policy, a particularly legislative function that warrants significant deference. Development of the comprehensive plan was predicated on numerous hearings and deliberations before submitting the draft comprehensive plan to the Metropolitan Council for review. Local residents, interested citizens, a representative of the subject property, members of the Planning Commission, city council members, and the mayor took part in the decision-making process. The City Council and the Planning Commission specifically discussed the subject property at several public meetings held on March 30, April 20, May 18, June 2, and June 15, 1998. On March 30, 1998, the planning commission determined that it would be “too much, too soon” to place the subject property in the MUSA any earlier than 2010 because of a lack of available water and a commitment to preserving the City’s rural character. At an April 23, 1998 City Council work session, city council members agreed, recommending to stage the subject property for inclusion in the MUSA no earlier than 2010 or 2015. On June 15, 1998, the City Council concurred and designated the subject property “2010-2015 MUSA.”
A lack of resources and a policy determination to curtail urban sprawl are reasonable bases on which to make land-use decisions. Moreover, earlier inclusion of the subject property in the MUSA does not preclude the City from removing the property from the MUSA at a later date. See Manke,53 P.2d at 1018-19. Our review of the municipal record establishes that the City’s decision to designate the subject property “2010-2015 MUSA” was a reasonable land-use decision that was neither arbitrary nor capricious.
designating the subject property “2010-2015 MUSA” in its comprehensive plan,
the City submitted the plan to the Metropolitan Council for review, as required
by law. See Minn. Stat. § 473.858,
subd. 1 (2004) (requiring city to submit completed comprehensive plan to
Metropolitan Council for review); see also City of
Metropolitan Land Planning Act (MLPA) requires increased coordination between
the Metropolitan Council and local governmental units within the Twin Cities
metropolitan area. City of
When the City submitted its 1998 comprehensive plan to the Metropolitan Council for review, the Metropolitan Council refused to accept the City’s plan unless and until the City reduced its MUSA and created an “urban reserve” area to comply with the Metropolitan Council’s regional land-use plan. The purpose of the “urban reserve” zoning designation is to preserve properties with large acreage until urbanization actually occurs. Working with the Metropolitan Council to achieve compliance, the City adjusted its comprehensive plan so that all properties set for MUSA inclusion after 2010, including the subject property, would not be included in the MUSA until at least 2020. At the direction of the Metropolitan Council, the City rezoned all of these “beyond 2020 MUSA” properties as staged development districts for the purpose of preserving properties with larger acreage until urbanization actually occurs. Although the City held a public meeting on these MUSA changes, no representative of the subject property attended the meeting.
It is apparent from the record that the rationale for the City’s decision to change the subject property from 2010-2015 MUSA to “beyond 2020 MUSA” was based entirely on achieving necessary conformity with the Metropolitan Council’s regional policies. The City is required to submit its comprehensive plan to the Metropolitan Council for review and the Metropolitan Council is granted authority to demand that the comprehensive plan conform to its regional land-use plan. Thus, the City’s decision to amend its comprehensive plan to comport with directives from the Metropolitan Council was not arbitrary or capricious.
Concept Properties also argues that the City erred in failing to make specific written findings in support of its decision. Concept Properties is correct that ordinarily municipalities prepare contemporaneous findings to support a zoning decision. See Honn v. City of Coon Rapids, 313 N.W.2d 409, 416 (Minn. 1981) (observing that municipality at minimum should reduce basis for zoning decision to writing); R.A. Putnam & Assocs., Inc. v. City of Mendota Heights, 510 N.W.2d 264, 267 (Minn. App. 1994) (considering whether municipality provided contemporaneous rationale for zoning decision), review denied (Minn. Mar. 15, 1994). The Honn court acknowledged that a city council usually does not make complete records of their proceedings, but concluded that the city council must reduce to writing the reasons for its decision in more than a conclusory fashion. 313 N.W.2d at 415-16. But municipalities generally are not required to articulate reasons for enacting an ordinance. Arcadia Dev. Corp. v. City of Bloomington, 552 N.W.2d 281, 289 (Minn. App. 1996), review denied (Minn. Oct. 29, 1996).
Here, Concept Properties is not challenging a specific zoning decision. Rather, it is challenging the City’s adoption of a comprehensive land-use scheme for the next 50 years. This action is more analogous to enacting an ordinance than to making a particular zoning decision. Requiring the City to make written findings regarding the MUSA status for each parcel in the entire city would place an inordinate burden on the municipality.
