Forgive developer Martin Harstad if he thought he was in Potterville and not Woodbury when the city told him he had to pay nearly $1.4 million in “road assessments” as a condition of approval for his “Bailey Park” residential development. Harstad sued Woodbury to challenge its authority to demand the road assessments and won in both the trial court, and now the Minnesota Court of Appeals in a published decision released September 18.

For now, it’s a wonderful life for Harstad, other developers and for property owners who have been troubled for years over whether Minnesota cities have the power to condition development approvals on the payment of (frequently hefty) fees for future road improvements to accommodate new growth and development. Here, the court of appeals struck down what amounted to an impact fee assessed by Woodbury, but sidestepped the longstanding question of whether impact fees are legal in Minnesota.

As is the case for other developers, Harstad was already paying significant amounts for transportation infrastructure that would be needed within the Bailey Park development. Woodbury attempted to rationalize its road assessment policy by declaring that new development must not only “pay its own way,” but also pay “all associated costs” for “public infrastructure.” This meant, according to the city, that if a proposed development is perceived as contributing to the need for unspecified, offsite road improvements at unspecified locations outside the development, at unspecified points in the future, then road assessments under the city’s formula must be imposed and collected now as a condition of approval for the development.

The court of appeals said that Woodbury can only exercise powers conferred by the state legislature and that Woodbury overstepped its powers here. The court said of the statute on which the city pinned its hopes for upholding the assessment (Minn. Stat. Sec. 462.358, subd. 2a): “In fact, subd. 2a does not authorize collection of any type of assessment. Rather subd. 2a authorizes city planning.”

While Woodbury called its fees “major road assessments,” these types of charges have a variety of names, including “transportation improvement district fees,” “trip charges” and “transportation fees.” The name may vary, but the purpose is the same: cities are seeking to capture revenues for anticipated future upgrades to area roads to accommodate growth from new development. Regardless of a particular city’s label, the commonly-recognized name for this revenue-raising practice is “impact fee.”

Impact fees were defined by the Minnesota Supreme Court in Country Joe, Inc. v. City of Eagan, 560 N.W.2d 681, 685 (Minn. 1997), as fees: (a) in the form of a predetermined money payment; (b) assessed as a condition to the issuance of a permit or plat approval; (c) justified as within local government powers to regulate new growth and development and to provide for adequate infrastructure; (d) levied to fund large-scale, off-site public facilities and services necessary to serve new development; and (e) in an amount proportionate to the need for the public facilities generated by new development. Country Joe did not clearly decide, however, whether impact fees were illegal in Minnesota.

The court in Harstad did not address whether Woodbury’s road assessment was an impact fee, or whether impact fees are legally authorized in Minnesota. [This blogger made the case that such fees are not legally authorized in Minnesota in a March 2009 article in Hennepin Lawyer entitled Road Improvements: When Are Special Assessments Legitimate?

The court of appeals in Harstad also did not address whether Woodbury’s road assessment was an illegal tax. Country Joe held that the City of Eagan’s “Road unit connection charge” was an illegal tax under state law that limits municipal taxing powers. The court of appeals in Harstad did not address the illegal tax issue because it was raised only by amicus parties and not by either of the parties to the litigation. The City of Woodbury has until October 18 to decide whether to petition the Minnesota Supreme Court for review.

Stretching from the Cathedral of St. Paul to the Mississippi River, St. Paul’s Summit Avenue is one of the premier stretches of Victorian homes in the United States. Throughout the last four decades, the neighborhood has been the target of investment and restoration that has solidified Summit Avenue as an iconic part of Minnesota’s Capitol City. However, just blocks south of Summit Avenue, in a neighborhood colloquially known as “Tangletown,” residents continue to struggle with how to balance investment and preservation.

With meandering side-streets that deviate farther from the traditional grid than even the most infamous of St. Paul avenues, Tangletown exists as something of a micro-community within the Mac-Groveland neighborhood. In recent years, the broader neighborhood has repeatedly expressed concern with a series of “tear downs” which made way for the construction of larger homes. In response to neighborhood pressure, the St. Paul City Council adopted new residential design standards in 2015. A large number of the new requirements only applied to Planning Districts 14 and 15 (largely the Mac-Groveland and Highland Park neighborhoods). The new design standards regulate building heights at the side-yard setback, sidewall articulation, and maximum lot coverage.

