Opinion ID: 2122123
Heading Depth: 2
Heading Rank: 2

Heading: Purpose of the Ordinance

Text: Pawn America also argues that the interim ordinance was invalid because, according to Pawn America, the City did not adopt the ordinance for the purpose of protecting the planning process and the health, safety and welfare of its citizens. See Minn.Stat. § 462.355, subd. 4(a). Pawn America contends that the sole purpose of the interim ordinance was to prevent Pawn America from obtaining a pawnbroker license, and that this is evidenced by numerous events, including the City's delay in processing the application and the City's efforts to make the effective date of the ordinance as early as possible. [9] Pawn America cites Almquist v. Town of Marshan, 308 Minn. 52, 64, 245 N.W.2d 819, 826 (1976), for the proposition that in order for the interim ordinance to be valid, the City was required to enact the ordinance in good faith and without discrimination, but did not do so here. We have not previously addressed the standard of review for analyzing the validity of an interim ordinance. Our decision in Almquist predates statutory authority for municipalities to adopt interim ordinances. Nevertheless, in Almquist we held that even without a statutory grant of authority, where a municipality enacts in good faith and without discrimination, a moratorium on development which is of limited duration, is valid if upon enactment, the study proceeds promptly and appropriate zoning ordinances are expeditiously adopted when it is completed. 308 Minn. at 65, 245 N.W.2d at 826. The same day that Almquist was decided, April 2, 1976, the Legislature enacted the first version of Minn.Stat. § 462.355, subd. 4(a), granting municipalities statutory authority to adopt interim ordinances. See Act of Apr. 2, 1976, ch. 127, § 21, 1976 Minn. Laws 304 (codified at Minn.Stat. § 462.355, subd. 4(a)). The statute, as enacted in 1976, see id., and in its current version, see Minn.Stat. § 462.355, subd. 4(a), does not contain an express reference to a good-faith or non-discrimination requirement. But Minn.Stat. § 462.355, subd. 4(a), does require that the interim ordinance be adopted for the purpose of protecting the planning process and the health, safety and welfare of its citizens. Implicit in the statutory language is a requirement that a municipality not act unreasonably, arbitrarily, or capriciously because the ordinance must be legitimately tied to the planning process and public health, safety, and welfare. In this sense, the statutory language arguably embodies the Almquist good-faith requirement. [10] See Minn.Stat. § 462.355, subd. 4(a); Almquist, 308 Minn. at 62, 63, 245 N.W.2d at 825 (conducting a good-faith analysis by determining whether the moratorium was arbitrary, capricious, or unreasonable). Although we have not previously reviewed the vitality of Almquist or interpreted Minn.Stat. § 462.355, subd. 4(a), the court of appeals has concluded that Almquist has continued applicability and the statute precludes arbitrary or capricious conduct. See, e.g., Duncanson v. Bd. of Supervisors of Danville Twp., 551 N.W.2d 248, 250 (Minn.App.1996) (A moratorium will be upheld unless it is determined that a zoning authority acted arbitrarily in adopting it.), rev. denied (Minn. Sept. 20, 1996); Medical Servs., Inc. v. City of Savage, 487 N.W.2d 263, 267 (Minn.App.1992) (A municipality may not arbitrarily enact an interim moratorium ordinance to delay or prevent a single project.). This approach comports with our statement in Honn v. City of Coon Rapids, 313 N.W.2d 409, 417 (Minn.1981), where we said that in reviewing a zoning authority's actions, the standard is whether the action has a reasonable basis, or is unreasonable, arbitrary, or capricious. [11] Reading the requirement in Minn.Stat. § 462.355, subd. 4(a), that a city must enact an interim ordinance for the purpose of protecting the planning process and the health, safety and welfare of the city's citizens in light of our prior case law, we review the validity of an interim ordinance by determining whether the ordinance is reasonably related to the planning process and the public health, safety, and welfare, or whether it is unreasonable, arbitrary, or capricious. The thrust of Pawn America's argument is that the City acted arbitrarily and impermissibly by aiming its actions only at Pawn America. Pawn America relies heavily upon the court of appeals' decision in Medical Services, Inc. v. City of Savage, 487 N.W.2d 263, 267 (Minn.App.1992), where the court, citing Almquist , stated that [a] municipality may not arbitrarily enact an interim moratorium ordinance to delay or prevent a single project, and struck down an interim ordinance as arbitrary. The court of appeals opinion in Medical Services , however, besides only having persuasive authority, is distinguishable. Unlike the city council in Medical Services , which delayed in acting for nearly two years before enacting an interim moratorium ordinance, id. at 267, the city council here only became aware of Pawn America's plans in late September 2007. [12] At the October 1 meeting, the city council authorized a zoning study of pawnshops and passed the interim ordinance. In further contrast to Medical Services , see id., neither the interim ordinance nor the zoning study was part of a litigation strategy here because Pawn America had not yet brought