In sum, the municipal record establishes that the City’s decision to defer inclusion of the subject property in the MUSA until after 2020 has a rational basis. Acting in its legislative capacity, the City engaged in an extensive and deliberative decision-making process, which led to revision of the comprehensive plan to meet statutorily required compliance with the Metropolitan Council’s regional plan. Summary judgment was properly entered in favor of the City on this ground.
Having concluded that it was not arbitrary or capricious for the City to revise its 1998 comprehensive plan to designate the subject property for inclusion in the MUSA after 2020, we next consider whether it was arbitrary or capricious for the City to deny Concept Properties’ application to amend the comprehensive plan and rezone the subject property R2 for development at urban densities.
the municipal record to determine whether a rational basis supports a city’s
decision to deny an application to rezone.
SuperAmerica Group, Inc. v. City
of Little Canada, 539 N.W.2d 264, 266 (Minn. App. 1995), review denied (Minn. Jan. 5, 1996). The challenger bears the burden of
demonstrating that the most recent land-use decision was unreasonable. Sun Oil
In support of its decision, the City found that rezoning the subject property from SDD (requiring a ten-acre lot minimum) to R2 (requiring a 20,000-square-foot lot minimum) would be “inconsistent with the comprehensive plan.” The City also found that there was no compelling reason to amend the comprehensive plan to reinstate the subject property in the MUSA.
Concept Properties contends that,
by merely relying on the comprehensive plan, the City lacked a sufficient legal
basis to deny its application. This
argument is without merit. The Minnesota
Supreme Court has specifically held that when a municipality refuses to rezone
because it would be inconsistent with its comprehensive land-use plan, that
action does not, “without evidence to the contrary, constitute arbitrary or
capricious action on the part of the [city] council.” Sun Oil
Co., 300 Minn. at 337, 220 N.W.2d at 263; see also Amcon Corp. v. City of Eagan, 348 N.W.2d
66, 75 (Minn. 1984) (holding that refusal to zone in accordance with
comprehensive plan is evidence that city’s action was arbitrary). Moreover, the Minnesota Legislature has
directed that municipalities refrain from making land-use decisions that
deviate from their comprehensive plans. See Minn. Stat. § 473.865, subd. 2 (2004)
(requiring municipality not to adopt zoning that conflicts with its comprehensive
plan). Indeed, the decision to rely on a
comprehensive plan when considering a rezoning request guards against arbitrary
and capricious action by serving as a hedge against “special interest,
irrational ad hocery.” Town of
The City’s comprehensive plan specifically placed the subject property in the urban reserve and zoned the property SDD. The comprehensive plan is “Minnetrista’s official statement and document used to make short and long range planning decisions, including those related to subdivisions, zoning changes . . . neighborhood and rural plans and amendments to the Plan itself.” The plan makes clear that “growth and expansion of the MUSA shall be accomplished in accordance with the City’s Growth Strategy—Staged Development Plan” and that extension of the MUSA will be allowed only “when the area can be served with sewer and the extension is consistent with the Growth Strategy.” The plan also sets forth the City’s land-use goals, including “[p]reserv[ing] Minnetrista’s rural character” and “[p]rotect[ing] and preserv[ing] agriculture/rural qualities.”
Both objectives sought by Concept
Properties are inconsistent with the City’s policies of preserving the City’s
rural character and preventing urban sprawl.
As such, a legally sufficient rationale supports the City’s denial of
Concept Properties’ application to amend the comprehensive plan and rezone the
subject property. See Sun Oil Co., 300
Concept Properties relies on our
recent decision in PTL, LLC v. Chisago County Bd. of Comm’rs, 656 N.W.2d
567 (Minn. App. 2003), to advance its argument that reliance on a comprehensive
plan is a legally insufficient basis to deny an application to rezone. But PTL is legally and factually
inapposite. In PTL,the
property owner sought approval of a plat that was consistent with a permitted
use under the zoning ordinance, but prohibited under the comprehensive
The City also based its denial of Concept Properties’ application on the lack of available water in the area of the subject property. The city engineer’s reports provide factual support for this finding. A land-use decision based on the scarcity of resources to support the proposed land use is not unreasonable. See Hay, 436 N.W.2d at 806 (finding rational basis to deny request to change sewer districts when city based decisions on practical recommendations in engineering report).
