Opinion
No. A06-661.
Filed May 8, 2007.
Hennepin County District Court File No. 27-CV-CD-000002777, Affirmed Halbrooks, Judge.
Gregory M. Bistram, Lisa M. Agrimonti, Matthew Slaven, Briggs and Morgan, P.A., Minneapolis, MN, (for respondent).
Bradley J. Gunn, Patrick B. Steinhoff, Malkerson Gilliland Martin LLP, Minneapolis, MN, and James R. Dorsey, Leonard, Street and Deinard, Minneapolis, MN, (for appellant).
Considered and decided by Halbrooks, Presiding Judge; Toussaint, Chief Judge; and Peterson, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2006).
UNPUBLISHED OPINION
On appeal from the district court's condemnation order, appellant property owner argues that respondent's taking of a fee-simple interest in appellant's land is not "necessary" under Minn. Stat. § 117.075 (2006) because respondent's long-term use for the fee simple interest is speculative, and the taking, therefore, is excessive. We affirm.
FACTS
In May 2001, respondent Metropolitan Airports Commission (MAC) approved the acquisition of residential properties in Bloomington to mitigate harm caused by increased noise from airplanes landing on a newly constructed runway at Minneapolis-St. Paul International Airport. An Environmental Impact Statement (EIS) conducted by the MAC and the Federal Aviation Administration (FAA) recognized that 27 homes and 131 multi-family units would have to be acquired because of safety-zone concerns and exposure to excessive noise levels. Among the affected properties was the 92-unit Forest Meadows apartment complex at 2405, 2415, 2425 and 2435 East Old Shakopee Road in Bloomington, owned by appellant Brandon Square III. The MAC authorized condemnation proceedings against the residential properties, including Brandon Square, in 2005 and filed the condemnation in district court. The MAC did not seek acquisition of properties adjacent to Brandon Square that were vacant or commercial in nature.
The MAC and the City of Bloomington also enacted new zoning restrictions to prevent future residential development that was nonconforming to the runway use. Bloomington, Minn., Land Dev. Zoning Regulations § 19.38.03(a) (2005) (stating that "[t]he Airport Runway Overlay Districts are established to implement the 2004 Minneapolis-St. Paul International Airport (Wold-Chamberlain Field) Zoning Ordinance"). These restrictions prohibit uses such as churches, schools, theaters, amphitheaters, campgrounds, fuel-storage facilities, medical facilities, and all residential uses. Id., § 19.38.03(c)(1)(B) (2005). In addition to the runway-overlay zone, Brandon Square's property is zoned Commercial Service District 1, which limits land use to hotels, offices, theaters, and public uses, as well as provisional and conditional uses of retail stores, restaurants, commercial establishments, financial institutions, athletic and recreational facilities, and automotive-service facilities. See id., § 19.40.07 (2005). Where both districts coincide, the stricter limitations prevail. Id., § 19.38.03(a). The allowance of a prohibited use on appellant's land would require variances from the City of Bloomington and the MAC's Board of Adjustment.
At the district court, Brandon Square argued that the MAC only needed to take the apartment buildings but that the land, without residential use, complied with zoning, noise, and other safety requirements. Furthermore, Brandon Square indicated that it would comply with those land-use requirements to profitably redevelop the land. But the district court held that the MAC demonstrated that taking the land "is necessary to further its legitimate public purposes of noise abatement and ensuring compliance with the safety zone requirements of the airport's new runway" and therefore granted the condemnation. This appeal follows.
