10.0 EDSR 02-13-2006ITEM / 10.
MEMORANDUM
TO: Mayor and City Council
Economic Development Authority
Housing and Redevelopment Authority
FROM: Heidi Steinmetz, Assistant Director of Economic Development ~~
DATE: February 13, 2006
SUBJECT: Presentation on Proposed Eminent Domain Legislation
Attachments
• Background information on eminent domain issue
• League of Minnesota Cities proposed eminent domain legislation as of February 7
2006
• Institute of Justice/Minnesota Auto Dealers Association (Rep. Johnson/Senator
Bakk) proposed eminent domain legislation as of February 8, 2006
Background
2005 U.S. Supreme Court decision and its affect on Minnesota
Attached is the below background information on the 2005 U.S. Supreme Court decision
regarding Kelo v. New London, Connecticut.
• Fact Sheet on the Case of Kelo v. New London
• Understanding the Kelo Decision
• Kelo v. New London: What does it mean going forward?
The Kelo decision has prompted significant discussion and potential legislative activity in
Minnesota despite the fact that the decision did not actually change the law in any
substantive way for Minnesota. Due to the significant discussion on this issue, the first state
legislative public hearing in the Minnesota House CivIl Law Committee was already held on
January 11, 2006 even though the legislative session does not begin until March 1, 2006.
Preservation nn P~opased Lxrvrent Domain Lebnslauor
Pebmary 13, 2006 I~UA Meefing
Pagi 2of3
Proposed Minnesota Le,¢islation
Attached are the two bills that contain proposed legislative changes for Minnesota.
Summaries of both draft bills axe provided below.
Minnesota Auto Dealers Associatio~MADA) and Institute for Justice bill
This bill redefines "public use" to exclude economic development, narrows the definition of
"blight", and increases costs to public agencies. It also suggests requiring the
courts to review eminent domain challenges with a higher level of scrutiny, instead of the
usual deference given to legislative actions. It is also important to note that at the federal
level, numerous bills have been drafted. Congress attached a rider to the Txanspoxtafion
funding bill that prohibits the use of federal funding fox any project that uses "Kelo-type"
condemnation. Also, the US House of Representatives passed a bill that would prohibit any
city receiving federal funds from using condemnation. The bill awaits action in the Senate
and would preclude even most "redevelopment" condemnation.
League of Minnesota Cities bill
This bill improves the process and clarifies which public purposes authorized in law justify
the use of eminent domain. 'these may include:
• Procedural changes to provide a more transparent and predictable process fox all
acquisitions under Minn. Stat. 117.
• A list of specific purposes fox which an acquiring authority may exercise eminent
domain under Minn. Stat. 469, such as: remedying an environmentally contaminated
area; removing a public nuisance; mitigating a blighted area; or developing affordable
housing that is eligible fox state ox local financial assistance.
• Cleaxex, more objective criteria fox determining "blight" fox the purposes of using
eminent domain.
• Prohibiting the use of eminent domain fox economic development, unless the
development involves state financial assistance.
• Possible compensation provisions that acknowledge property owners costs, but don't
remove incentives to negotiate.
There are sufficient cases where local units of government have taken greater liberty than the
intent of current legislation which makes valid and important such changes as those under
consideration by the League.
F,lk River's use of eminent domain
Over the last twenty years, the City of Elk River has used eminent domain once. Several
properties were acquired for the east Elk River road project and redevelopment project.
What authority do cities cuxxendy have to use eminent domain?
Under state law, cities may acquire private property fox public purposes upon payment of
just compensation. The acquiring authority must establish that the property is needed fox a
particular, identifiable public purpose within a reasonable time period.
HRAs are explicitly given the (redevelopment) authority in Minnesota Statute 469.012 to
eliminate substandard, slum ox blighted areas through eminent domain.
Pms'cnCi[ion nn Proposal P:rrunent Domain I,ogislnCion
14~bmary 13, 2006 ISDA Mecfing
Pagc 3 of 3
Mimi. Statute 469.101 gives EDAs the power of eminent domain to acquire pxoperry needed
to create "economic development districLS" though the districts axe defined as a tax
increment redevelopment district. The broadest economic development authority is in
Minn. Stat. 469.124 where the legislature stated that providing employment opportunities
and improving the tax base axe a public purpose.
How often is eminent domain used in Minnesota
Attached is an article summarizing case studies of Minnesota cities that have used eminent
domain responsibly. The article also mentions a survey the League of Minnesota Cities
completed regarding cities' use of eminent domain in Minnesota. Below is a summary of the
survey:
• In a survey of the 824 cities that axe members of the League of Minnesota Cities, 635
responses were submitted (77%).
• 100 cities used eminent domain during the past 6.5 years.
• 34 cities used it fox redevelopment, removal of hazardous building, ox economic
development.
• On average cities used eminent domain an average of 78 times per year since 1999,
of which only 27 times per year were to turn the property over to another private
owner. In the same period, there was an average of more than 81,000 real estate
transactions per year in Minnesota.
Issue
Staff will provide a PowerPoint presentation about the eminent domain issue, including case
studies of Minnesota cities' use of eminent domain. The presentation template was
developed by the City of Brooklyn Park Economic & Redevelopment Director and
distributed to Economic Development Association of Minnesota members for the purpose
of educating local public officials on the issue.
Staff Recommendation
Staff xecotnmends that the EDA, HRA and City Council provide direction to staff regarding
the City's policy on eminent domain. Below axe three options to consider:
• Do nothing.
