IS THE CITY  OBLIGATED TO APPROVE THE HOLLYDALE DEVELOPMENT?

NO.

The city is under no legal obligation to allow residential development of the Hollydale property.  It is highly unlikely a court would require them to buy the property if it denies the development request.

MYTHS, MISINFORMATION AND UNSUBSTANTIATED

OPINIONS ABOUND

Many people have expressed opinions regarding the obligation of the city to approve the development of Hollydale.  At his neighborhood meeting, aspiring Hollydale developer Jake Walesch told the audience that if the City did not approve the development it would have to buy the property.   At a caucus, one of our elected officials said that the City would have to approve the development because it had approved others.  Still others have opined on the appropriate price of the property, suggesting that regardless of Comp Plan guidance, any sale would need to be at full residential development  value.  Some believe that absent full satisfaction of the buyer and seller, the City is certain to be sued.

These assertions ignore two key factors :

  1. The authority granted to City Councils for land use decisions.

  2. Case law in which the Minnesota Supreme Court upheld cities' rights not to change their Comprehensive Plans to accommodate residential development of golf courses.

Minnesota cities are granted the authority to regulate land use by the Municipal Planning Act.  The law is designed to provide a means of -

"guiding future development of land so as to insure a safer, more pleasant and more economical environment for residential, commercial, industrial and public activities, to preserve agricultural and other open lands, and to promote the public health, safety, and general welfare. ... planning, by providing public guides to future municipal action, enables other public and private agencies to plan their activities in harmony with the municipality's plans." 

 

The foundation of the city's authority is the Comprehensive Plan, a document created by the city that states, among other things, the city's vision, goals and land use plan.  It is in this Plan that city decision makers document the areas of the city designated for different purposes, such as commercial, residential or public use. Once a plan is adopted, zoning and subdivision ordinances are created to implement the Plan. Therefore, what's most relevant in consideration of a proposed development project such as Hollydale is not how the property is zoned, but how it's guided by the Comprehensive Plan.  

When creating and amending the Comprehensive Plan and the ordinances that enact it,  a city council is effectively making policy and law for the city.  In making those policy decisions it is considered to be exercising "quasi-legislative" authority, and has maximum discretion in its decision making.  

Conversely, when assessing a request for approval of something that is addressed in its ordinances, such as consideration of a variance, or a housing development in an area zoned for housing development, the Council is considered to be exercising "quasi-judicial" authority, and has relatively little discretion in whether or not to grant approval.

 

As shown in the pyramid graphic,  approval of subdivision applications entails "quasi-judicial" decision making.  Yet the presumption is that the application is for development that already meets the guidance of the Comprehensive  Plan. 

 

By its own ordinance, in compliance with state statute, the City of Plymouth is not allowed to approve developments that do not first meet the guidance of the Comprehensive Plan.

According to the League of Minnesota Cities, "When acting legislatively, the council has broad discretion and will be afforded considerable deference by any reviewing court. City councils are ultimately accountable to the voters for legislative decisions. ... A city council has less discretion when acting quasi-judicially, and a reviewing court will examine whether the city council applied rules already in place to the facts before it. In general, if the facts indicate the applicant meets the relevant legal standard, then they are likely entitled to the approval."

Properties owned by Hollydale LLC give us examples of both legislative and judicial authority.  
 
The Hollydale Golf Course has been guided "Public-Institutional" under the Comprehensive Plan, as Plymouth guides all of its park and recreation land, since at least 1975. Therefore, to allow residential development of the property would require a change in the Comprehensive Plan to a residential designation.  That decision to change or not to change its designation is a policy decision, and therefore affords the Council the maximum discretion.  They are not required to grant approval, and require a rational basis for doing so.

 

Conversely, in 2019 Hollydale's parking lot property just west of the golf course was approved for residential development as Timber's Edge.  That property had been guided​ as Residential 1 under the Comprehensive Plan, and approving it was a matter of applying a land use decision that was already in place.  The City's discretion was limited in the case of Timber's Edge. It is not limited in consideration of developing the golf course.

STATE LAW GIVES CITY COUNCILS BROAD AUTHORITY TO REGULATE LAND USE 

CityPyramidofDecisionMaking2.gif

"The pyramid framework illustrates how much discretion the city has to make land use decisions based on the role it is playing." League of Minnesota Cities, Zoning Decisions Information Memo

COURT CASES

There are two metro cases in which the Minnesota Supreme Court upheld a city council's decision to deny Comprehensive Plan changes for golf courses.

In Mendota Golf LLP vs City of Mendota Heights, the Minnesota Supreme Court reversed district and appeals court decisions that required the City of Mendota Heights to change its Comprehensive Plan in order to accommodate residential development of Mendota Golf, concluding that the city did not have a clear duty to amend the Plan and the city had a rational basis to deny Mendota Golf's proposed Plan amendment.  

