Opinion ID: 2122942
Heading Depth: 3
Heading Rank: 5

Heading: Does the Redevelopment Plan Prohibit the EDA from Condemning the Property Owners' Property?

Text: We next consider the content of Resolution 01-63specifically, the provisions of the Redevelopment Plan and TIF Planto determine what limitations were placed on the EDA's authority to acquire property. As we begin our analysis of the Redevelopment Plan and the TIF Plan, we note that the Plans are poorly drafted. In particular, the imprecise language of the Redevelopment Plan, especially the language of Subsection 1-8, makes interpretation of Subsection 1-8 challenging. The challenge we face here brings to mind the frustration expressed by one of the most esteemed jurists ever to sit on this courtJustice William Mitchellin an opinion written over 125 years ago. Justice Mitchell and the court on which he sat faced the challenge of dealing with a statute that contained very imperfect and very obscure provisions. See Pamperin v. Scanlan, 28 Minn. 345, 347, 9 N.W. 868, 869 (1881). Justice Mitchell, when presented with the challenge of interpreting this poorly drafted statute regulating the redemption of mortgages premises after foreclosure, said: The provisions of this statute are so very imperfect and in some respects so very obscure, that the task of construing them is one of great difficulty. Indeed, we do not think it possible to place a construction upon some of the provisions of this statute that will not be subject to grave objections and result in some serious practical difficulties. When called upon to construe so imperfect a statute, the best course for a court to pursue is to consider its general aim or purpose, and the plan adopted to carry that purpose into effect, and then adopt the construction that will in practice most nearly accomplish the object intended. Id. at 347-48, 9 N.W. at 869. In the case before us, we will heed the advice of Justice Mitchell when faced with the difficult task of interpreting an imperfectly drafted resolution. We will sort through Resolution 01-63's language and pursue the best course available which is to consider its general aim or purpose and adopt a construction that will in practice most nearly accomplish the object intended. See id. at 348, 9 N.W. at 869. Subsection 1-8 of the Redevelopment Plan, which was incorporated into Resolution 01-63, is titled Proposed Reuse of Property, and states in full: The Redevelopment Plan contemplates that the City may acquire property and reconvey the same to another entity. Prior to formal consideration of the acquisition of any property, the City will require the execution of a binding development agreement with respect thereto and evidence that Tax Increments or other funds will be available to repay the Public Costs associated with the proposed acquisition. It is the intent of the City to negotiate the acquisition of property whenever possible. Appropriate restrictions regarding the reuse and redevelopment of property shall be incorporated into any development agreement to which the City is a party. The parties disagree as to which entities Subsection 1-8 applies and as to what type of transaction it restricts. The property owners argue that Subsection 1-8 applies to the EDA even though the subsection does not explicitly name the EDA. Additionally, they argue that Subsection 1-8 requires a binding development agreement before the EDA considers acquiring any property for any reason. The EDA responds to this argument by asserting that Subsection 1-8 limits only the City's power to acquire property, not the EDA's power to acquire property. Alternatively, the EDA argues that Subsection 1-8 does not limit the City's or the EDA's powers to acquire property in furtherance of the Redevelopment Project, except in instances of reuse of property. In this alternative argument, the EDA asserts that when Subsection 1-8 is read in light of other provisions of the Redevelopment Plan and the TIF Plan, it plainly applies only to instances where a developer has taken the lead in acquiring property, and the EDA acquires the property with intent to convey the property to that specific developer. Whenever possible, a statute should be interpreted to give effect to all of its provisions. Am. Family Ins. Group v. Schroedl, 616 N.W.2d 273, 277 (Minn. 2000) ([N]o word, phrase, or sentence should be deemed superfluous, void, or insignificant. (citation omitted) (internal quotation marks omitted)). We must read and construe a statute as a whole and must interpret each section in light of the surrounding sections to avoid conflicting interpretations. Id. We have also said that courts should construe a statute to avoid absurd results. Id. at 278. Rules of statutory construction are applicable to the construction of municipal ordinances and resolutions. E.g., Smith v. Barry, 219 Minn. 182, 187, 17 N.W.2d 324, 327 (1944).