• Support legislation upholding the use of eminent domain for redevelopment projects
and limited economic development projects (such as the League of Minnesota Cities
bill).
• Draft a resolution indicating the City's policy on eminent domain.
T ~ i(~ League of Minnesota Cities
-1.-ill 145 University Avenue West, St. Paul, MN 55103-2044
Laog~w ofM~.~wom C.'tia. (651) 281-1200 • (800) 925-1122
C'tiar plnmoting aural/enro Fax: (651) 281-1299 • TDD: (651) 281-1290
www.lmncorg
Fact Sheet on the Case of Kelo v. New London
U.S. Supreme Court Case: Kelo et al v. New London, Ct, et al. (No. 04-108)
This case is an appeal by property owners from a decision by the Connecticut Supreme Court in
2004 that the Public Use Clause does not prohibit taking private property for economic
development and revitalization purposes.
Question Presented: "What protection does the Fifth Amendment's public use requirement
provide for individuals whose property is being condemned, not to eliminate slums or blight, but
for the sole purpose of `economic development' that will perhaps increase tax revenues and
improve the local economy?"
Case Summary: In 1990, Connecticut officially designated New London a "distressed
municipality" that urgently needed economic growth. In 1996, New London suffered another
devastating blow when the Navy closed a large defense facility, putting 1,500 more people out of
work. After years of careful planning, public hearings, and community outreach, New London
city officials decided to build a 90-acre waterfront redevelopment project near historic Fort
Tmmbull that will include retail, residential, and commercial space, a waterfront hotel and
conference center, marinas, and other public amenities. The Fort Tmmbull project will bring up
to 2,300 jobs to unemployed New London residents and as much as $1.2 million in tax revenue
for improved city services.
New London acquired 98 percent of the land needed for the project through voluntary purchases,
but a handful of owners refused to sell. The property owners, who collectively own 15 homes
located on two parcels comprising 1.54 acres in the City's proposed 90-acre redevelopment area,
challenged the City's use of eminent domain. They did not win at trial or on appeal to the
Connecticut Supreme Court. The homeowners asked the U.S. Supreme Court to override the
state supreme court decision. On a 5-4 vote, the U.S. Supreme Court mled in favor of the City of
New London.
Quotes From the Majority Decision:
"Promoting economic development is a traditional and long-accepted governmental function,
and there is no principled way of distinguishing it from the other public purposes the court has
recognized."
"The city's determination that the area at issue was sufficiently distressed to justify a program of
economic rejuvenation is entitled to deference. The city has carefully formulated a development
plan that it believes will provide appreciable benefits to the community, including, but not
limited to, new jobs and increased tax revenue."
AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER
The reaction to the U. S. Supreme Court's ruling in Kelo v. City of New London has been
loud and furious. T{ze backlash is rife with misinformation. What follows is a summary
of the key points that should inform the continuing debate over eminent domain.
By Tiruotky J. Dow{inR
.S. Scn. James Scnsenbrcnncr
denounced the ruling as [he
"Deed Scott decision of the 21st
century." Editorials and blogo-
sphere postings proclaim Chat
every home is now at risk of
being condemned to make way
for a Wal-Mar[. Kelo even made
the late-night talk shows, with Jay Leno
quipping that when Justice Sandra Day
O'Connor announced her retirement,
"She didn't really want to resign. She
just wants to make sure she's home so
no one can seize her hous'e."
The Wall Street Journal denounced
the mling as judicial legislation, even
though the court upheld [he city's
legislative decision [o condemm the
land. Others have reported that Kelo
utassively expands government power,
eveu though the court applied long-
standing precedent and an eminently
natural reading of [he Constitution.
This article explores how best to
think about Kelo once the initial shock-
wave subsides.The court invited states
and localities [o consider carefidly the
benefits and burdens of using enunen[
domun for economic development, but
these deliberations should be based on
facts, not emotion and ideology Follow-
ing is a summary o£[he key points that
should inform the continuing debate
over enrinen[ domain.
Kelo's meaning and effect
The first question to ask in deciding
how to respond to Kelo is whedaee the
ruling breaks new ground in holding
that econotrtic development is a "public
use" under the takings clause of the
Fifth Amendment [hat justifies the use
of ennnent domain to condemm private
peoperry.Thc answer is plainly no, not-
withstanding the histrionic headlines to
the conRary.
For many decades, the U.S. Supreme
Court has held chat the scope of public
use is coextensive with the police powee,
and that courts should defer to legisla-
tive determinations' of public us'e.These
dedsions spedfically rejected [he argu-
ment that private benefits generated
by a condemnation render it constitu-
tionally suspect.
For example, in Berman v. Parker
(1954), the roue[ unanimously upheld
the condemnation of a profitable
deparmaent store as part of an urban
redevelopment program to eliminate
blight, ntling [hat where a government
objective is legitimate,"the right to
realize it through the exercise o£ emi-
nent domain is dear° In Hawaii Housing
Authority v. Midk~(1984), the court
unanimously reaffirmed that public use
is "co[ernfinous" with the police power.
Just two years ago, the court reaffirmed
that government officials may condemn
property for any reason that wouldjus-
ti£y exercising any other governmental
power.These repeated rulings are not
fact-based, but rather driven by a com-
mon rationale recognizing that the
concept of public use is as inclusive as
the police power.