"We uphold the city's land-use decision unless the party challenging the decision establishes that the decision is unsupported by any rational basis related to promoting the public health, safety, morals, or general welfare.  Even if the city Council's decision is debatable, so long as there is a rational basis for what it does the courts do not interfere."
In the Mendota case, as with Hollydale, the property had been guided in the Comprehensive Plan as a golf course for over 25 years, and the city had recently chosen to retain the land use designation.  Plymouth last reiterated Hollydale's land use destination in July of 2019.
"A municipality has legitimate interests in protecting open and recreational space, as well as reaffirming historical land use designations ... Accordingly, we conclude that legitimate objectives supported the city's denial of Mendota Golf's application for an amendment to the city's comprehensive plan ... given the statutory priority of municipal comprehensive plans over local zoning ordinances and the role of comprehensive plans in the regional planning process, it would be difficult to conclude that the city abused its discretion by denying the proposed amendment to the comprehensive plan."
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Wensmann Realty, Inc. vs.

the City of Eagan

In Wensmann Realty, Inc vs. the City of Eagan, the Minnesota Supreme Court upheld Eagan's decision to deny a comprehensive plan change to allow residential development of Carriage Hills golf course. It also addressed the circumstances under which private property is deemed a "taking" for public use, and the appropriate level of compensation to the property owner.
 
This directly addresses the contention that if the City of Plymouth does not allow residential development of Hollydale the City will have to buy the course.
 
In upholding Eagan's decision not to change the Comprehensive Plan to accommodate residential development of the golf course, the Supreme Court affirmed as rational the basis for Eagan's decision, which included preservation of open and recreational space, reaffirmation of historical land use designations, disruption of surrounding neighborhoods due to increased traffic, and burdens on the school system. 
In considering the contention that failure of Eagan to allow residential development of the golf course would be a taking of private property for public use, the Court explained -
"The purpose of the Takings Clause “is to ensure that the government does not require ‘some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.’ ” ... This is precisely what the property owner is arguing in this case-that the denial of the comprehensive plan amendment will preserve open space for the benefit of the entire community while forcing the property owner alone to bear the economic burden.
In limited circumstances, government regulation of property may result in a taking. The [US] Supreme Court has observed that “government regulation-by definition-involves the adjustment of rights for the public good,” and “[o]ften this adjustment curtails some potential for the use or economic exploitation of private property.”  ... “the determination of whether a taking has occurred is highly fact-specific, depending on the particular circumstances underlying each case.”"
In its takings analysis, the Minnesota Court used “several factors that have particular significance” identified by the US Supreme Court. These include "‘[t]he economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations’, and the 'character of the governmental action', with the primary focus being the “the severity of the burden that government imposes upon private property rights.”  The Court's analysis included this:
 
"The parties disagree about how to measure the economic impact in this case. The city argues that the economic impact should be measured by comparing the value of the property as a golf course before and after the denial of the comprehensive plan amendment. ... The property owner, on the other hand, argues that the economic impact should be measured by comparing the value of the property as a golf course with the value of the property if residential development had been permitted...
 

We conclude that neither of these methods is appropriate in this case. ... under the city's proposed method, the government could effectively force a property owner to maintain an existing use of property forever by refusing to change the comprehensive plan designation ... Similarly, the property owner's method is not appropriate because it presupposes a right that the property never enjoyed under the city's regulatory scheme. 

 
A taking does not result simply because the property owner has been deprived of the most profitable use of the property.  If we measured the value of the property as if residential development had been permitted, whenever a city's zoning ordinance prevented a use of property that could be more productive or valuable than what is allowed, the property owner could try to assert a takings claim.  But “[t]he takings clause was never intended to compensate property owners for property rights they never had. ... We conclude that the most appropriate method in cases like this, where the government chooses to maintain an existing comprehensive plan designation, is to determine whether the city's decision leaves any reasonable, economically viable use of the property.” 
Based on these two cases, we see that cities have authority over land use decisions as long as the decision is rational. And we see that a taking exists only if that decision does not leave a reasonable use for the land for the property owner.  Thus, the question of whether or not the City of Plymouth would need to buy the Hollydale property if it refused a requested amendment to the Comprehensive Plan comes down to a question of whether or not uses allowed under its Comprehensive Plan designation represent a reasonable, economically viable use of the property.
Given the historical popularity of the Hollydale golf course, the relatively high number of golfers in the area, and the material reduction in golf course availability in recent years which will likely be compounded by Shamrock golf's designation as residential on Corcoran's Comprehensive Plan, deeming golf at Hollydale to be an unreasonable, economically unviable use of the property would be a difficult case to make.