This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2006).
IN COURT OF APPEALS
In re the Matter of the Petition for the
Annexation of Land to
the City of
R. Gordon Nesvig,
D. R. Horton, Inc. -
Filed July 31, 2007
Affirmed in part, reversed in part, and remanded
Washington County District Court
File No. C2-05-7924
David T. Magnuson, Magnuson Law Firm,
R. Gordon Nesvig,
Laurie J. Miller, Fredrikson & Byron, P.A., 200 South Sixth Street, Suite 4000, Minneapolis, Minnesota 55402 (for respondent D. R. Horton, Inc. – Minnesota and co-counsel for respondent Nesvig)
James F. Shiely, Jr., Gearing & Shiely, P.A., 500 Degree of Honor Building, 325 Cedar Street, St. Paul, Minnesota 55101 (for respondent City of St. Paul Park)
Considered and decided by Halbrooks, Presiding Judge; Lansing, Judge; and Hudson, Judge.
Gordon Nesvig (hereinafter “Nesvig”) owns approximately 308 acres located in
property is located within the
March 2003, the City and the Township adopted resolutions providing for
environmental review through an AUAR; a draft AUAR was completed in May
2003. In November 2003, a final AUAR was
completed and submitted to the Environmental Quality Board (EQB)—the state
entity responsible for ensuring the effectiveness of the environmental-review
rules. Comments submitted during the
review process from a total of 20 different agencies, local units of
government, nonprofit organizations, and individual citizens were attached in
the appendix of the AUAR. The Minnesota
Department of Natural Resources (DNR) objected to the final AUAR in March 2004,
but it withdrew all objections in May 2004 after further discussions and/or
meetings with the RGU (responsible governmental unit, the City). The final draft of the AUAR was adopted by
the RGU on May 17, 2004. The
On December 21, 2004, respondents Nesvig and Horton filed a petition with the Minnesota Office of Municipal Boundary Adjustments under Minn. Stat. § 414.031 (2004), seeking annexation of the property by the City. Respondents had the support of the City, which adopted a resolution supporting the petition for annexation on October 18, 2004. See Minn. Stat. § 414.031, subd. 1(a)(3), (c) (2004) (governing initiation of a proceeding for the annexation of unincorporated property abutting a municipality).
a letter dated February 28, 2005, the deputy commissioner of the Department of
Administration delegated a final decision in this matter to the Office of
Administrative Hearings pursuant to Minn. Stat. § 414.12, subd. 2(a)
Appellant challenged the ALJ’s order of November 2, 2005, in district court under Minn. Stat. § 414.07 (2004). The district court order of July 19, 2006, affirmed the ALJ on all issues. Appellant filed this appeal, and this court issued an order construing the appeal to be from the district court order of July 19, 2006.
court may not substitute its decision for that of the agency.
Here, the ALJ considered all 14 factors in its order, making extensive findings and supporting these findings with citations to the record. And although Minn. Stat. § 414.031, subd. 4(b), requires satisfaction of only one of the three annexation criteria, the ALJ found that all three were met: “[T]he subject area described in the Petition for Annexation is about to become urban or suburban in character. . . . [M]unicipal government in the area proposed for annexation in the petition is required to protect the public health, safety and welfare. . . . [A]nnexation to the city of the area described in the petition is in the best interest of the subject area.”
Appellant argues that
there is not substantial evidence to support the ALJ’s finding on the first
factor of Minn. Stat. § 414.031, subd. 4(b), regarding urbanization or
suburbanization of the area. Appellant
did not brief the other two criteria for annexation. Appellant has consequently waived appellate
consideration of those issues. See Melina v. Chaplin, 327
N.W.2d 19, 20 (
“Urban or Suburban” Factor
argues that there is not substantial evidence in the record to support the
ALJ’s finding that the subject area is about to become urban or suburban,
contending that only 74 of the 300 acres are buildable. Respondents argue that 106 acres are
buildable and that, in any event, there is no requirement that unbuildable land
remain under the control of the Township.
The district court agreed with respondents, explaining that “[o]ne of
the factors to be considered is the quantity of land and the natural terrain in
the area.” See Minn. Stat. § 414.031, subd. 4(a)(2). Whether the land is buildable may be a
consideration in this factor, but it does not control the outcome of the
case. All 14 factors must be balanced to
determine whether the area is about to become urban or suburban.
The ALJ also found, and the record supports, that this increased population and the environmental inventory, which indicated that the condition of the property was moderate to very poor, favor annexation. Specifically, the ALJ determined that “[t]he ecological and environmental restoration proposed in the AUAR’s mitigation plan would be more likely to be achieved through the proposed urban development of the subject property than through low density development under the Township’s existing Comprehensive Plan.” The City, unlike the Township, is capable of providing the necessary services to the growing population, such as sewer systems, storm-water management and environmental maintenance of the area. There are copious findings in the ALJ’s 47-page order supporting his conclusion that the property meets all three subdivision 4(b) criteria for annexation. And each finding is supported by citation to the transcript or exhibits in the record. We conclude that there is substantial evidence to support annexation.
next argues that the property cannot be developed as planned due to its
environmental and land-use designations.