Older cases, too, consistently approved
the use of etninen[ domain to foster
economic development.The Kelo court
reviewed rulings from the nineteenth
century upholding eminent domain
to assist private farnvs, mining interests,
private mills, powee-producing dams,
and other private enterprises where such
activity advanced the public good by
promoting economic growth.
Kelo actually is mote msuictive
than die court's prior rulings because
it includes limiting language not con-
tained in earlier precedents.The Kelo
utajoriry emphasized that New London
is in economic distcess.And it noted
that ac the time of the condemnation
decision, New London had not chosen
a private developer, thereby reducing
the risk that [he condemnations were
for the benefit ofprivatc interests. Kelo
also elevates the importance of compre-
hensive planning by emphasizing that
there nnght be a different result where
condemnatons for economic develop-
ment take place "outside the confines
of an integrated development plan"
It is certainly not the case that every
home is now at risk of being condenmed
to make way For a Wal-Mart or other
Cax-generating enterprises. Kelo makes
crystal clear that condenma[imts moti-
vated purely by revenue enhancement
should be viewed by courts with suspi-
don.And state and local laws, policies,
and practices remain in effect to pro-
vide additional protections to property
owners.
New London's dilemma
The public benefit that New London
seeks [o achieve has been overshadowed
by the rympathetic landowners in Fort
M irv Nrsorn Ctr~rs Oc~roeva 2005
j Understanding the Ndo Decision
Trumbull, and by the cynical effort to
portray them as victims of a sell-out to
private business interests.
Susette Kelo and the other Fort
Trumbull landowners wan[ nothing
more than to save their homes. They
have done nothing wrong. By all
accounts, they are good neighbors and
good dtizens.The emotional attach-
ment they have for their homes cannot
be translated into just compensation:'
Far less media attention has been
paid to the human misery on the other
side of [he equation.The New London
city officials who planned the Fort
Trumbull redevelopment project faced
a desperate economic aisisThis small,
former whaling center ofjust 2,000
people has suffered decades of eco-
uomic decline, unth the unemployment
sate approaching H percent. Many of its
children are on public assistance. With
job opportunities already scarce, New
London sustained another hard hit in
1990 with the closure of the federal
Nava] Undersea Warfare Center, which
threw an additional 1,d00 people out
of work.
Inspired by successful waterfront
redevelopment projects, such as Balti-
more's world-renowned Inner Harbor,
New London officials decided to trans-
form the decaying Fort Trumbull
peninsula into a vibrant mix of retail,
residential, and commercial space; a
public "Riverwalk;" public marinas;
and a hotel and conference center.The
1998 derision by Pfizer, Inc. to build a
global research facility on a site adjacent
to the Fort Trumbull peninsula served
as a natural catalyst, offering thousands
of ready customers for the Fort Trumbull
shops, restaurants, and hotel.The rede-
velopment will integrate an existing
state park, put the abandoned federal
research site to ttse, and perhaps include
a new U.S. Coast Guard museum. It also
will result in the cleanup of environ-
mental contamination, reduce flood
risks by filling the 100-year floodplain,
and bring extensive infrastructure
improvement.
New London officials want nothing
more Chan to put a paycheck back into
the hands of the unemployed and
improve the plight of the impoverished.
The Fort Trumbull project prorrtises
to create thousands of new jobs and
millions of dollars of tax revenues that
could be used for better health care
at public hospitals, affordable housing,
enhanced services for the elderly, better
police protection, child protection
services, and countless other services
for [hose most in need.
The trial courtjudge aptly observed
that New London officials have a dream
for their beloved but decaying com-
munity, the accomplishment of which
"presents no opportunity of personal
gain or favor." Every justice of the
Supreme Court of Connecticut con-
cluded that the redevelopment plan was
not intended to promote the interests
of any private entity, but to revitalize
the econonry with new jobs and spin-
off economic opportunities.The wide-
spread effort to characterize the project
as a sop by local officials to Pfizer or
other private interests is a vicious smear.
The natimtal debate
Regardless of how one views the com-
peting equities in New London, every-
one should agree that the facts in an
individual case should not drive national
policy. Nor is the debate enhanced by
spurious statistics on alleged eminent
domain "abuse"-a term defined by
partisans to include any proposed use
of enunent domain for economic devel-
opment, no matter how reasonable.
We must be careful no[ [o throw the
baby out with the bathwater. Eminent
domain used [o promote economic
development is a critical tool for state
and local ofTicials that has brought
new hope to many dying conmmnities
across the country.
Redevelopment projects often
depend on eminent domain to assem-
ble acritical mass of property because
market failures make it impossible for
the private sector to do the job alone.
Holdouts axe the most obvious market
failure, but many other obstacles can
prcdudc redevelopment.The legal risks
associated with cleaning up lightly con-
taminated "brownfield" sites often deter
private development, but governnten[
officials can use eminent domain to
acquire the site, address the contamina-
tion, and then sell or lease the land for
new development. Clouded property
title on key parcels also can require the
use of eminent domain to dear tide.
Ennnen[ domain also can break logants
caused by existng businesses that leave
nearby land vacant to prevent potenfial
competitors from entering the market.
C)CTObLIi 2~OJ I~IN NG50'I'A (; I'rll'S
Beymtd the Coostftution:
Best practices for eminent domain
~ Despite the heated rhetoric surround-
ing the use of eminent domain for
economic development, substantial
common ground exists regaeding the
need for fair treatment o£condeumees.
Many contmunifies already use
a-eative approaches to promote fairness.