The first question we must address with respect to Subsection 1-8 is whether the word City, as used in the Redevelopment Plan, is distinct from the EDA or includes the EDA. Our attempt to define the word City as used in the Redevelopment Plan will illustrate the problems created by the poor drafting of the Plan. The EDA points out that City is defined in the Redevelopment Plan to mean the City of Eagan, and argues that the word City does not include the EDA because an economic development authority is a political subdivision of the state and is a separate entity from a city or a city council. See Minn.Stat. § 469.091, subd. 2. We acknowledge that the EDA is a political subdivision of the state with the right to sue and be sued in its own name. See Minn.Stat. § 469.091, subd. 2. (An economic development authority is a public body corporate and politic and a political subdivision of the state with the right to sue and be sued in its own name.). But the usage of the word City in the Redevelopment Plan is inconsistent because it appears the word sometimes means the City alone and other times includes the City Council and the EDA, the entities that act on its behalf. In several provisions of the Redevelopment Plan, interpreting the word City to include the EDA is necessary for the Redevelopment Plan to make sense. In Subsection 1-2, for example, the Redevelopment Plan provides that [t]he Enabling Act authorizes the City, upon certain public purpose findings by the City, to establish and designate development and redevelopment projects. The Enabling Act is specifically defined in Subsection 1-1 of the Redevelopment Plan as Minn.Stat. §§ 469.090-.1081 and 469.001-.047. These statutory sections apply to economic development authorities and housing and redevelopment authorities; they authorize an economic development authority to establish and designate redevelopment projects. See Minn.Stat. §§ 469.027, 469.101. Accordingly, it appears that Subsection 1-2 makes sense only if we read City as including the EDA. In another instance directly relevant to the issue in this case, Subsection 1-8 appears to make more sense if the word City includes the EDA. Subsection 1-8 states that [t]he Redevelopment Plan contemplates that the City may acquire property and reconvey the same. The City acts through entities like the EDA and City Council and can acquire property only through such entities. If the word City as used in the Redevelopment Plan does not refer to the entities that act for the City, the directions and restrictions in the Redevelopment Plan would have little significance as they would not instruct or restrict the actions of any entity. We also see little merit in the EDA's argument that Subdivision 1-8 intentionally names only the City because the drafters intended to limit the City Council's actions made on the City's behalf but not the EDA's actions. The drafters differentiated between the City Council and the City in the Redevelopment Plan. [5] While EDA is not mentioned in the definitions subsection of the Redevelopment Plan, City Council is defined as the City Council of the City of Eagan. And, while the other subsections of the Plan do not mention the EDA, Subdivision 1-10 does refer to the City Council. We conclude that if the drafters wanted to limit the City Council's actions but not the EDA's, it could and would have used the words City Council. Moreover, the EDA has not offered any reasonable rationale for why the drafters would impose the limitation in Subsection 1-8 on the City Council but not the EDA. Additionally, the lack of any consistent reference to the EDA in the Redevelopment Plan supports the conclusion that the word City, as used in the Plan, includes the EDA. The EDA is not defined in the definition subsection of the Redevelopment Plan, nor is it mentioned in other subsections of the Plan. The sole reference in the Redevelopment Plan to the EDA occurs in the definition of Tax Increment Bonds which states any tax increment bonds or notes issued by the EDA or the City to finance the Public Costs. (Emphasis added.) The use of the phrase the EDA or the City suggests the drafters knew how to differentiate between the two terms, a suggestion that supports the EDA's argument that the word City as used in the Redevelopment Plan is distinct from the EDA. But this is the sole reference to the EDA in the entire Redevelopment Plan. While we conclude that the single reference carries some weight, it does not justify a narrow interpretation of the term City. In contrast, the EDA is mentioned throughout the TIF Plan, which is a separate document adopted by Resolution 01-63the same Resolution that adopted the Redevelopment Plan. The TIF Plan consistently uses the phrases the EDA and City or the EDA or City. Given that the Redevelopment