DECISION
We may overturn the condemnor's decision regarding necessity only if it is "arbitrary, unreasonable, or capricious, or [if] the evidence against the necessity or public use is overwhelming." City of Duluth v. State, 390 N.W.2d 757, 764 (Minn. 1986) (alteration in original) (quotation omitted). The condemning authority bears the burden of proving necessity. Regents of the Univ. of Minn. v. Chicago N. W. Transp. Co., 552 N.W.2d 578, 580 (Minn.App. 1996), review denied (Minn. Nov. 20, 1996). "The mere suggestions of possible alternatives to the condemning authority's plan will not in itself support a finding of arbitrariness." City of Pipestone v. Halbersma, 294 N.W.2d 271, 274 (Minn. 1980); see also County of Blue Earth v. Stauffenberg, 264 N.W.2d 647, 650 (Minn. 1978) (quotation omitted) (stating that for a taking "there need be no showing of absolute or indispensable necessity"); Metro. Sewer Bd. v. Thiss, 294 Minn. 228, 230, 200 N.W.2d 396, 397 (1972) (holding "[t]here need be no showing of absolute necessity, and the mere suggestion of possible alternatives does not, in itself, support a finding of arbitrariness"). Therefore, "the district court gives deference to the legislative determination of public purpose and necessity of the condemning authority and the appellate courts give deference to the findings of the district court, using the clearly erroneous standard." Lundell v. Coop. Power Ass'n, 707 N.W.2d 376, 381 (Minn. 2006).
Both the federal and state constitutions protect private-property owners from government taking of private property for public use without just compensation. U.S. Const. amend. V; Minn. Const. art. I, § 13. But land taken for improvements to airports is considered "acquired and used for public, governmental, and municipal purposes and as a matter of public necessity." Minn. Stat. § 360.033 (2006). Minnesota law also requires the condemning authority to prove that the taking is "necessary." Minn. Stat. § 117.075 (2006); City of Duluth, 390 N.W.2d at 764. But "`[n]ecessary' need not be `absolute or indispensable necessity.' The condemning authority need only show that the proposed taking is reasonably necessary or convenient for furtherance of the end in view." City of New Ulm v. Schultz, 356 N.W.2d 846, 848 (Minn.App. 1984) (quotations omitted); see also Stauffenberg, 264 N.W.2d at 650 (stating that a taking only needs to be "reasonably necessary or convenient for the furtherance of the end in view").
The district court ordering condemnation "may, in the discretion of the [district] court, limit the title or easement to be acquired by the [condemning authority] by defining the rights and privileges which the owner of any of the lands may exercise therein in subordination to the public uses to which it is appropriated." Minn. Stat. § 117.075, subd. 5. But "[a]s long as the record supports the acquisition of the fee as `reasonably necessary or convenient' for furtherance of a public purpose, the [district] court's decision not to exercise its power to limit the [condemning authority's] title is not an abuse of its discretion." Schultz, 356 N.W.2d at 848.
The MAC is a statutorily established public corporation, Minn. Stat. § 473.603 (2006), that owns and operates the Minneapolis-St. Paul International Airport. The MAC is required, among other things, to promote and regulate air travel in the state of Minnesota while reducing the environmental impact of such travel by means of "noise abatement, control of airport area land use, and other protective measures." Minn. Stat. § 473.602 (2006). The MAC has the power of eminent domain to carry out its purposes. Minn. Stat. § 473.608, subd. 3 (2006). Eminent domain power is exercised through condemnation. "Title to any such property acquired by condemnation . . . shall be in fee simple, absolute, unqualified in any way." Id., subd. 2 (2006).
Brandon Square does not deny that the MAC may condemn its property for nonconforming residential use. But after the apartment complex is removed, Brandon Square argues that its property will be no different from conforming parcels that the MAC is not taking, such as adjacent undeveloped land. Therefore, Brandon Square contends the MAC has not shown necessity to condemn a fee-simple interest in its land. Furthermore, Brandon Square argues that because the MAC has no plans for the property, other than possible resale, the condemnation of the fee interest is for merely speculative purposes.
