Martin M. Harstad, et al., Respondents,
City of Woodbury, Appellant.
County District Court File No. 82-CV-16-115
A. Van Cleve, Rob A. Stefonowicz, Larkin Hoffman Daly &
Lindgren Ltd., Minneapolis, Minnesota (for respondents)
C. Hoff, Justin L. Templin, Hoff Barry, P.A., Eden Prairie,
Minnesota (for appellant)
A. Yarosh, Mark Thieroff, Siegel Brill, P.A., Minneapolis,
Minnesota (for amicus curiae Franklin P. Kottschade, et al.)
L. Naughton, League of Minnesota Cities, St. Paul, Minnesota
(for amicus curiae League of Minnesota Cities)
Considered and decided by Bratvold, Presiding Judge;
Rodenberg, Judge; and Jesson, Judge.
statutory city lacks express or implied authority under Minn.
Stat. § 462.358, subd. 2a (2016), to impose a road
assessment as a condition for its approval of a
developer's subdivision application.
declaratory-judgment action, appellant/cross-respondent city
challenges the district court's ruling that its road
assessment is unlawful. By notice of related appeal,
respondent/cross-appellant developer challenges the district
court's determinations that its temporary
regulatory-takings claim is moot, and that its subdivision
application was not approved by operation of law under Minn.
Stat. §§ 15.99, subd. 2(a), and 462.358, subd. 3b
(2016). We affirm the district court's judgment on all
City of Woodbury (the city) has allocated undeveloped land
into three "phases" and has identified
"roadway needs" caused by "increased traffic
and trips that are generated" by expected development
within each phase. Roadway needs include reconstructing
existing roads, as well as constructing new roads.
Respondent/cross-appellant Martin Harstad seeks to develop 77
acres of phase-two land into a 183-home residential community
called "Bailey Park." In this appeal, Harstad
challenges the city's decision to condition approval of a
subdivision application on payment of a road assessment.
city's ordinance provides that it may not approve a
proposed subdivision that is "deemed premature."
Woodbury, Minn., Code of Ordinances, § 21-16 (2016). The
city may deem a subdivision "premature" if streets
"to serve the proposed subdivision" are not
"available, " which is defined as streets
"existing or readily extended and funded" as
"consistent with the phasing in the comprehensive
plan." Id. § 21-16(e). The city's
resolution provides that a new residential development
"pays its own way" and "all associated
costs" for "public infrastructure" will
"be the sole responsibility of the developing property
owner." Relevant to this appeal, the city's
resolution directs that roadway improvement costs "will
normally be collected at the time a property develops per a
negotiated major roadway contribution, " also called a
"major roadway assessment" (MRA). According to a
city official, "prematurity can be avoided if an agreed
upon MRA contribution is made."
resolution also sets out a formula to calculate the MRA,
dividing the total expected cost of improvements by the net
developable acreage in each phase to arrive at a per-acre
fee. Based on the MRA formula, the city estimated that
phase-two developers must pay $20, 230 per acre to fund
necessary road improvements. The record evidence established
that the city used this per-acre estimate as a
"proposal" in "opening negotiation with the
development community." The city memorialized the final
MRA imposed against a developer in an agreement and described
it as a "negotiated contribution."
23, 2015, Harstad submitted the Bailey Park application to
the city. On July 27, 2015, the city sent a letter
summarizing deficiencies in the Bailey Park application and
stating that it was incomplete. On July 29, Harstad's
architect responded in an e-mail. On July 30, the city
replied that all deficiencies had been satisfied, except the
"items required within 200 feet" of the proposed
development. The city stated that "[t]hese items are not
necessary for this project to proceed to Planning Commission
later in August but the application is considered incomplete
from a 60-day rule process without them." Harstad's
architect replied that "we will make sure we meet the
200' overlap" on any future resubmittals.
