Title: CITY OF HELENA v DeWOLF

State: montana

Issuer: Montana Supreme Court

Document:

No. 12333 I N T H E S U P R E M E C O U R T O F THE STATE O F M O N T A N A 19 73 CITY O F HELENA, M O N T A N A , a municipal corporation, P l a i n t i f f and Respondent, ANNA MAE DeWOLF, et a l . , Defendants and Appellants. Appeal from: D i s t r i c t Court of t h e F i r s t J u d i c i a l D i s t r i c t , Honorable Peter G. Meloy, Judge presiding. Counsel of Record: For Appellants : Gough, Booth, Shanahan and Johnson, Helena, Montana Ronald F. Waterman argued, Helena, Montana Edward Booth appeared, Helena, Montana For Respondent : Keller, Reynolds and Drake, Helena, Montana Keith Keller argued, Helena, Montana C. W. Leaphart argued, Helena, Montana Submitted: March 5, 1973 Decided : #AR 2 7 1973 Filed: MRR 2 7 i973 Mr, Justice Wesley Castles delivered the Opinion of the Court. This is an appeal from a preliminary order of condemna- tion. P l a i n t i f f c i t y of Helena brought t h i s action seeking t o condemn and take by eminent domain defendants ' property located i n the c i t y of Helena. The t r i a l court held a hearing on neces- s i t y and entered i t s preliminary order of condemnation. After exceptions were overruled, defendants appealed. Defendants a r e owners of property consisting of some four l o t s or about 9,000 square f e e t , on which the Union Market operates and f i v e s t o r e s a r e rented, The property fronts on Sixth Avenue. To the west and extending south l i e s Jackson S t r e e t , t o the north and extending north i s Allen Street. The e a s t and south sides a r e parking l o t s , and across Jackson S t r e e t t o the west i s a build- ing housing the S t a t e Nursery Company. I n 1967 the downtown area of the c i t y of Helena was sur- veyed f o r a proposed Urban Renewal project pursuant t o 42 U,S,C.A. $ 5 1450 et.seq. Thereafter the planning process of the project began, That stage lasted eighteen months and on April 30, 1970, the plan f o r the Urban Renewal area was submitted t o the federal government and approved. Funding was received i n July 1970. B y March 1972, approximately 90% of the land within the Urban Renewal area had been acquired and 45% of the buildings acquired had been demolished. Defendants' property i s within the confines of the Urban Renewal area a t i t s northernmost boundary. The c i t y attempted t o negotiate a purchase of defendants' property without success. It then authorized condemnation proceedings. The proposed development plan shows defendants' property i s t o be crossed a t the northeast corner by the "new" Jackson Street. The remainder of the property i s t o be used f o r surface parking, yielding about t h i r t y parking s t a l l s . Simply s t a t e d , the purpose of the Last Chance Urban Renewal plan i s t o r e v i t a l i z e t h e whole downtown area of the c i t y of Helena to make it attractive for commercial redevelopment. The development and proposed new construction is a relatively large project and involves downtown Helena from Sixth Avenue south up historic "Last Chance ~ulch". At the date of the hearing in the district court the project had expended some $5,000,000 out of $9,300,000 provided, These monies have been expended and will be expended for acquisition of properties and public improvements, such as streets, sidewalks, curbs, gutters, and storm sewers. Other projects include elderly housing and a neighborhood facility building. So far, one new hotel has been constructed with private funds, The Urban Renewal agency does not itself rebuild structures. It has no funds available for rehabilitation except in certain limited classes of historic restoration and for planning grants. The Urban Renewal agency's function is to make an area attractive far private development. It performs this by consolidating land ownership, installing public improvements such as streets, sewers and curbs, and demolishing existing structures on an area basis. The basic concept of the plan is a "shopping center" in which vehicles are separated from pedestrians. The business area would be surrounded by public streets with parking adjacent to them. The commercial area itself is located between the surround- ing streets and parking areas. The shopping center analogy is descriptive in a sense. However, its development is somewhat reverse; that is, parking and streets come before business in the plan. Business, dependent entirely on private enterprise, may or may not come at all. In the overall plan the area is not being all taken nor all cleared. The properties taken are on a selective basis, the