Puce v. City of Burnsville
| Decision Date | 07 February 2022 |
| Docket Number | A21-0895 |
| Citation | 971 N.W.2d 285 |
| Parties | Almir PUCE, Appellant, v. CITY OF BURNSVILLE, MN., Respondent. |
| Court | Minnesota Court of Appeals |
Stephen W. Cooper, Stacey R. Everson, The Cooper Law Firm, Chartered, Minneapolis, Minnesota (for appellant)
Paul D. Reuvers, Aaron M. Bostrom, Iverson Reuvers, Bloomington, Minnesota (for respondent)
Considered and decided by Reilly, Presiding Judge; Johnson, Judge; and Jesson, Judge.
A property owner applied to a city for permission to redevelop residential property for commercial use. The city approved the application but imposed a park-dedication fee. The property owner objected to the park-dedication fee and sought judicial review in the district court, which determined that the park-dedication fee is lawful. We conclude that the city's imposition of the park-dedication fee does not comply with a state statute because the city did not reasonably determine that it will need to acquire and develop or improve parkland as a result of its approval of the development application and because there is not a rough proportionality between the park-dedication fee and any need for acquisition and development or improvement of parkland as a result of the municipality's approval of the development application. Therefore, we reverse.
In 2015, Almir Puce purchased real property located at 2208 Old County Road 34 Place in the city of Burnsville. The property was zoned for commercial use but had a lawful non-conforming house. Puce and his family lived in the house until 2017.
Beginning in 2018, Puce sought to redevelop the property for commercial use, in three phases. For the first phase, Puce planned to operate an automobile dealership and a bakery in the existing structure. For the second phase, he planned to build a new building for an automobile repair shop. And for the third phase, he planned to improve part of the property to create an open storage lot.
In May 2018, Puce submitted an application to the City of Burnsville seeking approval of a preliminary and final plat of the property, a conditional use permit (CUP), and variances related to signage and land grading. In mid-January 2019, the City's planning commission reviewed Puce's application and, by a 4-to-1 vote, recommended approval of the plat, approval of a CUP, and denial of the variances, subject to 17 conditions, including the payment of a park-dedication fee in the amount of $37,804.1 Puce objected to the City's imposition of a park-dedication fee as well as the amount of the fee. He asked the City to waive the fee on the ground that his planned automobile dealership and bakery would not result in a need for more parkland or park services.
In late January 2019, the city council reviewed the planning commission's recommendations. At a city council meeting, Puce, through counsel, again objected to the park-dedication fee. He argued that his future businesses would not increase the number of persons living in the area or using parks in the area. In response, the city attorney stated that there is a "need for open space created any time that open land is developed or redeveloped and used at a higher intensity than previously used." The city council tabled Puce's application to a future meeting to gather more information.
In February 2019, the City reduced the park-dedication fee from $37,804 to $11,700. The City did so by recalculating the size of Puce's property and by using the actual fair market value of Puce's property instead of the average value of commercial property in the city. Puce maintained his objection to the imposition of any park-dedication fee.
In March 2019, the city council considered Puce's application for a second time. At a council meeting, the city attorney explained the calculation of the $11,700 park-dedication fee. He stated that the three phases of Puce's proposed development would add 7,254 additional square feet of building structure to the property. He also stated that the City's ordinances seek to reserve parkland and that "most properties within [the city] have a park within walking distance." Councilmember Schulz asked the city attorney where the city intended to create a new park. The city attorney answered by stating that he was not aware of any "actual land acquisition in the foreseeable future" but that the City typically acquires land for parks when opportunities arise and "continually reviews and enhances amenities" for existing parks. Councilmember Peterson noted that the city was focused on expanding its trails and that there was a "gap" in the trail system near Puce's property, and he stated that "many residents" could use the connected trails, including customers of Puce's businesses. The city attorney concluded by stating that business development generally "increases the demand on public services, including parks" and that the City uses park-dedication fees to fund "new capital improvements that enhance and provide additional capacity to serve developments" such as Puce's development. Councilmember Schulz asked the city attorney whether a park-dedication fee is appropriate if a development does not directly cause a need for additional parkland. The city attorney answered in the negative, explaining that the City has a formula for calculating a park-dedication fee that is "predicated on development having an impact and requiring the need." At the conclusion of the meeting, the city council voted to deny Puce's request for a waiver of the park-dedication fee. The council approved the plat and the requested CUP, approved a sign variance, and denied a land-grading variance.
