St. Louis Park Post No. 5632, Veterans of Foreign Wars of the United States, Incorporated, et al., Plaintiffs, Clear Channel Outdoor, Inc., a Delaware corporation, Appellant, ASK Property Management, Inc., et al., Plaintiffs, vs. City of  St. Louis Park, Respondent.

St. Louis Park Post No. 5632, Veterans of Foreign Wars of the United States, Incorporated, et al., Plaintiffs, Clear Channel Outdoor, Inc., a Delaware corporation, Appellant, ASK Property Management, Inc., et al., Plaintiffs, vs. City of  St. Louis Park, Respondent. A06-355, Court of Appeals Unpublished, December 26, 2006.

This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2004).

 

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-355

 

St. Louis Park Post No. 5632,
Veterans of Foreign Wars of the United States, Incorporated, et al.,
Plaintiffs,

Clear Channel Outdoor, Inc., a Delaware corporation,
Appellant,

 

ASK Property Management, Inc., et al.,

Plaintiffs,

vs.

City of  St. Louis Park,
Respondent.

 

Filed December 26, 2006

Affirmed

Wright, Judge

 

Hennepin County District Court

File No. 27-CV-03-007593

 

 

Marvin A. Liszt, David K. Nightingale, Bernick & Lifson, 1200 The Colonnade, 5500 Wayzata Boulevard, Minneapolis, MN  55416 (for appellant)

 

Thomas M. Scott, Campbell Knutson, 1380 Corporate Center Curve, #317, Eagan, MN  55121 (for respondent)

 

 

            Considered and decided by Wright, Presiding Judge; Randall, Judge; and Halbrooks, Judge.

U N P U B L I S H E D  O P I N I O N

 

WRIGHT, Judge

            In this appeal from the district court's entry of summary judgment in favor of respondent-city on appellant's challenge to respondent's grant of a conditional use permit requiring that appellant's billboard be removed, appellant argues that respondent (1) misinterpreted and misapplied its ordinance; (2) acted unreasonably, arbitrarily, and capriciously by neglecting to issue proper findings supporting its decision; and (3) violated appellant's constitutional rights.  We affirm.

FACTS

This matter is before us for a second time.  In an earlier decision, we affirmed in part and remanded the district court's December 8, 2003 order granting summary judgment in favor of respondent City of St. Louis Park on all claims brought by appellant Clear Channel Outdoor, Inc.  The facts underlying this matter are set forth in St. Louis Park Post No. 5632 v. City of St. Louis Park, 687 N.W.2d 405, 406-07 (Minn. App. 2004), review denied (Minn. Dec. 14, 2004).  In that decision we held that summary judgment was properly granted to the city on Clear Channel's claim that it was entitled to just compensation under the Minnesota Outdoor Advertising Control Act, Minn. Stat. § 173.17(c) (2002), but we remanded to the district court to address the propriety of summary judgment on Clear Channel's remaining claims.  St. Louis Park Post No. 5632, 687 N.W.2d at 410.

On remand, the district court granted the city's motion for summary judgment on December 23, 2005, and dismissed Clear Channel's remaining claims.  The district court held that the city did not act unreasonably, arbitrarily, or capriciously when it granted the conditional use permit (CUP) to plaintiff ASK Property Management, Inc., on the condition that Clear Channel's billboard be removed because the city properly applied its ordinance in doing so.  The district court also held that, under the law of the case established in our earlier decision, Clear Channel was not entitled to just compensation on its due-process or takings claims.  This appeal followed.

D E C I S I O N

On appeal from summary judgment, we determine whether any genuine issues of material fact exist and whether the district court erred as a matter of law.  State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  In doing so, we view the evidence in the light most favorable to the party against whom summary judgment was granted.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).  Summary judgment is appropriate when a party fails to make a showing sufficient to establish the existence of an element essential to the party's case, Bersch v. Rgnonti & Assocs., Inc., 584 N.W.2d 783, 786 (Minn. App. 1998), review denied (Minn. Dec. 15, 1998), or when "the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party," DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986)). 

 

I.

            Clear Channel argues that the district court erred by granting summary judgment in favor of the city because the city misinterpreted and misapplied its ordinance when it conditioned its approval of the CUP on the removal of Clear Channel's billboard.

