W. & G. Co. v. Redevelopment Agency of Salt Lake City

• Decision Date: 30 November 1990
• Docket Number: No. 890285-CA,890285-CA
• Citation: 802 P.2d 755
• Court: Utah Court of Appeals
• Parties: W. & G. COMPANY, a Utah general partnership; Darol Krantz, an individual, dba Broadway Music; J. Ross Trapp, Trustee of the Ross Trapp Trust and Trustee of the June Trapp Trust; National Department Store, a Utah corporation; Robert C. Nelson, dba The Magazine Shop; and Downtown Athletic Club, a Utah corporation, Plaintiffs and Appellees, v. REDEVELOPMENT AGENCY OF SALT LAKE CITY, Salt Lake City Corporation, Ted L. Wilson, in his official capacity as a member and chief operating officer of the Board of Directors of the Redevelopment Agency of Salt Lake City; Ronald J. Whitehead, Grant Mabey, Sidney R. Fonnesbeck, Earl S. Hardwick, Ione M. Davis and Edward Parker, in their official capacities as members of the Board of Directors of the Redevelopment Agency of Salt Lake City, and Michael Chitwood, in his official capacity as the Executive Director of the Redevelopment Agency of Salt Lake City, Defendants and Appellants.

Page 755

802 P.2d 755

W. & G. COMPANY, a Utah general partnership; Darol Krantz,

an individual, dba Broadway Music; J. Ross Trapp, Trustee

of the Ross Trapp Trust and Trustee of the June Trapp Trust;

National Department Store, a Utah corporation; Robert C.

Nelson, dba The Magazine Shop; and Downtown Athletic Club, a Utah corporation, Plaintiffs and Appellees, v. REDEVELOPMENT AGENCY OF SALT LAKE CITY, Salt Lake City

Corporation, Ted L. Wilson, in his official capacity as a

member and chief operating officer of the Board of Directors

of the Redevelopment Agency of Salt Lake City; Ronald J.

Whitehead, Grant Mabey, Sidney R. Fonnesbeck, Earl S.

Hardwick, Ione M. Davis and Edward Parker, in their official

capacities as members of the Board of Directors of the

Redevelopment Agency of Salt Lake City, and Michael

Chitwood, in his official capacity as the Executive Director

of the Redevelopment Agency of Salt Lake City, Defendants

and Appellants.

No. 890285-CA.

Court of Appeals of Utah.

Nov. 30, 1990.

Harold A. Hintze (argued), Provo, for defendants and appellants.

Robert S. Campbell, Jr. (argued), Barney Gesas, Salt Lake City, for plaintiffs and appellees.

Craig G. Adamson, Salt Lake City, for plaintiffs and appellees, J. Ross Trapp, Trustee of the Ross Trapp Trust and Trustee of the June Trap trust.

Before GARFF, JACKSON and ORME, JJ.

OPINION

GARFF, Judge:

Appellant, the Redevelopment Agency of Salt Lake City (RDA), seeks reversal of the district court's order granting partial summary judgment in favor of appellee Robert C. Nelson dba The Magazine Shop, ¹ and denying RDA's motion for partial summary judgment.

In 1969, the Utah Legislature adopted the Utah Neighborhood Development Act (the Act), found in Utah Code Ann. § 11-19-1 et seq., which creates and empowers municipal redevelopment agencies such as the RDA to acquire and redevelop property determined to be "blighted." See Redevelopment Agency of Salt Lake City v. Tanner, 740 P.2d 1296, 1297 (Utah 1987). Pursuant to this act, Salt Lake City's Board of Commissioners (Commission) and, subsequently, its City Council, were designated to act as the city's redevelopment agency. Id. Defendants Nelson, W & G Company, Broadway Music, J. Ross Trapp, National Department Store, and Downtown Athletic Club (Landowners), at the times relevant to these events at issue in this case, were property owners having separate interests in properties on Block 57 in Salt Lake City.

On February 4, 1971, the RDA adopted the Central Business District (CBD) West Neighborhood Development Program, which included two and one-half blocks of the downtown Salt Lake City business district. In May 1975, the RDA passed a resolution to consider the adoption of an ordinance amending the redevelopment plan to include an additional eleven blocks of the downtown business district, including Block 57. In this resolution, the RDA designated this area as a redevelopment survey area, and decided that it required further study to determine whether one or more redevelopment projects within its boundaries were feasible. It directed the RDA staff to select one or more project areas comprising "all or part of the above described redevelopment survey area," and to formulate a preliminary redevelopment plan.

To this end, the public hearings were held on the adoption of this ordinance on July 31 and August 4, 1975 before the RDA, and on September 3, 1975 before the Commission. Although the RDA notified every property owner in the affected area by mail prior to the hearings, no Landowners attended these hearings.

During the hearings, the RDA's executive director, Michael Chitwood, assured those present that all owners of property designated for redevelopment by the RDA would be provided notice and hearing, along with detailed architectural information about the renovation of their properties, and that property acquisition would not occur without their approval and consent.

