Opinion
No. 2-063 / 01-0172.
Filed May 31, 2002.
Appeal from the Iowa District Court for Johnson County, Larry J. Conmey, Judge.
Property owner appeals the district court ruling that upheld a special assessment for a municipal improvement project. REVERSED AND REMANDED.
Steven E. Ballard of Leff, Haupert, Traw Willman, L.L.P., Iowa City, for appellant.
Ivan T. Webber of Ahlers, Cooney, Dorweiler, Haynie, Smith Allbee, P.C., Des Moines, for appellee.
Considered by Huitink, P.J., and Vogel and Eisenhauer, JJ.
Graytowne Apartments appeals a special assessment levied by the City of Coralville for certain public improvements. Because we find Graytowne has established the assessment was inequitable, we reverse and remand for further proceedings.
Background Facts and Proceedings . The City of Coralville (the City) undertook a municipal improvement project which included improvement to Second Avenue and Fifth Street Place, as well as construction of and/or improvement to sidewalks, sewers, and water mains along those two streets. The City assessed the entire cost of the project against eleven local property owners, including itself. In making the distributions, sidewalk and overwidth driveway costs were assessed against owners whose property directly abutted or contained those portions of the project. All other expenses were lumped into a "general project" category. Individual special assessments were based upon the number of linear feet in each parcel that fronted onto the project area.
Graytowne Apartments (Graytowne), a small, nine-unit apartment complex with 142.08 feet of property fronting the project, was assessed $35,118.33 in general project costs and $3,000.31 in sidewalk costs, for a total of $38,118.64 or 11.66 percent of the total project cost. Graytowne challenged the fairness of the assessment in district court. The assessment was upheld, and Graytowne appeals.
Scope of Review . Upon our de novo review, we give weight to the district court's findings, but are not bound by them. Freeman v. City of Waverly, 581 N.W.2d 194, 196 (Iowa Ct.App. 1998).
Fairness of the Assessment . Because the City's assessment is presumed correct, Graytowne bears the burden of demonstrating the assessment did not reflect its fair portion of the total cost. Id. Fairness is measured by the special benefits conferred upon the property, and the assessment cannot exceed the benefit. Id.; Iowa Code § 384.61 (1997). If the property owner cannot present evidence showing the assessment is excessive, including proof as to any actual benefit received, the assessment must be upheld. Freeman, 581 N.W.2d at 196.
The crux of Graytowne's complaint is that the assessment was based solely upon a linear front footage method of calculation, which resulted in an arbitrary and improper assessment amount far exceeding the actual benefit to its property. It is clear the engineering firm hired by the City to assess or spread the costs of the project used the front footage method and did so at the City's request. Although the City's brief implies the final distribution was the product of an independent analysis by the city council, there is no evidence any other considerations factored into the assessments. We therefore concur with the district court the assessments were based solely upon the number of linear feet of each parcel that fronted the project area. See, e.g., Mulford v. City of Iowa Falls , 221 N.W.2d 261, 266-67 (Iowa 1974) (finding assessment was based on front footage method only, where no significant difference between front foot calculation and final assessment, and where city council only "eyeballed" property without benefit of experts).
We also agree with Graytowne's assertion that basing a special assessment solely on front footage can lead to arbitrary and unfair results:
The statute involved here does not specify any particular method or measure to be used in determining the assessments. The council may use its own judgment to a reasonable extent. . . . But any method must be so used as to effect the ascertainment of assessments that are just and equitable . . . . (citations omitted). The area or frontage methods cannot be made the sole or conclusive basis of determining the assessments without regard to all other factors. . . .
Des Moines Chrysler-Plymouth, Inc. v. City of Urbandale , 488 N.W.2d 711, 714 (Iowa Ct.App. 1992) (citations omitted) (emphasis added). See also Freeman, 581 N.W.2d at 196. Clearly, the City should have made an effort to consider all relevant factors when making the assessment. Contrary to Graytowne's assertions, however, the City's failure to do so does not automatically render the assessment invalid. The overriding question is whether the assessment equitably represents Graytowne's portion of the total costs. Mulford, 221 N.W.2d at 268.
Upon thorough review of the record we reject Graytowne's contention the assessment was grossly disproportionate as its property received only nominal benefits. Rather, we agree with the district court's determination that real, definitive, and substantial benefits accrued to Graytowne's property, including improved access and water drainage and increased safety factors. These aspects mandate that Graytowne pay a not insubstantial portion of the total project cost. However, to be fair, an assessment must also be proportional.
We note initially that the City was assessed a portion of the cost only to the extent it was a local property owner. It made no assessment against itself for the general benefit to the City as a whole. At least for the street paving portion of the project, this was clearly error.