However, in recent months, the residents of Tangletown have again expressed concern that existing zoning and design standards are insufficient and that the St. Paul Board of Zoning Appeals grants too many variances. As a result, last month St. Paul City Councilmember Chris Tolbert introduced and the council passed, a resolution asking the St. Paul Planning Commission to study the creation of a new overlay or conservation district just for the Tangletown area. While there is no timeline for the St. Paul Planning Commission study, the ongoing burdens placed on the city’s Planning and Economic Development Department by the Ford Plant redevelopment mean any recommendation is unlikely to reach the Planning Commission before mid-2018 at the earliest.

While consideration of specialized residential design standards is not unique to St. Paul and historic or preservation districts are a common tool used by municipalities to protect the identity of a neighborhood, a Tangletown-specific overlay district raises a number of interesting issues. First of all, Minnesota statutes section 462.357 – which provides municipalities their statutory authority to promulgate zoning restrictions – ties said authority to “the purpose of promoting the public health, safety, morals, and general welfare.” Open questions remain as to how design standards for a neighborhood, only marginally distinguishable from its surrounding area, would promote the public health, safety, morals, and general welfare.

Additionally, the statute requires that “regulations shall be uniform for each class or kind of buildings, structures, or land and for each class or kind of use throughout such district.” While the 2015 standards encompassed all of Planning Districts 14 and 15, a Tangletown-overlay likely would cover a much smaller area. Going forward, the St. Paul Planning Commission and City Council will have to weigh the value of responding to the neighborhood’s desire with the possibility of creating a cumbersome patchwork of building regulations.

 

Image credit: Google

On July 28, the St. Paul Planning Commission voted unanimously to recommend a redevelopment plan for the 135-acre Ford Motor Company property in the Highland Park Neighborhood of St. Paul. Nearly a decade in the making, the plan would provide the zoning and land use guidance necessary for any master developer seeking to redevelop the site. Originally constructed in 1912, the Ford property became available for redevelopment when the Twin Cities Assembly Plant closed in 2011.

The proposed redevelopment plan would divide the Ford property into six districts and allow for increased height and density in each district moving east away from the Minnesota River. For example, along the western end of the property, residential development (including townhomes and multi-family buildings) would be limited by a maximum height of 48 feet. Along the eastern end of the property, near existing commercial development, the plan allows for buildings between four and 10 stories tall.

Planning Commissioner Kris Fredson successfully amended the plan to allow for a slight increase in density along the river in an attempt to decrease the pressure for high-density development in other parts of the site. Earlier versions of the plan called for “mansion-style development” overlooking the river which would have reflected similar single-family residential communities north of the property along Mississippi River Boulevard.

While the plan was approved unanimously, it is far from noncontroversial. The Planning Commission received approximately 400 written comments and nearly 50 people testified at a public hearing in early July. The majority of consternation surrounding the plan – including the concerns of new community organizations like Neighbors for a Livable St. Paul – focuses on the proposed density and the number of new residents expected. City planners expect somewhere between 2,400 and 4,000 new residential units and as many as 7,000 new residents in the area in the next 10-15 years.

Critics of the plan have repeatedly expressed concern over increased traffic and congestion. That being said, other segments of the community – including members of the community group Sustain Ward Three – see the increased density as essential to maximizing the taxable value of the property while also creating the kind of pedestrian and bicycle-friendly community new residents are seeking.

The St. Paul City Council is expected to hold a public hearing this fall prior to taking up and potentially voting to approve the redevelopment plan. A formal decision on zoning and land use is likely the last obstacle to the Ford Motor Company’s sale of the property to a master developer. With an estimated $1.3 billion in potential investment in the site pending, the development plan will likely loom large on the City Council’s fall agenda. Controversy over the proposed redevelopment plan could also be a factor in St. Paul’s mayoral election this November as at least five candidates vie to replace Mayor Chris Coleman, who is stepping down to run for governor after 12 years in office.

 

Photo credit: city of Saint Paul

Property owners and lawmakers joined forces last month in an attempt to reverse the erosion of property rights in Wisconsin which resulted from two landmark decisions, one issued by the U.S. Supreme Court and the other issued by the Wisconsin Supreme Court. In Murr v. Wisconsin, the highest court in the land sided with local officials in a 5-3 decision holding that the Wisconsin Court of Appeals was correct in upholding a requirement that two nonconforming lots be treated as one for zoning purposes (see Jake Steen’s post on Murr v. Wisconsin).