A.

            The interpretation of a local zoning ordinance presents a question of law, which we review de novo.  Clear Channel Outdoor Adver., Inc. v. City of St. Paul, 675 N.W.2d 343, 346 (Minn. App. 2004).  We construe the language of a zoning ordinance according to its plain and ordinary meaning and in favor of the property owner.  Id.  In doing so, we also consider the ordinance's underlying policy goals.  Id.

            The ordinance at issue provides that, when a CUP application is submitted for a multitenant building and there are no proposed exterior modifications resulting in an increase to the building's floor area, height, or density, the city may issue the CUP provided that "[a]ny nonconformities existing on the site shall be brought into greater or complete compliance . . . to the extent reasonable and possible."  St. Louis Park, Minn., City Code § 36-404(6)(b)(2) (2006). 

            It is undisputed that the CUP application at issue here relates to a multitenant building in which exterior modifications that would change the building's area, height, or density are not proposed.  It is also undisputed that the presence of a billboard on the property constitutes a nonconforming use.  The city granted the CUP subject to several conditions, including a requirement to bring the site into greater compliance with the city's zoning ordinance by removing the billboard.  The city's actions reflect an interpretation of section 36-404(6)(b)(2) that is consistent with the plain and ordinary meaning of its terms.  The city's interpretation of section 36-404(6)(b)(2) also is consistent with the city code's stated policy goal of eliminating "all nonconforming uses and certain other nonconformities by . . . [e]ncouraging the elimination of nonconformities or minimizing their impact on adjacent properties [and] . . . [r]equiring certain nonconformities either to comply . . . or terminate."  St. Louis Park, Minn., City Code § 36-402(4), (5) (2006).  Thus, we reject Clear Channel's contention that summary judgment was improper because the city misinterpreted its ordinance.

B.

Clear Channel also argues that the city abused its discretion by acting  unreasonably, arbitrarily, and capriciously when it applied section 36-404(6)(b) so as to condition approval of the CUP on the removal of a nonconforming use that does not bear on or impact the use proposed by the CUP.  In a related argument, Clear Channel maintains that the city's application of section 36-404(6)(b)(2) constitutes an illegitimate exercise of the city's police power.

            We give great deference to a city's land-use decisions.  SuperAmerica Group, Inc. v. City of Little Canada, 539 N.W.2d 264, 266 (Minn. App. 1995), review denied (Minn. Jan. 5, 1996); see also Schwardt v. County of Watonwan, 656 N.W.2d 383, 389 n.4 (Minn. 2003) (holding that CUP approvals are given "a more deferential standard of review than CUP denials").  We review zoning decisions that require discretion and judgment, such as the decision to issue a CUP, to determine whether the city acted arbitrarily, capriciously, or unreasonably, and whether the evidence reasonably supports the decision made.  Clear Channel Outdoor Adver., Inc., 675 N.W.2d at 346.  A city's action pursuant to its own ordinance is reasonable and not arbitrary or capricious when the action bears a reasonable relationship to the purpose of the ordinance.  Id.

Here, the purpose of the ordinance is to eliminate nonconforming uses.  St. Louis Park, Minn., City Code § 36-404(6)(b)(2) (stating that a CUP may be issued only if nonconformities existing on the site are brought into "greater or complete compliance").  Granting the CUP on the condition that the nonconforming billboard be removed bears a reasonable relationship to that purpose.  It also bears a reasonable relationship to related policies in the city's code.  See St. Louis Park, Minn., City Code §§ 36-362(e)(6) (stating that billboards are prohibited signs), -402(5) (stating city's policy goal of eliminating or minimizing nonconformities by requiring nonconformities to comply or terminate), -365 (2006) (stating that city may "attach such conditions to any [CUP] as shall be determined to be necessary or convenient to better accomplish the intent of the comprehensive plan and this chapter and to minimize the impact of the use on adjacent properties").  Because the city acted pursuant to its own ordinance and its action bears a reasonable relationship to the ordinance's purpose, conditioning its approval of the CUP application on eliminating a nonconforming use was not arbitrary or capricious.

