United States District Court, D. Minnesota
W. Diehl, Esq., Dean A. LeDoux, Esq., Gregory R. Merz, Esq.,
and Matthew P. Webster, Esq., Gray Plant Mooty Mooty &
Bennett, PA, and G. Craig Howse, Esq., and Jacob R. Grassel,
Esq., Howse & Thompson, PA, counsel for Plaintiff.
C. Hoff, Esq., and Jared D. Shepherd, Esq., Hoff, Barry &
Kozar, counsel for Defendant.
SECOND AMENDED FINDINGS OF FACT, CONCLUSIONS OF LAW,
AND ORDER FOR JUDGMENT
DONOVAN W.FRANK UNITED STATES DISTRICT JUDGE
dispute arises from a city enforcing its zoning ordinances to
thwart a church's attempts to purchase a movie theater
for religious worship. The Court held a bench trial from
October 18, 2016 to November 8, 2016, to determine whether
the city violated the church's constitutional rights by
preventing the purchase and whether the city defamed the
church in a subsequent statement about the failed purchase.
upon the presentations of counsel, including all pre- and
post-trial submissions, and the Court having carefully
reviewed the evidence in the case, including all testimony
and exhibits entered by the parties, and the Court being
otherwise duly advised in the premises, the Court concludes
that the city violated the church's constitutional rights
and that the city did not defame the church. As a result, the
Court awards the church damages in the amount of $1, 354, 595
plus prejudgment and post-judgment interest.
Plaintiff Riverside Church (“Riverside” or the
“Church”) is a Christian Missionary &
Alliance church that currently meets for collective worship
at a church building in Big Lake, Minnesota (the “Big
Defendant City of St. Michael (“St. Michael” or
the “City”) is a city and municipal corporation
in Wright County, Minnesota.
Riverside's congregation assembles weekly each Sunday for
collective worship, which includes singing and preaching.
Riverside's services are contemporary evangelical
Christian worship. The Church incorporates into its services
video and lighting, including projecting pre-produced videos
and slideshows onto movie screens. (Trial Exhibit
(“Ex.”) P001.)The Church intentionally blocks windows
in its main worship area so that lighting and video elements
are visible. Riverside also simulcasts its services and makes
its services available on the Church's website. (P001,
P006-7; Trial Transcript (“Tr.”) 1243:23-1244:15
(Lee); 37:14-38:7 (Lundeen); 146:21-147:8
2004, Riverside's average weekly attendance at its Big
Lake Church was approximately 675. But, by the end of 2015,
attendance had grown to approximately 1, 600.
the years, Riverside expanded and renovated its Big Lake
Church and also added additional service times. These
efforts, however, were insufficient to meet the needs of
Riverside's growing congregation. (Tr. 48:10-25; 47:6-17
Riverside currently has maximum seating for 670 at its Big
Lake Church divided between a primary auditorium and a video
café where congregants watch a video simulcast of the
live service in the main auditorium. (Tr. 152:16-17
Riverside first opened its video-café venue in 2005.
The Church uses this second worship venue like a movie
theater. Much like a movie theater, the video café
provides elevated seating, which allows the congregants to
clearly see the services being projected on movie screens.
(Exs. P001; P007; Tr. 46:24-47:5; 39:11-40:4 (Lundeen).)
Riverside grew, it began to consider adding a second worship
location. Riverside studied the geographic areas from which
it drew congregants. The Mississippi River and Interstate 94
(“I-94”) form natural barriers for attendees
driving from areas south and east of the Big Lake Church. To
reach new members and to provide a convenient site for the
significant number of congregants from St. Michael,
Albertville, Buffalo, Otsego, and surrounding communities,
Riverside focused on locations along I-94 from Rogers to
Monticello. (P002; Tr. 53:23-55:3 (Lundeen).)
Riverside Identifies the Theater Property as a Possible
early 2014, Riverside identified the former Cinemagic Theater
at 4300 O'Day Avenue N.E. in St. Michael (the
“Property” or “Theater Property”) as
a potential location for a satellite to replay services by
video from the Church's location in Big Lake. (D225.)
Theater Property is bordered to the east by I-94, to the
north by Trunck Highway 241 (“TH 241”), to the
west by O'Day Avenue (“O'Day”) and the
BNSF railroad tracks, and to the south by the Crow River and
wetland/flood plain area. The Theater Property sits in the
southeast corner of the intersection of TH 241 and O'Day
(the “Intersection”). The Intersection is located
southwest of the I-94/TH 241 interchange. The current access
to the Property's parking area includes a
right-in/right-out access along O'Day south of TH 241 and
a full access further south of TH 241. The Intersection of
O'Day and TH 241 has no traffic signals.