Sonte provide for compensation well
above market value to address special
hardship cases or account for subjec-
tive losses when homes are condemned.
Ocher ideas include paying homeowners
an extra 1 percent of market value for
every year they have lived in their home.
Some commentators have recommeuded
localities be required co show that
eminent domain for economic devel-
opment has a primarily public purpose,
and not just an incidental public benefit.
Following [he lead of the Kelo coact,
[hey also suggest limiting the use of
eminent domain for economic develop-
ment to situations in which the project
is integrated into a comprehensive land-
use plan, and requiring a full opportu-
nity for public input with state-funded
technical assistance to facilitate public
participation at the r-esidents'r-equest.
Proposals like these should be at
the center of the post-Kelo debate, not
blanket prohibitions that will consign
many neighborhoods and communities
to the despair of economic decay. Abso-
lutist ideologies offer li[de hope for
appropriate solutions. We should all take
a deep breath and sit down as fellow
citizens to identify common ground,
ouce the shouting stops. t-
Tim Dowling is chief caurrse{ of Comnw-
nity Rights Counsel (CRC), a public
interest law firm that assists state and Iota!
a~}kials in defending against constitutional
challenges to land use controls, environmen-
tal sa_feguarAs, and other cornrnunity protec-
tions.This article is an edited version ofn
longer essay that will appear in "Eminent
Domain: Kelo in Canter[," which will be
pubh'sher( later Phis year }yy the American
BnrAssociatian's Stn[e nud L.ocnl Govern-
ment Law Sec[ian. This version is reprinteA
with permission. II
J
Kelo v. New London:
What does it mean going forward?
Tom Grundhocfer
The U.S. Supreme Court's decision
in Kelo a New Condon, rendered this
past summer, precipitated axore media
coverage, public reaction, and policy
debate than any federal court deusion
in recent memory. Ironically, the rul-
ing did little-if arrything-to change
existing municipal eminent domain
law az either federal or state levels.
The power to use eminent
domain m help facilitate economic
development and redevelopment has
been explicitly authorized by Min-
nesota statutes and state federal court
decisions for years. However, in light
of the emotional reaction to the
decision, it is' important to review
implications for Minnesota cities
going forward.
What Kelo did
The Kelo decision upheld longstanding
U.S. Supreme Court precedent per-
mitting the ^se of eminent domain to
further econorruc developmen[.The
coax[ ruled drat acquiring property
to promote economic development,
qualified as a "public use" under the
U.S. Constitution.The court reasoned
that the acquisition was executed pur-
suant m acarefully considered devel-
opment plan. Citing prior Supreme
Coact decisions, the court restated its
"longstanding policy" of giving defer-
ence to legislative judgment regarding
what public needs justify the use of
errunent domain.
According to the mling, the City
of New London's determination that
the area to be developed was suffi-
dently distressed to justify a program
of economic rejuvenation is entitled
to deference. In essence, the court
found there was nn principled way to
distinguish economic development
from other public purpose recognized
by previous courts.
While undoubtedly the decision
has prompted vigorous and emotional
public dialogue, and has resulted in
proposed legislative modifications at
the federal and start Icvel, it cannot
seriously be argued that the ruling
gives new eminent domain powers
ro local government.
What Kelo did not do
As indicated, Kelo did not in any way
expand the authority of Minnesota
cities to acquire property. Foe many
years state legislafion has explicitly
authorized the use of eminent domain
for economic development, redevel-
opment, housing, and other public
revitalization efforts. In addition, the
Minnesota appellate courts have con-
sistently recognized the authority of
municipalities to use eminent domain
to acquire property for these purposes.
Contrary ro what has been
reported in media accounts, th deci-
sion does not empower cities to
indiscriminately seize residential and
business properties. State law requires
an exhaustive process, payment of fair
compensaROn, and judicial review
before any property can be acquired
through eminent domain.
Why there should be thoughtful
response to Kelo
Despite the emotional reaction to the
decision, the fact that it does not cre-
ate new law should give state leg-
i,da[ors reason to be thoughtful and
cautious in fashioning a response.
Minnesota has a long history of
supporting public efforts to promote
economic development and neigh-
borhood revitalization. Accordingly,
efforts at eaxinent domain reform
should thoughtfully consider flit
effects that reform will have on local
goveenmen[s'initiaUVes to help alle-
viate and improve blighted areas,
authority to promote affordable hous-
ing and senior housing opportunities,
ability [o clean up polluted land, and
ability to revitalize distces'sed areas-
particularly in [he core cities and
inner-ring suburbs.
State policymakers need to be
careful about effectively giving a sin-
gle property owner the ability [o stop
important public purpose projects.
The League believes local elected offi-
cials are in flit best position to ntakc
decisions about what is in the best
interests of [heir own conxmuni[ies.
A legislative response that strips local
governments of their cxisfing powers
[o improve communities will inevitably
result in [hose same decisions having
to be made on a case-by-case basis at
the state Icvel.
October 26, 2005 LMC Cities Bulletin Page 5
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LERGUE OF MN C[TIES 6512811299 P.02
A bill for an act
relating to eminent domain; providing for and regulating the use of eminent
domain; providing for notice, heating, appeal, and other procedural requirements;
allowing attorney fees under certain conditions; providing for a right of first
refusal; providing definitions; making clarifying, confortnipg, and technical
changes; amending Minnesota Statutes 2004, sections 117.036; 117.055;
117.075, by adding subdivisions; 117.085; 117.51; ] 17.52, subdivision 1, by
adding a subdivision; 163.12, subdivisions la, lb; 469.012, subdivision lg;
proposing coding for new law in Minnesota Statutes, chapters 117; 469.
