City of St. Paul v. Chicago, St. P., M. & O. Ry. Co.

• Citation: 413 F.2d 762
• Decision Date: 02 July 1969
• Docket Number: No. 19151.,19151.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Parties: CITY OF ST. PAUL, a Municipal Corporation, Appellant, v. CHICAGO, ST. PAUL, MINNEAPOLIS AND OMAHA RAILWAY COMPANY, and Chicago and Northwestern Railway Company, Appellees.

413 F.2d 762 (1969)

CITY OF ST. PAUL, a Municipal Corporation, Appellant, v. CHICAGO, ST. PAUL, MINNEAPOLIS AND OMAHA RAILWAY COMPANY, and Chicago and Northwestern Railway Company, Appellees.

No. 19151.

United States Court of Appeals Eighth Circuit.

May 6, 1969.

Rehearing Denied July 2, 1969.

Jon R. Duckstad, Asst. Corp. Counsel, City of St. Paul, Minn., for appellant; Joseph P. Summers, Corp. Counsel, City of St. Paul, Minn., on the briefs.

Philip Stringer, of Stringer, Donnelly & Sharood, St. Paul, Minn., for appellees; R. Paul Sharood, St. Paul, Minn., on the brief.

Before MATTHES, MEHAFFY and HEANEY, Circuit Judges.

HEANEY, Circuit Judge.

The City of St. Paul appeals from a judgment enjoining the enforcement of an amendatory zoning ordinance restricting building heights in a downtown river front area and adjudging the rezoning unconstitutional.

The rezoned area includes a city park which stretches more than three blocks along the edge of a sharp bluff overlooking the Mississippi River and Valley. The appellees' property lies from forty to ninety feet below the surface of the park at the foot of the bluff and is separated from the Mississippi River by railroad tracks and a waterfront street.¹

The ordinance imposed height restrictions which effectively prohibit the erection of building on the appellees' property which would rise above the level of the park and the adjacent bluff.²

The city park and the appellees' property lies largely between the Wabasha Street and Robert Street bridges which cross the Mississippi River and serve as the gateways to the downtown area from the south. The park was established in 1930 and serves to open up the southern approach to the core area which lies immediately to the north of the park.³ It further serves as a passive recreational area for residents, shoppers, visitors and an estimated 23,000 to 25,000 downtown employees.

In the early 1960's the St. Paul Housing and Redevelopment Authority undertook planning for the renewal and redevelopment of the downtown core area with the cooperation of other public agencies and private interests. The plan was formally adopted in 1964. A similar task was undertaken by the City Planning Department as a part of an effort to develop a comprehensive plan for the entire city. The downtown portion of the comprehensive plan was adopted in March of 1963, and the plan as a whole in April 1963. Both the renewal plan and the comprehensive plan envisioned that the park would remain and that no structures would be built on the railroads' property which would rise above the level of the park.

The area immediately north of the zoned area has undergone the contemplated intensive redevelopment. The Hilton Hotel, Degree of Honor, Y.W.C.A. and Federal Courts buildings have been erected in the last few years. Block J has been cleared for the construction of a high rise apartment building. Further north in the core area, the Osborn, Northwestern National Bank and Farm Credit Bank buildings have been completed and more construction is contemplated.

At about the time that the public agencies began their planning, the railroads⁴ started a program of disposing of its non-operating property throughout its system. The manager of the Real Estate Department of the railroad contacted a number of parties, beginning in the Spring of 1961, in an effort to stimulate interest in the subject property. He testified that publicity in the Fall of 1963, regarding the possible imposition of height restrictions on the property, dampened the sales effort. In late 1963, the railroads received an offer to purchase about one-half of the property, i. e., the land at the Wabasha Street end, for $4.00 per square foot. It was subject to the condition that the premises not be zoned so as to prohibit the construction of structures above the existing grade of the park. The management of the railroads rejected the offer on the basis that the property was needed for the railroad's operating purposes. At least two other potential purchasers of the property, who did not intend to build above the level of the park, indicated an interest but made no firm offers.

A consulting firm was engaged by the railroads in February, 1966, two months prior to trial, with a view toward a determination of the highest and best use of the property. The railroads' only interest was to sell the property. The study indicated that the highest and best use would be to construct a motel and four high rise apartments which would rise from ten to twenty-two stories above the park.⁵ This use would give the apartment occupants the benefit of the light and view over the river valley but in so doing, would equally deprive others of these benefits. It would also result in the closing off the "front door" of the core area from the southern approaches. The study envisioned building on the property originally deemed necessary for operating purposes. A witness for the railroads testified that the problem had been resolved and the property was available.

