Court Opinion

ID: 9714342
Source: CourtListenerOpinion
Date Created: 2023-08-26 05:35:37.506542+00
Date Added: 2024-06-11T18:23:25.347874
License: Public Domain

KELLY, Justice
(dissenting)
I respectfully dissent. Our decision in Mesaba Aviation Div. v. County of Itasca, 258 N.W.2d 877 (Minn.1977) contemplates the application of an estoppel remedy in this case. In Mesaba, we articulated a balancing test in which the hardships to the individual are balanced against the potential frustration of the public interest. Id. at 880. In my judgment, the equities of these circumstances tip the scale in favor of plaintiff, Ridgewood Development Company, and justice requires that the state be estopped from enforcing the provisions of Minnesota Laws 1979, Chapter 306 against it.
Plaintiff’s uncontroverted affidavits establish that it incurred enormous obligations in reliance on Minn.Stat. §§ 474.01 et seq. (1978). Except for the purchase of an option to buy the 180 acre tract of land, all expenditures were made in reliance on the City of Burnsville’s preliminary approval of the project on November 6, 1978, the Commissioner of Security’s approval on November 24, 1978, and the City of Burnsville’s final approval on April 16, 1979. Defendants did not attempt to controvert the joint affidavit of the partners who formed Ridgewood Development Company. This affidavit established that the land would not have been purchased but for the availability of financing the project under the provisions of Minn.Stat. §§ 474.01 et seq. As a result of the city’s preliminary approval of the financing of the project through the issuance of industrial revenue bonds, plaintiff incurred the obligation to pay $1,719,798.00 for the land. As of August 23, 1979, plaintiff has paid $199,655.64 on the contract for deed. Plaintiff hired the consulting firm of Urbanscope, Inc. to assist in the planning of the project which consisted of 250 single family houses, 200 qua-draminiums and 400 rental units. Plaintiff *296paid a $10,000 fee for Urbanscope’s planning services. Plaintiff incurred a fee of $13,500 for Suburban Engineering Company’s consulting work. In addition, plaintiff incurred $4,000 in legal fees and $488.88 in filing and publication fees in connection with the examination of title to the land and the preparation for the issuance of the revenue bonds. After the city’s final approval of the location of streets, utilities, building units, and parklands, only ministerial acts remained to be performed before the issuance of the revenue bonds. In reliance on these actions, plaintiff entered into an arrangement for the formulation, underwriting, and issuance of the bonds with Juran and Moody, investment bankers and specialists in marketing industrial development bonds.
In short, plaintiff incurred such extensive obligations and expenses that it would be inequitable and unjust to apply the provisions of Minnesota Laws 1979, chapter 306 to it. Ridgewood Development Company’s reliance expenses bear a marked similarity to the expenses incurred by the plaintiff in reliance on a county’s approval of a certain site for use as a land fill in Sullivan v. Credit River Township, 299 Minn. 170, 217 N.W.2d 502 (1974). In that case, we held that the county was estopped from rescinding its approval of the site for use as a land fill even though the citizens were not notified of the meeting at which the approval was given. There the plaintiff expended $10,000 for engineering survey, attorney’s fees and accountant’s fees in addition to purchasing the land.
The majority makes much of the fact that plaintiff “has not demonstrated that there is no other way in which the land can be profitably used.” Even assuming that this is an essential element of estoppel, in the context of cross motions for summary judgment, it is not plaintiff’s burden to conclusively “prove” this to be the case. Plaintiff alleged in uncontroverted affidavits that proceeding with the project is a financial impossibility without the availability of financing through industrial revenue bonds.
The inducement in this case lies in the project’s approval, both preliminary and final, by Burnsville and the Commissioner of Securities. But for their approval, plaintiff would not have exercised the option and incurred the other expenses listed above.
There is no evidence in the record indicating that the plaintiff’s project does not benefit the public interest. In fact, the evidence indicates that the project’s financing pursuant to the provisions of Minn.Stat. §§ 474.01 et seq. would benefit the public interest. In its application to the Commissioner of Securities for approval of the project, the City Council listed the factors it believed to benefit the public interest.
1. Lower interest and rental rates to users of the housing;
2. The inclusion of moderate and low priced housing will enable the City to meet the Metropolitan Council’s goals for those types of housing;
3. This proposal introduces new money into the housing market;
4. Lower interest rates would allow our City to continue to grow through tight money markets;
5. The continued growth of Burnsville is necessary to utilize already constructed utilities; and
6. Reducing interest rates by 2%, which we understand is likely to result, is equivalent to reducing property taxes by one-half.
This method of financing will also assist the continual growth of Burnsville in a declining construction period, expand the tax base and assist the City in providing the adequate housing and employment required by our citizens.
There is absolutely no evidence that plaintiff’s project was aimed at “erecting living accommodations for the affluent.” The only evidence as regards this rather peripheral point is directly to the contrary. See City Council finding No. 2. Furthermore, there is a dearth of evidence indicating that the purpose of Minn.Stat. §§ 474.01 et seq. prior to its amendment was aimed exclusively at “providing housing for low income groups, or encouraging the construction of *297multiple housing.” Prior to its amendment, the chapter defined “project” broadly enough to include all housing projects provided that the powers granted the municipality be used “to aid in the redevelopment of existing areas of blight, marginal land, and substantial and persistent unemployment.” Minn.Stat. § 474.01, subd. 5. As has been already pointed out, the city concluded that the project would assist “the city in providing adequate housing and employment required by our citizens.”
The proper focus of inquiry is whether this project serves a public purpose, not, as the majority indicates, whether the venture is incidentally serving a private and profit-motivated end. Cf. Port Authority of City of St. Paul v. Groppoli, 295 Minn. 1, 202 N.W.2d 371 (1972). The majority’s dictum is not only unnecessary, but also misleading. Were it construed to be a correct statement of the law, projects such as the Minneapolis City Center, financed pursuant to the provisions of Minn.Stat. §§ 472A.01 et seq. (1978) as well as factory projects financed through the issuance of municipal bonds pursuant to the provisions of Minn.Stat. §§ 474.01 et seq. would be unconstitutional. Such ventures are “clearly private and profit motivated.” Nevertheless, they improve the tax base, provide employment and often eliminate blighted areas.
Finally, it is not the province of this court to determine whether the legislature has been “overly generous” in its legislation. Our duty is to determine only whether such legislation is reasonable and within the bounds of the Constitution.
I would therefore affirm the judgment of the district court.