Posted by: Patricia Salkin | August 14, 2010

Decision Maker Bias and Ex Parte Communications in the Zoning Process Results in Due Process Violation

Plaintiff Bradley Hoyt, developer at Continental Property Group, purchased an option on property consisting of a surface parking lot in the Loring Hill neighborhood of Minneapolis with the intention of developing high rise condos and townhomes, known as Parc Centrale.  The property was zoned in the OR3 district, which restricts the height of buildings to 6 stories or 84 feet, and due to its location near the ordinary high water mark, it was also subject to Shoreland Overlay District standards, which impose a height restriction of 2.5 stories or 35 feet.  In July of 2004, Plaintiff applied for 2 CUPs to increase the maximum permitted height to 21 stories or 230 feet and to allow for a multiple family project with 104 units, and 2 variances to reduce the corner side yard and rear yard setback.  In August of 2004, the City of Minneapolis Planning Commission, acting on recommendation by the CPED, denied the application. 

In September 2004, the Zoning and Planning Committee denied the application and ten days later the full City Council upheld the decision.  Plaintiff purchased property later that month, and submitted an application for a second project which required no variances.  CPED staff issued a report recommending its approval, but Plaintiff withdrew its application citing infeasibility due to higher than anticipated construction costs. 

Plaintiff filed suit against the City of Minneapolis alleging violations of its equal protection, substantive due process, and procedural due process rights.  The district court dismissed both the equal protection and substantive due process claims, but held that held that Plaintiff was denied a fair hearing on appeal by the Zoning and Planning Committee and City Council and had thus established its procedural due process claim.

Plaintiff alleged that the City violated the equal protection clause by routinely issuing variances to similarly situated applicants without requiring a showing of hardship. The projects Plaintiff compared itself to, however, were not similarly situated, as they were subject to different zoning requirements and criteria, involved different settings, circumstances and time periods.  Even if the other projects were similarly situated, the fact that Parc Centrale did not meet applicable zoning standards and requirements gave the City a rational basis for giving differential treatment.  Plaintiff also failed to offer applications of the other applicants to show they did not demonstrate hardship, but were nevertheless granted a variance. 

As to the substantive due process claim that the City acted arbitrarily and capriciously in denying Plaintiff’s application, the court found although some of the statements made in the findings lacked factual support, the existence of one reasonable, factually based ground for denial was legally sufficient to survive substantive due process scrutiny.  Here, the City’s finding that Parc Centrale was inconsistent with the Comprehensive Plan, which was to ensure new residential developments contribute to the sense of neighborhoods through appropriate site planning and design, was rational because Parc Centrale called for a 21 story glass façade slender tower amidst a neighborhood consisting entirely of low rise residential and office buildings.

Plaintiff’s procedural due process rights were violated when City Council member Lisa Goodman took a position in opposition to Parc Centrale and exhibited a “closed mind” prior to hearing Plaintiff’s appeal and the meeting of the full City Council.  The timeline of events showed she “was clearly involved in an effort not only to assist to organize and mobilize neighborhood opposition to the project, but also to sway the opinions of her fellow council members.”  Instances where Goodman demonstrated a bias or conflict of interest include several critical communications to other Zoning and Planning members that were not included in the “official record,” depriving Plaintiff of the entitlement to a public hearing that was to be conducted full and open disclosure and in a fair and meaningful manner.  Since the City condoned the unlawful conduct of Goodman, she acted under the color of state law giving Plaintiff a cause of action under 42 USC § 1983.  The court awarded $500,000 in damages to Plaintiff.

The liability ruling can be found here.

Damages ruling awarding $500,000 to developer for out of pocket expenses and attorney’s fees can be found here.

Links to news articles:

City’s Response to Ruling

http://blogs.citypages.com/blotter/2010/04/city_must_pay_d.php

City Plans to Appeal

Hoyt v. City of Minneapolis, No. 27-CV-07-5826, MN District Court, Fourth Judicial District (9/16/09)


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