Land Use Law Update

1. Land Use Law Update APA Minnesota State Planning Conference St. Cloud, Minnesota September 29, 2011 Cynthia Kirchoff, Esq., AICP Jean Coleman, Attorney/Planner

2. Why does case law matter? • Case law is different from statutes • Courts can: • Make new interpretations of the law • Interpret or clarify statutory language: • E.g., variance statute in Krummenacher v. Minnetonka • Declare statutes unconstitutional

3. What did appellate courts review? • Conditional Use Permits (unpublished decisions) • Due Process (unpublished decision) • Regulatory Takings (published decisions)

4. Conditional Use Permits • Eagle Nests Townhome Ass’n v. Aitkin County Planning Commission • Kraemer Mining & Materials v. City Sauk Rapids • Kotten v. Brown County Bd. of Commissioners

5. No Property Interest, No Due Process • Continental Property Group, Inc. v. City of Minneapolis (Court of Appeals unpublished decision) • APA filed amicus brief • CPG’s CUPs, variances, and site plan denied • CPG sued for equal protection and due process violations; district court found due process violation • Court of Appeals found CPG did not have a property interest so had no right to due process • Court found under MS 462.361 that hearing unfair so remanded to Council for new hearing and decision

6. Simple Mistake, No Estoppel • City of North Oaks v. Sarpal (Minn. 2011) • City employee gave Sarpal proposed survey not as-built survey • Sarpal built shed in trail easement and 30 foot side yard setback • City denied Sarpal’s variance request • City requested court order requiring Sarpal to relocate shed • Sarpal asserted “equitable estoppel” defense • District court concluded City equitably estopped from enforcing its zoning ordinance against Sarpalbecause it provided the survey on which Sapral had relied in applying for permit; Court of Appeals affirmed

7. Under doctrine of equitable estoppel, party must prove • the government engaged in wrongful conduct; • the person reasonably relied on the government's conduct; • the person incurred a unique expenditure; and • a balancing of the equities favors estoppel • Court reiterated that simple mistake is not wrongful conduct to satisfy first element • Court concluded City’s actions did not constitute anything other than simple mistake

8. Airport Zoning • DeCook v. Rochester International Airport Joint Zoning Board, 796 N.W.2d 299 (Minn. 011) • Disagreement about whether state or federal takings clause should be applied • Disagreement about what test to apply to determine if the regulation resulted in a taking

9. Airport Zoning • 240 acre property • In 1989 when purchased only 19 acres were subject to airport safety zone A • 2002, zone A extended and permitted land uses restricted • Jury in the trial court found a reduction in value of $170,000 • 3.5-6% of market value

10. Takings Clause • Minnesota Constitution – Art. I, Sec. 13 • Just compensation required where private property is “taken, destroyed or damaged for public use” • U.S. Constitution – Fifth Amendment • Just compensation required if “taken for public use”

11. Airport Zoning • The MN Supreme Court held that the controlling law was that of McShane v. City of Faribault, 292 N.W.2d 253 (Minn. 1980) • Because it arose from an airport safety zone ordinance • The “broader” MN constitutional takings clause was governing – covers “damage” caused by regulation • Held that when a land use regulation benefited “a specific governmental purpose” then compensation is owed if the there is a “substantial and measurable decline in market value” • 3.5-6% decline in value was substantial

12. What does this mean to me? • Being interpreted as a narrowly applying to airport zoning only • Landowners may be emboldened • Don’t change your perspective on regulatory takings based on this decision

13. Regulatory Takings • Iowa Assurance Corporation v. City of Indianola, Iowa • 2011 WL 3568922 (8th Cir. (Iowa) 8/16/11) • 8th Circuit federal Court of Appeals case • Iowa case with implications for Minnesota • If Minnesota case with similar facts appealed to U.S. Court of Appeals this case would be cited as precedent

14. Interlude:The journey of a local land use case through the courts

15. U.S. Supreme Court Supreme Court of MN U.S. Federal Court of Appeals 8th Circuit includes Minnesota MN Court of Appeals District (Trial) Courts County CUP or Subdivision Map source: www.fda.gov Final local land use decision

16. Regulatory Takings • Neighbors complained about storage, noise, and repair of racing cars • Cars were in structure and on parking lot zoned for commercial use • Indianola City Council passed a vehicle enclosure ordinance requiring a fence • Landowner challenged ordinance • uncompensated regulatory taking violating the Fifth Amendment of the US Constitution • required cost of fence to continue existing use • decreased the overall property value

17. Regulatory Takings • District (trial) court dismissed the takings claim using the regulatory takings test from Penn Central Transportation Co. v. City of New York, 438 U.S. 104 (1978) • Applied when loss is less than total loss • Balancing test – Balance the interest of the government in regulating an activity against the private loss caused by the regulation • If there is a legitimate governmental interest it is balanced against the economic impact of the regulation and the owner's reasonable investment-backed expectations

18. Regulatory Takings • Landowner appealed the district (trial) court’s decision eventually to the US Court of Appeals • 8th Circuit Court of Appeals upheld the dismissal of the landowners claim • Supported the application of the Penn Central balancing test • Rejected the assertion that requiring a fence was a permanent physical invasion of private property (Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419 (1982)) • Rejected the assertion that the action was an exaction (Nollan v. California Coastal Commission, 483 U.S. 825 (1987))

19. What does this mean to me? • The law of regulatory takings is not as clear cut as some would like it to be • It is difficult for a landowner to make a successful claim that a regulation requires just compensation

20. Practical Difficulties • Statutory amendment followed Krummenacher v. City of Minnetonka decision • City and County standard now consistent • Variances shall only be permitted when they are: • in harmony with general purposes and intent of the ordinance and • when the variances are consistent with the comprehensive plan.

21. Variances may be granted when the applicant establishes that there are practical difficulties in complying with the zoning ordinance • Practical difficulties means: • that the property owner proposes to use the property in a reasonable manner not permitted by the zoning ordinance; and • the plight of the landowner is due to circumstances unique to the property not created by the landowner; and • the variance will not alter the essential character of the locality. • Economic considerations alone do not constitute practical difficulties. • Conditions must be directly related to and roughly proportionate to impact created by variance.

22. Trends in Land Use Litigation • Religious Land Use and Institutionalized Persons Act • Petition to U.S. Supreme Court – City of San Leandro v. International Church of Foursquare Gospel (9th Circuit Court of Appeals) • U.S. Dept. of Justice filed brief in Unitarian Universalist Church of Minnetonka v. City of Wayzata to uphold the constitutionality of RLUIPA but not the merits of church’s case

23. QUESTIONS?

24. Interested in the Law and Planning Committee? Contact Cynthia Kirchoff at cynthiakirchoff@gmail.com for more information.

25. Resources • Minnesota Courts: http://www.mncourts.gov/ • Minnesota State Law Library: http://www.lawlibrary.state.mn.us/ • League of Minnesota Cities: http://www.lmc.org • Association of Minnesota Counties: http://www.mncounties.org/ • Law of the Land: http://lawoftheland.wordpress.com/ • US DOJ – Religious Discrimination/Freedom: http://www.justice.gov/crt/spec_topics/religiousdiscrimination/