Appellant’s argument focuses on what appellant “believes are
inconsistencies between the proposed development and Metropolitan Council
policies and existing federal and state land use controls.” The parties agree that because the subject
property is in the Critical Area, after a recommendation by the Metropolitan
Council, the DNR must approve any amendment to the City’s comprehensive plan,
which would include examining the proposed development for compliance with the
Critical Area Act. Appellant argues that
the plan will never be approved because the density of the proposed development
violates the requirements of the Critical Area Act and the rural open-space
district. But the ALJ correctly
observed: “[T]he subject property will remain in the Critical Area regardless
of whether or not annexation occurs.”
That is, whether or not the property is annexed, the Critical Area
guidelines that protect the area’s natural resources will apply. In addition, the district court previously
determined in the 2001 annexation petition that the Critical Area designation
“cannot be a compelling factor in the denial of the annexation from
Furthermore, DNR approval of a Critical Area Plan amendment, by definition, can only be obtained after the property is formally annexed by the City and an amendment is actually proposed. Indeed, before annexation, the City has no legal interest in, or jurisdiction over, the subject property. Finally, we agree with the ALJ’s conclusion that “[d]isapproval of a development cannot be presumed in light of the withdrawal by the DNR of its objections to the AUAR after modifications were made.” Accordingly, the ALJ did not err in declining to speculate on a DNR decision regarding an amendment to the City’s comprehensive plan that has yet to be drafted or proposed.
argues that the ALJ violated Minnesota law and denied the Township residents of
the “island” lots their due-process rights by annexing the Nesvig homestead and
“island” lots without first recessing the hearing and publishing notice of the
proceedings. We review de novo whether
the annexation violated a statute or constitutional rights because it is a
question of law. See Frost-Benco Elec. Ass’n v.
that the Township is precluded from raising this issue on appeal because the
Township did not raise it below. See Thiele v. Stich, 425
N.W.2d 580, 582 (
The town would, of course, object to that, and one reason, of course, is that this would take any number of residents of the town and, slam bang, they’d go into the City of St. Paul Park without prior notice or almost no notice of what’s going to happen to them. . . .
The notice issue was clearly raised below and accordingly, we will address it.
The director may alter the boundaries of the area to be annexed by increasing or decreasing the area so as to include only that property which is now or is about to become urban or suburban in character or to add property of such character abutting the area proposed for annexation in order to preserve or improve the symmetry of the area, or to exclude property that may better be served by another unit of government.
Minn. Stat. § 414.031, subd.
4(f) (2004) (emphasis added). In
addition, Minn. Stat. § 414.09, subd. 1(e) (2004), governs the uniform
procedures pertaining to municipal-boundary adjustments: “When the director exercises authority to
change the boundaries of the affected area so as to increase the quantity of the
land, the hearing shall be recessed and reconvened upon two weeks’ published
notice in a legal newspaper of general circulation in the affected area.”
In this case, the hearing was not recessed and notice was not published. Yet the ALJ’s order unquestionably altered the area to be annexed, stating that “the area to be annexed should be increased from that set out in the original petition so as to include the area described in Findings of Fact Nos. 14 & 15 so as to improve the symmetry of the area.” Findings of Fact numbers 14 and 15 refer to Nesvig’s 30-acre homestead and the two “island” lots.
Respondents argue that during the proceedings no party “suggested that the annexation hearing should be adjourned until notice could be published or provided to all residents of the Township ‘island’ parcels. . . . Nor did the Township suggest that to use the authority granted in Minn. Stat. § 414.031, subd. 4(f), would be unconstitutional.” And with respect to Nesvig’s homestead, it was Nesvig himself who proposed that his homestead be added to the area proposed for annexation.
But Nesvig has no
authority to speak for the residents of the island lots. In any event, we must agree with appellant,
who correctly argues that the ALJ was bound by and required to apply
Appellant also argues that the ALJ failed to apply and analyze the 14 statutory factors in section 414.031, subd. 4(a), in relation to the additional annexation of the homestead and “island” lots. We decline to address this issue given our holding that the ALJ erred by not providing notice and an opportunity for hearing prior to annexing the homestead and “island” lots.
Because the statute required the ALJ to recess the hearing and to publish notice for the annexation of the homestead and “island” lots, we reverse that portion of the annexation order and remand for proceedings consistent with this opinion. Because the record contains substantial evidence to support the ALJ’s order annexing the original subject property, we affirm the remainder of the annexation order.
Affirmed in part, reversed in part, and remanded.
 This is the second annexation petition. Nesvig filed the first one in 1999, involving about 600 acres he owned in the Township. There were six days of hearings, district-court orders, a remand to the ALJ, a settlement agreement (which was allowed to expire in 2004), and ultimately Nesvig withdrew his request for further review of the ALJ’s order in October 2004. See MN Ctr. for Envtl. Advocacy v. City of St. Paul Park, 711 N.W.2d 526 (Minn. App. 2006) (holding that the final AUAR in this case was not inadequate as a matter of law).
 Moreover, Nesvig’s authority to waive the statute’s notice requirements—even with respect to his own homestead—is far from clear.