Oneka Lake Development Co., LLC, Appellant, vs. City of Hugo, Respondent.

Oneka Lake Development Co., LLC, Appellant, vs. City of Hugo, Respondent. A06-140, Court of Appeals Unpublished, February 6, 2007.

 This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480 A. 08, subd. 3 (2006).

 

STATE OF MINNESOTA

IN COURT OF APPEALS

A06-140

 

Oneka Lake Development Co., LLC,
Appellant,
 
vs.
 
City of Hugo,
Respondent.

 

Filed February 6, 2007

Affirmed

Stoneburner, Judge

 

Washington County District Court

File No. C9045917

 

Gerry S. Duffy, Jerrie M. Hayes, Siegel, Brill, Greupner, Duffy & Foster, P.A., 1300 Washington Square, 100 Washington Avenue South, Minneapolis, MN 55401 (for appellant)

 

James J. Thomson, Mary Tietjen, Kennedy & Graven, Chartered, 470 U.S. Bank Plaza, 200 South Sixth Street, Minneapolis, MN 55402 (for respondent)

 

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

U N P U B L I S H E D  O P I N I O N

 

STONEBURNER, Judge

 

            Appellant argues that the district court erred in holding that respondent city complied with Minn. Stat. § 15.99 (2006) when it denied appellant's application for an amendment to the city's comprehensive plan.  Appellant argues that respondent's procedure was inadequate to effectively deny the application within the statutory 60-day period and that the application should be approved by operation of law.  We affirm.

FACTS

 

            Appellant Oneka Lake Development Company, LLC (Oneka), is a Minnesota corporation engaged in land development.  Oneka seeks to develop property located near respondent City of Hugo (the city).  Under the city's comprehensive plan, the property is not scheduled for development until after 2020.  The property is outside of, and not adjacent to, the city's current Metropolitan Urban Services Area (MUSA)[1].  Oneka alleges that it cannot proceed with its planned development until the property is brought within the MUSA.

            In June 2003, Oneka presented its proposed development to the city's planning commission to solicit informal comments.  The city's Community Development Director wrote a report to the planning commission on Oneka's plan, noting that: (1) there is existing land within the MUSA where the type of proposed development could occur; (2) extension of the MUSA boundary to include Oneka's property could result in other property owners requesting that their properties also be included in the MUSA; (3) the development would create the need for a sanitary sewer lift station that would require future maintenance by the city; and (4) the development would increase the need for improvements to nearby roads.

            The planning commission reviewed Oneka's concept plan in June 2003 but took no action other than to ask Oneka to hold a neighborhood meeting on its proposal.  The city council considered and discussed Oneka's concept plan in August 2003.  The minutes of the meeting indicate that after the council's discussion, the council informed Oneka that the city would not expand the MUSA to accommodate the proposed development.

            On May 27, 2004, Oneka submitted an application to the city requesting an amendment to the comprehensive plan to expand the MUSA to include Oneka's property.  City staff prepared a report and background material on the application for a July 8, 2004 meeting of the planning commission.  The report recommended that the application be denied because (1) sewer capacity is limited; (2) extension would require other adjacent properties to be included in the MUSA; (3) the property is not uniquely situated, which could lead to other property owners requesting additional MUSA extensions; (4) comparable properties are available within the MUSA; and (5) the property can be put to reasonable use without extending city services.

            The city published notice that the planning commission was considering Oneka's request.  At the public hearing, Oneka and planning-commission members commented on the proposed MUSA extension, and some community members expressed concern about the proposed development.  The planning commission voted to forward Oneka's application to the city council with a recommendation that it be denied. 

            The report prepared for the planning-commission hearing was re-titled "City Council Agenda Report" and sent to the city council with added sections entitled "Proposed Motion" and "Planning Commission Update."  A draft resolution with findings supporting denial of Oneka's application was attached to the report.  The findings in the proposed resolution are identical to the reasons stated in the report for denying extension of the MUSA to include Oneka's property.

            The matter was placed on the "Consent Agenda" portion of the July 19, 2004 city-council-meeting agenda.  Oneka part-owner, Terry Miller, received a copy of the agenda with the attached report and proposed resolution.  Miller attended the city council meeting on behalf of Oneka.  The agenda stated that

[a]ll matters listed under the Consent Agenda are considered to be routine . . . and will be enacted by one motion and a roll call vote.  If a member of the City Council wishes to discuss an item, that item will be removed from the Consent Agenda and will be considered separately.

 

            Several items were removed from the Consent Agenda by request of a council member, but Oneka's request for an amendment to the comprehensive plan remained on the Consent Agenda.  A council member moved to approve the items remaining on the Consent Agenda.  The motion was seconded and passed without any discussion.  The city manager then stated: "Council approved this evening, if anyone is in attendance, the following items . . . they approved the denial of [Oneka's] Comprehensive Plan amendment request for the [] property on behalf of Terry Miller."

