Opinion
No. C6-01-387.
Filed August 7, 2001.
Appeal from the District Court, Ramsey County, File No. C80010078.
Marc J. Manderscheid, Christian S. Walker, Briggs and Morgan, P.A., (for respondent Port Authority of the City of Saint Paul)
Eric J. Magnuson, James L. Forman, Timothy J. Nolan, John Rolland Neve, Rider, Bennett, Egan Arundel, LLP, (for appellant)
Considered and decided by Amundson, Presiding Judge, Lansing, Judge, and Shumaker, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2000).
UNPUBLISHED OPINION
In this appeal from "quick-take" condemnation orders allowing respondent's acquisition of appellant's real estate, appellant alleges that the district court made various procedural errors and denied appellant due process of law. Because the district court followed and applied all requisite legal procedures and accorded appellant due process of law, we affirm.
FACTS
In 1996, the Saint Paul City Council passed a resolution to support the construction of an enclosed pedestrian walkway linking major downtown Saint Paul hotels and the Saint Paul Civic Center, now known as the RiverCentre. Among the supporters of the project was respondent Port Authority of the City of Saint Paul, which holds ownership interests in two downtown hotels.
By 1997, two proposals for the project came before the city council, the "Kellogg Boulevard Scheme" and the "Fourth Street Concourse Scheme." After study and research, the city council approved the Fourth Street design. This approach involved the possibility of the erection of a three-story "connector building" that would provide both skyway and tunnel connections to the pedestrian link. The connector building was to be constructed on a 12-space surface parking lot owned by appellant Baillon Company and leased to Imperial Parking for operation as a public parking lot.
In September 1999, the port authority's board of commissioners authorized the port authority to contribute $1,000,000 to the project. The city suggested that, instead of contributing money to the project, the port authority should instead acquire the property. The port authority's board authorized the port authority to negotiate with Baillon for the purchase of the property and, if a purchase could not be negotiated, to exercise the power of eminent domain to acquire the real estate.
On May 23, 2000, the city and the port authority agreed that the latter would acquire the Baillon land:
The PORT shall acquire, on behalf of the CITY, all permanent and temporary real property ownership and easement rights not owned or controlled by the CITY as of April 1, 2000, necessary for construction and operation of the PROJECT. Upon acquisition of such rights the PORT shall promptly transfer the acquired rights to the CITY, except for temporary rights acquired for construction purposes, which shall be retained by the PORT.
By November 2000, the port authority had negotiated with Baillon and had offered to buy the property for $390,000, which was $30,000 higher than the value determined by an independent appraisal the port authority had obtained. Baillon declined the offer.
Soon thereafter, the port authority filed with the district court its petition for the "quick-take" of the Baillon property under Minn. Stat. § 117.042 (2000). Baillon contested the taking and filed with the court a brief and exhibits in opposition. The district court heard arguments and received additional Baillon exhibits at the hearing.
The district court issued its orders for the "quick-take." Baillon moved for reconsideration of the orders but the court denied the motion and, in an amended order, authorized a "quick-take" deposit and the transfer of title to the property to take place on February 28, 2001. Baillon did not move for a stay of that order. The district court administrator transferred title to the port authority on that date. Baillon appeals from the orders effectuating the "quick-take" acquisition of the property.
DECISION
The judiciary's review of condemnation proceedings has always been "very narrow." In re Condemnation by Minneapolis Community Dev. Agency, 582 N.W.2d 596, 598 (Minn.App. 1998), review denied (Minn. Oct. 29, 1998) ( MCDA Nicollet). The court's limited scope of review only allows the port authority's decision to be overturned if it was "arbitrary, unreasonable, or capricious, or if the evidence against the necessity or public use is overwhelming." City of Duluth v. State, 390 N.W.2d 757, 764 (Minn. 1986) (citation omitted).
1. Statutory provisions
The "quick-take" condemnation procedure is described in Minn. Stat. § 117.042 (2000). This is not a separate kind of condemnation proceeding; rather, it is a step in a condemnation proceeding. City of Rochester v. Peoples Coop. Power Ass'n, Inc., 505 N.W.2d 621, 626 (Minn.App. 1993). Under the "quick-take" procedure,
at least 90 days prior to the date on which possession is to be taken, [the owner of the property shall be notified] of the intent to possess by notice served by certified mail * * * .
Minn. Stat. § 117.042. However,
before taking title and possession [the petitioner] shall pay to the owner or deposit with the court an amount equal to petitioner's approved appraisal of value.
Id.
If it is deemed necessary to deposit the above amount with the court the petitioner may apply to the court for an order transferring title and possession of the property or properties involved from the owner to the petitioner.
Id. The petitioner obtains the right to title and possession of the property after the filing of the award by the court-appointed commissioners and depositing three-fourths of the award with the court. Id.