Plan and TIF Plan were prepared by the same entity and adopted by both the EDA and the City, the fact that the EDA and City language is used in the TIF Plan could be construed to indicate that the drafters of the two documents knew how to differentiate between the two entities. But, on the other hand, the fact that the two entities are always mentioned together, as if one unit, could suggest that the drafters thought of the two entities essentially as one unit and meant to limit them both. Here, we find the lack of mention of the EDA in the Redevelopment Plan to be puzzling given the EDA's participation in establishing the Cedar Grove Redevelopment Area and the consistent reference to the EDA in the TIF Plan. Without a doubt the language is imprecise, but the best course for us to pursue is to conclude that the lack of reference to the EDA in the Redevelopment Plan, coupled with the fact that the EDA has a central role to play in the Cedar Grove Redevelopment Project, most likely suggests that the drafters of the Plan intended the word City to encompass the EDA. In fact, to conclude otherwise would render the Redevelopment Plan nearly incomprehensible. Therefore, we conclude that the word City in Subsection 1-8 refers to the EDA and applies to the EDA's actions.
Having concluded that the word City as used in the Redevelopment Plan includes the EDA and having previously concluded that the Redevelopment Plan is binding on the EDA, we must now determine precisely to what type of transaction Subsection 1-8 refers in order to determine whether the EDA exceeded its authority in condemning the property owners' property. The EDA argues that Subsection 1-8 applies when the EDA acquires property with the intent to convey the property to a specific developer. The property owners assert that Subsection 1-8 requires the EDA to secure a binding development agreement before it considers acquiring any property for any reason. When read in isolation, the second sentence of Subsection 1-8[p]rior to formal consideration of the acquisition of any property, the City will require the execution of a binding development agreement with respect theretoappears to prohibit formal consideration of acquisition of property by any manner unless there is a binding development agreement in place. This is the interpretation offered by the property owners. But we may not read the second sentence in isolation. Rules of construction require that we read and construe Subsection 1-8 as a whole and interpret it in light of surrounding sections to avoid conflicting interpretations. Cf. Schroedl, 616 N.W.2d at 277. We must therefore consider the other sentences of Subdivision 1-8 and other provisions of the Redevelopment Plan to ascertain the intent of the drafters. Because the TIF Plan was adopted contemporaneously with the Redevelopment Plan by the City Council in a single resolution and both Plans address the Cedar Grove Redevelopment Project, we will consider provisions of the TIF Plan as well. Reading Subsection 1-8 as a whole demonstrates that the binding development agreement requirement does not apply to all instances of property acquisition. The subsection is titled Proposed Reuse of Property. The first sentence of Subsection 1-8 states, The Redevelopment Plan contemplates that the City may acquire property and reconvey the same to another entity. The requirement that a binding development agreement exist [p]rior to formal consideration of the acquisition of any property refers to the type of property acquisition included in the previous sentenceproperty that is acquired so that it can be reconveyed to another entity. Cf. Minn.Stat. § 645.08 (2008) ([G]eneral words are construed to be restricted in their meaning by preceding particular words.). Subsection 1-12 of the Redevelopment Plan, titled Property Acquisition, states that the City may acquire property as the City may deem to be necessary or desirable to assist in the implementation of the Redevelopment Plan. No binding development requirement is included in Subsection 1-12, further demonstrating that the drafters did not intend the binding development requirement to apply to property acquisition generally. If the drafters intended the restriction to apply to property acquisition generally, they could have placed the restriction in Subsection 1-12. [6] We further conclude that Subsection 1-8's application is limited to instances where the EDA acquires property with the intent to convey the property to a specific developer, rather than with the general intent to convey the property to an unknown developer sometime in the future. We reach this conclusion because interpreting Subsection 1-8 to apply to instances where the EDA acquires property with the general intent to eventually convey the property to a developer