Opinion ID: 2219255
Heading Depth: 2
Heading Rank: 1

Heading: Designation of the Urban Renewal Area

Text: The property owners challenge the city's inclusion of the I-80 corridor as part of the consolidated urban renewal area. The property owners misconstrue the real issue before us by concentrating their argument on the legality of declaring the I-80 corridor itself an economic development area. We do not review whether the I-80 right-of-way as it stands alone complies with chapter 403, but rather whether the Mall and Highway 6 Urban Renewal Area (of which the I-80 right-of-way is a part) is consistent with our state urban renewal law. Property owners have the heavy burden of showing the city's designation of this urban renewal area was arbitrary, unreasonable, or capricious. Dilley v. City of Des Moines, 247 N.W.2d 187, 190 (Iowa 1976). As we have said before, it is critical to examine the nature of the city council's action to determine whether the city acted in conformance with the urban renewal laws of Iowa Code chapter 403. McMurray v. City Council, 642 N.W.2d 273, 277 (Iowa 2002). A municipality is vested with all the powers necessary or convenient to carry out and effectuate the purposes and provisions of [chapter 403.] Iowa Code § 403.6 (2001). In McMurray, we summarized the proper actions of a city council in achieving the purposes of our urban renewal statute as follows: In general, the City Council acts in a legislative capacity. Chapter 403 grants city councils authority to carry out urban redevelopment, rehabilitation, and renewal projects. As such, the City Council's action in designating this economic development area involved determination of legislative, not judicial, facts. Legislative facts are generalized propositions of fact or policy guiding the exercise of legislative judgment. (Citation omitted.) Moreover, legislative facts are not concerned with particular problems of individuals, but involve a determination of what is in the best interests of the public generally. Trager v. Peabody Redevelopment Auth., 367 F.Supp. 1000, 1002 (D.C.Mass.1973).... Such decisions by the city council involving legislative facts necessarily involve the exercise of considerable discretion. Legislative declarations, such as the one before us, are entitled to great weight. See, e.g., Miller v. City of Tacoma, [61 Wash.2d 374] 378 P.2d 464, 470 (Wash. 1963).... Consequently, we have no power to interfere with the City Council's legislatively given discretion to carry out the purposes of the urban renewal law. See, e.g., Dilley v. City of Des Moines, 247 N.W.2d 187, 192 (Iowa 1976).... Rather, we presume the City Council, as a governing body of elected officials, acted in the overall best interests of the public. McMurray, 642 N.W.2d at 277. Bearing in mind the wide discretion city councils have in carrying out our urban renewal laws, we turn to whether the city in this particular case complied with the requirements of chapter 403. Iowa Code chapter 403 provides that one reason a municipality may create an urban renewal area is to encourage general economic development for a community. Iowa Code § 403.2(3); see McMurray, 642 N.W.2d at 278 (citing Bowers v. Polk County Bd. of Supervisors, 638 N.W.2d 682, 697 (Iowa 2002)). In this instance, the city had already created two separate urban renewal areas. [2] The Mall Urban Renewal Area already had substantial development, while the Highway 6 Urban Renewal Plan remained relatively unchanged. By resolution, the city council amended the Highway 6 Urban Renewal Area and the Mall Urban Renewal Area and created the Mall and Highway 6 Urban Renewal Area. The city combined these two areas to use the success and stability of the Mall Urban Renewal Area to assist in the economic development of the Highway 6 Urban Renewal Area. It is common for a municipality to amend urban renewal areas to respond to changing needs and circumstances. Once a city adopts an urban renewal plan, it may modify the original plan through additional resolutions. Iowa Code section 403.5(6) states, Upon approval by the municipality of an urban renewal plan or of any modification thereof, such plan or modification shall be deemed to be in full force and effect for the respective urban renewal area, and the municipality may then cause such plan or modification to be carried out in accordance with its terms. Iowa Code § 403.5(6). Property owners do not contend the city is prohibited from consolidating urban renewal areas, especially those areas that are not contiguous. No statute prohibits a municipality from combining tax revenues within the combined urban renewal areas to fund a new project. To the contrary, the record shows it is common for a municipality to consolidate existing urban renewal areas to finance development of the community within the expanded urban renewal area. Further, the record reflects that it is not unusual for a municipality to use a highway right-of-way to join urban renewal areas. It was within the city's discretion to amend the original urban renewal areas and combine them to promote economic development in the Highway 6 area. The question is whether the city's declaration of the consolidated areas as one economic development area to support the creation of the Mall and Highway 6 Urban Renewal Plan Area complied with chapter 403. Before a municipality may designate an urban renewal area, it must pass a resolution finding the area is a slum or blighted area, or an economic development area. The municipality must further find development in the area is necessary in the public interest. In this case, we are reviewing the creation of an