Brandon Square relies, in part, on Schultz in support of its argument. While Schultz reinforces the stringent standard of review that we use in condemnation cases, Brandon Square's situation can be distinguished from that of the landowners in Schultz. In Schultz, the landowners challenged the condemnation of their land for airport expansion for "clear zones" or "transitional zones." 356 N.W.2d at 847. In addition, the city was taking the land because of anticipated future expansion. Id. at 848. The condemning authority received an easement from a nearby landowner, with an "underground installation," because of the prohibitive cost of taking a fee interest. Id. at 847. Other landowners were also "willing to accept a permanent use restriction rather than give up their full title." Id. But the land would continue to be farmed under city ownership through leases granted after competitive bids. Id. Nor would an entire farm be taken and put out of business. Id. In fact, the city's goal was to prevent taking or destroying buildings or homesteads and thus eliminating an individual's livelihood. Id. at 849, 850.
Based on the advice of governmental agencies including the FAA, the condemning authority sought to acquire a fee interest in the land because obtaining easements would cost nearly as much as obtaining fee ownership. Id. at 848. Because both the airport-expansion and the airport-protection privileges constitute public necessities, this court held that "[t]he city need only show that acquiring the fee rather than easements was a reasonable means of acquiring airport protection privileges. The existence of alternatives does not make the decision to take the fee arbitrary." Id. at 849. Therefore, this court concluded that the district court "did not err in refusing to limit the [condemning authority's] interest in the property it acquired." Id. at 850. And we agreed that taking a fee-simple interest was necessary for the public use. Id.
Brandon Square seeks to surrender only an easement with the intent of complying with zoning restrictions. Brandon Square faces condemnation of its fee interest while neighboring properties remain in private possession and controlled by zoning regulations. And unlike the farmers in Schultz, Brandon Square's entire parcel is being taken, the buildings destroyed, and future profitability removed with the fee-simple taking. While the MAC has relied upon government agencies, including the FAA, to justify condemning fee interests in nonconforming property, Brandon Square will be unable to continue operations through leasing with the taking authority. Therefore, Schultz does not fully support the MAC's taking.
Before seeking condemnation, the MAC completed an extensive public process to determine public necessity, beginning with a 1989 study of options to improve air transportation. From that study, the legislature accepted the MAC's recommendation for a new runway. The MAC then worked with the FAA on an EIS that established the means of mitigating the harm from increased noise over residential areas. The MAC and the City of Bloomington followed the EIS's requirement by changing land-use plans so that the land beneath the flight path associated with the new runway would be conforming to the impact of increased noise. Furthermore, the MAC discussed acquiring the property in public meetings, including open houses for affected landowners in 2001 and 2005, when the MAC approved filing the condemnation action. This was, therefore, a public, deliberative process.
The MAC chose condemnation as reasonably necessary and convenient to the public purpose of a new runway. Acquisition of properties ensured timely conformity to mitigate environmental harm. Through condemning a fee interest, the MAC would not be faced with intractable negotiations or future nonconformity, even if such uses could be constructed only after obtaining variances from two entities, including the MAC's Board of Adjustment. Timeliness was an issue. The MAC obtained the parcels through the quick-take process and thus obtained possession through depositing with the district court the amount of the approved appraisal value. See Minn. Stat. § 117.042 (2006).
In affirming the condemnation, the district court found:
There has been no claim made, nor is there any evidence in the record, that MAC officials have acted arbitrarily, capriciously, or fraudulently in reaching their decision to condemn Brandon Square's property. The proposed condemnation is the product of years of careful research and planning by MAC officials — research and planning that [the district court] has neither the time nor expertise to conduct. This activity culminated in a determination that Brandon Square's property must be acquired through condemnation because the apartment complex is in a noise abatement area and because it violates the use restrictions. . . . Condemnation of the property is certainly one reasonable necessary or convenient manner in which MAC can achieve its purposes.
