Housing and Redevelopment Authority In and For City of Minneapolis v. Minneapolis Metropolitan Co., 38028

• Decision Date: 05 August 1960
• Docket Number: No. 38028,38028
• Citation: 259 Minn. 1,104 N.W.2d 864
• Parties: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR the CITY OF MINNEAPOLIS, Petitioner, Respondent, v. MINNEAPOLIS METROPOLITAN COMPANY, Relator.
• Court: Minnesota Supreme Court

Page 864

104 N.W.2d 864

259 Minn. 1

HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR the CITY OF MINNEAPOLIS, Petitioner, Respondent, v. MINNEAPOLIS METROPOLITAN COMPANY, Relator.

No. 38028.

Supreme Court of Minnesota.

Aug. 5, 1960.

Syllabus by the Court.

1. The Municipal Housing and Redevelopment Act (M.S.A. §§ 462.415, 462.421, and 462.425), which provides for redevelopment of blighted areas, does not limit the use of such areas as redeveloped for housing purposes. The areas as redeveloped may be used for housing purposes, commercial or industrial purposes, or a combination of such uses which in the determination of the Authority will best serve the public interest. A redevelopment authority is not obligated under the statute to limit uses of redeveloped areas to low-rent housing or to projects which integrate housing with other uses.

2. The provisions of § 462.531 which deal with temporary relocation of families displaced by redevelopment project and require that the Authority 'shall be satisfied that there is a feasible method for the temporary relocation' and that there are available or will be provided dwellings 'not less desirable' in the project area or in other areas do not require the Authority to delay redevelopment project until all such displaced persons are provided with shelter. Where the Authority has made a survey from which it has determined that the community facilities can and will provide proper housing for such dislocated persons and has assumed the responsibility of assisting such persons to find new locations in the community, it has done all that it is required to do under the act.

3. The right of eminent domain and condemnation proceedings in furtherance of that right are legislative functions of the government. The only questions which are judicial are the public use and the adequacy of compensation. If it appears from the record that the taking serves a public purpose, there is nothing left for the courts to pass upon. Courts may interfere only when the Authority's actions are manifestly arbitrary or unreasonable. The acts of an Authority vested with legislative determination are manifestly arbitrary or unreasonable when they are taken capriciously, irrationally, and without basis in law or under conditions which do not authorize or permit the exercise of the asserted power.

4. The Authority is permitted to attack the problem of eliminating blighted parts of a community on an area rather than a structure-by-structure basis, and even though a building located in such area may be sound and capable of being economically operated, courts will not interfere with its taking where the record supports the finding of the Authority that its taking will serve a public purpose.

O. A. Brecke and J. Robert Nygren, Minneapolis, for relator.

Palmer & Palmer, Minneapolis, for respondent.

MURPHY, Justice.

This matter is before us on a writ of certiorari to review a condemnation proceeding begun by the Housing and Redevelopment Authority of the City of Minneapolis, hereinafter referred to as the Authority. The proceeding is to take a lot which is the site of a 12-story office building known as the Metropolitan Building and owned by Minneapolis Metropolitan Company, hereinafter referred to as the company. The property in question has been included by the Authority in an urban redevelopment project known as 'Gateway Center Urban Renewal Plan, Minn. R--2.' The company has asserted objections to the taking on several grounds. Trial was had in the district court on the issues raised by the objections. The action of the Authority was sustained and the petition to condemn allowed.

The points raised by the company must be viewed against the factual background. Pursuant to the Municipal Housing and Redevelopment Act, M.S.A. § 462.415, et seq., the Authority, by action of the City Council of Minneapolis, was granted the power to plan and carry out urban rehabilitation, renewal, and redevelopment projects in the city of Minneapolis. The plan herein was adopted by the Authority on November 20, 1958, after having been duly adopted by the City Planning Commission. Hearing was held by the city council and on January 30, 1959, the plan was approved by the council. ¹

