JOSEPH A. HAPPE and ELIZABETH B. HAPPE, Plaintiffs-Appellants, vs. CITY OF URBANDALE, IOWA, Defendant-Appellee.
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IN THE COURT OF APPEALS OF IOWA
No. 7-577 / 06-0631
Filed November 15, 2007
JOSEPH A. HAPPE and ELIZABETH B. HAPPE,
Plaintiffs-Appellants,
vs.
CITY OF URBANDALE, IOWA,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Polk County, Donald C. Nickerson,
Judge.
Residential property owners appeal a ruling affirming a city’s special
assessment. REVERSED AND REMANDED.
Joseph A. Happe and Elizabeth B. Happe, West Des Moines, pro se.
Ivan T. Webber of Ahlers & Cooney, P.C., Des Moines, for appellee.
Heard by Mahan, P.J., and Miller and Vaitheswaran, JJ.
2
VAITHESWARAN, J.
Residential property owners appeal a ruling affirming a city’s special
assessment. We reverse and remand.
I. Background Facts and Proceedings
Joseph and Elizabeth Happe owned 4.48 acres of land in Urbandale. A
portion of their land abutted 142nd Street.
The City of Urbandale (City)
determined it would need to acquire approximately 15.5% of the Happes’
property for the repaving, relocation, and eventual expansion of 142nd Street.
The City also notified the Happes that the remaining 3.79 acres, valued at
$281,720, was subject to a preliminary special assessment of $37,092.09. 1
The Happes challenged the amount of the City’s special assessment. See
Iowa Code § 384.66(2). Following trial, the district court concluded the Happes
failed to establish that the assessment was excessive. This appeal followed.
II. Amount of Assessment
Iowa Code section 384.61 (2003) governs this appeal.
That provision
states in pertinent part:
The total cost of a public improvement, except for paving that
portion of a street lying between railroad tracks and one foot
outside of the tracks, or which is to be otherwise paid, must be
assessed against all lots within the assessment district in
accordance with the special benefits conferred upon the property,
and not in excess of such benefits.
1
At trial, Urbandale’s City Engineer testified the final assessment would be 7 1/2 percent
less, or “$34,000 and some odd change.” He also testified that, if the Happes chose to
pay that sum within thirty days, they would receive an additional ten percent reduction,
making the final payment about $30,000. He emphasized, however, that the final
assessment had yet to be completed. Therefore, we will refer to the preliminary
assessment figure.
3
The key question is whether the special assessment was “in accordance with the
special benefits conferred upon the property.” Id. While the Happes concede
some special benefit from the road project, they characterize the benefit as
“miniscule.”
In their view, they rebutted the presumption of correctness with
which the special assessment was cloaked by presenting “overwhelming
evidence” of the “minimal benefits to their property.”
See Goodell v. City of
Clinton, 193 N.W.2d 91, 93 (Iowa 1971) (setting forth standards governing
challenges to assessment amounts).
In evaluating this argument, we are guided by the following general
principles:
[S]treet paving projects usually confer both general and special
benefits, and the abutting property owners are not required to pay
for the general benefits accruing to the community at large. The
finished street is available for all in the community to use; and all,
including the abutting land owners, contribute to the costs through
general taxation. The abutting property owners, however, obtain
additional benefits for which they must separately pay. It is these
benefits which we must extract and determine.
Thorson Revocable Estate Trust v. City of West Des Moines, 531 N.W.2d 647,
650 (Iowa 1995) (citations omitted). Factors to consider in distinguishing special
benefits from general benefits include the following:
[T]he present and future use of the abutting property, the increase
in the market value of the affected property, the size and shape of
the abutting property, the proximity of the property to the
improvement, the amount of property fronting the improvement, the
needs of the property owners served by the improvement, and the
primary purpose behind the construction of the improvement.
Id. Reviewing the record de novo in light of these principles and factors, we are
convinced the Happes satisfied their burden.
4
Elizabeth Happe was asked about several potential benefits of the new
roadway. She discounted them. For example, she testified she and her husband
experienced no problems with drainage or standing water that the repaving
project would correct.
She testified they did not have problems with snow
removal prior to installation of the new road.
She stated the old roadway
provided sufficient access to their property and the new road in fact limited their
access by reducing visibility.
She explained that the relocation of the new
roadway closer to their house created the potential for more noise with the
increased traffic volume.
Finally, Elizabeth Happe rejected the City’s assertion that the new
roadway would enhance the development potential of the property.
She
explained that, at the time the property was purchased, it came with covenants
restricting subdivision. Although there was some question as to whether those
covenants remained in effect, she noted that one potential developer backed
away from a project in the vicinity based on possible litigation over the
covenants. 2
As for enhanced property values based on the development
potential, she stated the new road did not affect that potential and, therefore, did
not enhance the property’s value.
The Happes’ expert bolstered this testimony. He opined that the Happes
had “an existing serviceable roadway that was adequate for [their] use” and they
“received no additional benefit from the new pavement.” With respect to noise
reduction, he stated noise was not previously a problem, but it would be with the
2
Urbandale's City Engineer testified that the issue was not so much the enforceability of
the covenants but the objection of other neighbors to this particular development plan
adjacent to their acreages.
5
increased traffic on the newly paved parkway. He also disagreed that dust would
be reduced, as asserted by the City Engineer.
The Happes’ expert cited several additional problems that, in his view,
minimized the special benefits of the project. He noted that the relocation of the
road would initially “leave a large part of the city right-of-way on” the Happes’
side of the roadway, leaving maintenance of that right-of-way to them. He also
noted that median access might be more difficult depending on which direction
the Happes were traveling, and one access point to their property might be
eliminated.
