In re Matter of Petition for the Annexation of Land, No. A06-1738 (Minn. App. 7/31/2007)
| Decision Date | 31 July 2007 |
| Docket Number | No. A06-1738.,A06-1738. |
| Court | Minnesota Court of Appeals |
| Parties | In re the Matter of the Petition for the Annexation of Land to the City of St. Paul Park Pursuant to Minnesota Statute 414 (A-7212) Town of Grey Cloud Island, Appellant, v. R. Gordon Nesvig, Respondent, D. R. Horton, Inc. — Minnesota, Respondent, City of St. Paul Park, Respondent. |
Appeal from the Washington County, District Court, File No. C2-05-7924.
David T. Magnuson, Magnuson Law Firm, for appellant.
R. Gordon Nesvig, pro se/co-counsel for respondent Nesvig.
Laurie J. Miller, Fredrikson & Byron, P.A., for respondent D. R. Horton, Inc. — Minnesota and co-counsel for respondent Nesvig.
James F. Shiely, Jr., Gearing & Shiely, P.A., for respondent City of St. Paul Park.
Considered and decided by Halbrooks, Presiding Judge; Lansing, Judge; and Hudson, Judge.
UNPUBLISHED OPINION
Appellant Town of Grey Cloud Island challenges the district court's order of July 19, 2006, affirming the Administrative Law Judge's (ALJ's) order allowing respondent City of St. Paul Park to annex certain land. Appellant argues that (1) the substantial-evidence test for annexation is not satisfied when only about one-quarter of the land in question is buildable and is part of the national park system; and (2) the ALJ's increase in the amount of land to be annexed is contrary to law. Because substantial evidence existed to support annexation, we affirm in part. But because the statutory procedures for annexing additional land were not followed, we reverse in part and remand.
Respondent Gordon Nesvig (hereinafter "Nesvig") owns approximately 308 acres located in appellant Grey Cloud Island Township (hereinafter "Township"). Specifically, the property at issue is located immediately to the south of the City of St. Paul Park (hereinafter "City") on the Mississippi River and is bordered on the north and east by the City of St. Paul Park, on the west by the Dakota County line, and on the south by the Township of Grey Cloud Island. Respondent D.R. Horton, Inc. (hereinafter "Horton"), a developer, has an option to purchase the subject property from respondent Nesvig. The City, together with Horton and Nesvig, has been engaged in planning for development of the subject property for several years. The proposed development of 106 acres of the subject property consists of 653 units of mixed housing: single-family homes, twinhomes, townhomes, and multi-family units, including condominiums for senior housing. The rest of the property (about 200 acres) would be left natural. The ALJ found that the natural-resources inventory performed as part of the required Alternative Urban Area-wide Review (AUAR) determined "that a majority of the ecological settings on the property were moderate to very poor in condition, or very highly degraded." For example, the forested bluffs along the river were found to be highly degraded; there were high levels of erosion; and invasive species were causing further erosion.
The subject property is located within the Mississippi National River and Recreation Area (MNRRA), and is part of the National Park System. The MNRRA is a federal protection program administered in Minnesota through the Minnesota Critical Area Act, Minn. Stat. §§ 116G.01 — .14 (2004), which has been implemented by Executive Order 79-19. The property is also located within the Mississippi River Corridor Critical Area, which was established by the 1979 executive order. The executive order also designated the area a "rural open space district." The executive order mandated that rural open-space districts "shall be used and developed to preserve their open, scenic and natural characteristics and ecological and economic functions." Exec. Order No. 79-19, 3 S.R. 1680, 1693 (Mar. 12, 1979). The executive order does not prohibit residential development in a rural-open-space district. "Local government units are directed to protect the Critical Area's resources, prevent and mitigate irreversible damage, and enhance its public value." MN Ctr. for Envtl. Advocacy v. City of St. Paul Park, 711 N.W.2d 526, 529 (Minn. App. 2006).