August 5, 2015, the city project manager completed a five-day
review memorandum to determine "[s]ubmittal
completeness." The memorandum listed all of the
requirements needed for a complete application with boxes
next to each requirement for "complete, " "not
complete, " and "not applicable." Two
requirements had boxes that were checked "not
complete." The 200-foot requirements, which had been
incomplete as of July 30, were indicated as
"complete" on the memorandum. The memorandum
concluded by stating that "[f]urther comments or
conditions may need to be addressed" after Harstad
submitted revised plans.
next day, on August 6, the city project manager left Harstad
a voice message, telling Harstad not to "put too much
stock into that five-day review" because it was
"just a checklist" and "just details."
The project manager also stated that she understood why
Harstad's plans did not include one of the requirements
marked incomplete on the memorandum and "I don't
want to say ignore it, but basically ignore that." The
project manager concluded that she would get back to Harstad
after completing a "full comment letter" and
meeting with her staff.
September 18, 2015, the city completed a memorandum
containing 64 preliminary plat comments and conditions. The
memorandum stated that the developer should submit
"revised plans addressing these items, " which the
city would review, and may result in additional
"comments or conditions." The record does not
establish that Harstad submitted revised plans.
further correspondence occurred regarding the Bailey Park
application until November 13, 2015, when the city sent
Harstad a memorandum stating proposed area and connection
charges for Bailey Park, including a "proposed" MRA
of $1, 389, 444. The memorandum stated that "[m]ajor
roadway and intersection improvements (i.e., roundabouts,
signals, etc.) will be required to accommodate traffic
generated by Bailey Park and surrounding areas."
meeting with a senior city planner in December 2015, Harstad
objected to paying the MRA and argued the city was required
to approve the Bailey Park application because the city had
failed to deny it within the applicable statutory time
periods. In a letter, the city responded that the Bailey Park
application was incomplete because Harstad had not remedied
all the deficiencies listed in the July 27 letter. The city
told Harstad that the statutory time periods for automatic
application approval had not begun to run.
January 12, 2016, Harstad filed a verified complaint and
petition for a writ of mandamus, alleging ten counts that
amount to three claims. First, Harstad sought a declaration
that the MRA is unauthorized by Minnesota law and
unenforceable. Second, Harstad brought an inverse
condemnation claim, alleging that the MRA amounted to a
temporary regulatory taking (takings claim). Third, Harstad
sought relief compelling the city to approve the Bailey Park
application because it had failed to deny the application
within the statutory review periods under Minn. Stat.
§§ 15.99, subd. 2(a), and 462.358, subd. 3b. During
this litigation, the Bailey Park application stalled.
parties filed cross-motions for summary judgment. In
September 2016, the district court entered summary judgment
in favor of the city on all counts. The district court
dismissed the MRA and takings claims without prejudice,
concluding they were not ripe for judicial review. The
district court also dismissed Harstad's
application-approval claim with prejudice, reasoning that the
time periods for automatic approval under sections 15.99,
subdivision 2(a), and 462.358, subdivision 3b, had not begun
to run because the Bailey Park application was incomplete.
November 2016, after Harstad received reconsideration, the
district court vacated its dismissal of the MRA and takings
claims. Initially, the district court concluded that the
claims were ripe because "Woodbury has indicated to
Harstad that it intends to propose that the MRA be imposed on
Harstad's development, " and it was in the
parties' interests "to be relieved of the
uncertainty" about the MRA's legality. The district
court also concluded that the MRA was a development
"impact fee" and that the city lacked statutory
authority under Minn. Stat. § 462.358, subd. 2a, to
impose the MRA as a condition of approving a developer's
subdivision application. The district court declared the MRA
unenforceable and entered partial summary judgment in favor
of Harstad on the MRA and takings claims.
city filed a letter brief with the district court, arguing
that the November order declaring the MRA illegal rendered
moot Harstad's takings claim and, therefore, the district
court should have dismissed that claim. The district court
agreed because the city had "neither imposed nor
collected" the MRA from Harstad. Therefore, the district
court issued a new order that dismissed Harstad's takings
claim with prejudice. As a result of all three
summary-judgment decisions, the district court dismissed all
but two of the counts in Harstad's complaint with
prejudice and directed entry of judgment in favor of Harstad
on the two remaining MRA counts. This appeal followed.
I. Did the district court err in its determination that the
city lacks express or implied authority under Minn. Stat.
§ 462.358, subd. 2a, to impose the MRA as a condition of