The port authority filed its petition under Minn. Stat. § 117.042 on November 22, 2000, and served the petition and notice of hearing on Baillon on November 29, 2000. Possession was not authorized to take place until at least February 28, 2001. The port authority deposited the requisite amount of money before taking possession. Thus, the record shows that the statutory requirements of Minn. Stat. § 117.042 were appropriately followed. However, because condemnation under the "quick-take" procedure is only a step in the condemnation process, we must consider whether all aspects in the condemnation proceedings were proper.
2. Sufficiency of the hearing
Baillon argues that the district court violated its due process rights by not granting its request for an evidentiary hearing or trial so that it could contest the necessity of the taking. Baillon also argues that the district court violated its due process rights by not allowing it to call witnesses at the January 26, 2001, hearing in opposition to the petition for condemnation.
No person shall be deprived of property without due process of law. Minn. Const. art. I, § 7. The basic requirements of due process are notice and an opportunity for a hearing. Alton v. Wabedo Township, 524 N.W.2d 278, 281 (Minn.App. 1994). There is no applicable body of law in this case that would alter this standard. See Minn. Stat. § 117.075 (2000) (the district court shall "hear all competent evidence offered for or against the granting of the petition); see also Peoples Coop. Power Ass'n, Inc., 505 N.W.2d at 626 (stating that relevant bodies of law "do not suggest that the hearing afforded the parties in quick-take proceedings is any more limited than the hearing afforded in general condemnation proceedings"). Baillon received timely notice of the hearing on the "quick-take" petition, and a hearing was held in district court on January 26, 2001. Baillon did submit documentary evidence in opposition to the taking and was allowed to present argument on the issues. The record does not show that Baillon requested an opportunity to call witnesses at that time.
The district court was not required to grant any additional hearing. See In re Condemnation by Minneapolis Community Dev. Agency, 439 N.W.2d 708, 710-711 (Minn. 1989) ( MCDA LaSalle) (finding that the hearing was adequate because considerable documentary evidence was presented to the court and the issues were thoroughly argued and briefed, and the property owner failed to show how any information it might produce at a further evidentiary hearing would successfully oppose the condemnation). Baillon did not show, either at the hearing in district court or in any submissions with this court, how allowing witnesses to testify at the hearing would have provided any compelling evidence against the propriety of the taking. Because we find that the district court hearing was sufficient for Baillon to present evidence contesting the necessity of the taking and that the district court was not required to grant Baillon's motion for an additional evidentiary hearing or trial, Baillon's due process rights were not violated.
3. Necessity
The port authority has the power of eminent domain, "needed by it for public use." Minn. Stat. § 469.055, subd. 8 (2000). It must "adopt a resolution describing the property and stating its intended use and the necessity of the taking." Id. Baillon argues that there are no facts supporting the public necessity for the taking. Necessity is a question of fact, and the district court's decision on this matter will not be reversed on appeal unless clearly erroneous. MCDA Nicollet, 582 N.W.2d at 599. The district court's finding is clearly erroneous "if, on the entire evidence, we are left with a definite and firm conviction that a mistake has been committed." Housing Redev. Auth. v. Schapiro, 297 Minn. 103, 109, 210 N.W.2d 211, 214 (1973).
The port authority is not required to show an "absolute or indispensable necessity, but only that the proposed taking is reasonably necessary or convenient for the furtherance of a proper purpose." City of Pipestone v. Halbersma, 294 N.W.2d 271, 274 (Minn. 1980) (citation omitted). "Once necessity has been established, condemnation may only be denied when the party contesting condemnation demonstrates that the condemnation proposal is manifestly arbitrary or unreasonable." Itasca County v. Carpenter, 602 N.W.2d 887, 889 (Minn.App. 1999) (citation omitted). Arbitrary or unreasonable in this context means acting "capriciously, irrationally, and without basis in law or under conditions which do not authorize or permit the exercise of the asserted power." Id. at 889-90 (quotation omitted).
On January 25, 2000, the port authority passed a resolution finding that the acquisition of [the Baillon property] is necessary for the support of a skyway bridge from the Landmark Towers Building over Fourth Street and connection of the skyway system to the RiverCentre * * *.
The city considered as many as twelve different possibilities for the pedestrian link. It narrowed the choices to two and, after conducting a "design charrette" on December 5, 1997, it chose the Fourth Street design. The evidence supports the decision to construct the Fourth Street pedestrian connection, and the condemnation of the Baillon property was necessary to further the project.
Baillon suggests that the fact that the city selected the Fourth Street option from among several possibilities shows that it is not necessary to acquire the Baillon property. This demonstrates, argues Baillon, that the city's choice was arbitrary. But the mere existence of possible alternatives to a plan for taking does not in itself support a finding of arbitrariness. Halbersma, 294 N.W.2d at 274.
Baillon also argues that the taking is not necessary because the project at this point is too speculative to allow a condemnation. Speculative purposes will not support the assertion of necessity. Carpenter, 602 N.W.2d at 890.