Because Concept Properties failed to establish that the City denied its application to rezone on a legally or factually insufficient basis, and the record provides no evidence demonstrating that the SDD zoning classification was “a mistake” or that the neighborhood has changed significantly since the zoning classification, summary judgment in favor of the city on this ground was properly granted.
Concept Properties next asserts that, even if it was not arbitrary and capricious for the City to make land-use decisions that ultimately altered the subject property’s MUSA status, it was inequitable and unconstitutional for the City to deprive the subject property of MUSA inclusion until after 2020 when a prior owner of the subject property paid a sewer assessment. We analyze the merits of Concept Properties’ argument on several grounds, namely (a) vested rights, (b) equitable estoppel, (c) the takings clause of the Minnesota Constitution, and (d) substantive due process.
Concept Properties argues that, because a former
owner of the subject property paid a sewer assessment in 1975, Concept
Properties possesses a vested right to be included in the MUSA and to be
permitted to connect to the sewer. The
vested rights doctrine typically is used as an alternative way of resolving
land-use controversies between a developer and a government entity. Ridgewood
Dev. Co. v. State, 294 N.W.2d 288, 294 (
As a general rule, a right becomes vested when it
has “arisen upon a contract, or transaction in the nature of a contract,
authorized by statute and liabilities under that right have been so far
determined that nothing remains to be done by the party asserting it.”
Concept Properties’ argument that it possesses a
vested right to have its property included in the MUSA and connected to the
sewer system fails for two reasons.
First, the record does not establish that, in exchange for the
predecessor landowner’s payment of the sewer assessment, the City made a
binding commitment to connect the property to the sewer or permit a particular
land-use project. In 1975, the City
assessed all properties that were in the MUSA as part of a project designed to
expand and improve the sewer system in the area for development within the next
10 to 20 years. The City assessed all
properties anticipated to have sewer services in the future, but it never
represented that the properties would be able to connect to the sewer at a
particular time. The sewer assessment
did not convey to the prior owner immediate connection to the sewer or
immediate sewer service. On the
contrary, the special benefit conferred by the sewer assessment was the
increased market value of the property due to potential access to the trunk sewer. See
Quality Homes, Inc. v. Vill. of New Brighton, 289
On the record before us, the sewer assessment created, at most, an expectation that the property owner would be able to connect to the sewer and develop the property in the next 10 to 20 years. An expectation to develop the property does not create a vested right to do so. See Wermager, 716 F.2d at 1215.
Second, other than a sewer assessment paid by a former owner, Concept Properties has not expended funds to develop the property. When Concept Properties purchased the property in October 1998, it did so with the mere expectation that, based on the MUSA designation, it could develop the property at urban densities in 2005. But between 1998 and 2005, Concept Properties did not expend funds physically developing the property for the proposed use. Even if Concept Properties purchased the property with the intention to develop the property into 20,000-square-foot lots, the actual implementation of this plan has not progressed far enough to create a vested right in its completion. See id.
Properties also argues that, because the City collected the sewer assessment
from a predecessor landowner, the City is now estopped from refusing MUSA
status to the subject property. When the
facts permit only one conclusion, the application of equitable estoppel is a
question of law subject to de novo review.
State v. Ramirez, 597 N.W.2d 575, 577 (
Equitable estoppel, like the doctrine of vested
rights, provides an alternative means to resolve developer-government conflicts
over land-use decisions. Ridgewood Dev. Co., 294 N.W.2d at 292. In this context, a plaintiff must demonstrate
that, relying in good faith on an act or omission of the government, it made
such a substantial change in position or incurred such extensive obligations
that it would be unjust to destroy the rights ostensibly acquired. Save
Concept Properties’ claim fails for several reasons. First, Concept Properties failed to establish reliance. Concept Properties did not own the subject property in 1975 and could not have relied on the sewer assessment as an affirmative representation that the City would connect the property to the City sewer line at any particular time. See Ramirez, 597 N.W.2d at 578 (finding no equitable estoppel when individual failed to present any evidence of reliance on government representations).
