Business Ventures, Inc. v. Iowa City, 2--56006

CourtUnited States State Supreme Court of Iowa
Writing for the CourtHeard by MOORE; REYNOLDSON
Citation234 N.W.2d 376
PartiesBUSINESS VENTURES, INC., Appellee, v. IOWA CITY, Iowa, Appellant.
Docket NumberNo. 2--56006,2--56006
Decision Date15 October 1975

Page 376

234 N.W.2d 376
IOWA CITY, Iowa, Appellant.
No. 2--56006.
Supreme Court of Iowa.
Oct. 15, 1975.

Page 378

Jay H. Honohan of Honohan, Epley & Lyon, Iowa City, for appellant.

William L. Meardon of Meardon, Sueppel, Downer & Hayes, Iowa City, for appellee.



The City of Iowa City, Iowa, instituted a proceeding to acquire by condemnation approximately two and one-half acres from a 34.6 acre tract owned by Business Ventures, Inc.

The owner appealed the condemnation commission's $16,000 award to district court, where the jury fixed the damages at $47,750. The city appeals here, and we affirm.

The affected unimproved 34.6 acre 'Englert tract' lies in the northern part of the city. Taft speedway runs along its southerly boundary, an unnamed road flanks it on the west, and Foster road abuts it on the north. On the east it fronts Dubuque street, a four-lane thoroughfare carrying 10,000 cars per day and leading to an interstate highway 80 interchange a short distance to the north. The eastern portion of the affected property was taken into the city during the 1930's, the balance involuntarily annexed on December 1, 1965. This real estate is level to gently rolling. Most of it lies in the flood plain of the Iowa river. At the time of condemnation the tract was still being farmed.

One of several unique facets of this appeal is that the city took possession of the two and one-half acre area (condemned as of July 29, 1971) several years before the condemnation, possibly with the acquiescence of the then owners. A portion of the condemned realty became part of Dubuque street when it was converted to four lanes in about 1964. In approximately 1968 possession of the balance was taken for a Dubuque street 'green belt' established following a 1964 recommendation of 'Project Green,' an advisory commission established by city ordinance.

Apparently all property taken into the city is automatically classified R1A, for single family dwellings and certain other public-type buildings and parks. In addition, the easterly portion of the subject tract is zoned 'valley plain' which permits the property to be used for farming, truck gardens, parks, playgrounds and related uses. Valley plain zoning also allows use as permitted by the overlapping zoning but subject to certain fill and elevation requirements. The area immediately surrounding this plot is zoned R1A, R3A and R3B. R3A zoning permits, Inter alia, multiple dwellings, clinics and nursing homes. R3B additionally permits apartment hotels and office buildings. The Mayflower, a large multistory student housing complex, is across Dubuque street and approximately 200 to 300 yards south of the Englert tract. A mobile home park is in the area, as is Andover Square apartment house development. A proposed land use study for the north side area of Iowa City, prepared by the city staff, designated the subject tract as medium-high density (apartments). American Oil Co. acquired an interest (not otherwise here pertinent) in a 200 by 250 foot portion of the affected tract along Dubuque street. This small portion was valued by the city assessor at virtually the same amount as

Page 379

the balance of the plot, a clear recognition of its commercial potential.

The record before us is replete with instances of various owners of the affected tract attempting to secure a change in zoning to permit development for commercial and multiple dwelling purposes, and the city's interest in the plot for park purposes.

Records of the city clerk's office disclosed a 1960 joint request by the 'Englert estate' heirs and American Oil Co. to rezone the tract from residential to commercial. After hearings the request was withdrawn. A 1962 request by the same parties was withdrawn pending the adoption of new city zoning ordinances. A subsequent 1964 request was withdrawn after the planning and zoning commission recommended denial. In 1968 the present owner applied for rezoning but in 1969 the necessary ordinance was tabled and deferred.

The Iowa City planning and zoning commission operates as a part of city government under chapter 414, The Code. Minutes of its meetings and of a city council meeting are in the record. The rezoning application of this owner was considered at the commission meeting of April 25, 1968. A number of local residents appeared in opposition. The minutes disclose a commission member,

'* * * reiterated some of the past history concerning the rezoning and development of this tract and Stated that this land Ultimately has to be used. If the City will not buy this land for the purpose of a park or other public use, which he felt would be the best solution, then he is afraid if the Commission does not agree to some reasonable proposal, sooner or later less desirable development will occur.' (Emphasis supplied.)

