Pawn America applied to the City of St. Louis Park for a license to operate a pawn-shop. The City’s assistant zoning administrator issued a zoning verification letter confirming that the intended use of the property complied with the City’s zoning code. In addition to complying with the zoning code it was necessary for Pawn America to acquire a pawnbroker license. Certain policy concerns began to arise among the city council which brought them to vote on adopting a moratorium on new pawnshops by interim ordinance and to initiate a study in order to decide whether the City wanted to implement any additional conditions or restrictions on pawnshops. Upon Pawn America’s notification of the intent of the city council to vote on this measure they immediately entered into a lease agreement and submitted a signed certificate of occupancy and land use registration application, and requested immediate issuance of a pawn broker license. The City, however, would not issue the license because of the pending moratorium on new pawnshops. The City later adopted the interim zoning ordinance which temporarily prohibited new pawn-shops and also placed a hold on any further processing and approval of pending or new pawn-shop licenses. Further, based on the zoning study set forth by the council, the city adopted a permanent ordinance that amended the zoning code to make pawn-shops conditional uses which included a distance separation requirement between pawnshops, gun shops, liquor stores, and certain other business from being located within 350 feet of residentially zoned property. The property in question fell under this requirement.
Pawn America asked the district court to declare the interim ordinance invalid because it was adopted for the improper purpose of delaying or preventing Pawn America from opening a pawnshop. The City moved to dismiss the claims because the interim and permanent ordinances do not allow a pawnshop at the property. The district court dismissed Pawn America’s claims on the grounds that a municipality is authorized to enact an interim ordinance and that this particular one was not arbitrary or capricious because it is permissible to preserve the status quo pending further study of zoning. The court went further saying the mere adoption of an interim ordinance after learning of a particular proposed use of property does not, in itself, mean that enactment of an ordinance is arbitrarily enacted to delay or prevent the project. After the court of appeals affirmed, citing the city’s safety and welfare concerns Pawn America appealed to the Supreme Court of Minnesota.
The court relied on Minnesota Statute § 462.355, subdivision 4(a) which gives authority to a municipality, under certain conditions, to adopt an interim ordinance:
If a municipality is conducting studies or has authorized a study to be conducted or has held or has scheduled a hearing for the purpose of considering adoption or amendment of a comprehensive plan or official controls. . . the governing body of the municipality may adopt an interim ordinance applicable to all or part of its jurisdiction for the purpose of protecting the planning process and the health, safety and welfare of its citizens. The interim ordinance may regulate, restrict, or prohibit any use, development, or subdivision within the jurisdiction or a portion there of for a period not to exceed one year from the date it is effective.
The court turned to the purpose of the ordinance and Pawn America’s argument that the interim ordinance was invalid because the City did not adopt the ordinance “for the purpose of protecting the planning process and the health, safety and welfare of its citizens.” The court looked to whether the radiance was reasonably related to the planning process and the public health, safety, and welfare, or whether it was unreasonable, arbitrary, or capricious.
The Court found that based on the wording of the ordinance itself, it appeared that the City sought to make informed decisions for the long-term welfare of the City and wanted sufficient time to deliberate. Further, while the court found little doubt that there was hostility about locating a pawnshop at Pawn America’s proposed site, nothing in the statute precluded the City from adopting the interim ordinance when the City knew that the ordinance would affect only one particular entity and further, nothing in the statute prevented the City from adopting the interim ordinance in an effort to preserve the status quo in response to Pawn America’s pending application. The court concluded that because of the City’s purpose of protecting the planning process and the health, safety and welfare of its citizens, the interim ordinance was not unreasonable, arbitrary, or capricious, even though one of the purposes of the ordinance appears to have been to temporarily prevent Pawn America from operating a pawnshop.
Pawn America Minnesota, LLC v. City of St. Louis Park, 2010 WL 3339157 (MN 8/26/2010)
The opinion can be accessed at: http://caselaw.findlaw.com/mn-supreme-court/1536332.html