Second, the record does not demonstrate that the City made a requisite “act or omission” on which Concept Properties purports to rely. Concept Properties apparently claims that by assessing the subject property for sewer in 1975, the City made a representation that the property would be connected to the sewer. As discussed in our vested-rights analysis, the City made no such representation. At most, the City created an impression or expectation that the property owner could connect to the sewer in the next 20 years, which is not sufficient to establish equitable estoppel. See Brown, 368 N.W.2d at 910.
Third, Concept Properties has not made sufficient progress developing the subject property as to have incurred expenditures on its development project that could not be put to another use. On the undisputed facts, Concept Properties has not acquired a right to develop the subject property in the proposed manner.
Fourth, Concept Properties alleges no affirmative misconduct by the City. And the record fails to establish any misconduct, as we have already concluded that the City did not act arbitrarily or capriciously in changing the MUSA in the process of enacting its 1998 comprehensive plan. Accordingly, the district court did not err in rejecting Concept Properties’ equitable estoppel claim.
Concept Properties next claims that the City’s “beyond 2020 MUSA” classification, adopted in the 1998 comprehensive plan, constitutes an unconstitutional taking because it interferes with the special benefit conferred on the subject property by the sewer assessment and “severely diminishes the value of the Property.”
Minnesota Constitution provides, “Private property should not be taken,
destroyed, or damaged for public use without just compensation.”
a preliminary matter, Concept Properties misstates the record by assuming that
the “special benefit to the property in 1975 and afterwards was the present
availability of sanitary sewer service to the Property.” The sewer assessment did not convey to the
prior owner immediate connection to the sewer or immediate sewer service. As addressed earlier, the special benefit
conferred by the sewer assessment was the increased market value of the
property due to the potential access to the trunk sewer. See
Quality Homes, 289
This benefit—the increased market value—still exists. The City’s decision to delay inclusion of the subject property in the MUSA until after 2020 does not deprive the subject property of its potential access to a trunk sewer. The City’s refusal to allow residential development at urban densities until after 2020 does not interfere with the sewer benefit conferred on the subject property by the sewer assessment.
construe Concept Properties’ argument as a general challenge to a land-use
decision that decreases the value of private property, we then address Concept
Properties’ claim under regulatory takings law.
When the exercise of state police power regulation of private property
“goes too far,” it constitutes a taking.
Zeman, 552 N.W.2d at 552. In zoning cases,
The enterprise test is employed when a regulation, to the detriment of private property, benefits a specific governmental enterprise that serves the public. See McShane, 292 N.W.2d at 258-59 (applying enterprise test to zoning regulation that burdened private land underneath flyway where regulation was adopted to benefit a governmental enterprise). This analysis is triggered only when a specific governmental enterprise takes an effective easement on the property, causing a substantial diminution in market value. Thompson, 455 N.W.2d at 517.
a specific governmental enterprise does not benefit from the regulation, the
regulatory purpose involves government arbitration between competing land uses,
and courts apply the arbitration test. McShane, 292 N.W.2d at 257-58; Thompson, 455 N.W.2d at 517. The arbitration standard reflects the
“increasing complexity of society and the realization that property must be
viewed more interdependently.” McShane, 292 N.W.2d at 257 (quoting
In applying the arbitration standard, we consider whether the regulation deprives the property of all reasonable uses. Thompson, 455 N.W.2d at 517; Larson, 387 N.W.2d at 907.The burden is on the landowner to demonstrate that governmental action denied the landowner all reasonable use of the property. Larson, 387 N.W.2d at 907-08. If an alternative use is available, even if it is not the most profitable use, the regulation has not denied the property all economically beneficial use. Larson, 387 N.W.2d at 908; McShane, 292 N.W.2d at 258.
Here, the City established its MUSA scheme as part of a comprehensive planning objective to balance many public interests and to promote the City’s particular land-use goals and rural values. We, therefore, apply the arbitration standard to determine whether all reasonable uses of the property have been precluded. See McShane, 292 N.W.2d at 257.