witnesses giving reasons for the taking. Some of the property was being preserved for architectural and historical significance. Some properties were shown as to rehabilitation projects. Some dilapidated properties were being kept for his- torical purposes. In other words, within the area, considerable picking and choosing was made for properties to be acquired. ~ e f e n d a n t s ' property was inspected and found t o be lacking i n meeting what were c a l l e d "code standards" i n some respects; but the record i s c l e a r , and the t r i a l court found, t h a t the neces- sary improvements could and would be made except f o r t h i s l i t i g a - tion. Accordingly, we a r e not here concerned so f a r a s defendants' property goes with substandard o r "blighted" property. W e a r e , however, concerned with a blighted area. Defendants s t a t e two issues on appeal. (1) Whether the d i s t r i c t court erred i n r u l i n g t h a t the condemnor had established I I necessity" f o r the take, and (2) whether the court erred i n ruling t h a t defendants f a i l e d t o e s t a b l i s h a r b i t r a r y and capri- cious action and abuse of discretion i n the c i t y ' s attempt t o take the property, W e approach our discussion by conceding, a s both p a r t i e s do, t h a t Urban Renewal and the proposed s t r e e t and parking i m - provements contemplated on defendants ' land a r e f o r public use.. Our a t t e n t i o n is narrowed t o whether the taking of the land i s necessary, and i n conjunction with t h a t , whether the proposed taking i s done with the l e a s t private injury, The t r i a l court found s p e c i f i c a l l y t h a t "the public i m - provements and use t o be made by P l a i n t i f f [ c i t y ] across and through Defendants' said land a r e located i n the manner which a r e most compatible with the greatest public good and the l e a s t private injury". Section 11-3902, R.C.M. 1947, expresses the l e g i s l a t i v e concern with the existence of deteriorated areas i n c i t i e s . It provides : "It i s hereby found and declared t h a t blighted areas which c o n s t i t u t e a serious and growing menace, injurious t o the public health, safety, morals and welfare of the residents of the s t a t e e x i s t i n municipalities of the s t a t e ; t h a t the existence of such areas contributes substantially and increasingly t o the spread of disease and crime and depreciation of property values, con- s t i t u t e s an economic and s o c i a l l i a b i l i t y , sub- s t a n t i a l l y impairs o r a r r e s t s the sound growth of municipalities, r e t a r d s the provisions of housing accommodations, aggravates t r a f f i c problems and substantially impairs o r a r r e s t s the elimina- t i o n of t r a f f i c hazards and the improvement of t r a f f i c f a c i l i t i e s ; and t h a t the prevention and elimination of such areas i s a matter of s t a t e policy and s t a t e concern i n order t h a t the s t a t e and i t s municipalities s h a l l not continue t o be endangered by areas which a r e focal centers of disease, promote juvenile delinquency, a r e con- ducive t o f i r e s , a r e d i f f i c u l t t o police and t o provide police protection f o r , and, while con- t r i b u t i n g l i t t l e t o the t a x income of the s t a t e and i t s municipalities, consume an excessive proportion of its revenues because of the e x t r a services required f o r police, f i r e , accident, hospitalization and other forms of public pro- tection, services and f a c i l i t i e s . "It i s further found and declared t h a t c e r t a i n of such areas, o r portions thereof,may require acquisition, clearance, and disposition subject t o use r e s t r i c t i o n s , a s provided i n t h i s a c t , since the prevailing condition of decay may make impracticable the reclamation of the area by r e h a b i l i t a t i o n ; t h a t other areas o r portions thereof may, through the meansprovided i n t h i s a c t , be susceptible of r e h a b i l i t a t i o n i n such a manner t h a t the conditions and e v i l s hereinabove enumerated may be eliminated, remedied or pre- vented: and t h a t t o the extent f e a s i b l e salvable m h t e d areas should be r e h a b i l i t a t e d through voluntary action and the regulatory process, "It i s f u r t h e r found and declared t h a t the powers conferred by t h i s a c t a r e f o r public uses and purposes f o r which public money may be expended and the power of eminent domain exercised; and t h a t the necessity i n the public i n t e r e s t f o r the pro- visions herein