Voters With Facts v. City of Eau Claire, Case No.: 2015AP1858

• Decision Date: 06 June 2018
• Docket Number: Case No.: 2015AP1858
• Parties: VOTERS WITH FACTS, Pure Savage Enterprises, LLC, Wisconsin Three, LLC, 215 Farwell LLC, Dewloc, LLC, Leah Anderson, J. Peter Bartl, Cynthia Burton, Corinne Charlson, Maryjo Cohen, Jo Ann Hoeppner Cruz, Rachel Mantik, Judy Olson, Janeway Riley, Christine Webster, Dorothy Westermann, Janice Wnukowski, David Wood and Paul Zank,, Plaintiffs-Appellants-Petitioners, v. CITY OF EAU CLAIRE and City of Eau Claire Joint Review Board, Defendants-Respondents.
• Court: Wisconsin Supreme Court

382 Wis.2d 1

913 N.W.2d 131

2018 WI 63

VOTERS WITH FACTS, Pure Savage Enterprises, LLC, Wisconsin Three, LLC, 215 Farwell LLC, Dewloc, LLC, Leah Anderson, J. Peter Bartl, Cynthia Burton, Corinne Charlson, Maryjo Cohen, Jo Ann Hoeppner Cruz, Rachel Mantik, Judy Olson, Janeway Riley, Christine Webster, Dorothy Westermann, Janice Wnukowski, David Wood and Paul Zank,, Plaintiffs-Appellants-Petitioners,

v.CITY OF EAU CLAIRE and City of Eau Claire Joint Review Board, Defendants-Respondents.

Case No.: 2015AP1858

Supreme Court of Wisconsin.

Oral Argument: February 23, 2018

Opinion Filed: June 6, 2018

For the plaintiffs-appellants-petitioners, there were briefs filed by Thomas C. Kamenick, Richard M. Esenberg, Brian McGrath, and Wisconsin Institute for Law & Liberty, Milwaukee. There was an oral argument by Richard M. Esenberg.

For the defendants-respondents, there was a brief filed by Douglas Hoffer, assistant city attorney, and Stephen C. Nick, city attorney, with whom on the brief was Remzy D. Bitar and Arenz, Molter, Macy, Riffle & Larson S.C., Waukesha. There was an oral argument by Douglas Hoffer.

An amicus curiae brief was filed on behalf of Eau Claire Area Chamber of Commerce, Inc. by Ryan J. Steffes and Weld Riley, S.C., Eau Claire.

An amicus curiae brief was filed on behalf of Wisconsin REALTORS Association, NAIOP-WI, and the Wisconsin Economic Development Association by Thomas D. Larson and The Wisconsin REALTORS Association, Madison.

An amicus curiae brief was filed on behalf of League of Wisconsin Municipalities, City of Milwaukee, City of Madison, and Wisconsin Towns Association by Claire Silverman and League of Wisconsin Municipalities, Madison, with whom on the brief were Mary L. Schanning, deputy city attorney of Milwaukee; Gregg C. Hagopian, assistant city attorney of Milwaukee; Grant F. Langley, city attorney of Milwaukee; Michael May, city attorney of Madison; and Rick Manthe and Wisconsin Towns Association, Shawano.

An amicus curiae brief was filed on behalf of the State of Wisconsin by Misha Tseytlin, solicitor general, Brad D. Schimel, attorney general, and Kevin M. LeRoy, deputy solicitor general. There was an oral argument by Misha Tseytlin.

ANNETTE KINGSLAND ZIEGLER, J.

¶ 1 This case arises out of the approval of a redevelopment project in the City of Eau Claire (the "City"), which relied in part on funds derived from two tax incremental districts ("TIDs"): TID 8 and TID 10. Voters with Facts, et al.¹ ("Plaintiffs") challenged the legality of the City's actions with regard to these TIDs. We review here a published decision of the court of appeals, Voters with Facts v. City of Eau Claire, 2017 WI App 35, 376 Wis. 2d 479, 899 N.W.2d 706 [hereinafter Voters ], affirming the Eau Claire County circuit court's² dismissal of Plaintiffs' complaint as to declaratory judgment, but reversing and remanding as to certiorari review.

¶ 2 The expansion or creation of TIDs is limited to one of four purposes: addressing blighted areas, urban rehabilitation or conservation, industrial development, or the promotion of mixed-use development. Wis. Stat. § 66.1105(4)(gm) 4.a. (2013–14).³ Where a municipality seeks to expand or create a TID, it must resolve to do so for one of these purposes. Id. Here, the City's declared purpose was to address blight, and, to support that purpose, the City's local legislative body had to find, among other things, that "[n]ot less than 50%, by area, of the real property within the district is ... a blighted area." Id. A TID must also be approved by a joint review board ("JRB"), which must find, among other things, that "in its judgment, the development ... would not occur without the creation of a [TID]." § 66.1105(4m)(b)2. In their complaint, Plaintiffs did not dispute that the appropriate bodies stated the appropriate findings, but rather alleged that the findings were "neither supported by record evidence nor factually correct." Additionally, Plaintiffs alleged that the City's disbursement of cash grants to the developer for "project costs" was unlawful because it amounted to an unconstitutional tax rebate and/or because the developer could apply the cash grants to reimburse itself for already-incurred costs of demolishing historic buildings, contrary to § 66.1105(2)(f) 1.a. Plaintiffs sought declaratory relief on these claims, but argued in the alternative that, under certiorari review, the City had acted outside the scope of its lawful authority.