Although the record is not clear, the city, in the Fall of 1963, apparently first became aware that the railroads were attempting to sell the river bottom property for the possible construction of buildings that would rise above the park level.

A number of municipal authorities and boards, including the Housing and Redevelopment Authority, the Planning Boards and the Zoning Board recommended the imposition of height restrictions. The action of the Planning Board was taken after a public hearing. The resolution passed by that Board recited that the rezoning was reasonably related to existing land uses, overall needs of the community and the planning for future land use.

On September 3, 1964, the City Council, after a public hearing at which the railroads were the sole voice in opposition, unanimously approved an ordinance restricting height in the questioned area and directed the corporation counsel to draft such an ordinance. The City Council formally adopted the ordinance on September 20, 1966.

In May of 1966, the appellees brought suit for a declaratory judgment and asked that the proposed ordinance be declared void and unconstitutional.⁶ Following the formal enactment of the ordinance, the appellees filed a supplemental complaint and asked that the enforcement of the ordinance be enjoined or, in the alternative, money damages be awarded.

The District Court found that the fair value of the property prior to the passage of the ordinance was $320,000, and that its after value was $150,000. There is substantial evidence in the record to support this finding.

The court also found that the ordinance was unreasonable and arbitrary and, therefore, not a valid exercise of the police power because: (1) it bore no substantial relationship to health, safety, morals or the general welfare, and was enacted for aesthetic reasons only; (2) it was an instance of spot zoning and not part of a comprehensive plan; and (3) it was a confiscation without compensation in that the benefit to the public was small in comparison to the detriment of the property owner. The court concluded that the ordinance was "unconstitutional as violative of due process of law." It enjoined enforcement of the ordinance.

The court held that the appellees were not entitled to damages for enforcement of the ordinance during the pendency of the action as any damages during that period were minimal and speculative.

"Since it is clear that this was a good faith attempt by the city to exercise its police power and since there is no demonstration that there will be any further improper interference with the plaintiffs\' property rights, the Court does not at this time award damages and thus, in effect, turn this action into an eminent domain proceeding."

It retained jurisdiction for the purpose of granting any further relief which might become necessary and proper under 28 U.S.C. § 2202. We reverse.

The appellees concede that the city's purpose is a public one. They acknowledge that the city can accomplish its objective by the proper exercise of its eminent domain power — compensating the railroads for the damage to their property. They argue, however, that the ordinance is violative of the Fifth Amendment to the United States Constitution and Article 1, Section 13 of the Minnesota Constitution in that it takes the railroads' property without compensation.⁷

Neither constitutional provision interposes a barrier to the imposition of restrictions on the use of private property if a zoning ordinance is enacted pursuant to a valid exercise of the police power. Goldblatt v. Town of Hempstead, 369 U.S. 590, 593, 82 S.Ct. 987, 8 L.Ed.2d 130 (1962);⁸ City of Marysville v. Standard Oil Co., 27 F.2d 478 (8th Cir. 1928), aff'd, Standard Oil Co. v. Marysville, 279 U.S. 582, 49 S.Ct. 430, 73 L.Ed. 856 (1929); Kiges v. City of St. Paul, 240 Minn. 522, 62 N.W.2d 363, 369-370 (1953); State ex rel. Beery v. Houghton, 164 Minn. 146, 204 N.W. 569, 54 A.L.R. 1012 (1925), aff'd mem., 273 U.S. 671, 47 S.Ct. 474, 71 L.Ed. 832 (1927).⁹ The test of whether the enactment falls within that power is one of reasonableness.

The zoning ordinance will be sustained unless its "* * * provisions are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare." Euclid, Ohio v. Ambler Realty Co., 272 U.S. 365, 395, 47 S.Ct. 114, 121, 71 L.Ed. 303 (1926). Gorieb v. Fox, 274 U.S. 603, 608-609, 47 S.Ct. 675, 71 L.Ed. 1228 (1927); McMahon v. City of Dubuque, Iowa, 255 F.2d 154, 158-159 (8th Cir.), cert. denied, 358 U.S. 833, 79 S.Ct. 53, 3 L.Ed.2d 70 (1958); Naegele Outdoor Adv. Co. v. Village of Minnetonka, 281 Minn. 492, 162 N.W.2d 206, 212 (1968); State ex rel. Howard v. Village of Roseville, 244 Minn. 343, 70 N.W.2d 404, 407 (1955).

In reviewing the trial court's determination of invalidity, we examine the record not to see whether its findings are supported by...