It is undisputed that Concept Properties has begun construction of a single-family residence and a building that will be used as a nursery. Because the subject property is not part of the MUSA, Concept Properties cannot connect to the City’s sewer line to service these buildings. But a septic system can be built to serve the subject property. Under the current zoning ordinances, Concept Properties may construct three more homes on the subject property. Although the inability to connect to the sewer makes development of the subject property more difficult, it does not deny the property all reasonable use. Although less profitable than the proposed use, Concept Properties has alternate uses available. The absence of any evidence that the 2020 MUSA designation deprives the subject property of all economically beneficial value defeats Concept Properties’ takings claim.
on the Minnesota Supreme Court’s recent decision in Johnson v. City of
Minneapolis, 667 N.W.2d 109 (
Properties attempts to remove this case from its proper land-use context by
characterizing the takings issue as a challenge to a special assessment, rather
than a challenge to a land-use regulation.
Arguing that a city’s assessment is unjustified when the property owner
would be unable to connect to the sewer for 15 to 20 years, Concept Properties
relies on In re Burnsville Assessments for Improvement No. 70TS-8 for
Sanitary Sewer, 287 N.W.2d 375 (Minn. 1979), and contends that the sewer
assessment constitutes a taking. But the
Because the 2020 MUSA designation did not deprive the property of all reasonable uses, Concept Properties’ takings claim fails.
Concept Properties next argues that the City’s decision to delay the MUSA staging for the subject property until at least 2020, after a sewer assessment has been paid, constitutes irrational conduct, in violation of Concept Properties’ substantive due process rights.
reviewing a zoning decision, we apply a two-part test to determine whether a
municipality violated substantive due process.
In doing so, we consider, “first, whether there has been a deprivation
of a protectible property interest and, second, whether the deprivation, if
any, is the result of an abuse of governmental power sufficient to state a
constitutional violation.” Northpointe Plaza v. City of Rochester,
465 N.W.2d 686, 689 (
substantive due process claim in the zoning context exists, if at all, only in
extraordinary situations and will not be found in ‘run-of-the-mill’ zoning
Here, Concept Properties has introduced no evidence
supporting a theory that the City Council engaged in “egregious” or
“extraordinary” conduct in deciding to change the MUSA boundary. Having already concluded that the City acted
rationally within its legislative function in adopting the comprehensive plan
in accordance with city and regional policies, we also conclude that such
action by the City does not violate the principles of a substantive due
process. Moreover, the record is devoid
of any evidence that the City acted with animus.
its final challenge, Concept Properties contends that the City’s failure to
strictly comply with Minn. Stat. § 15.99 (2002)
mandates automatic approval of its application to have the subject property
rezoned. When, as here, the grant of
summary judgment involves the application of a statute to undisputed facts, we
undertake de novo review. N. States
Power Co. v. City of Mendota Heights, 646 N.W.2d 919, 924 (Minn. App.
2002), review denied (
we interpret a statute, we first determine whether the statutory language, on
its face, is ambiguous.
The purpose of Minn. Stat. § 15.99 is to ensure
timely land-use decisions by governmental agencies. Tollefson Dev., Inc. v. City of Elk River, 665 N.W.2d 554, 558 (Minn. App.
2003), review denied (
An agency must approve or deny within 60 days a written request relating to zoning . . . or expansion of the metropolitan urban service area for a permit, license, or other governmental approval of an action. Failure of an agency to deny a request within 60 days is approval of the request. If an agency denies the request, it must state in writing the reasons for the denial at the time that it denies the request.
Minn. Stat. § 15.99, subd. 2(a). An agency may extend the 60-day period to
deny a request for an additional 60 days if the agency provides the applicant
with written notice before the initial 60-day period expires.
The parties agree that the deadline for approving or denying Concept Properties’ application, after numerous written extensions, was May 27, 2003. Concept Properties argues that the City failed to comply with section 15.99 because the City (a) neglected to provide Concept Properties with its written decision by the May 27, 2003 deadline; and (b) failed to adopt formal written findings at the time that it denied Concept Properties’ request.
absent from the language of section 15.99 is any requirement that an applicant receive
written reasons for the denial within the agreed upon timeframe. Subdivision 2 states that “a failure to deny
a request” within the statutory or agreed upon timeframe will be deemed an
approval of the application. Subdivision
3(c) further clarifies that an agency response meets the statutory time limit
“if the agency can document that the response was sent within 60 days of
receipt of the written request.”
