Davies v. City of Minneapolis
| Decision Date | 21 April 1982 |
| Docket Number | No. 51771.,51771. |
| Citation | 316 NW 2d 498 |
| Parties | Jack DAVIES, et al. petitioners, Appellants, v. CITY OF MINNEAPOLIS, et al., Respondents, and First Trust Company of St. Paul, intervenor, Respondent, Metropolitan Council, intervenor, Respondent, Metropolitan Sports Facilities Commission, intervenor, Respondent. |
| Court | Minnesota Supreme Court |
Kurzman, Shapiro & Manahan, Minneapolis, Jack Davies, for appellants.
Robert Alfton, City Atty., Jerome R. Jallo, Asst. City Atty., Minneapolis, for City of Minneapolis, et al.
Faegre & Benson, James Fitzmaurice and John H. Hinderaker, Oppenheimer, Wolff, Foster, Shepard & Donnelly, Richard G. Lareau, and Mark P. Wine, Minneapolis, for 1st Trust Co. of St. Paul.
John Hoeft, Staff Counsel, Metro. Council, St. Paul, for Metro. Council.
Olson, Gunn & Seran and David R. Knodell, Minneapolis, for Metro. Sports Facilities Comm Heard, considered, and decided by the court en banc.
This is an appeal from an order of the District Court of Hennepin County quashing an alternative writ of mandamus directing the City of Minneapolis to submit to Minneapolis voters for their approval a city charter amendment proposed by citizen's petition. If approved by the voters, the effect of the amendment would be to repeal a hotel-motel liquor tax enacted by the City in August of 1979 to finance the construction of a new domed stadium. The trial court upheld the City's refusal to submit the proposed amendment to the electorate, ruling that the amendment was an illegal attempt to supersede a general law, and that if approved, the amendment would unconstitutionally impair the contract rights of a multitude of parties involved in the financing, construction, and leasing of the new stadium, particularly the contract rights of bondholders who have purchased $55,000,000 in revenue bonds to finance the stadium project. While we disagree with the lower court's characterization of the proposed amendment as an illegal attempt to supersede general legislation, we do find the proposed amendment would unconstitutionally impair the contract rights of bondholders, and therefore affirm the decision of the trial court.
Respondent Metropolitan Sports Facilities Commission (Commission) is a public agency created by the Minnesota Legislature in 1977 to evaluate the need for sports facilities in the Twin Cities metropolitan area. Minn.Stat. § 473.553 (1980). The Commission was empowered by law to select the site for and to design, own and operate the domed stadium in question. Respondent Metropolitan Council (Council) is the state agency charged with the responsibility of issuing revenue bonds to finance construction of any sports facility proposed by the Commission.
In 1979, the Commission announced that it had chosen a downtown Minneapolis location as the site for a new stadium. Pursuant to Minnesota Statute section 473.592 (1980), on July 31, 1979, the City of Minneapolis entered into an agreement (hereinafter the Minneapolis Tax Agreement) with the Commission and the Council wherein the City agreed to levy a hotel-motel liquor tax to produce revenue to assist in the debt service on revenue bonds to be issued by the Council. The City's agreement to levy the tax for this purpose was a precondition to the Council's authority to issue bonds for the construction of the stadium facility. Minn.Stat. § 473.581, subd. 3(l) (1980). Minnesota Statute section 473.592, subdivision 1 expressly prohibited the construction of a sports facility in a municipality which had not agreed to levy such a tax:
A sports facility shall not be constructed or remodeled in a municipality which has not entered into an agreement in accordance with this section.
On October 15, 1979, the Council sold $55,000,000 in revenue bonds secured by an Indenture of Trust by and among the Council, the Commission, and respondent First Trust Company of St. Paul, as trustee on behalf of the holders of the Sports Facilities Revenue Bond, Series 1979.
On October 4, 1979, and again on November 1, 1979, petitioners Davies, Speak, Greenfield, and Ogren presented to the Minneapolis City Clerk a petition proposing an amendment to the Minneapolis City Charter. Because the October 4 petition contained over 3,600 signatures which could not be verified, it was rejected. The second petition, however, was certified by the Clerk on November 1, 1979. The proposed charter amendment provided, in pertinent part:
On December 14, 1979, the Minneapolis City Council adopted a resolution which directed the city clerk not to call for an election for the purpose of submitting the proposed charter amendment to Minneapolis voters. The City Council based its action upon an opinion rendered by the City Attorney which concluded the proposed amendment was an unlawful attempt to amend a general law, an unauthorized referendum, and would result in an unconstitutional impairment of contractual rights. On June 30, 1980, Davies and his fellow petitioners commenced this action for a writ of mandamus to compel the Council to place the proposed charter amendment before the voters.
1. The right of a local governmental unit to modify or supersede special legislation by home rule charter amendment is found in article XII, section 2 of the Minnesota Constitution. Section 2 provides, in pertinent part:
Every law which upon its effective date applies to a single local governmental unit or to a group of such units in a single county or a number of contiguous counties is a special law and shall name the unit or, in the latter case, the counties to which it applies. The legislature may enact special laws relating to local government units, but a special law, unless otherwise provided by general law, shall become effective only after its approval by the affected unit expressed through the voters or the governing body and by such majority as the legislature may direct. Any special law may be modified or superseded by a later home rule charter or amendment applicable to the same local governmental unit * * *.
The problems associated with special legislation were discussed as early as the Minnesota constitutional convention of 1857.1 One concern is that special interest groups might secure favorable special legislation of which the affected local community simply would not approve.2 Article XII, section 2 therefore gives to local governmental units the power to escape the effect of special legislation by allowing local approval by the voters or the governing body and subsequent repeal or modification by charter amendment.
At issue in the present case is whether the legislation which formulated a scheme for financing a new or remodeled sports facility is special legislation "which upon its effective date" applied "to a single local governmental unit or to a group of such units in a single county * * *." Appellants argue the legislation is clearly a special law which can be modified or superseded by an amendment to the Minneapolis City Charter. The City responds by arguing that the proposed charter amendment is an unlawful attempt to amend a general law.
We conclude the legislation, as amended in 1979, is special legislation within the purview of article XII, section 2. In 1979 the law was amended to require that any new or remodeled sports facility be located in Hennepin County.3 Minnesota Statute section 473.592, subdivision 1 authorizes any municipality within Hennepin County chosen as a sports facilities site to enter into an agreement with the Commission and the Council, the effect of which is to obligate the municipality to impose a sales tax. Revenue from the tax is to be used to supplement other revenue available to the Commission to pay the debt service on stadium bonds issued by the Council. Minnesota Statute section 473.581, subdivision 4 prohibits the municipality from later impairing, revoking or amending the tax until the bonds are fully discharged. These financing provisions clearly applied their effective date to a group of...
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