McMurray v. City Council of Des Moines, 01-0701.

• Citation: 642 N.W.2d 273
• Decision Date: 27 February 2002
• Docket Number: No. 01-0701.,01-0701.
• Parties: Michael P. McMURRAY, Bobbye J. McMurray, Valley West DM, an Iowa Limited Partnership, and Merle Hay Mall, an Iowa Limited Partnership, Appellants, v. The CITY COUNCIL OF THE CITY OF WEST DES MOINES, Iowa, and the City of West Des Moines, Iowa, Appellees.
• Court: United States State Supreme Court of Iowa

642 N.W.2d 273

Michael P. McMURRAY, Bobbye J. McMurray, Valley West DM, an Iowa Limited Partnership, and Merle Hay Mall, an Iowa Limited Partnership, Appellants, v. The CITY COUNCIL OF THE CITY OF WEST DES MOINES, Iowa, and the City of West Des Moines, Iowa, Appellees.

No. 01-0701.

Supreme Court of Iowa.

February 27, 2002.

Rehearing Denied March 26, 2002.

William J. Koehn, Sharon K. Malheiro and Deborah M. Tharnish of Davis, Brown,

Koehn, Shors & Roberts, P.C., Des Moines, for appellants.

Edward W. Remsburg, Ivan T. Webber and Nathan J. Overberg of Ahlers, Cooney, Dorweiler, Haynie, Smith & Allbee, P.C., Des Moines, for appellees.

STREIT, Justice.

A group of taxpayers argue the City of West Des Moines incorrectly used its powers under the urban renewal statute to create an urban renewal plan including projects to facilitate various public infrastructure improvements.¹ Opponents argue the designation of an urban renewal area in this case is for the sole purpose of allowing a private developer to construct a $150,000,000 shopping mall. They challenged the urban renewal development plan arguing it is inconsistent with the purposes of the Iowa urban renewal statute, inconsistent with the City's comprehensive plan, and in violation of the Iowa Constitution. On a joint motion for summary judgment, the district court disagreed with Opponents' arguments and found in favor of the City. Opponents appeal. We conclude this urban renewal plan is consistent with both Iowa Code chapter 403 and the comprehensive plan. We also conclude the urban renewal plan does not violate the Iowa Constitution. We affirm.

I. Background and Facts

A group of people joined to challenge the actions of the West Des Moines City Council in designating a particular region an urban renewal area. Michael and Bobbye McMurray are residents and taxpayers of Dallas County, Iowa. Valley West Mall is an Iowa limited partnership that owns and operates Valley West Mall in West Des Moines, Iowa. It is a taxpayer in the City of West Des Moines. Merle Hay Mall is an Iowa limited partnership that owns and operates Merle Hay Mall in the cities of Des Moines and Urbandale, Iowa.²

GGP Jordan Creek L.L.C. proposed to build a regional shopping mall and adjoining retail facilities (the "Project") on approximately 200 acres of land one mile south of interstate 80 in the City of West Des Moines in Dallas County. The surrounding property is primarily agricultural land with some residential development. The property is over one mile from the interstate highway.

The West Des Moines City Council approved a Development Agreement ("Agreement") between the City and GGP for the Project. The Agreement also provided the City would pay GGP $2,500,000 to offset a portion of the costs for construction of several recreational public use components on the private property of the mall.³ The City agreed to pay for all of the road, sewer, and water main infrastructure necessary for the development of the Project. The Agreement provided the City would finance these improvements through tax increment financing (TIF) by adopting an urban renewal plan pursuant to Iowa Code chapter 403 (1999) for the area of proposed development.⁴ GGP agreed to build a shopping center valued at approximately $150,000,000.

The City Council approved the agreement by resolution. On May 30, 2000, the City Council held a public hearing. The Council ultimately adopted the Jordan Creek Urban Renewal Plan (the "Plan") under Iowa Code chapter 403. The Plan designated a 1075 acre tract including the Project property as an urban renewal area for economic development and proposed to undertake public improvements within the area. In adopting the Plan, the City found,

The Plan is in conformance with the existing West Des Moines Comprehensive Plan and that a feasible method exists for the relocation of any families who would be displaced from the urban renewal area into decent, safe and sanitary dwelling accommodations within their means and without undue hardship to said families.

The City Council finds the project area to be suitable for designation as an economic development area, to encourage the location and expansion of certain commercial enterprises to more conveniently provide needed employment services and facilities to the residents of the City, to alleviate and prevent conditions of unemployment by assisting and retaining local industries and commercial enterprises and to strengthen and revitalize the economy of the State and the City.