2006, St. Michael approved construction of a 15-screen movie
theater with nearly 2, 800 seats on the Theater Property. The
capacity of the theater building is over 3, 600 people and
its interior area is more than 91, 000 square feet.
(Complaint ¶ 43; Answer ¶ 26; Exs. P003, P015.)
movie theater operated at the Theater Property from late 2006
until September 2010, when the property fell into
foreclosure. (Complaint ¶¶ 52-53; Answer ¶ 34;
Tr. 405:2-6 (Bot).)
Riverside first heard that the Theater Property might be for
sale at a discount price in 2011.
January 2014, Riverside learned that the Theater Property was
officially for sale. According to Pastor Thomas Lundeen, the
Theater Property was an ideal property for Riverside. Some of
the perceived benefits of the Theater Property included its
access to the interstate, its visibility, its large parking
area, and the fact that it was ready for assembly use. In
January 2014, the Theater Property was listed for $2, 695,
Michael's Zoning Ordinance provided for different zoning
districts and regulated the types of approved land uses as
either “permitted” or “conditional”
use. Until April 2015, the Zoning Ordinance did not permit
“collective religious worship” in any of its
business zones (B-1, B-2, or B-3) either as a
“permitted” or “conditional” use. The
Theater Property had been zoned B-1 since before 2013.
the B-1 zoning district, the following uses were allowed:
(a) “Assemblies less than 250 persons in a one-day
event, if approved by Zoning Administrator”;
(b) Government Buildings;
(d) “Hospitals, funeral homes, and mortuaries”;
(e) “Professional Offices and Services including . . .
day care . . . studios including art and photography, and
other similar office uses”;
(f) “Retail Sales and Services including, but not
limited to, . . . sporting goods, books, music, . . . on and
off-sale liquor, convenience stores, department and discount
stores, grocery stores, . . . hotel, motels.”
2014 Zoning Ordinance § 155.105.
January 2014, Riverside Executive Pastor Skipp Machmer called
Mark Weigle, the St. Michael's Community Development
Director, to inquire about whether Riverside could use the
Theater Property for what Machmer called worship.
testimony and record before this Court established that
Weigle was the most knowledgeable City employee regarding
zoning issues. He reviewed, interpreted, and enforced the
City's Zoning Ordinance and other land-use regulations.
He also was responsible for communicating with parties like
Riverside about what the City's Zoning Ordinance means.
In this case, he was closely involved in the City's
decision-making process regarding Riverside's efforts to
purchase the Theater Property.
Weigle informed Machmer in January 2014, during their phone
call, that St. Michael's Zoning Ordinance did not permit
Riverside to use the Theater Property for collective
religious worship. At the time of the January 2014 phone
call, Weigle was not aware of how Riverside intended to use
the Theater Property; all Weigle knew was that Riverside was
seller accepted an offer from Cinemasota, Inc. for $1.75
million even though Riverside's offer was higher. Despite
initially losing out on the Theater Property, Riverside
continued to monitor the pending sale. In April 2014,
Cinemasota offered to sell the Theater Property to Riverside
for $1.75 million plus closing costs.
With the new offer in hand, Riverside renewed contact with
St. Michael regarding the Zoning Ordinance. But Riverside had
a narrow window to work with the City as the sale had to
happen before the closing on April 23, 2014. Riverside
scheduled a meeting with the City for April 14, 2014. Prior
to the April 14 meeting-and without inquiring further about
Riverside's proposed use of the Theater Property-St.
Michael's City Administrator Steve Bot stated in an
internal e-mail, “I am a bit confused to the purpose of
this meeting being we've told numerous local churches
already that the old theater site is not zoned for a
church.” (P039.) Bot was described as the most senior
staff member at the City.
Weigle met with Riverside on April 14, 2014. At the meeting,
Riverside explained that it intended to use the Theater
Property as a satellite location where it would project a
video simulcast of its services and sermons from the Big Lake
Church. Weigle then understood that Riverside's proposed
use was similar to the operations of a movie theater. But
Weigle still told Riverside that its proposed use was not
allowed in the B-1 zoning district. (See P041.)
Weigle also testified that additional information- such as
the number of auditoriums that Riverside intended to use-was
unnecessary to determine whether the Zoning Ordinance allowed
“collective religious worship” at the Theater
Property. (See Tr. 652:25-643:11 (Weigle).)
April 24, 2014, Weigle sent an e-mail to Riverside stating
that the City would “enforce the Zoning Ordinance as it
is written, ” but that Riverside could consider asking
“the City to amend the Ordinance to allow churches in
the B-1 District.” (P042.) Weigle also invited
Riverside to attend an upcoming Planning Commission meeting.