economic development area to support the urban renewal designation. Iowa Code chapter 403 defines an economic development area, in part, as: an area of the municipality designated by the local governing body as appropriate for commercial and industrial enterprises, public improvements related to housing and residential development, or construction of housing and residential development for low and moderate income families, including single or multi-family housing.... Iowa Code § 403.17(10). The urban renewal statutes provide a a municipality shall not approve an urban renewal project for an urban renewal area unless the governing body has, by resolution, determined the area to be a[n]... economic development area ... and designated the area as appropriate for an urban renewal project. McMurray, 642 N.W.2d at 279 (citing Iowa Code § 403.5(1)). A city council is under no statutory obligation to make specific findings before declaring an area as an economic development area suitable for designation as an urban renewal area. Id. [T]he statute merely requires a declaration by the City Council in the resolution of necessity the area is suitable for economic development to support and stimulate commercial and industrial growth. Id. In the case before us, the city council complied with the provisions for declaring the property an economic development area within an urban renewal area. The city council stated the purpose of the Plan was to encourage the continued stability and economic well-being of the City of Coralville through the support of economic development and redevelopment within the area.... The primary goals ... are to stimulate, through public action and commitments, private investments in development and redevelopment. The Plan was to encourage economic development by providing infrastructure improvements to accommodate development of a vital, dynamic and competitive regional commercial area for the City of Coralville and the surrounding region. The city council also passed a resolution of necessity pursuant to Iowa Code section 403.4, stating investigations have been conducted which show the desirability of expanding the urban renewal areas to add and include all property shown [including the I-80 right of way] .... The resolution stated the Plan was necessary in the interest of the public health, safety or welfare of the residents of the city. The resolution said sufficient need exists to warrant finding the area of the I-80 corridor to be an economic development area.... The city council further complied with the remaining statutory requirements of chapter 403. The council submitted the proposed plan to the Planning and Zoning Commission for approval as required by Iowa Code section 403.5(2). The city held a public hearing on January 8, 2002, for the purpose of discussing the designation of the new Mall and Highway 6 Urban Renewal Plan Area. See id. § 403.5(3). Notice of the hearing was published as required. The property owners make a final effort to challenge the motives behind the city's designation of this economic development area to support the urban renewal plan. However, we have consistently said we do not examine the motives of those exercising legislative power in a manner which is not manifestly arbitrary, capricious, or unreasonable. Dilley, 247 N.W.2d at 192; accord McMurray, 642 N.W.2d at 280 (It is not within our province to decide whether the City made a good or bad decision in designating this economic development area.). In 1985, the legislature gave municipalities authority to adopt an urban renewal plan based solely upon the existence of an economic development area. The reason behind this amendment to chapter 403 was to stem economic decline and promote economic growth. McMurray, 642 N.W.2d at 281; see also 1985 Iowa Acts ch. 66, § 1 (codified at Iowa Code § 403.2(3) (1987)). Given this stated purpose of the urban renewal statute, we conclude the city's action in this case was reasonable. In designating the Mall and Highway 6 Urban Renewal Plan Area, the city promoted one of the main goals of chapter 403, i.e., to encourage and assist various industrial and commercial enterprises in locating to the State of Iowa. See McMurray, 642 N.W.2d at 281-82. It was reasonable for the city to consolidate two urban renewal areas in an effort to increase the viability of both areas and the proposed project. Including the I-80 corridor in the consolidated urban renewal area was also reasonable. The record shows the city took such action to improve the appearance of the corridor, to enhance the identity of the metro area, and to complement adjoining areas. The land use plan indicates, as a general planning goal, the city hoped to enhance the community image with the I-80 corridor by improving the aesthetics along the corridor and linking the Iowa City and Coralville developments. The property owners have shown nothing more than their disagreement over whether the urban renewal area is viable. Their disagreement is insufficient to render the city's action unreasonable. As such, they have not met their burden to prove the city's action was unreasonable, arbitrary, or capricious. In sum, because the city council followed the requirements of the Iowa Code in designating the consolidated property an economic development area, we will not interfere with the city's decision. It was a matter based upon public policy and we will not second-guess whether it was a good or bad decision. See id. at 280. Because the property owners have failed to show the city's actions in designating the economic development area were arbitrary, capricious, or unreasonable, we affirm.