In March 2003, the City and the Township adopted resolutions providing for environmental review through an AUAR; a draft AUAR was completed in May 2003. In November 2003, a final AUAR was completed and submitted to the Environmental Quality Board (EQB)—the state entity responsible for ensuring the effectiveness of the environmental-review rules. Comments submitted during the review process from a total of 20 different agencies, local units of government, nonprofit organizations, and individual citizens were attached in the appendix of the AUAR. The Minnesota Department of Natural Resources (DNR) objected to the final AUAR in March 2004, but it withdrew all objections in May 2004 after further discussions and/or meetings with the RGU (responsible governmental unit, the City). The final draft of the AUAR was adopted by the RGU on May 17, 2004. The Minnesota Center for Environmental Advocacy (MCEA) filed a complaint challenging the final AUAR, arguing that the RGU's decision of the adequacy of the AUAR was arbitrary and capricious and not supported by substantial evidence or contrary to applicable law. The district court granted summary judgment to the City. On appeal, this court affirmed in a divided opinion. MN Ctr. for Envtl. Advocacy,711 N.W.2d 526.
On December 21, 2004, respondents Nesvig and Horton filed a petition with the Minnesota Office of Municipal Boundary Adjustments under Minn. Stat. § 414.031 (2004), seeking annexation of the property by the City.1 Respondents had the support of the City, which adopted a resolution supporting the petition for annexation on October 18, 2004. See Minn. Stat. § 414.031, subd. 1(a)(3), (c) (2004) ().
In a letter dated February 28, 2005, the deputy commissioner of the Department of Administration delegated a final decision in this matter to the Office of Administrative Hearings pursuant to Minn. Stat. § 414.12, subd. 2(a) (2004). Appellant Township objected to the annexation petition, and a contested agency hearing was held before an ALJ from July 25 through July 28, 2005. The ALJ's order states that at the hearing, Nesvig proposed that his homestead and certain so-called "island" lots be included in the area proposed for annexation. The Metropolitan Council staff suggested that the "island" lots, which would be created if the original annexation petition was granted, be included in the annexation. The "islands" were located between the property proposed for annexation and the City of St. Paul Park. After the hearing, in an order issued on November 2, 2005, the ALJ approved the annexation. In accordance with the suggestions from Nesvig and the Metropolitan Council, the ALJ added Nesvig's 30-acre home parcel and two additional parcels ("islands") to the annexed land described in the petition. The hearing was not recessed and notice was not republished for the addition of these parcels to the annexation order pursuant to Minn. Stat. § 414.031, subd. 4(a) (2004).
Appellant challenged the ALJ's order of November 2, 2005, in district court under Minn. Stat. § 414.07 (2004). The district court order of July 19, 2006, affirmed the ALJ on all issues. Appellant filed this appeal, and this court issued an order construing the appeal to be from the district court order of July 19, 2006.
Under Minnesota law, there are 14 factors that must be considered regarding an annexation petition. Minn. Stat. § 414.031, subd. 4(a) (2004). Annexation may be ordered, based on the factors listed in subdivision 4(a), upon finding: "(1) that subject area is now, or is about to become, urban or suburban in character; (2) that municipal government in the area proposed for annexation is required to protect the public health, safety, and welfare; or (3) that the annexation would be in the best interest of the subject area." Id., subd. 4(b). "If only part of a township is to be annexed, the director shall consider whether the remainder of the township can continue to carry on the functions of government without undue hardship." Id., subd. 4(c).
Appellant Township argues that the record does not contain substantial evidence to support the ALJ's order annexing the property, because (1) the property cannot become urban or suburban, as 75% of the property is unbuildable; and (2) the property cannot be developed as planned due to its environmental and land-use designations. An order of annexation enjoys a presumption of correctness. McNamara v. Office of Strategic & Long Range Planning, 628 N.W.2d 620, 625 (Minn. App. 2001), review denied (Minn. Aug. 22, 2001). "Therefore, on review, we will not interfere with the decision unless the decision is either based on an erroneous theory of law or is not supported by substantial evidence in the record." Id. (citing Town of Forest Lake v. Minnesota Mun. Bd., 497 N.W.2d 289, 291 (Minn. App. 1993), review denied (Minn. Apr. 29, 1993)). Substantial evidence is defined as: "(1) more than a scintilla of evidence; (2) such that a reasonable mind might accept it as adequate to support a conclusion; or (3) more than `some evidence' and more than `any evidence.'" McNamara, 628 N.W.2d at 627.
The reviewing court may not substitute its decision for that of the agency. Township of Thomastown v. City of Staples, 323 N.W.2d 742, 744 (Minn. 1982). When a district court acts as an appellate tribunal with respect to an agency decision, this court will independently review the agency's record. In re Hutchinson, 440 N.W.2d 171, 175 (Minn. App. 1989), review denied (Minn. Aug. 9, 1989).
Here, the ALJ considered all 14 factors in its order, making...
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