[S]treet paving projects usually confer both general and special benefits, and the abutting property owners are not required to pay for the general benefits accruing to the community at large. The finished street is available for all in the community to use; and all, including the abutting land owners, contribute to the costs through general taxation.
Milton O. and Phyllis A. Thorson Revocable Estate Trust v. City of West Des Moines, 531 N.W.2d 647, 650 (Iowa Ct.App. 1995) (citations omitted).
Regardless of how the City chooses to denominate the two improved streets, the record clearly establishes both are open to general public access and are in fact used by the general public, both to reach new areas of commercial development and as a simple bypass between two other connecting streets. The City has also benefited from a reduction in its own maintenance costs and obligations, which was one of the motivating goals behind the project. In addition, we note the new eight-foot-wide sidewalks, while clearly working a substantial benefit to the abutting property owners, are also necessary for the completion of the City's planned community sidewalk and/or corridor bike trail system. This amenity will not only benefit all City residents, but will provide a recreational link to the surrounding areas. We find the assessments should have taken into account these general benefits accruing to the City. See id. at 650-51.
The City groups public streets into three categories: 1) arterial, or those which handle large volumes of traffic from one major destination to another, 2) collector, or those which carry surrounding traffic flows from local developments and improvements out to arterials, and 3) local, or those serving only adjoining properties. The City has categorized both Second Avenue and Fifth Street Place as local streets.
Reviewing the entirely of the record, we find a number of other relevant factors indicate Graytowne's assessment was disproportionate relative to other assessments and in excess of the benefits it received. In addition to evidence the preexisting systems and roadways were adequate to its needs, Graytowne demonstrated that its property was currently at it highest and best use and that the minimal increase in its appraised value since project completion resulted from factors other than the project improvements. See Milton O. and Phyllis A. Thorson Revocable Estate Trust , 531 N.W.2d at 650 (noting present and future use, increase in market value, size and shape of property, proximity to improvement, need of the property owners, and primary purpose behind the improvement are all relevant factors in reviewing special benefits).
In contrast, the Gatens' property, whose extensive commercial development was "one of the driving forces" behind the project, substantially benefited from the improvements. See id. (noting relevance of future use and primary purpose behind the improvement). The property moved from a large undeveloped tract of land with no access to Fifth Street Place to a development containing a 103-room Red Roof Inn, a Burger King restaurant, a multi-stall car wash, and an eight-pump gas station with convenience store, which can all now be accessed directly from Fifth Street Place. Even though these accesses are only "secondary entrances" to the developed area, it is fair to say the improvements were critical to that property's current commercial use. Yet the Gatens' property was assessed its portion of the general project costs based on exactly the same single criteria as Graytowne's land — the number of linear feet of property fronting the project.
We use the term "Gatens property" to refer to both the tract of land listed on the assessment plat as "Donald Gatens," as well as the tract listed as "Beaton Holding Co."
In such a case, if the front footage calculation were found to accurately reflect a fair proportion of to the total costs, it would be a matter of mere happenstance rather than studied assessment. This illustrates the potential for disproportional and arbitrary results inherent in an assessment based solely on linear or even area calculation methods, when other relevant factors exist. See Mulford , 221 N.W.2d at 266-67. While the City is not expected to arrive at an assessment amount with any degree of mathematical certainty, Milton O. and Phyllis A. Thorson Revocable Estate Trust , 531 N.W.2d at 650, it should not blindly adopt a single-figure calculation without first ascertaining that it is at least an approximation of the fair and proportionate amount. See Des Moines Chrysler-Plymouth, Inc ., 488 N.W.2d at 714 (holding all relevant factors must be considered).
By showing the City failed to consider any other relevant factor, such as benefits to the City as a whole and proportional benefits to the various properties in question, Graytowne has demonstrated that the assessment is fundamentally flawed. It has also presented significant evidence establishing that the benefit to its property was not as substantial as that asserted by the City. While Graytowne may not have been able to present the exact dollar amount of the actual benefits derived by its property, such proof is not necessary. City of Clive v. Iowa Concrete Block Material Co., 298 N.W.2d 585, 592 (Iowa 1980).
After consideration of the entire record, we find Graytowne has met its burden of establishing the assessment was inequitable and that it must be reduced. See Wharton v. City of Oskaloosa , 158 N.W.2d 834, 836-37 (Iowa 1968). While we could attempt to calculate the appropriate amount of reduction, based upon the record before us, any such endeavor would be little better than speculation. We therefore remand this matter to the district court, for the reopening of the record. Both parties may present evidence as to the proper assessment amount. Any alternate assessment calculation shall account for all relevant factors, including general benefits to the City as a whole.
REVERSED AND REMANDED.