In support of its argument that the city's application of section 36-404(6)(b)(2) is not a legitimate exercise of the city's police power, Clear Channel cites Dolan v. City of Tigard, 512 U.S. 374, 114 S. Ct. 2309 (1994).  In Dolan, the City of Tigard required a property owner to give up her constitutional right to receive just compensation upon the city's taking of her property in exchange for the issuance of a building permit.  Id. at 385-86, 114 S. Ct. at 2317.  The Dolan Court noted that, "[u]nder the well-settled doctrine of ‘unconstitutional conditions,' the government may not require a person to give up a constitutional right . . . in exchange for a discretionary benefit conferred by the government where the benefit sought has little or no relationship to the property."  Id. at 385, 114 S. Ct. at 2317. 

But Dolan is inapposite.  Here, the city did not require Clear Channel to give up a constitutional right.  As we held in our earlier decision, Clear Channel's only constitutionally protected property interest is its interest in its lease with the VFW.[1]  St. Louis Park Post No. 5632, 687 N.W.2d at 408.  When it granted the CUP on the condition that the billboard be removed, the city did not require Clear Channel to give up that interest.  Rather,

[i]f the landowner chooses to forgo property development, the billboard may remain under the terms of the lease for so long as the landowner wishes.  If the landowner chooses to develop the property before the lease expires, Clear Channel may leverage whatever remedies state law provides [against the VFW, the lessor,] if the landowner's decision amounts to a breach of the billboard lease.

 

Id.  Thus, if Clear Channel ultimately is required to remove the billboard before the lease expires, it will be the lessor, not the city, that requires Clear Channel to do so.  As such, the city's grant of the CUP on the condition that the nonconforming use be removed is not unreasonable, arbitrary, or capricious.  Nor does it constitute an illegitimate exercise of the city's police power.

II.

Clear Channel also argues that the city acted arbitrarily and capriciously by neglecting to issue findings that support its decision to grant the CUP subject to the billboard's removal.

            We review the grant of a CUP to determine whether the city's reasons for granting the CUP are sufficient to allow judicial review.  Sunrise Lake Ass'n, Inc. v. Chisago County Bd. of Comm'rs,633 N.W.2d 59, 61 (Minn. App. 2001).  Generally, a city is not required to prepare formal findings of fact, but it must, at a minimum, "have the reasons for its decision recorded or reduced to writing and in more than just a conclusory fashion."  White Bear Rod & Gun Club v. City of Hugo, 388 N.W.2d 739, 742 (Minn. 1986) (quotation omitted).  But St. Louis Park, Minn., City Code § 36-365(b), requires the city to prepare formal findings addressing eight specific factors before issuing a CUP.

The city approved the CUP in Resolution No. 02-078, which incorporates by reference a planning commission report that analyzed the CUP application.  In support of the first factor in section 36-365(b), which requires the city to find whether the CUP is consistent with and supportive of the principles, goals, and objectives of the city's comprehensive plan, the city found that "the proposed office use is in harmony with the general purpose and intent of the Zoning Ordinance and the Comprehensive Plan."  Addressing the second factor, whether the CUP is detrimental to the health, safety, morals, and general welfare of the community, the city found that

[t]his proposal is not detrimental to the health, safety and general welfare of the community.  Staff does not foresee any traffic concerns with the applicant's request.  In fact, traffic generated by office uses should be minimal and less offensive to the area compared with the possible types of truck traffic that can be associated with other industrial uses, and which can generate noxious odors and noise.

 

With respect to the third factor, whether the CUP is consistent with the intent and purpose of the city's zoning code and the zoning district in which the conditional use is located, the city found that the CUP "is consistent with the goals and objectives of the . . . zoning district.  Although this property is zoned and guided industrial, [an] office [use] is allowed."  The fourth factor requires the city to determine whether the CUP will have undue adverse impacts on governmental facilities, services, or improvements.  Regarding this factor, the city found that closing an access point to a city street was necessary because traffic through that location would have an undue, adverse impact on the street.  As to the fifth factor, whether the CUP will have an undue, adverse impact on the use and enjoyment of properties in close proximity to the conditional use, the city found that the proposed use will not seriously depreciate surrounding property values and that "[t]he office use will have a minimal impact and thus be a good mix with the surrounding residential and other uses."  The city also considered the sixth factor, whether the CUP should be subject to certain design and landscape plans.  In doing so, the city conditioned the issuance of the CUP on approval of the landscape plan by the zoning administrator.  The city did not address the seventh factor, whether the CUP should be subject to approval of drainage and utility plans, because the proposed use would not change the building's drainage and utility requirements.  Regarding the final factor, whether the CUP should be subject to additional conditions necessary to protect the general welfare, public safety, and neighborhood character, the city imposed several conditions, including removal of the billboard.[2]