The plan provides for the wholesale acquisition of all of the land within the entire Gateway Center area except for certain 'omitted' parcels. It is detailed and comprehensive, providing for new rights-of-way and easements, new land uses, street adjustments, new utilities, together with directions as to landscaping, zoning uses, building area ratios, building requirements, parking facilities, and signs, all in conformity to the plan. The entire area consists, as we view the record, of about 20 square city blocks. Except for omitted parcels, the Authority by resolution found that it was necessary to acquire all of the land within the area. ²

The Metropolitan Building was erected in 1890. It is a 12-story building of monumental character, constructed in the lower three floors and basement of New Hampshire granite and in the upper floors of Minnesota sandstone. It is of bearing wall construction, supported by steel beams and cast iron columns and masonry walls. ³ There is a large open court extending from the center of the first floor to the twelfth, surrounded by railed balconies. Offices are located around the four sides of these balconies. At one end of the court are six unenclosed, cage-type elevators. The floors of the building are of masonry and tile arch construction, except for the balcony floors which are of glass.

Sometime before the petition to condemn was filed, efforts were made to have the building omitted from the plan. The company protested the taking on several grounds, the principal of which were that (1) the building was not properly a 'blighted' structure; (2) that it was structurally sound; and (3) that it was economically maintainable during the project period of 30 years. Several proceedings were held by the Authority to determine whether the building should perhaps be excluded. It called upon its consulting engineer for reports as to the feasibility of retaining the structure as part of the renewal plan. The company was given a full hearing on the objections which it raised. Some of the evidence presented to the Authority by the property owner during these proceedings tended to support its arguments. ⁴ However, the report submitted to the Authority by its consulting engineer contained evidence to substantiate the taking. He was of the view that after an expenditure of approximately $1,200,000, which would be necessary to rehabilitate the structure, it would still be incompatible with the plan designed for the renewal area. He recommended that the building be demolished. ⁵ The inspector of buildings of the city of Minneapolis also submitted a report to the Authority. He stated with reference to the exterior of the building:

'* * * It is my opinion that the action of time and the elements is disintegrating the exterior at a faster rate than the maintenance is arresting. If the required degree of maintenance were given the exterior, it would be so costly as to render the retention of the structure an economic failure.'

As to the structure itself, he commented:

'* * * I also wish to point out that the structural makeup of the building is such as to be far below present day engineering standards and a similar design (structural) would not be permitted today for a 12 story building.'

In the supporting documentation it is stated:

'* * * The obsolete exterior would stick out like a sore thumb in the redeveloped area. Because of the nature of the wall and the costs involved, the wall surface does not lend itself to visual improvement. There is no way economically to rehabilitate the building or to make it more presentable. Age and construction type combine to make this an undesirable building.'

The Authority, having considered the evidence submitted by the company together with the reports of its consulting engineer and the inspector of buildings, reaffirmed its decision to take the building. In its Resolution 59--438, September 17, 1959, it stated:

'After careful study it appears that to bring the building up to the required Building and Fire Protection Standards and to modernize it to meet competitive rental conditions, would require an expenditure which could not be recaptured by rentals in the competitive market, and if that were the case the building would cease to maintain itself and sooner or later demolition would become necessary, in the interest of public safety and welfare and retention of the building would interfere with the redevelopment plan of The Authority * * *, would tend to deter investors or reduce the amounts which they would be willing to pay for adjacent property.'

At the trial in district court, further testimony with reference to the condition of the building was received, together with numerous exhibits, including resolutions of the Authority and photographs of the structure. This evidence related to potential fire hazards, the practicability of rehabilitation, and economic considerations bearing upon the issue. Briefly summarized, it may be said that there was evidence to the effect that time and the elements had taken their toll and had so far deteriorated the stone on some of the upper floors that pieces had fallen away. The company presented evidence that this condition could be controlled by a sandblasting and a tuck-pointing job and with proper future maintenance. While large expenditures had been made by the company on the interior of the building, it was the view of the building inspector that:

'It would not be impossible to remodel the interior to effect a more economical use of space * * * but the cost of such an ambitious program would be contrary to good judgment and it would not be in the interests of the public inasmuch as the structural elements would not benefit and be...