            Although Miller had copies of the Consent Agenda, the planning commission's report to the city council, and the proposed resolution denying Oneka's application in his hands at the meeting when the city council approved the Consent Agenda, Miller later testified in a deposition that when he left the city council meeting he did not know what, if any, action had been taken on Oneka's application.  The resolution on the Oneka matter reflects that it was signed by the mayor on the date the Consent Agenda was approved.  But, after the city council approved the Consent Agenda, the city did not provide Oneka with a signed copy of the resolution or any other written statements of its reasons for denying the application within the statutory time allowed.

            In September 2004, Oneka sued the city alleging that (1) the city acted arbitrarily and capriciously and (2) the city violated Minn. Stat. § 15.99 (2006) by denying Oneka procedural and substantive due process.  Oneka asserted that its application was not properly denied within the statutory timeframe and that the application should be deemed approved as a matter of law. 

            After a bench trial, the district court granted judgment to the city, concluding that the city had complied with Minn. Stat. § 15.99 and that the denial was based on sufficient evidence in the record.  This appeal followed.

D E C I S I O N

 

            Oneka appeals only the district court's determination that the city complied with the procedures set out in Minn. Stat. § 15.99 (2006) in denying its application to amend the comprehensive plan.  Because the parties do not dispute any material facts, we review de novo whether the district court erred in its application of the statute to the facts.  Hans Hagen Homes, Inc. v. City of Minnestrista, 713 N.W.2d 916, 919 (Minn. App. 2006), review granted (Minn. July 19, 2006).

            Minn. Stat. § 15.99, subd. 2 provides in relevant part that

(a)               . . . an agency must approve or deny within 60 days a written request relating to . . . expansion of the metropolitan urban service area for a permit, license, or other governmental approval of an action.  Failure of an agency to deny a request within 60 days is approval of the request.  If an agency denies the request, it must state in writing the reasons for the denial at the time that it denies the request.

 

            . . . .

 

(c)       . . . if [a city council] denies the request, it must state in writing the reasons for the denial at the time that it denies the request [and] it must state the reasons for denial on the record and provide the applicant in writing a statement of the reasons for the denial.  If the written statement is not adopted at the same time as the denial, it must be adopted at the next meeting following the denial of the request but before the expiration of the time allowed for making a decision under this section.  The written statement must be consistent with the reasons stated in the record at the time of the denial.  The written statement must be provided to the applicant upon adoption.

 

"The underlying purpose of the statute is to ‘establish[] time deadlines for local governments to take action on zoning applications.'"  Advantage Capital Mgmt. v. City of Northfield, 664 N.W.2d 421, 427 (Minn. App. 2003) (alteration in original) (quoting Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309, 312 (Minn. 2001)), review denied (Minn. Sept. 24, 2003).  "The rationale for mandating written findings accompanying a decision to deny a zoning application is to prevent a government's post hoc rationalization of a capricious decision."  Concept Props., LLP v. City of Minnetrista, 694 N.W.2d 804, 827 (Minn. App. 2005), review denied (Minn. July 19, 2005).

            In Hans Hagen, we affirmed the mandatory nature of the procedural requirements of Minn. Stat. § 15.99, and we affirmed a district court's conclusion that a city's failure to provide an applicant with a written statement of its reasons for denying his application to expand a MUSA within the statutory timeframe resulted in approval of the application as a matter of law.  713 N.W.2d at 923.  In a concurring opinion, Judge Randall noted the harsh result of the strict application of this "rigid legislative scheme."  Id. 

            In Hans Hagen, the city council stated its reasons for denial on the record and later adopted those reasons in a timely resolution that was available at city hall and contained in minutes posted on the city's website within the statutory time frame.  Id. at 918.  But the city did not specifically provide the resolution to the applicant within the 60-day statutory limit.  Id.  By contrast, in this case, the resolution setting out the written reasons for denying Oneka's application was specifically provided to Oneka's representative before the city council approved the reasons, and Oneka's representative was present when the city council approved the resolution without discussion.  Oneka does not dispute that evidence in the record sufficiently supports a denial of its request, but argues that the city violated the statutory procedures, mandating that its application be deemed approved as a matter of law.

            Oneka argues that the city's procedures did not fulfill the statutory requirements for denying its application because: (1) the city's approval of the Consent Agenda was not consideration of Oneka's application; (2) the city's approval of the Consent Agenda was not "adoption" of the resolution setting out reasons to deny the application; (3) the city did not state the reasons for denying the application on the record; (4) the city council did not state the reasons for denial in writing and did not adopt them; (5) it is logically impossible under these facts for the written statement of reasons for denial to be consistent with reasons for denial stated on the record because no reasons were stated on the record; and (6) the city did not provide Oneka with a written statement of reasons for denying the application "upon adoption," as required by the statute.