The Happes’ expert next challenged the City’s assertion that the Happes’
special assessment was only a fraction of the total cost of the project. He stated
that the total $3,338,000 cost of the repaving and expansion project “included
some storm sewer and a bridge, and a lot of other things,” which “were all city
obligations.” His testimony is consistent with the principle that, because paving
projects confer general benefits on the public, “only part of the cost is assessed
against the abutting property owners.” Goodell, 193 N.W.2d at 94.
On the question of the development potential of the Happe property, the
Happes’ expert acknowledged that the ability to develop property could be
considered a special benefit to that property.
He testified, however, that
redevelopment of this property, assuming that the land continued to be zoned
agricultural and used as for residential purposes, would not be “very practical.”
He explained that an appraisal report prepared for the City in connection with its
acquisition of part of the Happe property indicated that “the highest and best use
of this particular property is as it is, an acreage, and that the covenants prevent
6
any subdividing or any further dividing up that parcel.” Cf. Beh v. City of West
Des Moines, 257 Iowa 211, 221, 131 N.W.2d 488, 494 (1965) (noting witnesses,
including those called by plaintiff, agreed the highest and best use of dairy farm
was for subdivision purposes).
This testimony concerning the development potential of the Happe
property was consistent with the testimony of Urbandale’s community
development director.
He acknowledged that the Happes’ property was not
slated for any sort of retail, commercial, or industrial use.
The testimony of the Happes’ expert was also supported by assessments
on the west side of 142nd Street. Most of the property on that side received
preliminary special assessments of less than $10,000.
Although one similar
property across the street was assessed at more than $30,000, the Happes’
expert testified that, as far as he knew, this property was not subject to
covenants that restricted development. Later, he opined that the property was
“fully developed,” whereas the four parcels on the east side of the street
contained homes and no vacant parcels.
Urbandale’s City Engineer agreed,
stating the owners of that property “made an agreement with the Hubbell
development company that they would divide their property, basically take care
of all the cost of doing the engineering to divide their property into their house,
plus two more lots.” While he also stated this agreement was “in limbo”, the fact
that the owners were engaged in negotiations to develop their property
differentiates that assessment from the assessment on the Happe property.
On the question of development potential, we are not unmindful of the
testimony of Urbandale’s community development director that it would be
7
physically possible to subdivide the Happe property for development purposes.
However, he also stated this would require rezoning of the property. And, he
conceded that development “would be possible” with the pre-existing roadway.
This concession lends credence to the Happes’ assertion that development of
their property was not a special benefit of the road project. See Goodell, 193
N.W.2d at 94-95 (noting parties were “poles apart,” but stating that project
undertaken “for reasons of more importance to the city as a whole than to the
plaintiffs individually”).
In assessing the record on special benefits, we recognize that Urbandale’s
City Engineer and others disputed many assertions made by the Happes and
their expert. While we do not have the benefit of credibility findings to resolve
this conflict in testimony, we do have before us the City’s comprehensive urban
renewal plan.
That plan clearly envisioned that a repaved, relocated, and
expanded 142nd Street would serve as a conduit to a new retail and commercial
establishment
known
as
the
Village
Center.
Urbandale’s
community
development director conceded as much, stating the road was relocated “to be
able to bear the future traffic volumes that are anticipated with full development
of the entire area.
And plaintiffs’ property is a contributor, a very minor
contributor, to that overall traffic.” The Happes neither requested nor acquiesced
in this reconstruction of 142nd Street. These facts lead us to resolve the conflict
on special benefits in favor of the Happes. See Thorson, 531 N.W.2d at 651
(finding a street “designed as part of an important future alternative access to a
nearby planned regional park” was of general benefit to the City, not special
benefit to the land owners).
8
We conclude the Happes established that the City’s preliminary special
assessment of $37,092.09 was excessive.
Goodell, 193 N.W.2d at 95
(“[P]laintiffs should not pay for those benefits accruing to the community at
large.”).
III. Disposition
Having concluded the $37,092.09 assessment was excessive, the
question remains as to what amount is appropriate. The Happes maintain we
should adopt the assessment figures of similar properties with similar valuations
on the west side of 142nd Street. They point to the following testimony of their
expert:
[W]hen you look at the City not participating in the cost of this
pavement, and doing away with the maintenance obligation that
they have, and not sharing in some part of that construction cost, I
don’t think your benefit exceeds that of your neighbors across the
street. And I don’t think your assessment should exceed the
assessment that has been computed by the City of Urbandale for
those particular properties.
The expert opined that a fair and equitable assessment would be “no more than
comparable single family residences on the west side of the street which are in
the range of $6,118 to $6,806.”
On our de novo review, we note that lot twelve, located in the City of
Urbandale and abutting the west side of 142nd Street, was valued at $307,860
and subjected to a preliminary special assessment of $6,118.51. The City did
not counter the assertion of the Happes’ expert that this lot enjoyed comparable
special benefits as the Happe property. Accordingly, we adopt that figure as the
appropriate preliminary special assessment amount for the Happe property. See
9
Chicago, R.I. & P. RY. Co. v. Town of Reinbeck, 201 Iowa 126, 206 N.W. 664
(1926) (reducing assessments on appeal).
We find it unnecessary to address the Happes’ challenge to the formula
used by the City or the City’s assessment for a default fund. Costs are taxed to
the City of Urbandale.
We reverse and remand for entry of a decree and judgment consistent
with this opinion.
REVERSED AND REMANDED.
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