BE IT ENACTED BY THE LEGISLATIJRE,OF THE STATE OF MINNESOTA:
Section 1. Minnesota Statutes 2004, section 117.036, is amended to read:
117.036 APPRAISAL ANA NEGOTIATION REQUIIZEMENTS
Subdivision 1. Applieatiou. This section applies to the acquisition of property
e ~ , e , .
under this Chapter.
Subd. 2. Appraisal. (a) Before commencing an eminent domain proceeding under
this chapter, the acquiring authority must obtain at least one appraisal for the property
proposed to be acquired. In making the appraisal, the appraiser must confer with one or
more of the fee owners or contract purchasers of the property, if reasonably possible.
r4Heast Notwithstanding section 13.44 or env other law to the coatrarv the acauirins
authority must provide the fee owner or Contract purchaser with a coov of the appraisal
at the time an offer is made. but no later than 20 days before presenting s petition under
section 117.055,
appraise} and inform the ervaet-ofthevwpar's fee owner or contract purchaser of the right
Section 1.
1
FEB-10-2006 09 48 LERGUE OF MN CITIES 6512811299 P.03
02/07/05 REVISOR 7SKlMK 06-5594
2.1 to obtain an appraisal under this section. UDgn request, the acquiring aUthmlty must make
z.z available to the fee owner or wntract purchaser all appraisals of the property.
z.s (b) The fee owner or contract purchaser may obtain. an appraisal by a qualiSed
z.a appraiser of the property proposed to be acquired. The fee owner or contract ptuchaser
z.s is entitled to reimbursement for the reasonable cosffi of the appraisal from the acquiring
z.5 authority up to a maximum of $1,500 for single family and
z.~ two-family residential property and ariniutum dama¢e acouisitions and $5,000 for other
zs tunes of property, provided [hat the fee owner or contract purchaser submits to the
z.v acquiring authority the information necessary for reimbursement,
2.to doessv includin¢ a copy of the fee owner's or contract purchaser's appraisal. within 6A 90
2. t t days after **_~:~ recei, vi~n¢ the appraisal from the authority trader paragraph (a)
z.rz and at least 30 dove be£ore a condemnation commissioners' hearin¢_ For puroosea of this
z.t~ paragraph. a "minimum damaee acpuisition" means an interest in property that a oualificd
z.ta person with appraisal knowledee indicates can be acquired for a cost of $10,000 or less.
2.15 (c) The acguitng authority must pay the reimbursement to the fee owner or contract
z.r~ purchaser within 30 days after receivin¢ a copy of the eDDraisal gad the reimbursement
z.[~ information. Upon aereement between the aequirine authority and either the fee owner
z.ta or contract purchaser, the acquiring authority may~av the reimbursement directly to
z.rv the appraiser.
z.zo Subd. 3. Negotiation. In addition to the appraisal requircmcnta under subdivision 2,
zz1 before commencing an eminent domain proceeding, the acquiring authority must make a
z.zz good faith attempt to negotiate personally with the fee owner or contras purchaser of the
2.23 property in order to acquire the property by direct purchase instead of the use of emineirt
z.za domain proceedings. In making this negotiation, the acquiring authority must consider
z.zs the appraisals in its possession~ncluding any appraisal obtained and furnished by the fee
2.x6 owner or contract purchaser if available and other information that may be relevant to a
z.n determination of damages under this chapter.
z.za Subd. 4. Condemnation commissioners' hearing. Notwithstandine section 13.44,
z.zs . au appraisal must not be used or considered in a condemnation commissioners' hearing
z3o nor may the appraiser who prepared the appraisal testify unless a copy of the appraiser's
z.3r written report is provided to the opposine patty at least five days before the hearing.
2.32 Sec. 2 Mimresota Statutes 2004; section 117.055, is amended to read:
2 3s 117.055 YLtTI""PION AND NO'1'ICF..
z.sa Subdivision 1. Petition. In all cases a petition, describing the desired land, stating by
z.3s whom and for what purposes it is proposed to bo [aken, and giving the names of all persoris
Sec. 2.
FEB-18-2006 09 48 LERGUE OF MN CITIES 6512811299 P.04
02/07/06 REVISOR JSI~lMI{ 06-5594
3.t appearing of record or known to the petitioner to be the owners thereof shall be prtsented
3.2 to the district court of the county in which the land is situated praying for the appointment
3.3 of commissioners to appraise the damages which may be occasioned by such takigg.
3.a Subd. 2. Notice. Notice of t)te objccls of the petition and of the time and place of
3.5 presenting the same shall be served at least ZO days before such time of presentation upon
3.s all pttsons named in the petition as owners as defined in section 117.025, subdivision 3,
3.7 and upon all occupants of such ]and in the same manner as a summons in a civil action.
