Opinion ID: 3008277
Heading Depth: 1
Heading Rank: 4

Heading: The Parking Garage

Text: on the necessity or advisability of condemning each tract out of the many which go to make up a right of way for a railway line, straight courses from point to point, with the consequent lessening of mileage, would in many, if not all, cases be impossible to secure. So in the case of depot grounds. One jury might hold, on competent evidence, that the land in question was not necessary to the purposes of the railroad. Another might render a like verdict as to any other tract sought to be subjected to its uses, and by such a course the company could be excluded altogether.” (quotation marks omitted)). That rationale likewise necessitates that, although fraud, bad faith, and arbitrariness and capriciousness are the subject of judicial cognizance, their uniform application necessitates that they are questions of law for the court. 8 The trial court ruled as a matter of law after the verdict that the taking was necessary for a public use and that Government Code section 2206.001 (prohibiting takings for economic development purposes) did not retroactively apply to this taking. 9 The W hittingtons assert that the City waived the argument that fraud, bad faith, and arbitrariness and capriciousness are questions of law for the court. The City properly objected to these questions in its Motion to Bifurcate and its Motion to Disregard the Jury Verdict and Motion for Judgment Notwithstanding the Verdict. See HoffmanLaRoche Inc. v. Zeltwanger, 144 S.W .3d 438, 450 (Tex. 2004) (pure legal questions may be raised in post-verdict motions). 13 The City took possession of Block 38 for two distinct public purposes (the parking garage and the district plant). We analyze each separately.
We first examine whether City’s determination that the parking garage was necessary for a public use was fraudulent. The parties’ agreed to define fraud as “the taking of property for private use under the guise of public use, even though there may be no fraudulent intent on the part of the condemnor.”10 See Higginbotham, 143 S.W.2d at 83 (“‘Where the Legislature declares a particular use to be public use the presumption is in favor of this declaration, and will be binding upon the courts unless such use is clearly and palpably of a private character.’” (quoting West, 238 S.W. at 978)); see also Whitfield v. Klein Indep. Sch. Dist., 463 S.W.2d 232, 235 (Tex. Civ. App.—Houston [14th Dist.] 1971, writ ref’d n.r.e.) (holding proof of fraud in taking does not require proof of fraudulent intent).
The parties agreed to define public use as: a use which the public is entitled to share indiscriminately in as a matter of right. A use is public when the public obtains some definite right or use in the undertaking to which the property is devoted. What is important in the public-use determination is the character of the right inuring to the public, not the extent to which the public’s right is exercised. 10 The City objected and proposed an alternate definition of fraud, but has not pursued that issue on appeal. As our inquiry is a question of law, these definitions in the jury charge should instead have been conclusions of law. W e may review conclusions of law to determine their correctness. BMC Software Belgium, N.V. v. Marchand, 83 S.W .3d 789, 794 (Tex. 2002). But we will not reverse an erroneous conclusion if the trial court rendered the proper judgment. Id. Because any change in the definition would not yield a different outcome here, we do not address whether the parties’ definition of fraud is legally correct in its entirety. 14 A “public use” is not a private use. A taking may not be used to confer a private benefit on a particular private party or parties through the use of the property. A taking may not be used for a public use that is merely a pretext to confer a private benefit on a particular private party or parties. This Court has defined public use in similar circumstances as when the public obtains some definite right or use in the undertaking to which the property is devoted. Coastal States Gas Producing Co. v. Pate, 309 S.W.2d 828, 833 (Tex. 1958); see also Higginbotham, 143 S.W.2d at 84 (“‘It is immaterial if the use is limited to the citizens of a local neighborhood, or that the number of citizens likely to avail themselves of it is inconsiderable, so long as it is open to all who choose to avail themselves of it.’”