On September 10, 1975, the Commission passed an ordinance adopting the CBD West Neighborhood Development Plan and mailed a copy of the ordinance to every property owner in the affected area, including Landowners.

On May 14, 1982, the RDA again notified all affected property owners, including Landowners, of another set of public hearings to be held for the purpose of amending and updating the CBD West Neighborhood Development Plan. The notification letter described proposed housing rehabilitation and sidewalk beautification programs for the central business district. Landowners understood from this letter that the proposed modifications' only relevance to their properties would be curb, gutter, and sidewalk beautification along Main, State, and Third South Streets. Consequently, Landowners did not attend the hearing.

At the hearings, held in June 1982, neither the RDA nor the Commission received evidence on the issue of blight, nor did they find that Landowners' properties were either blighted, or detrimental to the public On June 15, 1982, the RDA proposed the adoption of the amended redevelopment plan and found that the "project area comprising the major portion of the central business district of Salt Lake City as above described is a 'blighted area' as defined in Section 11-19-2, Utah Code Annotated 1953, as amended, and that redevelopment of said area is necessary to effectuate the public purposes set forth in the Utah Neighborhood Development Act." The Commission subsequently passed an ordinance to adopt the CBD West Neighborhood Development Plan. It did not mention Block 57 or its allegedly blighted nature, nor did it indicate that the RDA intended to redevelop Landowners' properties that year or at any time thereafter. Instead, the plan articulated generalized objectives of substandard building removal, land development, rehabilitation of buildings, and elimination of other environmental deficiencies, and set forth only very general means of achieving those objectives. ² This ordinance was published in the Deseret News on July 2, 1982.

health, safety, or welfare. Instead they only designated a twenty-six and one-half block area as a redevelopment survey area. This survey area included such notable civic and cultural buildings as the Hotel Utah, the Kennecott Building, the ZCMI Center, the Tracy Office Center, the Tribune Building, the Kearns Building, the Walker Bank Building, and the Deseret Building.

On June 2, 1983, the RDA met and discussed a potential expenditure of $130,000 for a blight study of Block 57, but did not approve the study. On February 9, 1984, the RDA again met and decided that Block 57 was "so obviously blighted" ³ that it was unnecessary to spend even $20,000 for a blight study, so moved, instead, to perform an economic base study on the Block.

J. Ross Trapp, one of the Landowners, testified that in 1984, following a fire that virtually destroyed his property on Block 57, he discussed rebuilding plans with the RDA's executive director, Michael Chitwood, and then applied for and received a building permit from Salt Lake City Corporation to rebuild and refurbish his property. At that time, Chitwood denied that the RDA was contemplating any plan for involuntary condemnation of the Trapp property or any other Block 57 properties, but indicated that there might be a possibility in the future of "friendly" condemnation in order to acquire property for future use. Relying upon this assurance, Trapp spent approximately $495,000 to remodel his property. Neither the RDA nor Salt Lake City objected to or attempted to dissuade or stop Trapp from embarking upon this Several months later, in late 1984, the RDA attempted to acquire Trapp's property, along with that of the other Landowners, through its eminent domain power. The RDA's letter to Landowners stated that the Salt Lake City Council, on August 9, 1984, had authorized it to acquire Block 57 properties for redevelopment activities.

remodeling project. Further, they never notified him or any of the other Landowners that their property had been determined to be "blighted," and did not notify them of a time and place to challenge this determination.

In 1984 and 1985, the RDA continued to send to each Block 57 Landowner written notices that it intended to acquire their properties and that it would do so by condemnation if necessary.

Landowners filed this action on February 19, 1985, challenging the 1982 ordinance. They sought injunctive and declaratory relief, alleging that the ordinance and the CBD West Neighborhood Development Plan were procedurally and substantively defective, that their property was not and had not been determined to be "blighted," and that the RDA was not entitled to condemn or otherwise acquire their properties. Most of the other Utah municipal redevelopment agencies moved to intervene.

After some discovery, Landowners filed a motion for partial summary judgment, seeking a determination that the RDA did not, as required under Utah Code Ann. § 11-19-19 (1971), make a determination that Landowners' properties were blighted. Landowners argued that RDA did not restrict the project area to buildings which were "detrimental or inimical to the public health, safety, and welfare" and that RDA's notices of public hearings concerning the adoption of the 1982 plan did not give reasonable notice to Landowners that their Block 57 properties might be acquired for redevelopment.

In response, the RDA filed a motion for partial summary judgment on the grounds that Landowners' complaint was time-barred under Utah Code Ann. § 11-19-20 (1971) because its 1982 proceedings were controlling. The trial court did not immediately rule on this motion. After some discovery, the RDA again moved for summary judgment, asserting this time that its 1975 proceedings should govern the court proceedings. It sought a determination that: (1) RDA could acquire properties within a general area without regard as to whether any specific property was "blighted," (2) RDA...