enacted is hereby declared a s a matter of l e g i s l a t i v e determination," (Emphasis added). Section 11-3908, R.C.M. 1947, gives municipalities the r i g h t of eminent domain f o r Urban Renewal purposes. It provides i n p a r t : "A municipality s h a l l have the r i g h t t o acquire by condemnation, any i n t e r e s t i n r e a l property, which it may deem necessary f o r an urban renewal project under t h i s a c t a f t e r the adoption by the l o c a l governing body of a resolution declaring t h a t the acquisition of the r e a l property described therein i s necessary f o r such purpose. Condemna- tion f o r urban renewal of blighted areas i s declared t o be a public use, and property already devoted t o any other public use o r acquired by the owner o r h i s predecessor i n i n t e r e s t by eminent domain may be condemned f o r the purposes of t h i s act." A t t h i s point, we s h a l l digress somewhat. The power of eminent domain expressed above i n section 11-3908, R,.C.M. 1947, r e f e r s s p e c i f i c a l l y t o t h i s urban renewal project. Yet, the c i t y , i n i t s b r i e f , suggests and urges t h a t section 11-977, R.C.M, 1947, the power of condemnation s t a t u t e last amended i n 1937 and applying generally t o c i t y and town councils, provides f o r a 'lconclusive presumption a s t o the necessity of taking". The c i t y reasons t h a t once i t passes i t s ordinance declaring condemnation f o r urban renewal of blighted areas, the public use and the necessity a r e conclusively presumed; not under section 11-3908, but r a t h e r under section 11-977. The answer i s r e l a - t i v e l y simple. 1 I The c i t y ' s only authority t o condemn on an area" b a s i s i s section 11-3908, R.C.M. 1947. It could not otherwise condemn f o r parking l o t purposes under section 11-977, R.C.M, 1947. I n section 11-3908 it i s further provided t h a t c e r t a i n types of evidence a r e admissible during a condemnation hearing, Had t h e l e g i s l a t u r e intended the urban renewal's determination of necessity t o be f i n a l , it would have been unnecessary t o there- a f t e r declare what evidence wou1.d be admissible a t a hearing on necessity. It a l s o contemplated t h a t eminent domain wou1.d be exercised under the eminent domain s t a t u t e s , s e c t i o n s 93-9901, e t seq., R.C,M. 1947, Under section 93-9905, the l e a s t private injury must be considered, a t l e a s t i n t h e context of the Urban Renewal plan. The Urban Renewal sections heretofore quoted provide not only f o r clearance of blighted property but go on t o favor re- h a b i l i t a t i o n of areas o r portions thereof. Further, those sec- tions indicate t h a t redevelopment i s proper only when reclama- t i o n of an area by r e h a b i l i t a t i o n i s impractical, Thus, the c i t y ' s contention of a conclusive presumption i s not sound. Returning now t o our discussion of the record a s i t per- t a i n s t o the finding of necessity and l e a s t private injury. Both sides concede the general use f o r Urban Renewal purposes i s es- tablished, but the necessity of the p a r t i c u l a r use, t h a t of parking, i s challenged. The testimony concerning the need for parking was supplied by an engineer who had made a study and projected his study' into the future, - if the planned development does occur. His testimony established that -- unless all of the buildings were built and completely occupied, the need for the 31 parking spaces which defendants' property would yield would not exist. It is also clear from the testimony that no one can say whether redevelop- ment will occur. No public funding is available for redevelop- men t . The city argues that even though many of the public im- provements contemplated and under construction are not necessary if no redevelopment occurs; conversely, it is certain that no redevelopment can occur unless those public improvements are made. That is to say, that necessarily the plan's consummation is a long term proposition. Defendants stress these matters: First, "no one" can testify as to the extent of redevelopment. Second, the particular parking area or structure planned for the area to be condemned is not presently funded; that is, it is only a plan for the future, Third, if redevelopment does not occur, may of the public im- provements will not be needed. In this connection, defendants pessimistically forecast a dismal future for downtown Helena. In their brief, they refer to it as a "planner's dream expressed in architectural drawings". However, the city urges that the broad scope of