3s (b) The notice must state that (1) a party wishin¢ to challea¢e the public purpose
3.9 necessity, or authotirv for a takin¢ must appcaz et the court heain¢ and state the obiection-
a.to (2) failure to appear and obiect is deemed a waiver of any obiection: and (3) a court order
3.tt approving the public put-„pose necessity, and authority for the takin¢ is final unless an
3.t2 appeal is brou¢ht within GO davs after service of the order on the nariv
a.t3 ~If any such owner be not a resident of the state, or the owner's place of residence
3.ta be unknown to the pehitioney upon the filigg of an atFadavit of the petitioner or the
3.15 petitioner's agent or attorney, stating that the petitioner believes Utat such owner is not
a.te a resident of the state, and that the petitioner has mailed a copy of the notice to the
3.17 owner al the owner's place of residence, or that after diligent inquiry the owner's place
s.t a of residence cannot be ascertained by the afliant, then aervicc may be made upon such
3.19 owner by three weeks' published notice. If the state be an owner, the notice shall be
Sao served upon the attorney general. Any owner not served as herein prodded shall not be
3.zt bound by such proceeding except upon voluntarily appearing therein. Any owner shall
3a2 be famished aright-of--way map or plat of al] that part of ]and to be taken upon written
3.z3 demand, provided that the petitioner shall have ten days from the receipt of the demand
3aa within which to famish the same. Any plans or profiles which the petitioner has shall be
ass made available to the owner for inspection.
3.26 Sec. 3. Mimtesota Statutes 2004, section l I7.075, is amended by adding a subdivision
3.x7 to read:
3.zs Subd. la. Appeal of order. A partv wishine to challen¢e the nublic pumose
3.z9 necessity. or auhoriy for a takin¢ must aaoear at the court hearine required by subdivision
a 30 1 and state the obiection. Failure to appear and obicct is deemed a waiver of env obiection
3.31 A court order approvin¢ the nublic vuroose necessity and suthorirv for the taken¢ is final
3.32 unless an appeal is brought within 60 davs aftor service of the order on the party
3.33 Sec, 4, Minnesota Statutes 2004, section 1 ] 7.075, is amended by adding a subdivision
3.34 to read:
Sec. 4. g
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a.l Subd. lb. Attorney fees. If the court detelmines that a taken, is not for a public
a.z purpose or is unlawful, the court may award the owner reasonable attomev fees.
a.3 Scc. 5. Minnesota Statutes 2004, section 117.085, is amended to read:
a.a 117.085 COMMISSIONERS, POWERS, ALriTES.
a.s The commissioners, having been duly sworn and qualified according to law, shall '
a.6 meet as directed by the order of appointment and hear the allegations and proofs of all
a.7 .persons interested touching the matters to them committed. They may adjourn from time
a.e to time and from place to place within the county, giving oral notice to those present of
a.~ the time and place of their next meeting. All testimony taken by them shall be given
a.1a publicly, under oath, and in their presence. They shall view the premises, and any of
4.11 them may subpoena witnesses, which shall be servod as subpoenas in civil actions are
a.tz served, and at the cost of the parties applying therefor. If deemed necessary, they may
a,13 require the petitioner or owner to furnish for their use maps, plats, and other information
a.1a which the pefltioner or owner may have showing the nature, character, and extent of the
a.15 proposed undertaking and the situation of lands desired therefor. In proper cases they may
a.t5 reserve to the owner aright-of--way or other privilege in or over the land taken, or attach
a.t~ reasonable conditions to such taking in addition to the damages given or they may make
a.ts an alternative awazd, conditioned upon the granting or withholding of the right specified.
a.t9 Without unreasonable delay they shall make a sepazate assessment and award of the
a.zo damages which in their judgment will result to each of U1e owners of the land by reason
a.z1 of such taking sad report the same to the court. The commissioners shall not reduce the
a.zz amount of the damages awarded becauso the land being taken is, at the lima of the taking,
a.23 valued under section 273.111, designated as an agricultural preserve under chapter 473H.
a.za The commissioners, in all such proceedings, may in their discretion allow and show
a.zs separately i11 addition to the award of damages, reasonable appraisal fees not to exceed a
a.zG total of $S00 $1,500 for sin¢le family and two-family residential property and $5 000 for
a.n other tomes of property. Upon request of an owner the commissioners shall show in their
azs repoR the amount of the award of damages which is to reimburse the owner and tenant
a.zs or lessee for the value of the land taken, and the amount of the award of damages, if
a.3o any, which is to reimburse the owner and tenant or lessee for damages to the remainder
4.31 involved, whether or not described in the petition. The amounts awarded to each person
4.32 shall also be shown separately. The commissioners shall, if requested by any party, make
a.33 at1 express finding of the estimated cost of removal and remedial actions that will be
4.34 accessary on the taken property bocause of existing environmental aontaminaGon.
Sec. 5. q
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s.l Sec. 6. [1.17.2261 RIGAT OF FIRST REFUSAL.
5.2 (a) If the Rovernina body of the acguirin> authority determines that yublicly owned
53 property acquired under this chautcr has not been used and is no lonaer needed for the
s.a purpose for which it was oritrinally acquired. the authority must offer to sell the rroperty
ss to the owner fmm whom it was acquired, if the former owner can be located. at the current
5.6 fair market value of the nroperty.
