Real Estate & Property Law

Minn Court Of Appeals: Redevelopment Agency Exceeded Delegation Of Eminent Domain Authority

By Robert Thomas (inversecondemnation.com)

In Eagan Economic Development Authority v. U-Haul Company of Minnesota, No. A08-0767 (May 19, 2009), the Minnesota Court of Appeals held that when a delegation of eminent domain power from a municipality requires a redevelopment agency to enter into a development agreement before acquiring property, the agency is without power to take property until it enters such an agreement.

Most property owners within the redevelopment district did not object to the taking of their land but three did.  They argued that the city's resolution delegating condemnation power to the redevelopment agency incorporated a redevelopment plan into its requirements by reference.  As noted by the court, section 1-8 of the resolution provided:

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 of Tax Increments or other funds will be available to repay the Public Costs associated with the proposed acquisition.

Slip op. at 9 (emphasis original). The agency, however, argued that the redevelopment plan granted it broader authority and did not require it to enter into a development agreement first:

The second provision is section 1?12, which is a broader statement of acquisition of land: "The City may acquire such property, or appropriate interest therein, within the Redevelopment Project Area as the City may deem necessary or desirable to assist in the implementation of the Redevelopment Plan."

Id.  The agency did not enter into a development agreement, and the district court accepted its argument that the "broad language ... swallow[ed] the limiting language." Slip op. at 10. The court of appeals held the opposite, that the broad delegation in 1-12, which provided the "full extent" of the city's condemnation power, was "unequivocally qualif[ied]" by section 1-8 which made the entry into a development agreement the condition precedent to the exercise of the condemnation power. The court held:

The immediately apparent problem with the district court?s interpretation, which the EDA asks us to adopt, is that it disregards two well-worn maxims of statutory interpretation: First, a statute should be interpreted to give effect to all of its provisions, and, second, to the extent two provisions cannot be reconciled, the more specific provision should prevail over the general. Contrary to the EDA?s invitation to disregard section 1?8, we can reasonably give effect to both provisions by applying these principles so that neither part of the resolution is superfluous or insignificant.

Slip op. at 11 (citations omitted). The court also rejected the argument that the language limited the city's condemnation power but did not limit the agency's. The court noted that the city could delegate "no more power than the city possessed," and the delegation was limited by the city's self-imposed development agreement precondition. Slip op. at 12.  

More background on the case in Court rules against Eagan in eminent domain case.

Full post as published by inversecondemnation on May 20, 2009 (boomark / email).