Urban Renewal Agency of City of Reno v. Iacometti, 4555

• Docket Nº: No. 4555
• Citation: 79 Nev. 113, 379 P.2d 466
• Case Date: March 11, 1963
• Court: Supreme Court of Nevada

Page 466

379 P.2d 466 79 Nev. 113 URBAN RENEWAL AGENCY OF the CITY OF RENO, Nevada, a public
corporation, the City of Reno, a municipal
corporation, et al., Appellants,
v.
John IACOMETTI and Maria Angelina lacometti, his wife, et
al., Respondents. No. 4555. Supreme Court of Nevada. March 11, 1963.
Rehearing Denied April 3, 1963.

Page 467

Cooke & Roberts, Roy Lee Torvinen, City Atty., Richard Breitwieser, Asst. City Atty., Reno, for appellants.

Streeter, Sala & Richards, Lohse & Fry, John S. Halley, Guild, Busey & Guild and Howard Cunningham, Emile J. Gezelin, Sidney W. Robinson, Reno, for respondents.

[79 Nev. 115] THOMPSON, Justice.

This case involves the Urban Renewal Law, NRS 279.010-279.380. It is here upon appeal from a judgment of the district court which dismissed, after trial, multiple condemnation actions instituted by the Urban Renewal Agency of the City of Reno.

In broad outline the Urban Renewal Law concerns 'slum' and 'blighted' areas which were found to be a menace to public health, safety, morals and welfare, contribute to the spread of disease and crime, impose onerous municipal burdens which decrease the tax base and reduce tax revenues, impair the sound growth of municipalities, retard the provision for housing accommodations and aggravate traffic problems. The elimination of these areas by acquisition, clearance and [79 Nev. 116] disposition, or their reclamation by conservation and rehabilitation was declared to be a public use essential to the public interest.

In the fall of 1956 the Reno city council appropriated $9,000 for use by the Regional Planning Commission in making a preliminary survey of the City of Reno to ascertain if there existed an area, or areas, which would qualify as an urban renewal project area under federal law. The survey was initially directed to an area of about 400 acres located in the northeast section of the city.

The results of the survey conducted by the Regional Planning Commission were discussed with the city council. In February 1957 the council, by resolution (which was re-adopted June 10, 1957) declared the area surveyed to be an area of slum and blight and appropriate for an urban renewal project, and authorized the submission of an application to the Federal Housing and Home Finance Agency (HHFA) for an advance of funds for survey and plans for such project. Concurrently the city urged the state legislature to enact urban renewal legislation. The legislature did so, approving the Urban Renewal Law on March 29, 1957. The law did not prescribe an effective date, and thus became effective July 1, 1957. NRS 218.530.

On June 10, 1957 (after the enactment of the Urban Renewal Law, but before its effective date) the city council created an Urban Renewal Agency (URA). On July 8, 1957, after the effective date of the act, the council appointed the first board of commissioners of the URA (NRS 279.370), and appropriated money for its use. Federal funds for survey and planning were received and a detailed study undertaken of a project area comprising about 99.10 acres. ¹ That study, to which we shall later make more detailed reference, resulted in the 'Final Project Report, Northeast Project Area, Project No. Nevada R-2,' and was submitted to the city council at a public hearing on September 28, 1959. NRS 279.270(3). The council approved the report, found the [79 Nev. 117] project area to be a combination of slum and blight, and adopted an urban renewal plan for its rehabilitation and redevelopment. Thereafter, the federal government committed itself to the loan and grant of large sums of money to be used for land acquisition in the project area. Through December 31, 1960, $646,392.74 had been spent on the project.

Page 468

Since that date, and prior to the trial of this case, further sums were expended in the acquisition of parcels and the clearance of structures. The URA net project cost estimate is approximately $1,824.350 of which the federal government is expected to provide $1,216,233.32 in the form of a capital grant, leaving a balance of $608,116.68 to be provided by local grants-in-aid.