Here, the record establishes that the City denied Concept Properties’ application at a City Council meeting on May 5, 2003, and subsequently denied the application by formal resolution with written findings on May 19, 2003. The City essentially denied Concept Properties’ application twice, both times before May 27, 2003. Complying with subdivision 3(c), the City also submitted evidence that it mailed a copy of the resolution denying Concept Properties’ application to Concept Properties’ representative on May 27, 2003. Thus, the City complied with Minn. Stat. § 15.99 by issuing a timely decision.
Properties next argues that the City violated section 15.99 by failing to state
in writing the reasons for the denial of its application “at the time that it
denie[d] the request.” In Demolition
Landfill Servs., LLC v. City of
Demolition Landfill, we ultimately concluded that, “absent a denial
within the statutory time limit and simultaneous, written reasons for
the denial, the permit application [was] deemed approved.”
Here, while the City Council was discussing the application on May 5, 2003, Concept Properties’ representative stated that “he would like a decision.” By oral vote of 3 to 2, the City denied Concept Properties’ application. The minutes taken during the City Council meeting establish that the City Council members extensively discussed the application, and their concerns are documented in writing. On May 19, 2003, the City Council adopted resolution 38-03 by a vote of 5 to 0, which again denied Concept Properties’ application and set forth the City’s written findings and reasons for the denial.
Indeed, on May 5, 2003, the City failed to comply with Minn. Stat. § 15.99, subd. 2, by neglecting to make written findings at the time the application was denied by a 3 to 2 oral vote. However, unlike the facts in Demolition Landfill, the City voted on the application a second time before the deadline and issued a resolution, which contained simultaneous written findings. We, therefore, distinguish Demolition Landfill and conclude that, because the City made a second decision denying Concept Properties’ application within the timeframe set by the parties, the written findings accompanying the second decision are sufficient to meet the “simultaneous” writing requirement of section 15.99.
In reaching this conclusion, we note that the facts at issue here do not present any of the mischief that the simultaneous writing requirement seeks to address. The rationale for mandating written findings accompanying a decision to deny a zoning application is to prevent a government’s post hoc rationalization of a capricious decision. Demolition Landfill, 609 N.W.2d at 282. The record here establishes that the Planning Commission and the City Council held meetings on Concept Properties’ application for over a year, that council members and city engineers extensively researched the subject property, and that, at the May 5, 2003 meeting, council members raised numerous concerns that are reflected in the minutes of the meeting and again in the written findings of the resolution adopted on May 19, 2003. Thus, there is no basis for concerns regarding bad faith or other mischief.
We, therefore, hold on these facts that an agency may, in good faith, cure a violation of the simultaneous written findings requirement within the statutory or agreed-upon deadline by issuing a second timely decision accompanied by simultaneous written findings.
Based on an extensive review of the municipal record and de novo application of the law to the issues raised, the district court did not err in granting summary judgment in favor of the City.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 Concept Properties contends that the subject property was within the MUSA in 1992. The record does not include a complete copy of the 1992 comprehensive plan and does not contain other documentation establishing that the subject property was within the MUSA in the early 1990s. To support its contention, Concept Properties relies on the City’s admission that, in 1992, the subject property was located in a “sewer-benefited area.” This does not mean that the subject property was within the MUSA, however. A property in close proximity to the sewer is considered “sewer-benefited.”
 “Metropolitan area” is
defined in Minn. Stat. § 473.121, subd. 2 (2004), and, with the exception of
four cities (
 Concept Properties also argues on appeal that the district court erred in granting summary judgment in favor of the City on its equal protection claim. We agree that the district court erred in granting summary judgment, but not because the district court erred as a matter of law or because material facts are in dispute. The district court erred in granting summary judgment on an issue that no longer was before it. Concept Properties raised only an equal protection claim under the United States Constitution in Count VII of its complaint. Concept Properties subsequently dismissed its federal claims in response to the City’s notice of removal to federal court. In its Notice of Dismissal dated June 18, 2003, Concept Properties’ counsel stated, “[Concept Properties], by and through its counsel, hereby dismisses, without prejudice, Count VIII and the federal claims asserted in Counts III, IV, VI and VII of its Complaint.” Because Concept Properties dismissed its equal protection claim, the district court erroneously entered summary judgment on an issue that was not before it.
 Minn. Stat. § 15.99 was
amended in 2003 and became effective beginning with written requests submitted
on or after June 1, 2003. 2003
 In the second vote on the application, the margin for denial changed from 3 to 2 to 5 to 0.