(quoting West, 238 S.W. at 978)). Public use, however, does not include a benefit to the public welfare or good under which any business that promotes the community’s comfort or prosperity might be benefitted from the taking.11 Pate, 309 S.W.2d at 833. In 2001, the City Council authorized a condemnation lawsuit “for the construction of a parking garage for the Austin Convention Center . . . .” The Whittingtons assert that the taking was fraudulent as to the parking garage because it “favored one private party over another at public expense” by “reliev[ing] H.L. Hotels of its obligation to provide parking for the Convention Center.” We disagree. The parking garage was to provide parking for the expanded convention center. This is a public use. Pate, 309 S.W.2d at 833.12 The effect of the City’s decision to take Block 38 11 In 2003, the Legislature added section 21.023 to the Property Code, which requires a governmental entity acquiring property through eminent domain to notify landowners of their right to repurchase the property if the public use for which the property was acquired is cancelled before the tenth anniversary of the acquisition. T EX . P RO P . C O DE § 21.023. 12 See T EX . L OC . G O V ’T C O D E § 251.001(a)(1) (authorizing home rule municipalities to “exercise the right of eminent domain for a public purpose” such as providing, enlarging, or improving auditoriums); id. at § 251.001(a)(5) (authorizing home rule municipalities to “exercise the right of eminent domain for a public purpose,” including “for any other municipal purpose the governing body considers advisable”). 15 rather than build the larger underground garage with the hotel project was, at best, an incidental benefit to the H.L. Hotels.13 The decision not to build the larger underground garage resulted in a cost savings to the hotel project of approximately $10–12 million, resulting in fewer bonds being issued. The direct impact to the project developer was that its fee would be reduced if the overall project cost was reduced. There was no evidence introduced at trial to prove a benefit to H.L. Hotels due to the lower cost of the project. We hold that the City’s determination that the parking garage was a public use was not fraudulent.
The dissent argues that the developer benefitted from the taking because, even though the project budget was reduced by $10–12 million, the developer took third-tier bonds in lieu of its 4.5% fee. __ S.W.3d __, __ (Hecht, J., dissenting). The dissent reasons that only a short time elapsed between the decision to negotiate exclusively with the developer and the decision to not build the underground garage and that the bonds in lieu of the fee were not adjusted when the plans changed. Id. But this assertion is devoid of any record support. The only testimony the dissent cites is from the convention center director stating that the developer took bonds in lieu of its fee. Id. at __, n.15. But the director never testified that the amount of bonds was not reduced after the parking garage plans were altered.14 Nor did the Whittingtons put on any evidence proving that it was. The director 13 There is no evidence in the record of a benefit to H.L. Hotels, and there is evidence to suggest it received a diminished fee as a result of the project costing less. See supra note 2. 14 The convention center director testified: “Q. How much did [the developer] make out of this project in fees? “A. I’m not sure exactly how much they made at the end. There was—they took— in lieu of fees, they took 16 merely testified as to an approximate amount of bonds the developer ultimately received. Second, even if the amount of bonds in lieu of fees had been reduced—and there is no evidence it had—the dissent assumes the developer received a benefit without corresponding work performed with respect to the garage. The developer’s fee compensates it for such costs as the design of the structure and the permitting process. The developer performed sufficient design work on the garage to determine what variances were needed. The developer then applied for those variances but they were not granted. In short, there is no evidence, much less proof, that the developer received the same fee when the plans for the garage were altered, and even if it had, there is evidence that the developer performed work associated with the fee. In sum, the record plainly refutes the dissent’s assertion that the Whittingtons proved the developer benefitted from the decision to not build the garage.
We next address whether the City’s determination concerning the necessity of the parking garage was fraudulent. The Whittingtons assert that the determination of necessity for the garage was fraudulent because the City could cancel the 500 leases in its existing garage and therefore would not need to build a garage on Block 38. We disagree that the City did not actually consider the garage necessary for parking for the convention center. The jury charge did not define “necessary.” The statutory constraint on the City’s some third-tier bonds.