In the second significant decision, a sand mining case known as AllEnergy v. Trempealeau County, the Wisconsin Supreme Court upheld denial of a conditional use permit to mine sand. In upholding the lower court’s decision, the Supreme Court relied on a record of objections raised by residents though the applicant had supplied expert reports and testimony refuting the concerns and addressing the conditions for approval in the zoning ordinance.

At the outset of a day-long symposium on property rights in Madison, lawmakers announced an initiative known as the “Homeowners’ Bill of Rights” designed to roll back government regulations that threaten property rights and home ownership in Wisconsin. Two of the initiatives seek to reverse the impact of the Murr and AllEnergy decisions.

Legislation proposed by Senator Tom Tiffany and Representative Adam Jarchow would grandfather existing lots so property owners would not lose rights to build simply because the rules change over time. Another initiative would propose legislation modeled after Minnesota’s conditional use permit case law which requires that a municipality issue a conditional use permit if the applicant satisfies the conditions and standards in the zoning ordinance.

In recent years, a Republican controlled legislature in Wisconsin has passed laws that give property owners a leg up in negotiations with government zoning officials, particularly where officials seek to downzone property or deny construction along the state’s vast shorelines. Under new laws, the right to build vests when an application is submitted instead of when a building permit is issued. This prevents loss of development rights if an owner takes time to put together building plans or financing – and is particularly important for development phased over time.

Other changes no longer require deference to state agency interpretations of certain land use laws and provide for direct notice to property owners of zoning changes. At least one recent change may be modified in the next legislative session – a change designed to protect reconstruction of boat houses on Wisconsin lakes has resulted in the construction of a few three-story boat houses which the bill’s author said was not the intent.

 

Bill Griffith was a featured panelist at the University of Wisconsin Law School’s first annual “Property Rights and Land Use in Wisconsin” symposium.

As new housing options and a variety of transit oriented developments pop up throughout the Twin Cities, many communities are struggling to balance their desire for walkable neighborhoods and easy access to amenities with the increased density and population growth that usually comes as part of such development. A primary example of that back-and-forth struggle can be seen along Snelling Avenue in Saint Paul.

Snelling Avenue has long been a major arterial street in the Capitol city. Stretching from Rosedale Mall to the north, past the State Fairgrounds, Hamline University, and Macalester College, before ending in West 7th Street on the south, Snelling Avenue provides access to Interstate 94 and the Minneapolis/St. Paul International Airport as well as the University Avenue and Grand Avenue commercial districts. However, with the opening of Metro Transit’s Bus Rapid Transit (BRT) A-Line, there has been significant conversation about whether the city should allow larger scale developments along the Snelling Avenue corridor.

In April 2017, the St. Paul Planning Commission released the Snelling Avenue South Zoning Study and began a public dialogue regarding potential rezoning of a number of properties along Snelling Avenue between Interstate 94 and Ford Parkway. Nearly two years in the making, the Zoning Study attracted significant attention and the input of individual residents as well as the Highland Park, Macalester/Groveland, and Union Park District Councils.

The Planning Commission held a public hearing on May 19, 2017 to solicit comments, and the combined Comprehensive and Neighborhood Planning Committees reviewed those comments at a meeting on June 13, 2017 before forwarding a revised rezoning proposal to the full Planning Commission on June 30.

The proposal would rezone a number of residential, commercial, and industrial properties to “Traditional neighborhoods” (TN) in an attempt to promote more dense mixed-use development along the transit corridor. The St. Paul City Code describes TN districts as being “intended to foster the development and growth of compact, pedestrian-oriented urban villages.” The TN districts are also “intended to encourage a compatible mix of commercial and residential uses within buildings, sites and blocks; new development in proximity to major transit streets and corridors; and additional choices in housing.”

However, those “pedestrian-oriented urban villages” are not without their detractors. Many of the comments received by the Planning Commission expressed concern as to the impact increased building height and density would have on nearby single family homes. Reduced parking access, increased vehicle traffic, shade and privacy concerns, and pedestrian safety were all cited as potential negative side-effects of the rezoning plan.

One of the major points of contention centers on building height, with particular concern from neighborhood groups focused on buildings of five or more stories. In response to those concerns, the Planning Commission has scaled back portions of the proposal, including the rezoning of properties near the intersection of Snelling and St. Clair Avenues. The city council is expected to take up the rezoning proposal sometime in August.