the legis- lation partially quoted heretofore, and the entire urban renewal concept necessarily envisions positive, imaginative, and optimis- tic planning for the future. This Court has determined necessity questions in a number of cases, mostly related to highway condemnations, In only one case has the Court specifically directed its attention to the necessity of use as distinguished from the general purpose, In State Highway Comm'n v. Yost Farm Co,, 142 Mont. 239, 384 P,2d 277, the highway commission proposed to build a frontage road along an i n t e r s t a t e highway. A t the necessity hearing the com- mission introduced i t s resolution authorizing condemnation and rested i t s case, The property owner introduced evidence of ex- p e r t s who t e s t i f i e d t h e frontage road was unnecessary and t h a t the area was adequately served by other roadways, O n the b a s i s of t h i s evidence and lack of any evidence i n favor of construction of the road, the Court denied necessity. I n the i n s t a n t case, the c i t y did not r e s t i t s case s o l e l y on the introduction of i t s resolution authorizing condemnation. Instead it introduced considerable evidence, both o r a l and documentary, i n support of i t s Urban Renewal plan and the specific uses t o be made of defendants' property. M r . Greer, the former Urban Renewal d i r e c t o r , t e s t i f i e d a s t o the general purposes and o u t l i n e of the plan and the uses t o be made of defendants' property. That the area encompassed i n the project was a "blighted area"; some 89% of the buildings were "deficient"; while 39% were found t o be "sub-standard", M r . Dailey, an expert t r a f f i c engineer, t e s t i f i e d a s t o t r a f f i c and parking and h i s reasons therefor. M r , ~ a i l e y ' s testimony a s t o parking requirements was, other than the maps, the only evidence a s t o parking requirements, After discussing short-term and long-term parking requirements i n terms of l e s s than 2 1/2 hours and more than 2 1/2 hours, he a l s o established a distance of some 250 f e e t a parker would t r a v e l from short term parking. H e discussed the parking needs i n the area of defendantsf property i n terms of square f e e t of business a s r e l a t e d t o square f e e t of parking needs a s r e l a t e d t o distance, He discussed these i n terms of surface parking. Another witness, a M r . Cassidy, project d i r e c t o r , dis- cussed further parking studies being made on multi-floored parking structures. W e observe t h a t studying the testimony a s r e l a t e d t o the maps leaves one unimpressed with numbers of parking spaces required. The d i s t r i c t court made no findings of f a c t concerning specific parking requirements; nor, a s we read the record, could it have because there simply was not any c l e a r testimony concerning such requirements, The only b a s i s f o r the d i s t r i c t c o u r t ' s finding g r e a t e s t public good and l e a s t private injury, i f t h a t be a f i n d i n g of f a c t , i s the opinion of Dailey t h a t defendants' property would be necessary t o the project. As r e l a t e d before, t h i s opinion was highly speculative; and did not consider further studies then i n progress. The d i s t r i c t court i n i t s conclusions of law s t a t e d : "The inquiry here i s one of a f a c t determination and i n t h i s capacity t h i s Court is commanded by the Montana Supreme Court t h a t the decision of the City s h a l l not be overturned except on c l e a r and convincing proof t h a t the taking has been excessive o r a r b i t r a r y . Such c l e a r and convincing proof t h a t the taking is excessive or a r b i t r a r y i s not present i n t h i s case, I f Here, we have the c i t y required t o present proof of necessity; b u t , a s shown above, wind up with the property owners having co pr:,~i? by c l e a r and convincing proof af ].ark of neces- s i t y ! Sce df.sc-.ussion herei:=~a£t.er of S t a t e Highway Comrn'n v. Yost Farm Co,, 142 Mont. 239, 384 P.2d 277. But, i n any event, we do not find s u f f i c i e n t credible testimony t o uphold the d i s t r i c t c o u r t ' s findings. The c i t y r e l i e d upon the general r u l e of law concerning Urban Renewal Acts t o t h e e f f e c t t h a t urban renewal is an "area" concept and so long a s the c i t y established the boundaries i t did not have t o prove necessity f o r the taking of individual proper- t i e s . The c i t y c i t e s Berman v, Parker, 348 U.S. 26, 75 S,Ct. 98, 99 L ed 27; Anno, 44 ALR2d 1414,1416; 45 ALR3d 1054. W e acknow- the ledge