that is unknown to the EDA at the time of the acquisition would render Subsection 2-4(3) and 2-22 of the TIF Plan meaningless. Subsection 2-4(3) of the TIF Plan provides that [u]pon approval of a developer's plan relating to the project and completion of the necessary legal requirements, the EDA or City may sell to a developer selected properties that they may acquire. If Subsection 1-8 requires the EDA to have a binding development agreement before it acquires property, such a requirement would likely ensure that the EDA approves a developer's plan before it acquired the property. If this were so, Subsection 2-4(3)'s requirement that the EDA approve the developer's plan before it sells the property to that developer would be meaningless. Subsection 2-22 of the TIF Plan states that no more than 25 percent, by acreage, of the property to be acquired in the District as set forth in the Plan shall at any time be owned by the EDA or City as a result of acquisition with the proceeds of bonds ... unless prior to acquisition in excess of 25 percent of the acreage, the EDA or City concluded an agreement for the development or redevelopment of the property acquired. If Subsection 1-8 requires the EDA to have a binding development agreement before it acquires any property it intends to eventually convey to a developer unknown at the time of the acquisition, Subsection 2-22's requirement that the EDA conclude[ ] an agreement for property it acquired by bonds in excess of 25 percent of the TIF District would be meaningless. Under such an interpretation of Subsection 1-8, the EDA would be required to have a development agreement for essentially all of the property it acquires, rather than just the property in excess of 25 percent of the TIF District acquired by bonds, and the restriction in Subsection 2-22 would be unnecessary. [7] When we read and construe Subsection 1-8 as a whole, interpret Subsection 1-8 in light of other subsections of the Redevelopment and TIF Plans, and give effect to all of the subsections, the property owners' claim that Subsection 1-8 requires the EDA to have a binding development agreement before it acquires property for any reason fails. See Schroedl, 616 N.W.2d at 277. Instead, it appears that the drafters intended the binding development agreement requirement to apply in limited situations: when the EDA acquires property with the intent to convey the property to a known developer. Here, it is undisputed that the EDA is not acquiring property owners' property at the behest of a developer. Though the record suggests that the EDA sought to acquire the property owners' property with the intent that it will eventually convey the property to a developer, it did not acquire the property with the intent to convey it to a known developer. Thus, Subsection 1-8 does not require the EDA to have a binding development agreement with a third party before it acquires the property owners' property. Accordingly, we conclude that the EDA did not exceed the scope of its authority when it acquired the property owners' property. We therefore hold that the district court's conclusion that the EDA complied with Resolution 01-63 and the Redevelopment Plan the Resolution incorporates was not erroneous. At this point, one further comment is necessary. In reaching our holding, we do not mean to endorse universally an interpretation of Subsection 1-8 either as a matter of drafting or substantive policy. Our task was to interpret Resolution 01-63 and the Plans it incorporated and to give some rational meaning to all the provisions of the Redevelopment and TIF Plans, a difficult and challenging task given that Subsection 1-8 was imperfectly drafted. We also note that the EDA was responsible for drafting the Plansaccording to the EDA's August 7, 2001 resolution, the EDA caused the [Redevelopment and TIF] Plans to be prepared. Without question, the EDA could have used greater care in drafting the Plans to explain more clearly the limitations it intended to place on its ability to acquire property. Nevertheless, we conclude that Subsection 1-8 of the Redevelopment Plan as drafted does not require a binding development agreement before the EDA acquires property in this instance. Finally, the property owners challenged the district court's quick-take order on other grounds. Because the court of appeals invalidated the quick-take order on the ground that the EDA exceeded the scope of its eminent domain authority, it did not address the property owners' other claims that the taking was not necessary for public use and that the EDA was not entitled to use quick-take procedures. Therefore, we reverse and remand to the court of appeals to consider the property owners' other claims. Reversed and remanded. 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.