Our affirmance of the district court's condemnation order is based on our narrow standard of review in this matter and the supreme court's Lundell decision. In Lundell, the condemning authority had a lease on the Lundells' property for a telecommunications tower. 707 N.W.2d at 379. As a result of soured negotiations, the Lundells sent the condemning authority a notice of default and threat of eviction. Id. at 380. The condemning authority responded by seeking condemnation of the land to obtain it in fee. Id. It claimed that the taking was necessary to maintain occupancy without disruptions caused by disputes or uncertainty as to rights and taxes. Id. The Lundells contended that the condemning authority had no public necessity in taking a fee interest because it had previously successfully operated under a lease. Id. at 381. Thus, for the condemning authority to obtain a fee interest, the Lundells argued, it had to make an additional showing of necessity in order to justify condemnation of the fee interest. Id. at 381-82. But the supreme court held that
such an additional determination of necessity is not required. Whether or not a condemning authority has a present interest in the land less than fee title, the determination of necessity to support the taking of fee title by eminent domain is the same. The authority need only determine the underlying necessity to use the property in order to further its public purpose. In other words, [the condemning authority's] determination in support of condemnation is the same whether it has a present lease interest or no interest at all.
Id. at 382. Furthermore, "[a]lthough some public policy arguments might be made to support a requirement that a condemning authority take only the smallest interest in property that is necessary to serve the public purpose, the legislature has not enacted that requirement." Id. at 382 n. 3. Therefore, a condemning authority may take fee title even though a leasehold interest would be sufficient for its public purpose. Id.
Here, the MAC has demonstrated a public necessity to obtain Brandon Square's parcel in fee through complying with the EIS for an airport improvement defined in the statute as a public purpose. Brandon Square claims that the MAC needs only an easement and covenants, not the parcel itself. But the condemning authority in Lundell likewise had a choice between condemning a lease or a fee. Id. at 380. Because the MAC's condemnation is necessary for airport improvement, the MAC is not required to present its condemnation in a tiered fashion, justifying lesser interests and fee interest separately. And because the MAC's necessity for condemnation need only be reasonable or convenient, condemnation of Brandon Square's land is permissible.
Similarly, we disagree with Brandon Square's argument that the taking is speculative. Another measurement of necessity is whether the property will be used "now or in the near future." Regents, 552 N.W.2d at 580 (quotation omitted). "Speculative purposes will not support the assertion of necessity." Id. In Regents, the condemning authority sought to obtain property for which it did not indicate a specified purpose. 552 N.W.2d at 579-80. Although the authority considered several potential uses for the land, it had "not yet approved a single project for the property." Id. at 580. The land was not even on the university's master plan. Id. Even if the Regents had approved a project, site contamination prevented use of the land for as long as seven years. Id. This court noted that all proposed takings are required to be necessary, and "`necessity' in this context `means now or in the near future.'" Id. Furthermore, the authority had the burden of proving necessity. Id. Because the condemning authority had not demonstrated a specific need in the near future for the property, we affirmed the district court's denial of condemnation due to lack of necessity. Id.
Here, Brandon Square claims that the MAC has no plans for the property because the MAC's witnesses testified that the land would likely be sold with restrictive covenants preventing noncompatible use. The same testimony also indicated that sale was not a certainty. Furthermore, the runway is now operating, and the land is a part of the MAC's development plans. The taking is required to conveniently ensure land-use conformity with impacts of the existing new runway. Therefore, the MAC has a specific, immediate need for the property. As the district court found:
Brandon Square's analogy overlooks the fact that, in the present case, the condemning authority has identified and implemented a project that directly affects the property sought to be condemned. Rather than asserting a vague desire to do something with the property at some point in the future, MAC here has articulated a concrete need for some action to be taken.
Because we conclude that the MAC's taking of Brandon Square's land is not speculative but a reasonably necessary and convenient part of the completed runway project, the MAC has the ability to take the land. The district court noted the relatively novel concept advanced by Brandon Square that a condemning authority should take only the smallest property interest necessary to achieve the public purpose, but concluded that no basis can be found "in Minnesota law for separating the buildings from the real property on which they sit. Although such a remedy would no doubt appeal to landowners facing condemnation of their property, its availability will likely need to be the product of legislative action rather than trial court creativity." Likewise, the 2006 amendments to the eminent-domain statutes do not require such a precise finding of necessity. 2006 Minn. Laws ch. 214, at 195-206. We, too, agree that Brandon Square's desired precision for necessity is best found through legislative processes.