Posted by: Patricia Salkin | September 18, 2017

MN Appeals Court Finds City Lacked Authority to Impose a Road Assessment as a Condition for its Approval of a Developer’s Subdivision Application

Appellant/cross-respondent City of Woodbury allocated undeveloped land into three “phases” and identified “roadway needs” caused by “increased traffic and trips that are generated” by expected development within each phase. These roadway needs included reconstructing existing roads and constructing new roads. Respondent/cross appellant Martin Harstad sought to develop 77 acres of phase-two land into a 183-home residential community called “Bailey Park.”  In this appeal, Harstad challenges the city’s decision to condition approval of a subdivision application on payment of a road assessment. As pertinent to this case, city’s ordinance sets forth that the city may not approve a proposed subdivision that is “deemed premature.” Furthermore, the city’s resolution states that roadway improvement costs “will normally be collected at the time a property develops per a negotiated major roadway contribution,” also called a “major roadway assessment” (MRA). According to a city official, “prematurity can be avoided if an agreed upon MRA contribution is made.” The district court declared the MRA unenforceable and entered partial summary judgment in favor of Harstad on the MRA and takings claims.

The court noted at the outset that the City of Woodbury is a statutory city, and therefore had no inherent powers “beyond those expressly conferred by statute or implied as necessary in aid of those powers which have been expressly conferred.” While the Minnesota Municipal Planning Act (MPA) provides cities with broad planning powers, the court determined that the existence of these powers “does not necessarily imply that the legislature similarly intended to confer broad financing powers under the act.” Accordingly, the court held the district court did not err in granting Harstad judgment on its MRA claim.

Harstad next contended that the district court erred in dismissing its takings claim as moot. However, as the city had not denied the Bailey Park application or imposed the MRA, nothing had been taken. Furthermore, since the MRA was found to be invalid and unenforceable, the court determined that the district court did not err in dismissing Harstad’s takings claim as moot.

Finally, as to Harstad’s claim that its application was deemed approved by the inaction of the city, the record showed that the city began processing the incomplete application while waiting for Harstad to submit revised plans to cured the deficiencies it noted. Moreover, there was no evidence that Harstad ever submitted another application or revised plans, and the city’s correspondence to Harstad in November and December 2015 also stated that the application remained incomplete. As such, the statutory periods for automatic approval under sections 15.99, subdivision 2(a), and 462.358, subdivision 3b, were not triggered by the Bailey Park application. Accordingly, the court held that the district court did not err in granting summary judgment to the city on Harstad’s application approval claim.

Harstad v City of Woodbury, 2017 WL 4104728 (MN App. 9/18/2017)

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