¶ 3 The circuit court dismissed Plaintiffs' complaint because it found that they lacked standing. The court of appeals affirmed in part and reversed in part, remanding with instruction. Voters, 376 Wis. 2d 479, ¶¶ 2, 4, 899 N.W.2d 706. The court of appeals affirmed the circuit court's dismissal of Plaintiffs' complaint as to declaratory judgment because it agreed that Plaintiffs lacked standing. See id., ¶ 26 (findings); id., ¶ 39 (project costs); id., ¶ 48 (uniformity clause). It reversed and remanded for certiorari review, however, because the circuit court had not directly addressed that claim. Id., ¶¶ 35, 60.

¶ 4 On review, we consider two issues. First, we consider whether dismissal of Plaintiffs' declaratory judgment claims was proper. We conclude that it was, because Plaintiffs have failed to state claims upon which relief can be granted: the first and second counts fail because the City Common Council's findings of blight and the JRB's "but for" assertions are legislative determinations that do not present justiciable issues of fact or law; the third count fails because it does not allege facts which plausibly establish that the City's cash grant for TID 10 was used to reimburse the developer's costs associated with demolishing historic buildings; and the fourth count fails because it does not allege facts which plausibly establish that cash grants are intended or used to pay owner-developers' property taxes.

¶ 5 Second, we consider whether certiorari review is appropriate. We conclude that it is, because certiorari review is the appropriate mechanism for a court to test the validity of a legislative determination. The record before us, however, does not contain a municipal record sufficient to enable our review. Accordingly, we remand to the circuit court for certiorari review of Plaintiffs' first and second claims.

¶ 6 Thus, we affirm the decision of the court of appeals on other grounds.

I. FACTUAL AND PROCEDURAL BACKGROUND

¶ 7 As noted above, this case arises out of the approval of a redevelopment project (the "Confluence Project") in downtown Eau Claire. The Confluence Project relied in part on tax incremental financing ("TIF") derived from the City's expansion of the already-existing TID 8 and its creation of TID 10,⁴ both of which were endorsed by the City Planning Commission on August 18, 2014.

¶ 8 On September 9, 2014, the City Common Council adopted a resolution approving the expansion of TID 8. In its resolution, the City Common Council stated that "not less than 50%, by area, of the real property within the amended boundary area of the District is a 'blighted area' and is in need of 'rehabilitation or conservation' within the meaning of Section 66.1105(2)(a)1 of the Wisconsin Statutes." On September 26, 2014, the JRB approved the resolution. In its approval, the JRB stated that "the development described in the Amendment [to TID #8] would not occur without the amendment."⁵ (Alteration in original.)

¶ 9 On October 14, 2014, the City Common Council adopted a resolution approving the creation of TID 10. In its resolution, the City Common Council stated that "not less than 50%, by area, of the real property within the amended boundary area of the District is a 'blighted area' and is in need of 'rehabilitation or conservation' within the meaning of Section 66.1105(2)(a)1 of the Wisconsin Statutes." On October 22, 2014, the JRB approved the resolution. In its approval, the JRB stated that "the development described in the Project Plan would not occur without the creation [presumably of TID #10]."⁶ (Alteration in original.)

¶ 10 Open public hearings were held prior to the decisions of the Planning Commission and the City Common Council,⁷ at which "numerous city residents, including many of the Plaintiffs, spoke out against the TIDs." On March 12, 2015, Plaintiffs filed a complaint seeking declaratory relief on four claims.

¶ 11 The first and second claims (regarding TID 8 and TID 10, respectively) challenged the validity of the City's findings of blight under Wis. Stat. § 66.1105(4)(gm) 4.a. and the JRB's "but for" findings under Wis. Stat. § 66.1105(4m)(b)2. With regard to the City's findings, Plaintiffs alleged that the City was "required to articulate the basis for its finding and the evidence of record that supports its action," and that, although the City's resolution "contains a conclusory assertion that 'not less than 50%, by area, of the real property within the amended boundary area of the [TID] is a "blighted area," ' " the City "did not articulate the factual basis for this conclusory statement and the record before the [City] contains no evidence to support its assertion." With regard to the JRB's findings, Plaintiffs alleged that the JRB could not have "reasonably concluded on the record evidence that the development would not occur in the [TID] without tax incremental financing." Plaintiffs thus argued that the TIDs lacked a public purpose in violation of the public purpose doctrine and sought a declaration that the authorization and implementation of the TIDs was "invalid, void, and of no force and effect."

¶ 12 The third claim challenged the validity of the City's disbursement of cash grants pursuant to the project plan for TID 10. Plaintiffs alleged that "the development agreement does not clearly provide that the [ ] developer may not use the lump sum payments to reimburse itself for the costs of demolishing [historic] properties," and that, "[g]iven the lump sum character of the developer payments, there is in fact no way to...