I.          Action on application

            Because the agenda clearly stated that items listed on the Consent Agenda "will be enacted by one motion and a roll call vote," we find no merit in Oneka's argument that approval of the Consent Agenda was not consideration of Oneka's application.  And Oneka has not provided any authority that makes the distinction between "approval" and "adoption" that Oneka argues in this case.  The district court did not err in concluding that the city's act of approving the consent agenda "constituted formal denial of [Oneka's] application" within the 60-day period provided by the statute.

II.        Adoption of written reasons for denial

            Oneka argues that the planning commission's report and proposed resolution set out only the planning commission's rationale for denying Oneka's application, and that if the city council "merely concurred with the reasons proposed by staff, it was [their] affirmative obligation to state so both on the record and in writing."  Oneka argues that because the record of the city council's meeting is "utterly devoid of a single statement by even one council member setting forth any rationale for [its] denial of Oneka's application," the city has violated the statutory mandates to state the reasons for denial on the record and to adopt a written statement of those reasons.  But written reasons for the denial were "on the record" in the form of the resolution approved.

            We conclude that the city council's approval of the Consent Agenda without discussion constitutes the city council's statement on the record that it adopted without change and without comment the reasons for denying Oneka's application contained in the resolution that was attached to the Consent Agenda.  Oneka has provided no authority for its argument that the city council members were required to do anything additional or make any particular oral pronouncement to signify full approval and adoption of the written reasons stated in the resolution it adopted.

III.       Provision of written reasons for denial to Oneka

            We find the most merit in Oneka's argument that the city violated the statute by failing to provide it with the written statement of the reasons for denial "upon adoption," as required by the statute.  This is the deficiency that led us to affirm the district court's determination in Hans Hagen that the City of Minnetrista had failed to comply with Minn. Stat. § 15.99, and that, as a consequence, Hans Hagen's petition was approved as a matter of law.  In this case, however, Oneka's representative, Miller, had a copy of the proposed resolution in his hands at the moment it was approved by the city council, and everyone present, including Miller, was informed on the record that the council "approved the denial of [the] Comprehensive Plan amendment request for the [] property on behalf of Terry Miller."[2]  By contrast, no written reasons for denial of Hans Hagen's applicationalthough they were available at the Minnetrista city hall and on the city's websitewere ever placed in the hands of a Hans Hagen representative until after the expiration of the statutory deadline.  We find this distinction significant.

            Oneka relies on  Am. Tower, to argue that the proposed resolution Miller received at the beginning of the city council meeting cannot satisfy the requirement that the city provide Oneka its adopted written reasons for denying the application.  636 N.W.2d at 313.  In Am. Tower, the City of Grant purported to extend the time for decision on every application covered by the statute by including generic extension language in the application itself.  Id. at 310-11.

            The supreme court affirmed this court's holding that a city cannot extend the 60-day deadline for a decision on a zoning application to 120 days by granting itself an extension before receiving the application to which the extension applies.  Id. at 313.  The supreme court noted that the statute clearly provides that notice of the extension be provided to "the applicant," and because "one is not an applicant until one has submitted a zoning request, the use of the term ‘applicant' indicates that an extension must be made after the application is received by the agency."  Id.  The supreme court also held that the city's attempt to extend its decision time on every application relating to zoning in advance of an application is inconsistent with section 15.99's individualized approach "because it prospectively establishes generalized rules for all zoning requests."  Id.at 313-14.

            Oneka argues, by analogy, that the city in this case could not satisfy the statutory requirement by providing written reasons for denying Oneka's application before those reasons were adopted by the city.  But we do not find the situations analogous.  In this case, the city was not acting inconsistently with the statute's contemplated individualized approach to decisionmaking.  The reasons provided to Miller were not generalized statements purporting to govern any request.  The reasons stated in the resolution specifically addressed the circumstances surrounding Oneka's request.  And the resolution was adopted without any change in the presence of Oneka's representative, who had the resolution in his hands.  While the better practice would have been for the city to have provided Miller or another Oneka representative with a copy of the signed resolution after its adoption, we conclude that to make the city's compliance with section 15.99 hinge on providing a copy of the identical resolution after its adoption would elevate form over substance to a degree not contemplated even by the rigid procedural scheme of the statute.  Without condoning the method in which the city provided the written reasons to Oneka "upon adoption," we nonetheless conclude that under the unique circumstances of this case, the district court did not err in concluding that the city timely and effectively denied Oneka's application under the provisions of Minn. Stat.      § 15.99 and that Oneka is not entitled to have the application deemed approved as a matter of law.

            Affirmed.

[1] "The MUSA is the designated portion of the metropolitan area in which governmental agencies support urban development by providing necessary public facilities and services, including sewer service."  Concept Props., LLP v. City of Minnetrista, 694 N.W.2d 804, 811 (Minn. App. 2005), review denied (Minn. July 19, 2005).

[2] Oneka argues that Miller left the city council meeting not knowing what action was taken on the application, but has not presented any authority that Miller's failure to understand what occurreddespite the wording of the agenda and announcement of the outcome at the meetinghas any bearing on the effectiveness of the city's actions.