The City did not reference the proposed shopping mall. The Plan did not include the development of the shopping mall as one of its proposed projects. Instead, the Plan merely provided for the development and improvement of public infrastructures. On June 12, 2000, the City Council approved a TIF district covering the Plan to provide financing for the municipal projects proposed by it.

Opponents filed a petition for writ of certiorari and declaratory judgment seeking to declare the City's adoption of the urban renewal plan and related TIF district illegal. Opponents claim the City failed to comply with the procedural requirements of Iowa Code chapter 403 in adopting the Plan. Opponents also argue the Plan violates article III, section 31 of the Iowa Constitution.

Both Opponents and the City filed motions for summary judgment. On April 4, 2001, the district court granted the City's motion for summary judgment. The court concluded the following:

1) Chapter 403 did not require the City to make specific findings regarding the need to reduce unemployment or shortage of housing to establish an economic development area;

2) Chapter 403 did not require the City to establish the existence of unemployment or shortage of housing;

3) The City did not act in an arbitrary, capricious, or unreasonable manner in designating the urban renewal area despite the fact the City did not investigate what effect, if any, the proposed shopping center would have on existing businesses;

4) The Plan was not inconsistent with the City's comprehensive plan;

5) The City was not required to designate a percentage of the project revenue for low-income family housing because the economic area was designated for commercial, rather than residential development; and

6) The urban renewal plan did not violate article III, section 31 of the Iowa Constitution.

The district court noted the City proposed to build an infrastructure that would benefit both the private developer and the area residents. The court further found the proposed development in the urban renewal area would stimulate commercial growth and prevent unemployment. Opponents appeal.

On appeal, Opponents argue the district court erred in granting summary judgment. Specifically, Opponents contend the court erred as a matter of law in determining the City complied with the procedural requirements of Iowa Code chapter 403. Further, Opponents argue the court erred in concluding the urban renewal plan does not violate the City's comprehensive plan or the Iowa Constitution.

II. Standard of Review

We review a grant of a motion for summary judgment for correction of errors at law. Kolbe v. State, 625 N.W.2d 721, 725 (Iowa 2001) (citing Knudson v. City of Decorah, 622 N.W.2d 42, 48 (Iowa 2000)). Summary judgment shall be granted when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Iowa R. Civ. P. 237(c). We must review the entire record in the light most favorable to the party opposing the motion for summary judgment. Kelly v. Iowa Mut. Ins. Co., 620 N.W.2d 637, 641 (Iowa 2000). With respect to Opponents' constitutional challenge, our review is de novo. State v. Turner, 630 N.W.2d 601, 606 (Iowa 2001). We will make an independent evaluation of the totality of the circumstances shown by the entire record. Id.

III. The Merits

On appeal, Opponents challenge the City's actions based on three grounds. Opponents first argue the City did not comply with the procedural requirements of Iowa Code chapter 403. They also contend the urban renewal plan violates the City's comprehensive plan. Finally, Opponents assert the City's actions violate the Iowa Constitution. Before we address the issues before us, we briefly examine the nature of action taken by the City Council.

The nature of the City Council's actions in this case is critical to determine whether the City Council acted in accordance with chapter 403. In general, the City Council acts in a legislative capacity. Chapter 403 grants city councils authority to carry out urban redevelopment, rehabilitation, and renewal projects. As such, the City Council's action in designating this economic development area involved determination of legislative, not judicial, facts. Legislative facts are "generalized propositions of fact or policy guiding the exercise of legislative judgment." Montgomery v. Bremer County Bd. of Supervisors, 299 N.W.2d 687, 693 (Iowa 1980) (quoting Arthur E. Bonfield, The Definition of Formal Agency Adjudication Under the Iowa Administrative Procedure Act, 63 Iowa L.Rev. 285, 288 (1977)). Moreover, legislative facts are not concerned with particular problems of individuals, but involve a determination of what is in the best interests of the public generally. Trager v. Peabody Redevelopment Auth., 367 F.Supp. 1000, 1002 (D.C.Mass.1973).

It is appropriate for a city council, when determining whether an area may be designated as an economic development area, to be concerned with the area itself, as well as with considerations of public policy. Such decisions by the city council involving legislative facts necessarily involve the exercise of considerable discretion. Legislative declarations, such as the one before us, are entitled to great weight. See, e.g., Miller v. City of Tacoma, 61...