Cedar-Riverside Environmental Defense Fund v. Hills, CEDAR-RIVERSIDE

• Decision Date: 08 August 1977
• Docket Number: Nos. 76-1452,CEDAR-RIVERSIDE,76-1576,s. 76-1452
• Citation: 560 F.2d 377
• Parties: ENVIRONMENTAL DEFENSE FUND et al., Plaintiffs-Appellees, v. Carla A. HILLS et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 377

560 F.2d 377

10 ERC 2007

CEDAR-RIVERSIDE ENVIRONMENTAL DEFENSE FUND et al Plaintiffs-Appellees, v. Carla A. HILLS et al., Defendants-Appellants.

Nos. 76-1452, 76-1576.

United States Court of Appeals Eighth Circuit.

Submitted March 17, 1977.

Decided Aug. 8, 1977.

Anthony J. Steinmeyer, Appellate Section, Civ. Div., Dept. of Justice, Washington, D. C., for appellant, Secretary of Housing and Urban Development.

Wayne G. Popham, Minneapolis, Minn., for appellant, Cedar-Riverside Associates.

John H. Herman, Minneapolis, Minn., for appellee, Cedar-Riverside Environmental Defense Fund.

Rex E. Lee, Asst. Atty. Gen., Washington, D. C., Robert G. Renner, U. S. Atty., Minneapolis, Minn., and Morton Hollander and Anthony J. Steinmeyer, Attys., Appellate Sec., Civil Div., Dept. of Justice, Washington, D. C., on brief for Federal appellants.

Raymond A. Haik and Allen W. Hinderaker, Attys., Minneapolis, Minn., on brief for Cedar-Riverside Associates.

Roger A. Peterson, Minneapolis, Minn., on brief for The Minneapolis Building and Construction Trades Council, as amicus curiae.

Trudy McFall, St. Paul, Minn., on brief for The Minnesota Chapter, American Institute of Planners.

Timothy W. Regan, Minneapolis, Minn., on brief for Model Cities Planning Council and Model Cities Policy Board, appellees.

John H. Herman and James A. Payne, Minneapolis, Minn., on brief for appellees.

Barbara Allen Babcock, Acting Asst. Atty. Gen., Washington, D. C., Robert G. Renner, U. S. Atty., Minneapolis, Minn., Morton Hollander and Anthony J. Steinmeyer, Attys., Appellate Sec., Civil Div., Dept. of Justice, Washington, D. C., on brief for the Federal appellants.

Before BRIGHT and ROSS, Circuit Judges, and URBOM, ^* Chief District Judge.

PER CURIAM.

This is an appeal from an order of the district court permanently enjoining further construction on the housing project in Minneapolis, Minnesota, designated as the "Cedar-Riverside New Town in Town." The district court found the defendants in substantial noncompliance with the National Environmental Policy Act (NEPA), 42 U.S.C. §§ 4321 et seq., the Minnesota Environmental Policy Act (MEPA), Minn.Stat.Ann. §§ 116D.01 et seq., and the Minnesota Environmental Rights Act, Minn.Stat.Ann. §§ 116B.01 et seq. Cedar-Riverside Environmental Defense Fund v. Hills, 422 F.Supp. 294 (D.Minn.1976). Because we find the dispute to be no longer "alive" for purposes of the Article III case or controversy requirement, we dismiss the case as moot and order the injunction dissolved.

This appeal arises in a peculiar context. We proceed to outline the pertinent developments which have brought the case into its current posture.

In 1968, after years of study indicated that the Cedar-Riverside area of Minneapolis was in a state of urban decay and in need of urban renewal, the Minneapolis Housing and Redevelopment Authority (MHRA) submitted the Cedar-Riverside Urban Renewal Plan to the Minneapolis City Council which, in turn, approved the Plan. ¹ The Plan contemplated high density residential development and concomitant commercial development in order to accommodate the educational and institutional character of the area. In 1970, the defendant Cedar-Riverside Associates, Inc., was selected by the MHRA as the private developer for 100 acres of private, noninstitutional land within the Urban Renewal Area. At that time the Development Plan contemplated a ten stage residential and commercial development between 1972 and 1991, which would provide approximately 12,500 dwelling units and 2,500,000 square feet of commercial/cultural space. The population of the area at project maturity was projected between 25,000 and 30,000 people. ² In 1971, the United States Department of Housing and Urban Development (HUD) guaranteed $24 million of the developer's obligations pursuant to Title VII of the Housing and Urban Development Act of 1970, 42 U.S.C. §§ 4501 et seq.