Cinemasota, however, had completed its purchase of the
Theater Property a day earlier, on April 23. Riverside stated
that it therefore did not attend the upcoming Planning
After again failing to purchase the Theater Property,
Riverside continued its discussions with Weigle and St.
Michael City Attorney David Lenhardt. On June 12, 2014, David
Lenhardt wrote to Riverside and recommended that Riverside
“file an application to re-zone the property or to
amend the city's zoning regulations to allow a religious
institution to operate in a commercial
zone.” So in July 2014, Riverside submitted an
application for a text amendment to the City Zoning Code
requesting that the Zoning Ordinance be changed to allow
Riverside to use the Theater Property. Specifically,
Riverside asked St. Michael to allow “assemblies,
religious institutions, and places of worship” as
permitted uses in the B-1 zoning district.
Riverside Attempts to Purchase the Theater Property.
August 19, 2014, Cinemasota and Riverside entered into a
purchase-and-sale agreement for the Theater Property. Under
the August 2014 purchase agreement, Riverside would pay $2,
273, 000 for the Theater Property. The August 2014 purchase
agreement also contained a buyer contingency for government
approval by the closing in December 2014.
Riverside arranged to finance the Theater Property through
Alliance Development Fund (“ADF”). ADF required
Riverside to obtain City approval to use the Theater Property
before it would finance the purchase.
September 22, 2014, Riverside received a loan-approval letter
from ADF approving a $3.2 million loan. The loan-approval
letter contained a zoning contingency. In November 2014, the
zoning contingency was replaced with a requirement of a
signed agreement between Riverside and the City for
Michael's staff, the Planning Commission, and the City
Council considered Riverside's application from
approximately July 2014 through November 2014.
Riverside informed the City that it had a three-phase plan
for its worship areas at the Theater Property. Riverside
would immediately use one auditorium to seat 370
(“Phase 1”) and also add a second video
café in another auditorium with 100-150 seats
(“Phase 2”). Then, as soon as it was needed,
Riverside planned to combine two theaters which would provide
a combined seating total of 750 (“Phase 3”).
(P054 at 7; Tr. 190:11-193:20 (Machmer).)
Riverside informed the City that during its three phases, the
church intended to use another four of the fifteen
auditoriums for children's programming on Sunday morning.
evaluating St. Michael's application, the City
identified, in particular, issues of public safety and
traffic impacts. Bot testified that his concerns arose
immediately: “I started thinking about what, as I would
with any proposed use there, . . . traffic implications would
it have at this intersection that I know has issues and
concerns.” (Tr. 545:3-6 (Bot).)
only traffic study reviewed by the City when it considered
Riverside's application was a traffic study dated October
30, 2014 (the “2014 Traffic Study”). The study
was conducted by SRF Consulting (“SRF”) and Marie
Cote, a traffic consultant. The 2014 Traffic Study considered
only Riverside's proposed use. According to Cote, the
“purpose of the traffic impact study is to determine
the total impacts from the proposed development on the
roadway and intersections for all users.” (Tr.
and Cote discussed the 2014 Traffic Study before it was
conducted, and Bot requested that SRF review Riverside's
peak use. The results of the 2014 Traffic Study concluded
that once attendance levels reached 1, 200 (the upper limit
of Riverside's Phase 3 Plan), the Intersection would not
function properly and begin to experience operational,
queuing, and safety issues. This was the case, according to
the study, even if the City were to put in a traffic signal.
The parties argue over whether the 2014 Traffic Study was
predicated on a sufficient foundation and methodology, and
therefore valid. But more fundamentally, Cote and St. Michael
acknowledged that the study's potential concerns may
never become a reality at the attendance levels cited in the
2014 study. That is, Cote and St. Michael acknowledged that
there was a possibility that there might never be any traffic
safety issues with Riverside's proposed use of the
Theater Property even if attendance reached 1, 200 attendees.
Q. And so if there's a new recession or a new building
boom that nobody predicted, that might change the traffic,
A. Correct. That is why we recommended in our 2014 study that
after Phase III we should go in and collect data and make
adjustments to our recommendations. If by chance the volumes
that are being generated based on the three services at St.
Michael generates something less or more, then we would
revisit the recommendations being made.
Q. Right. Let's go to Exhibit 121, that first bullet
again on page 2. . . . So your analysis related to 1200
people was only used to determine when issues may begin and
additional mitigation should be considered, correct?
Q. And so things could change and 1200 could be fine. And if
we do a new study when we get to that point, that study could
have different results, right?
Q. And you don't know whether that study would show
greater traffic impacts or less traffic impacts?
Q. You would have to do the study in the ...