the l i t e r a l l y dozens of cases throughout/nation which hold it i s s u f f i c i e n t t h a t the taking as a whole i s reasonably neces- sary t o the clearance of blighted areas and prevention of their recurrence. See: Velishka v, City of Nashua, 99 N.H, 161, 106 A.2d 571. However, where it i s shown, a s here, t h a t the property i s not reasonably necessary t o t h e clearance of the blighted area and prevention of i t s recurrence, the "area concept" does not prevail, This brings us t o the issue here---whether the taking was reasonably necessary t o the clearance of blighted areas and prevention of their recurrence, i n particular under a s t a t u t e which contemplates rehabilitation where practical. The d i s t r i c t court found that it was necessary and did the least private injury. Did the d i s t r i c t court abuse i t s discretion? O r , put another way, is the credible evidence sufficient t o uphold the findings Defendants1 property stands a t the extreme edge of the project. It can be eliminated from the project without harming the balance of the project, The Urban Renewal plan can be amended for that purpose. The testimony of a l l witnesses admits t h i s . M r . Nesbit, c i t y construction engineer, was asked whether new Jackson Street could be moved ten feet east, thus avoiding defendants ' property "without greatly interfering with the overall project", H e answered that t h i s was so, Then on further ques- tioning, he explained it would not interfere with the with the I I renewal area" but would slightly interfere with alignment of new Jackson north across Sixth Avenue and and Allen Street, but that Allen Street was not a major feeder street. H e concluded that moving N e w Jackson Street ten feet east would not a l t e r the effectiveness of the s t r e e t i n serving the area. The "need" for defendants' property was for a parking area, Clete Dailey, the t r a f f i c engineer who made a study for the Urban 11 Renewal plan, provided the testimony for the need" as a parking area. Dailey made h i s own study and relied on other studies and forecast the need for parking. H e agreed that i f any of the structures shown on the projected land use map were not completed, the tDtal demand for parking would be reduced, H e also agreed that even i f the proposed structures were b u i l t , they would have t o be fully occupied. It i s clear from Dailey's testimony that need for the parking t o be supplied when defendants' property becomes available is not a present need nor a need i n the reason- ably foreseeable future, The need w i l l only a r i s e i f and when the area i s fully redeveloped. -- Thus, the concept of necessity f o r a public use i s a possi.ble future necessity, I t s present application i s only i n a "planning1' sense and a s t e p towards fulfillment of the long range plan. I t i s c r y s t a l c l e a r t h a t defendants' property is sought now t o await money, motivation, and hopes of the planners. Defendants' position i s simply t h a t the c i t y f a i l e d t o show a reasonable need with the a c t u a l , o r even reasonably foreseeable, a b i l i t y t o complete the project f o r which the property i s needed. There a r e numerous cases i n Montana involving the i s s u e of necessity. A recent review of the e n t i r e subject of eminent domain i s found i n Montana Power Co. v. Bokma, 153 Mont. 390, 397,399, 457 P.2d 769. There i t w a s stated: I I Before the d i s t r i c t court may order condemnation, it must find t h a t the proposed taking i s necessary t o the public use under the circumstances of the individual case. Sections 93-9905, 93-9911, R.C.M. 1947, The question of necessity i s one of f a c t t o be determined a s other questions of f a c t i n the l i g h t of a11 the evidence. S t a t e ex r e l . Livingston v , D i s t r i c t Court, 90 Mont. 191, 300 P, 916. Necessity does not mean absolute o r indispensable necessity but reasonable, r e q u i s i t e , and proper f o r the accom- plishment of the end i n view, under the p a r t i c u l a r _c$rcumstances of the case. S t a t e Highway Comm, v, Yost Farm Co,, 142 Mont. 239, 384 P.2d 277; Butte, A , & P. Ry, Co, v. Montana U.Ry. Co., supra. h he taking of private property by condemnation proceedings must be compatible with the g r e a t e s t public good and t h e l e a s t private injury. Section 93-9906, R.C,M. 1947. This requirement i s specifi- c a l l y made applicable t o easements and rights-of-way. Section 93-928 5),, R.C.M. 1947. The greatest good on the one han 3) tne least injury on the other a r e questions of f a c t t o be determined