5.7 (b) ff the former owner cannot be located or declines to repurchase the property
s.a the acquiring authority shall nrenaze a cerLifieate attestine to the same and record the
5.9 certificate in the office of the county recorder or county re¢istrar of litles as atroronriatc
5.1o to evidence the termination of the rieht of first refusal.
s.u (~ This section shall not annN (1) ifthe acguirine authority has an altttna[ive use
5.12 for the gr~erty and the ntoncrty would remain in uublic owaershin' or (2) to acquisitions
s.r3 of property for transportation nurposcs made by the commissioner of tranSroortation
S.Ia Sec. 7. 1~Iinnesola Statutes 2004, section 117.51, is amended to read:
s.ts 117.51 COOPERATION VVfTH FEDERAL AUTHORITIES.
s.t6 In all acquisitions undertaken by any acquiring authority and in all voluntary
5.17 rehabilitation can'ied out by a person pursuant to acquisition or as a wnsequence thereof,
s.rs the acquiring authority shall cooperate to the fullest extent with federal depattrnenu and
5.19 agencies, and it shall take all necessary action in order to insure, to the maximum extent
s.zo passible, federal financial participation in any and ail phases of acquisition, including the
s.zt provision of relocation assistance, services, payments and benefits to displaced persons.
5.22
5.23
s.za Sec. 8. Minnesota Statutes 2004, section 117.52, subdivision 1, is amended to read:
5.25 Subdivision 1. Lack of federal funding, In all acquisitions undertaken by any
s.z6 acquiring authority and in all voluntary rehabilitation carried out by a person pursuant
5.27 to acquisition or as a consequence thcseof, in which, dye to the lack of federal financial
5.2s participation, relocation assistance, services, payments and benefits under the Uniform
s.29 Relocation Assistance and Real Property Acquisition Policies Act of 1970, United States
s.3o Code, title 42, sections 4601 to 4655, as amended by the Surface Transportation and
s3 t Uniform Re]ocation Assistance Act of 1987, Statutes at barge, volume 101, pages 246
s32 to 256 (1987), are not available, the acquiring authority, as n cost of acquisition, shall
5.33 provide all relocation assistance, services, payments and benefits required by the Uniform
5.34 Relocation Assistance and Rea) Property Acquisition Politics Act of 1970, as amended by
Sec. 3. 5
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02/b7l06 REVISOR SSIUMK OG-5594
G.l the Surface Transportation and Uniform Relocation Assistance Act of 1987, and those
s.2 regulations adopted pursuant thereto, and eithei (1) in effect as of3n}'-i-i~68 January 1,
G.3 2006, or (2) becoming effective after 3v}p-198$ January 1, 2006, following a public
G.a hearing and comment. Comments received by an acquiring authority within 30 days after
G.s the public hearing must be reviewed and a written response provided to the individual or
G.G organization who initiated the comment. The response and comments may be addressed in
G.7 another public hearing by the acquiring authority before approval:
Gs Sec. 9. Minnesota Statutes 2004, Becton 117.52, is amended by adding a subdivision to
G.9 read:
G.lo Subd. la. Reestablishment costs limit, Forvumoses of relocation benefits void in
6.tr accordance with this section. the limitation in Code ofpederal iteaularions title 49 section
G.12 24.304, with resyect to reimbursement of reestablishment expenses for nonresidential
G.13 moves, an acguirin>r authority may consider reimbutsinx u to X50 000 for such expenses
G.)a Sec. 10. Minnesota Statutes 2004, section 163.12, subdivision la, is amended to read:
G.15 Subd. la. Petition, notice, and access to information. (a) Upon passage of the
G.tG resolution specified in auction 163.11, subdivision 2, a petition must be presented to the
G.t~ district court of the county is which the land is located. The petition must describe each
G.rs tract of land through which the highway passes, state the purposes for which the land is
G.19 proposed to be tnlceu, and list the names of all persona appearing ofrecord or known to
G.zo the county to be the landowners.
G.2t (b) Notice of the objects of the petition end of the time and place of presenting the
G.22 notice must be served, togciher with a copy of the resolution, upon each occupant of
G.23 each tract of land through which the highway passes at least 20 days before the hearing
G.za under subdivision lb. If an owner is not a resident of the state, or the owner's place of
G.zs residence is unknown fo the county, service may be made by three weeks' published
G.2G notice following the filing of an aEridavit on behalf of the county by the county's agent or
G.27 attorney stating drat the eoanly;
G.zs (1) believes that the owner is not a resident of the state; and
G.z9 (2) has either mailed a copy of Ure notice to the owner at the owner's last known
G.30 residence address or, after diligent inquiry, the owner's pace of residence cannot be
G.31 ascertained by the county.
G3z If the state is an owner, the notice must be served upon the attorney general. Art owner
G33 not served as provided in this subdivision is not bound by the proceeding, except if rho
G.34 owner voluntarily appears in the proceeding.
Scc. 10. 6
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7.1 (c) Within ten days of an owner's demand, the ownei must be furnished a
zz right-of--way map or plat of all that part of the owner's land to be taken. Any applicable
~.3 plans or profiles that the county possesses must be made available to the owner far
7.a inspecGan.