Another member stated he agreed 'that public use would be the best use for this area.' A motion to table the rezoning request carried.

At its meeting of June 6, 1968 the commission voted to recommend to the city council that the request to rezone be approved as limited to R3, contingent upon certain changes. The commission also adopted a resolution 'to recommend that the City Council consult with the Park and Recreation Commission to consider this area for the possible use of park space.' June 18, 1968 the city council unanimously moved that the use of the 'Englert Tract area for a park and recreation area be referred to the Park and Recreation Commission for their recommendation.' A date and time were fixed for public hearing on the rezoning request but the matter was apparently continued.

On December 16, 1968 the owner responded to a request from the city's mayor that it write a letter to the mayor and city council 'suggesting a price at which they would be willing to dispose of the property, based on the actual cost that they had in the property, providing the city wanted to buy it for park purposes.' The record discloses no response from the city to this letter.

March 11, 1969 a revised plan for the Englert tract was submitted to the planning and zoning commission. A lawyer for residents in the area (who had 'started a fund for preserving this area as open space') objected, maintaining his clients believed '(a)ll of this land should be used for public open space.' A commissioner stated 'he thought the Commission was in an awkward position by not knowing if the City is going to purchase the adjoining land for public use.' The matter was again tabled.

May 6, 1969, as above noted, the city deferred action on the rezoning request.

At trial these parties stipulated the Englert tract was included in the long range acquisition plans of the city's park and recreation commission and that on February 4, 1970 'the recommendation of the Park & Recreation Commission' was submitted and filed but 'the city council * * * has taken no action whatever in connection with the matter as filed by the Park & Recreation Commission.' A knowledgeable witness for the city testified it was known

Page 380

throughout the area 'the Park Commission intends to buy the whole Englert tract in the next two or three years.'

In 1971 the city commenced this condemnation to legally acquire the real estate it already occupied in and along Dubuque street. Important features of the taking included the loss of all right of access to Dubuque street and loss of visual access to that street resulting from tree growth in the established 'green belt' area.

Upon trial in district court, there was no disagreement among the expert witnesses for both sides that the highest and best use of the Englert tract was for highway commercial and apartment use, and this condemnation would destroy its potential for commercial use. The owner's experts were permitted to express their opinions of the before and after values of the tract under existing zoning, and, over the city's objections, without regard to zoning.

The owner's witnesses testified it would be impossible to develop the 34.6 acres under existing R1A zoning as a single family residential area because of the fill requirements, estimated in the record to cost between $200,000 and $338,000.

Experts of the owner and their valuations were: Schlaegel, before value with existing zoning $100,000, after $60,000, damage $40,000, before value without zoning $200,000, after $100,000, damage $100,000; Fisher, before value with existing zoning $150,000, after $82,500, damage $67,500, before value without zoning $280,000, after $82,500, damage $197,500. City's experts and their valuations were: Whiting, before value with existing zoning $76,100, after $72,900, damage $3,200, before value with multi-family zoning $138,400, after $132,640, damage $5,760; Means, before value with existing zoning $82,175, after $78,850, damage $3,325.

Appealing, the city asserts the following propositions for reversal: 1) a zoning ordinance is not subject to collateral attack in a condemnation appeal, 2) the owner's expert witnesses may not disregard zoning in arriving at value in a condemnation appeal, and 3) sales of alleged comparable property are inadmissible as substantive evidence when in fact the properties are not comparable.

I. Issue of collateral attack.

The city argues this issue was raised below by motion to strike and withdraw all evidence 'based upon no zoning ordinance being present' and by its objection to jury instruction 10, the substance of which is set out, infra. Objection to instruction 10 did not refer to this concept. The testimony moved to be stricken was not objected to when offered on the ground it constituted a collateral attack on the ordinance. The motion made at close of evidence grounded on this theory was made too late and was properly denied. Linge v. Iowa State Highway Commission, 260 Iowa 1226, 1232, 150 N.W.2d 642,...

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