an action against the City. The City does not deny that Pawn America's plan to open a pawnshop prompted the adoption of the interim ordinance. But awareness of one particular application does not, in itself, make the City's actions arbitrary or unreasonable. See Duncanson, 551 N.W.2d at 252 ([T]he good faith effort demonstrated here to plan for orderly development ... must ... defeat any objection that this ordinance is directed at a single project.). The City had not previously conducted a zoning study of pawnshops in order to analyze the land use impact of pawnshops and to determine if the City should place additional restrictions on opening pawnshops. [13] A review of the October 1 city council minutes reveals the city council's concern about pawnshops in general and the council's consensus that there should be a moratorium on opening new pawnshops in the entire City, not just on the property at issue, until further study could be done and long-term decisions made concerning limitations on the number of pawnshops, limitations on the sale of firearms, and the location of pawnshops. Based on the wording of the interim ordinance itself, it appears that the City sought to make informed decisions for the long-term welfare of the City and wanted sufficient time to deliberate. The interim ordinance, which was in effect for only four months, stated: There are substantial concerns that the current City zoning ordinance provisions relating to pawnshops do not adequately address issues relating to pawnshops, such as the appropriate locations and the conditions under which they may be allowed within the City, including compatibility with existing uses in the area. There are also concerns about the land use impacts of the combination of pawnshop uses with other uses at the same location such as a secondhand goods store, precious metal dealer, and banking and/or lending type uses. As a result of the important land use and zoning issues cited above, the City Planning staff will conduct studies for the purpose of consideration of possible amendments to the City's official controls to address the issues concerning pawnshops. The City finds that this Interim Ordinance must be adopted to protect the planning process and the health, safety and welfare of the citizens. Further, the City did in fact complete the study on December 5, 2007, and adopted a permanent ordinance on February 4, 2008, based on that study. These facts support the conclusion that the City was not acting arbitrarily. See Almquist, 308 Minn. at 65, 245 N.W.2d at 826 (placing importance on whether the study proceeds promptly and appropriate zoning ordinances are expeditiously adopted when it is completed). If we were to view the City's preservation of the status quo pending further study as constituting unreasonable, arbitrary, or capricious action, any city's use of Minn.Stat. § 462.355, subd. 4(a), would be presumptively questionable. At the same time, there is little doubt that there was hostility about locating a pawnshop at Pawn America's proposed site. And there is no doubt that the City also intended the interim moratorium to apply to Pawn America. In fact, prompted by Pawn America's application for a pawnbroker license and attempt to open a pawnshop at the property, the City took specific measures to ensure that the interim ordinance became effective as soon as possible. Nevertheless, nothing in the statute precluded the City from adopting the interim ordinance when the City knew that the ordinance would affect only one particular entityPawn Americaand further, nothing in the statute prevented the City from adopting the interim ordinance in an effort to preserve the status quo in response to Pawn America's pending application. Had the City enacted the interim ordinance and adopted a permanent ordinance without conducting a study, a different result might very well obtain. We conclude that the interim ordinance here was not unreasonable, arbitrary, or capricious, even though one of the purposes of the interim ordinance appears to have been to temporarily prevent Pawn America from operating a pawnshop at the property. Although the Pawn America application undoubtedly prompted the City's concern about pawnshops and the City took steps to preserve the status quo, the record indicates that the City adopted the interim moratorium ordinance not merely because of Pawn America, but to protect the City's planning process with respect to pawnshops in the City in general, and to examine the impact of pawnshops on the health, safety, and welfare of its citizens. [14] The City promptly proceeded with a study, and enacted a permanent ordinance based on the findings of that study. Because of this broader purpose of protecting the planning process and the health, safety and welfare of its citizens, the City's actions were not unreasonable, arbitrary, or capricious, and the interim ordinance was valid. Because we conclude that the City's interim moratorium ordinance was validly enacted, thereby placing a moratorium on the issuance of pawnbroker licenses, and under the current ordinance Pawn America does not meet the conditions for a pawnbroker license at the requested location, we hold that the district court did not err in concluding that the City is not required to issue a pawnbroker license to Pawn America. Affirmed. STRAS, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.