may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Marlene A. Fearing,
M.A. Fearing Companies, Inc.
The City of Hastings,
Filed August 19, 1997
Dakota County District Court
File No. C1938777
John M. Baker, Jessica S. Ware, Greene Espel, P.L.L.P., 333 South Seventh Street, Suite 1700, Minneapolis MN 55402 (for respondent)
Considered and decided by Schumacher, Presiding Judge, Crippen, Judge, and Kalitowski, Judge.
Following a trial, the district court concluded that appellant Marlene A. Fearing had presented a prima facie case that respondent City of Hastings (city) had discriminated against her on the basis of her gender with regard to a housing project that she had proposed to develop in the city. The court, however, concluded that the city had articulated legitimate, nondiscriminatory reasons for its actions, which Fearing had failed to overcome. We affirm.
In the summer of 1989, based on recommendations by its public finance expert, the HRA recommended that the city give preliminary approval for tax increment financing if Fearing could demonstrate secured equity backing from project investors, provide at least a one-to-one ratio of private equity to tax increment subsidy, reserve 100% of the units for persons 55 years and older, and provide evidence of a firm commitment from a permanent financing lender because there probably would be no more bond allocations until 1990.
The city council approved in concept the establishment of a tax increment housing district if, by February 1990, Fearing could submit proof of a firm financial commitment from a lender, submit documentation of secured private equity backing, reserve 80% of the units for persons 55 and older, market at least 40% of the units to low and moderate income residents, and secure appropriate zoning approvals.
Fearing obtained a letter from a mortgage company indicating that it was prepared to issue a firm commitment for construction and financing of Fearing's project. The mortgage company indicated that its commitment was as firm as the city would receive from any financial source prior to the establishment of a tax increment financing district.
The HRA directed Fearing to meet with an underwriter, who concluded that the private investor proposed by Fearing did not meet necessary liquidity requirements. Based on that conclusion, the city rejected Fearing's investor.
The city council granted Fearing's request to extend her February 1990 deadline to May 1990 and to use the tax increment financing district for a general housing project if financing for a senior citizens housing project were unavailable. The city council granted Fearing's further requests to extend her deadline to August 1990 and then to December 31, 1990.
A citizens committee appointed by the mayor reviewed Fearing's project and made recommendations to the city. The city council extended Fearing's deadline to April 15, 1991, and required her to submit written proof of an assigned FHA case and project number. Fearing failed to submit such proof, and in March 1991, she withdrew her application for housing revenue bonds. On April 29, 1991, the city council concluded that due to Fearing's continuing inability to meet its terms and conditions, it would no longer consider providing tax increment financing assistance for her project.
It is illegal for a person, including a city, to discriminate against or refuse to do business with a person in the absence of a legitimate business purpose. Minn. Stat. § 363.03, subd. 8a (1996) (prohibiting business discrimination); see Minn. Stat. § 363.01, subd. 28 (defining "person" as including state agency or political subdivision).
The district court's finding that Fearing had established a prima facie case of discrimination is supported by an editorial written by the city's mayor stating that she believed the city council was discriminating against Fearing because she was a woman. The finding is also supported by statements by the mayor and council members that Fearing should "bring in a man" to assist with the project.
Once a plaintiff has established a prima facie case of discrimination, the defendant must articulate a legitimate nondiscriminatory reason for its actions. See Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 252-53, 101 S.Ct. 1089, 1093 (1981). The district court found that the city had met this burden by demonstrating that Fearing had failed to comply with the city's reasonable requirements. This finding is supported by evidence that Fearing continuously asked for and received extensions and revisions to the resolutions, but ultimately failed to comply with the terms of the revised resolutions.
If the defendant meets its burden, the plaintiff must prove by a preponderance of the evidence that the legitimate reason offered by the defendant was a pretext for discrimination. Id. at 253, 101 S. Ct. at 1093. The district court rejected Fearing's evidence that the city's articulated reasons were a pretext for discrimination. The district court cited evidence that the city's mayor never voted against Fearing's project, that two other city council members did not vote against the project until the end, and that the two remaining council members had justifiable reasons for changing their initial support of the project. The court also cited evidence that the city council had routinely extended deadlines for the project and had relaxed the terms of performance at Fearing's request; for example, the city granted Fearing's request to change the project from a seniors-only development to a general housing development.
The court found that Fearing expected the city council and HRA to guide her through the procedures, but the city had a right to expect Fearing to handle her project herself. The court found that the comments that Fearing should "get a man" were not meant to discriminate against Fearing, but instead merely reflected frustration with Fearing's failure to move her project forward, as well as annoyance with Fearing's requests for more and more assistance from the city and HRA. These findings are supported by the record.
The district court properly rejected Fearing's argument that the city council treated a prior developer differently by drafting a resolution for the developer, but only a motion for Fearing. See Lindahl v. Independent Sch. Dist. No. 306, 270 Minn. 164, 168-69, 133 N.W.2d 23, 26 (1965) (indicating that even though "motion" may lack formal attributes of "resolution," deficiency in form may not be fatal). The city council did pass several resolutions for Fearing's project, including the approval of tax increment financing for the project contingent on Fearing's compliance with several requirements.
Fearing also argues that the city council treated her less favorably than another developer. But the evidence supports the district court's finding that the other project was not similar to Fearing's project because it was constructed in an existing tax increment financing district, and it was a seniors-only, public, low-income housing complex. In contrast, Fearing's project was intended for a new tax increment financing district, was not designed for only low-income or public housing, and eventually became a general, rather than a seniors-only housing project.
Fearing argues that the city's requirement of a firm financial commitment was unreasonable. But even if Fearing obtained a commitment from a mortgage company that was as firm as possible under the circumstances, the evidence indicates that Fearing failed to meet other requirements; for example, she failed to return the HRA's applications for tax increment financing and housing revenue bonds with all required attachments, she failed to submit written proof of an assigned FHA case and project number, she withdrew her application for housing revenue bonds, and she failed to obtain secured equity backing from a private investor, which the city believed was necessary and in the public interest in order to lower rents by reducing the amount of debt required to be financed.
Fearing claims that she was given incorrect and/or incomplete information regarding zoning, bonding, and FHA application procedures. But the district court properly found that the city council expected Fearing to understand the procedures necessary for developing the project she had proposed. The court found that Fearing had never handled a completed development on her own prior to this time, that she "lacked the skills necessary to develop the housing project," and that the city's actions were taken because of Fearing's lack of knowledge and skills required for the development. The court found that the HRA had developed the criteria that the city imposed on Fearing and that those criteria were fair, reasonable, and within industry standards. These findings are supported by the record and are not clearly erroneous.