In support of this argument, Baillon cites to Regents of Univ. of Minn. v. Chicago N.W. Transp. Co., 552 N.W.2d 578 (Minn.App. 1996), review denied (Minn. Nov. 20, 1996). In that case, the regents were interested in a parcel of property located near the university that was owned (and contaminated) by a railroad. Id. at 579. The regents had not yet determined or approved a use for the property, but had in mind the possibilities of student housing, a steam plant, or women's athletic facilities. Id. Then the regents learned that the railroad had sold the property to another entity. Id. at 579-80. Soon thereafter, the university filed a petition to acquire the property by eminent domain. Id. at 580. The court noted that, although the university had proposed three uses for the land, the uses were mutually exclusive and the regents had not yet decided how to use the property. Id. Furthermore, since the land was contaminated, none of the proposed uses could be made a reality until the land was cleaned up. Id. The court found that, based upon this combination of factors, the taking was not necessary at that time because the university's use of the land was too speculative. Id.
Here, although specific "bids" have not gone out, the port authority and the city have determined the route, design, and appearance of the pedestrian walkway, and have determined a price cap on the project. They have also passed resolutions stating the public purpose and necessity of the project and directed the port authority to acquire the Baillon property in furtherance of the project. Although there is the possibility that the project may cost more than $10 million, at which point the project might be abandoned, this contingency alone does not render the project speculative. See MCDA Nicollet, 582 N.W.2d at 601 (finding that the relative certainty of the project stands in marked contrast to the ambiguity and uncertainty of the plans for the property to be condemned by the county in Schumm v. Milwaukee County, 258 Wis. 256, 45 N.W.2d 673 (1951), where the necessary resolutions were not in place, it was uncertain whether resolutions would ever be in place, there was no valid contract between the condemning authority and the intended beneficiary of the property, and numerous details were still to be resolved). The lack of bids and the possibility that costs might exceed the project price cap are not sufficient to render the project too speculative for a proper taking.
Lastly, Baillon argues that, although the port authority has independent powers of eminent domain, it is condemning Baillon's property "on behalf of" the city, and thus it is acting in an agency relationship with the city. Because it is acting as an agent for the city, it must condemn the property in accordance with the procedure set out in the city charter, which requires a public hearing before the city council. No such hearing was ever held.
Whether an agency relationship exists is a question of fact, and the party alleging the existence of the agency has the burden of proof. White v. Boucher, 322 N.W.2d 560, 566 (Minn. 1982). "Generally, an agency relationship is based upon consent by one person that another shall act on his behalf and be subject to his control." Frank v. Winter, 528 N.W.2d 910, 914 (Minn.App. 1995) (citations omitted), review denied (Minn. Apr. 27, 1995).
Baillon points to the agreement between the city and the port authority stating that the port authority is to acquire the property "on behalf of" the city. But that same agreement also expresses the intention of the parties that "[n]o partnership, joint venture, or principal-agent is established among the parties under this Agreement." In addition to the parties' expressed intent that there be no agency relationship, the evidence shows that the port authority had an independent interest in the acquisition of the property and that it controlled both the fact and the method of the acquisition. The property is located in the port authority's economic development district and the port authority, as owner of major downtown hotels, would benefit from a pedestrian link in downtown Saint Paul. If the port authority was unsuccessful in attempting to purchase the property, it was to acquire the property in its own name through its own power of eminent domain and with its own funds. The substantial evidence on this issue in the record compels the conclusion that the port authority was not serving as the city's agent in this taking.
4. Mootness
The port authority contended at oral argument that this case is now moot because Baillon did not seek a stay of the proceedings pending appeal, and the project has gone forward since the district court authorized the taking of Baillon's property. See Minn.R.Civ.App.P. 108.01, 108.03 (stating that when a stay of an order is obtained, it stays all further proceedings in the district court upon the order appealed from or the matter embraced in it). By order of a special term panel of this court, we previously found that, although the property has been taken and construction has begun, appellate review is not precluded. See County of Blue Earth v. Stauffenberg, 264 N.W.2d 647, 649-650 (Minn. 1978) (stating appellate court could order property which had been condemned and improved by condemning authority returned to original order); In re Rapp, 621 N.W.2d 781, 784 (Minn.App. 2001) (stating that although land has been condemned and a highway constructed across it, the property owner from whom the property was condemned still has relief in the form of the return of his or her property). Thus, despite Baillon's failure to obtain a stay, the matter is not dismissable as moot. See Housing Redev. Auth. v. Walser Auto Sales, Inc., ___ N.W.2d ___ (Minn.App. July 3, 2001) (a condemnee's appeal of the public necessity for the taking is not rendered moot simply because the condemnor has acquired title under the quick-take statute).
We are persuaded by the record that Baillon received proper and timely notice of the quick-take petition; that the district court held the requisite hearing and did not in any way prevent Baillon from presenting evidence at that hearing; that Baillon was not entitled to a second hearing; that the taking properly serves a public purpose; and that the port authority was not acting as the city's agent in the taking.