i n passing upon the question of necessity. State ex r e l . Livingston v. D i s t r i c t Court, supra, quoted with approval i n State Highway C o m m . v. Yost Farm Co., supra. These questions commonly a r i s e i n connection with the location of the proposed improvement. Since the condemnor has the expertise and detailed knowledge of considerations involved i n determining location of t h e improvement, i t s choice of location i s given great weight. See S t a t e ex r e l . Bloomington Land & Live Stock Co. v. District Court, 34 Mont. 535, 88 P. 44; State ex r e l , 1,ivingston v. D i s t r i c t Court, supra. Such choice w i l l not be overturned except on c l e a r and convincing proof t h a t the taking has been excessive o r a r b i t r a r y , it not being the function of the j u r i d i c i a r y t o determine a s an engineer the b e s t location of the proposed improvement. S t a t e Highway Comm. v. Crossen-Nissen Co., 145 Mont. 251, 400 P.2d 283. O n the other hand when the condemnor f a i l s t o consider the ques- t i o n of the l e a s t private injury between a l t e r - nate routes equal i n terms of public good, i t s action i s a r b i t r a r y and amounts t o an abuse of discretion. State Highway Comm. v. Danielsen, 146 Mont, 539, 409 P.2d 443." (Emphasis added), The burden of demonstrating necessity r e s t s upon the con- demnor who must e s t a b l i s h a prima f a c i e case t o j u s t i f y the taking, State Highway ~omm'n v. Yost Farm Co., 142 Mont. 239, 384 P.2d 277. In State Highway Comm'n v. Crossen-Nissen Co., 145 Mont. 251, 254, 400 P.2d 283, the Court stated: I I The requirement t h a t the condemnor must show necessity f o r the property taken does not mean t h a t i t must be indispensable t o the proposed project. Rather the word 'necessary' a s used i n section 93-9905 means t h a t the p a r t i c u l a r property taken be reasonably r e q u i s i t e and proper f o r the accomplishment of the purpose f o r which it is sought under the peculiar circumstances of each case. I ' It is against t h i s measure t h a t the present case must be tested, Each decision c i t e d above notes t h a t necessity must be determined by ascertaining whether the property i s reasonably needed f o r the accomplishment of the end i n view. Involved here i s not j u s t the alleged need f o r parking spaces on defendants' property, but the e n t i r e development of the Urban Renewal area. While the evidence established t h a t the parking w i l l be needed t o serve the Urban Renewal project, it establishes a l s o t h a t the p r o j e c t parking w i l l be required only i f the e n t i r e Urban Renewal project i s completed. That was M r . Dailey's testimony. He based h i s conclusions of the amount of parking needed upon the assumption t h a t a l l of the projects on the Urban Renewal land use map would be b u i l t and f i l l e d with the number of tenants projected by the Urban Renewal department. Clearly, the necessity f o r parking must be measured against the reasonable probability of the success of the Urban Renewal development. The parking need i s completely interwoven with the redevelopment of downtown Helena, This case i s exceptional f o r the reason t h a t t o e s t a b l i s h reasonable necessity the c i t y of Helena must show not only the amount of parking needed, but a l s o the probability t h a t the structures which the parking is designed t o serve w i l l be con- structed, Otherwise, the only limitation upon the amount of property t h a t could be acquired f o r Urban Renewal parking projects i s the a r c h i t e c t ' s imagination. W e conclude t h a t "necessity" must be shown a s a reasonable need with foreseeable a b i l i t y t o complete. Under the f a c t s of t h i s case we do not find a showing of reasonably foreseeable a b i l i t y t o complete. Defendants' going business would be des- troyed, the property acquired, and simply held f o r t h a t i n d e f i n i t e future when i t j u s t might be needed. It i s not then reasonably necessary t o the clearance of the blighted area and prevention of i t s recurrence. Under t h i s reasoning, the d i s t r i c t court did not have substantial credible evidence t o support i t s findings and p a r t i c u l a r l y i t s conclusion of law t h a t the taking was neces- sary. Accordingly, the preliminary order of condemnation i s reversed. ~ s s o c i & J u s t i c e ------- Judge, s i t t i n g f o r Associate J u s t i c e John Conway Harrison, M r . J u s t i c e Frank I. Haswell specially concurring: I concur i n the r e s u l t . Associate J u s t i c e