These extensive findings satisfy both the city's general obligation to set forth in more than a conclusory fashion written reasons for granting the CUP and section 36-365(b)'s specific requirement to address the eight factors.  See, e.g., Citizens for a Balanced City v. Plymouth Congregational Church, 672 N.W.2d 13, 23 (Minn. App. 2003) (holding that city's findings were sufficient because they incorporated by reference planning department's findings, which detail the basis for eachfinding required by city code).  Because these findings are sufficient to support the city's decision to grant the CUP subject to certain conditions, including removal of the billboard, Clear Channel's challenge on this ground fails.

III.

            Clear Channel also contends that summary judgment was improperly granted because the city violated Clear Channel's constitutional right to procedural due process of law when it took Clear Channel's property without paying just compensation.

A.

            We review de novo whether a party was afforded procedural due process of law.  Comm'r of Natural Res. v. Nicollet County Pub. Water/Wetlands Hearing Unit, 633 N.W.2d 25, 29 (Minn. App. 2001), review denied (Minn. Nov. 13, 2001).  Procedural due process of law requires the deprivation of one's property interest to be preceded by notice and an opportunity to be heard.  Id.  We, therefore, begin our analysis by determining whether Clear Channel possessed a compensable property interest subject to deprivation by the city's action.  CUP Foods, Inc. v. City of Minneapolis, 633 N.W.2d 557, 562 (Minn. App. 2001), review denied (Minn. Nov. 13, 2001). 

In our earlier decision, we held that Clear Channel's property interest is in its billboard lease with the VFW.  St. Louis Park Post No. 5632, 687 N.W.2d at 408.  Based on the doctrine of law of the case, our earlier holding will not be reexamined in a subsequent appeal.  Westbrook State Bank v. Johnson, 407 N.W.2d 688, 689 (Minn. App. 1987).  Clear Channel now claims that it has a compensable property interest in the billboard itself.  This argument is unavailing.

When a lease "unequivocally describes the designated structure as personal property," the lessee does not have a compensable property interest in the designated structure.  In re Minneapolis Cmty. Dev. Agency, 417 N.W.2d 127, 130 (Minn. App. 1987) (holding that billboard is personal property because billboard owner's lease with owner of property on which billboard was located contained clause stating that lease automatically terminates at condemnation or on sale or development of property), review denied (Minn. Feb. 24, 1998).  Here, the lease states that "[a]ll . . . structures, displays, . . . equipment and other materials placed upon the Property by Lessee . . . shall be and remain Lessee's exclusive personal property, and may be removed by Lessee at any time prior to . . . termination of this Lease."  The lease also contains a clause that allows Clear Channel to relocate the billboard to another part of the property under certain circumstances.  Finally, the lease contains a clause giving the lessor, the VFW, the right to "terminate this Lease early for the Sale and/or Re-development of the Property requiring the removal of the Lessee's [billboard] from site."  Because the Clear Channel/VFW lease unequivocally describes the billboard as personal property, Clear Channel does not have a compensable property interest in the billboard itself. 

We next consider whether the city deprived Clear Channel of its property interest in the lease with the VFW in violation of Clear Channel's right to procedural due process of law.  As we held in our earlier decision, the lease was not altered by the city's grant of the CUP conditioned on removal of the billboard.  St. Louis Park Post No. 5632, 687 N.W.2d at 408.  Indeed, Clear Channel admits that its interest in the lease remains intact after the city's action, stating in its appellate brief: "The lease between Clear Channel and the VFW has not been altered," and "[t]he lease is in full force and effect."  See Wehner v. Wehner, 374 N.W.2d 569, 571 (Minn. App. 1985) (holding that statements of fact made in briefs are taken as binding admissions).  Because Clear Channel has not been deprived of its property interest in its lease with the VFW, its claim of a procedural-due-process violation necessarily fails.[3]  Summary judgment on this ground was properly granted.