On December 13, 1973, the plaintiffs brought this action alleging, inter alia, noncompliance with NEPA, MEPA and the Minnesota Environmental Rights Act. Because its financial involvement constituted a major federal action significantly affecting the quality of the human environment under NEPA, HUD agreed, on March 22, 1974, to prepare an environmental impact statement (EIS) on Stage II and the project at maturity. This lawsuit was held in abeyance pending the filing of the EIS. The draft EIS was circulated for public comment on October 15, 1974. On February 10, 1975, after the appropriate comment period had run, the final EIS was published. HUD thereupon submitted the EIS to the Council on Environmental Quality (CEQ) for purposes of NEPA, and the MHRA transmitted the EIS to the Minnesota Environmental Quality Council for purposes of MEPA.

The plaintiffs' action then took the form of an attack on the adequacy of the EIS. On March 29, 1976, after a lengthy trial before a master, the district court found that the EIS was inadequate in many respects under NEPA, MEPA and the Minnesota Environmental Rights Act and enjoined the future development. HUD and the private developer thereupon took this timely appeal.

Financial difficulties have plagued the private developer throughout the history of this project. In 1975, the developer defaulted on its Stage I mortgages and its New Community loan. Although the parties attribute different reasons for the developer's financial difficulties, one point remains clear: substantial land cost write-downs or other debt forgiveness is an essential prerequisite for any future development of the area.

After the appeal was docketed in this court, several significant developments occurred. On the federal front, the New Community Development Corporation within HUD adopted a resolution on December 10, 1976, concerning the acquisition and disposition of the Cedar-Riverside New Town in Town. The resolution discussed a report prepared by a Coopers & Lybrand consultant team which proposed continuation of the development, including the construction of a minimum of 5,000 new and 200 rehabilitated units, with HUD acquiring the project property by a deed in lieu of foreclosure or by foreclosure. The resolution authorized and directed the Deputy General Manager of HUD to determine whether this alternative was acceptable to the local parties and the City of Minneapolis. The resolution further authorized and directed the Deputy General Manager to " * * * take such steps as are necessary for the termination and orderly liquidation of the project * * * " if the local parties failed to indicate acceptance of the alternative.

Viewing this resolution as a substantial departure from the defendants' theretofore expressed intention of building a 12,500 dwelling unit development, the plaintiffs, on January 4, 1977, moved for an order declaring the action moot. On May 9, 1977, after the merits of the case had been submitted on briefs and oral argument, we ordered the parties to file sworn affidavits and supplemental briefs on whether, in view of the December 1976 resolution and subsequent developments, the case had been rendered moot. In response to our order, William White, General Manager of the New Community Development Corporation, stated that the 5,000 dwelling unit figure mentioned in the December 1976 resolution was merely a minimum density level set for purposes of negotiating an expeditious end to this litigation. White also stated:

It is the view of the Department that * * * the construction of the Cedar-Riverside New Town in Town at the density levels originally specified is viable with the current developer or a replacement developer. Assuming private and public sources of revenues to finance development and construction, a project could be economically viable at any number of density levels including the original level proposed. The project becomes more economically viable as densities and therefore per-unit sales proceeds increase. My present intention is to recommend to the New Communities Development Corporation Board that given a density of development satisfactory to them as a new town, that they should approve some level of federal financing to insure the continuation of the project rather than its liquidation.

The private developer also indicated its intention to proceed with the project. Robert Jorvig, president and chief executive officer of Cedar-Riverside Associates, Inc., stated: "Even though CRA has sustained large losses as a result of the delay attendant to the lawsuit, CRA itself definitely proposes to proceed with the project if the litigation is concluded in the foreseeable future."

Given White's express intent to request the necessary financing for the project and the developer's intent to proceed, we would have little doubt that the December 1976 resolution, in and of itself, did not moot the case. However, matters have been considerably complicated by actions taken by the various local agencies since February 16, 1977. On that date, a unanimous resolution of the Minneapolis City Council was approved by the Mayor of Minneapolis establishing the Cedar-Riverside Task Force. The...