In May 2019, Puce commenced an action in the Dakota County District Court for judicial review of the city council's decision to impose a park-dedication fee. In late 2019, Puce and the City filed cross-motions for summary judgment. The district court denied both motions on the ground that there existed genuine issues of material fact. In January 2021, the district court conducted a court trial based solely on the parties’ submission of 17 exhibits. In April 2021, the district court filed an order in which it concluded, "Defendant's imposition of a park-dedication fee in the amount of $11,700 is lawful." Puce appeals.
Does the City's imposition of an $11,700 park-dedication fee on Puce's development application comply with section 462.358 of the Minnesota Statutes ?
Puce argues that the City erred by imposing a park-dedication fee in the amount of $11,700 on his development application and that the district court erred by determining that the fee is lawful.
A state statute provides that municipalities "may by ordinance adopt subdivision regulations establishing standards, requirements, and procedures for the review and approval or disapproval of subdivisions." Minn. Stat. § 462.358, subd. 1a (2020). Such an ordinance "may address without limitation: the size, location, grading, and improvement of lots, structures, public areas, streets, roads, trails, walkways, curbs and gutters, water supply, storm drainage, lighting, sewers, electricity, gas, and other utilities," as well as other issues. Id. , subd. 2a. An ordinance regulating subdivisions "shall require that subdivisions be consistent with the municipality's official map if one exists and its zoning ordinance, and may require consistency with other official controls and the comprehensive plan." Id.
In addition, an ordinance regulating subdivisions "may require that a reasonable portion of the buildable land ... of any proposed subdivision be dedicated to the public or preserved for public use as streets, roads, sewers, electric, gas, and water facilities, storm water drainage and holding areas or ponds and similar utilities and improvements, parks, recreational facilities as defined in section 471.191, playgrounds, trails, wetlands, or open space." Id. , subd. 2b(a). The term "reasonable portion," as used in the statute, means "that portion of land which the evidence reasonably establishes the municipality will need to acquire for the purposes stated as a result of approval of the subdivision." Collis v. City of Bloomington , 310 Minn. 5, 246 N.W.2d 19, 26 (1976). "The municipality must reasonably determine that it will need to acquire that portion of land for the purposes stated in this subdivision as a result of approval of the subdivision." Minn. Stat. § 462.358, subd. 2b(e).
Furthermore, as an alternative to taking a reasonable portion of the buildable land of any proposed subdivision, a municipality "may choose to accept a cash fee as set by ordinance from the applicant for some or all of the new lots created in the subdivision, based on the average fair market value of the unplatted land for which park fees have not already been paid." Id. , subd. 2b(c). "Cash payments received must be placed by the municipality in a special fund to be used only for the purposes for which the money was obtained." Id. , subd. 2b(f). The cash payments "must be used only for the acquisition and development or improvement of parks, recreational facilities, playgrounds, trails, wetlands, or open space based on the approved park systems plan" and "must not be used for ongoing operation or maintenance of parks, recreational facilities, playgrounds, trails, wetlands, or open space." Id. , subd. 2b(g).
Whether a municipality takes a reasonable portion of the buildable land of a proposed subdivision or exacts a cash payment, "[t]here must be an essential nexus between the fees or dedication ... and the municipal purpose sought to be achieved by the fee or dedication," and "[t]he fee or dedication must bear a rough proportionality to the need created by the proposed subdivision or development." Id. , subd. 2c(a).
The supreme court, in interpreting an earlier version of the statute, explained that the statute places limits on a municipality's authority to regulate subdivisions:
[T]he possibility of arbitrariness and unfairness in [the] application [of subdivis...
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