B.

Clear Channel also argues that the city unlawfully took Clear Channel's property without just compensation, in violation of the United States and Minnesota constitutions.

Private property cannot be taken for public use without just compensation.  U.S. Const. amend. V; Minn. Const. art. 1, § 13.  A regulatory taking occurs when a governmental body conditions a discretionary benefit on compliance with an unconstitutional regulation.  Naegele Outdoor Adver. Co. of Minneapolis v. City of Lakeville, 532 N.W.2d 249, 252 (Minn. App. 1995), review denied (Minn. July 20, 1995).             In Naegele Outdoor Adver. Co., we considered facts similar to those presented here to evaluate appellant-lessee's takings claim.  There, the lessee argued that the respondent-city's ordinance requiring removal of nonconforming billboards as a condition of plat or planned-unit development approval constituted an unconstitutional regulatory taking of private property.  Id. at 252-53.  But like Clear Channel's leasehold interest, the lessee's property interest in the lease was not altered by the ordinance because the ordinance permitted the nonconforming billboard to remain so long as the lessor desired and permitted that land use.  Id. at 253.  Because the lessee's property interest had not been altered, we held that a taking had not occurred.  Id.  We also concluded that, even if a taking had occurred, the lessee did not have a compensable interest in the property because, under the lease, the lessee agreed to terminate its leasehold interest on the property owners' development of the land.  Id.

As in Naegele Outdoor Adver. Co., Clear Channel's leasehold interest was not altered by the city's action of granting the CUP on the condition that the billboard be removed.  Clear Channel's leasehold interest can be altered only by an early termination or breach of the lease by the lessor, the VFW.  As such, Clear Channel's property interest was not taken without just compensation.  Moreover, like the lessee in Naegele Outdoor Adver. Co., Clear Channel does not have a compensable interest in the property because Clear Channel agreed to terminate its leasehold rights upon the VFW's notice of early termination of the lease.  Therefore, Clear Channel's takings claim also fails.

            Because there are no genuine issues of material fact, and because the district court did not err as a matter of law when it dismissed Clear Channel's challenge to the city's grant of the CUP on the condition that the billboard be removed, we affirm.

            Affirmed.

[1] The record establishes that Clear Channel's lease with the VFW expired on August 24, 2006.  However, during oral argument, Clear Channel's counsel advised us that the lease had been renewed, which prevents this appeal from being rendered moot.  See Mut. Serv. Cas. Ins. Co. v. Midway Massage, Inc., 695 N.W.2d 138, 141 (Minn. App. 2005) (holding that appeal may be dismissed as moot if, pending the appeal, an event occurs that makes a decision on the merits unnecessary or an award of effective relief impossible), review denied (Minn. June 14, 2005).

[2] Clear Channel argues that this requirement requires the city to make a specific finding that the condition is necessary to protect the general welfare, public safety, and neighborhood character.  But section 36-365(b)(8) does not contain such a requirement.  Rather, it requires a finding as to whether the CUP shall be "subject to the imposition of additional conditions as part of the [CUP if], in the opinion of the city council, such additional conditions are necessary to protect the general welfare, public safety and neighborhood character."  St. Louis Park, Minn., City Code § 36-365(b)(8) (emphasis added). 

[3]Clear Channel also argues that the city denied Clear Channel due process of law when the city failed to comply with its own procedural mandates.  St. Louis Park, Minn. City Code § 36-33(1) (2006) requires the city to hold a public hearing regarding all CUP applications and to give notice of these hearings "to each owner of the affected property."  But Clear Channel does not own "affected property."  As we have concluded, the city's decision to grant with conditions the CUP does not affect Clear Channel's property interest in its lease with the VFW.  And whether the city's decision to grant the CUP conditioned on the removal of the billboard results in any effect on Clear Channel's leasehold interest rests within the exclusive control of the property owner.  St. Louis Park Post No. 5632, 687 N.W.2d at 408 (holding that if property owner forgoes development under the CUP, billboard may remain, but that if property owner begins development and that development results in the removal of the billboard, Clear Channel's remedy is in contract against lessor-VFW for breach of billboard lease).  Because the city's CUP decision does not affect Clear Channel's property, Clear Channel was not entitled to notice under the city's ordinance.