The assigned errors and extensive briefing require our determination of the following basic problems. First, the scope of review by the trial court, i. e., in determining whether the project area was an area of slum and blight within the meaning of the Urban Renewal Law, is that court limited to a consideration of the information presented to the city council as of September 28, 1959 (when that body approved the project report and found the area to qualify), or may it conduct, in effect, a trial de novo in making such determination? The URA contends that the trial court was limited in its judicial review of the city council's action to the sole question of whether that body abused its discretion, or acted arbitrarily, or capriciously, or in bad faith, in the light of the information presented to it. On the other hand, the respondent property owners insist that the trial de novo conducted by the court was within its province, and that the findings made by that court upon conflicting evidence may not be disturbed by us. Second, whether the creation of the URA by the city council after enactment of the Urban Renewal Law, but before its effective date, renders unlawful all actions of the commissioners of that agency who were appointed after the effective date of the Urban Renewal Law. Third, whether the Urban Renewal Law is constitutional. ²

[79 Nev. 118] 1. Scope of trial court review. The district court conducted a trial de novo. It made its own determination as to whether a portion of the project area could qualify as either a blighted area or a slum area within the Urban Renewal Law. It should not have done so. Its function was limited to a review of the record of information presented to the city council from the fall of 1956 to September 28, 1959 (the date of the public hearing at which the council approved the project report and found the area to qualify). Nevada has recognized this principle for years in varying circumstances. We have not distinguished between the scope of trial court review of a formal hearing by a governmental body, Nevada Tax Commission v. Hicks, 73 Nev. 115, 310 P.2d 852; ³ its review of such body's determination made after investigation and a public hearing, McKenzie v. Shelly, 77 Nev. 237, 362 P.2d 268; and its review of a governmental body's discretionary ruling made after investigation and inquiry, but without a formal hearing or a public hearing, Douglas County Board of County Commissioners v. Pederson, 78 Nev. 106, 369 P.2d 669. In each instance the court's inquiry is limited to the record of information presented to the governmental body. The court's purpose is to ascertain whether, upon such information, that body acted arbitrarily, capriciously, and abused its discretion. ⁴ Thus, a trial court should sustain discretionary action of a governmental body, absent an abuse thereof, to the same extent that an appellate court upholds the discretionary action of a trial court. McKenzie v. Shelly, supra. In Nevada Tax Commission v. Hicks, 73 Nev. 115, 123, 310 P.2d 852, 856, we said, inter alia, 'Trial de novo, in effect, could relegate the commission [79 Nev. 119] hearing to a meaningless,

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formal, preliminary and place upon the courts the full administrative burden of factual determination.' It is primarily for this reason that the scope of judicial review has been thus confined.

Indeed, the proper trial court function in the instant case is not dissimilar to the function of this court where a review of action by a governmental body is sought by an original proceeding here. Oliver v. Spitz, 76 Nev. 5, 348 P.2d 158 (mandamus); Richardson, State ex rel. v. Board of Regents, 70 Nev. 347, 269 P.2d 265 (certiorari); Boswell v. Board of Medical Examiners, 72 Nev. 20, 293 P.2d 424 (prohibition); Van Heukelom v. Nevada State Board of Chiropractic Examiners, 67 Nev. 649, 224 P.2d 313 (prohibition). In either instance, the reviewing court focuses its attention upon the information presented to the governmental body whose decision is questioned.

Though the scope of judicial review of action by a governmental body is limited in most cases, the respondents suggest that no such limitation exists where the power of eminent domain is employed. They argue that the issues of public use and necessity permit a full scale judicial review without limitation or restriction of any nature, i. e., a trial de novo as to such issues, thus requiring the trial court to decide whether areas of slum and blight exist, and a public necessity obtains for their eradication, citing Offen v. City of Topeka, 186 Kan. 389, 350 P.2d 33; Hogue v. Port of Seattle, 54 Wash.2d 799, 341 P.2d 171; Bristol Redevelopment & Housing Authority v. Denton, 198 Va. 171, 93 S.E.2d 288. The scope of review was not an issue in Offen, for there the appeal was from an order overruling the defendants' demurrer to plaintiffs' complaint. In Hogue the Washington constitution permitted a de novo trial on the question of public use in a condemnation suit. The constitution of Nevada does not contain a similar provision. The Bristol case does support the respondents' position, but is contra to the weight of authority.

The Nevada legislature declared that the powers conferred by the Urban Renewal Law 'are for public uses and purposes for which public money may be expended [79 Nev. 120] and the power of eminent domain and police power exercised, and that the necessity in the public interest for the provisions herein enacted is hereby declared as a matter of legislative determination.' NRS 279.230(3). In Berman v. Parker, 348 U.S. 26, 32, 75 S.Ct. 98, 102, 99 L.Ed. 27, 37, the constitutionality of the District of Columbia Redevelopment Act was before the court. That act proposed the redevelopment of substandard housing and blighted areas, and delegated to an agency the power to...