~s (d) The notice must state that: (1) a party wishine to challenee the vublic vutvose
7.c necessity, or authority for the takine must avpeaz at the court hearing and state the
zz erection; L2) failure to avveaz and object is deemed a waiver of env obiection• and (3) a
~.a court order apntovine the public purpose necessity and authority for the takine is final
~.v unless an appeal is brought within 60 days after service ofthe order on the yarty
~.lo Sec. 11. Minnesota Statutes 2004, section 163.12, subdivision lb, is amended to read:
zt t Subd. lb. k'indlag or ncecsalty. When proof of service of the notice required in
7.12 subdivision Isis filed with the court, the court shall hear all competent evidence offered
z13 for or against granting the petition at the time and place fixed in the notice or otherwise set
i.ta by the court, On finding that the proposed taking is necessary and authorized by law the
7.ts court shall order the proceedings to commence pursuant to the remaining provisions of
7.t~ this section. The court order findin¢ the taking necessary and authorized by law is a final
zn vrder and must be avvealed within 60 days from its service an the vertu
7.1s Sec. 12. Miffiesota Statutes 2004, section 469.012, subdivision lg, is amended to read:
~:ts Subd. lg. Gct property; eminent domain. (a) An authority may, within its area of
~.zo operation, acquire real or personal property or any interest thttein by gigs, grant, purchase,
~.zt exchange, lease, transfer, bequest, devise, or otherwise, and by the exercise of the power
~.zz of eminent domain, in the meaner provided by chapter 117, acquire real ptnperty which it
zz3 may deem necessary for its purposes, alter We adoption by it of a resolution declaring that
zza the acquisition of the real property is necessary:
~.zs (1) to eliminate one or more of the conditions found to exist in the resolution adopted
~.z6 pursuant to section 469.003 or to provide decent, safe, and sanitary housing for persons
~.z7 of low and moderate income; or
zzs (2) to cazry out a redevelopment.project.
~.z9 (b) Real property needed or convenient for a project may be acquired by the
~.3o authority for the project by condemnation pursuant to this section end section 469.401.
7.31
7.32
7.33 ~~~~
7.34
Sec. 12, ~
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8.1
s.z -
8.3
s.a ,
as
x.G
s.~ ,
a.s fdj~c, property acquired by condetnnalion under this section may include any
s.9 property devoted to a public use, whether or not held in trust, notwithstanding that the
s.to property may have been previously acquired by condemnation or is owned by a public
s.lt utility corporation, because the public use in conformity with the provisions of sections
b.tz 469.001 to 46<J.047 shall be deemed a superior public use. Property, devoted to a public
8.13 use may be so acquired only if the go~eming body of the municipality has approved
a.ta its acquisition by the authority.
8.15 (rj~ Att award of compensation shall not be increased by reason of any increase
s.tG in the value of the real property caused by the assc~tnbly, clearance or reconstruction, or
s.t~ proposed assembly, clearance or reconstruction for the purposes of sections 469.001
5.16 to 469.047 of the real property in an arcs.
8.19 Sec. 13. (469.4011 ACOUTSITION BY ENITNENT DOMAIN UNDER THiS
a.zo CHAP-CLR.
e.2i Subdivision 1. Application. Sections 469.401 to 469.403 apol~to the exercise of
s.zz eminent domain powers by a condemning authority under this chanter if the property
8.z3 interest to be awuired by eminent domain is intended to be sol trans£errcd or otherwise
a.za conveyed to a person or nonaovcmmental entity without the Dower of eminent domain
azs Subd. 2. Public hearing and uotice regpired _P_rior to adoption of a resolution
azG authorizing the use of eminent domain the governing body of the condergning authority
e.z~ must hold apublic hearing on the proposed acquisition after published notice in_a
sza newspaper of general circulation is the Rovemment entity's jurisdiction which must be
6.29 made at least one time not less than two weeks nor more than 60 da rior to the date of
s.3o the hearine. The notice must reasonably describe the properly interest to be acquired state
a.31 that the purpose of the heariae is [o wnsider acouisition by eminent domain state that
s.32 comments maybe submitted orally at the hearin or in writing prior to or at the hcarina
8.33 and specify an address to which written comments may be mailed Not lass than two
a.3a weeks before the hcarine notice of the hearinx must also be mailed to the owner of each
s.35 parcel proposed to be acquired bnt defects in the notice do not invalidate the acguisi[ion
Sec. 13.
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9.1 For the aurpose of eiyin~ , mailed notice ownels ace determined a5 v rovided by section
v.z 429 031 subdivision 1 p ara>rraph (a) The resolution authorizing the use of eminent
v.3 domain must not be adopted at the same meetin or on the same da as the ublic heari
9.a Subd. 3. Resolution, The resolution authorizing the use of eminent domain must:
9.5 f 1) identify and describe the public benefits that are ]mown of expected to result
4.6 from the progrrtm or proicct for which the property interest is proposed to be acguired•
9.7 ~2) identify and describe the private bcnefil's that are known or expected to result
9.s from the anticipated conveyance of the property interest proposed to be acquired:
v.9 f3) summarize and respond to any oral comments made at the public hearing or
9.to written comments received at or prior to the public hearin¢: and
v.u (4) address how the acquisition of the properiv interest serves one or more identified
v.tz public pumoses and why the acquisition of the property is reasonably necessary to
9.13 accomplish those purposes.
9.ra Subd. 4. Sttmmar~of 5ndin2s. The aoveming body of a condemning authoriri
9.15 must sunrmari~c the findings adopted in the resolution authoriunQ the use of eminent
v.t6 domain in the notice of petition required under section 117.055.
9.n Sec. 14. 1469.4021 DEFINITIONS.
9.1s Subdivision 1. ScgpC, For purposes of sections 469.401 to 469.403, the following
9.19 terms have the meatrings given to them.
9.zo Subd. 2. Abandoned. "Abandoned" means that at least 75 percent of a building's
9zt azea has been substantially unoccupied for at least one year prior to [he date of inclusion
v.zz in a blighted area.
v.z3 Subd. 3. SliEhted arcn. "Blighted area" is an area where the condemning authoriri
9.za finds that the conditions provided in clauses (a), ), and (c) exist:
925 (a} the land is or has been in urban use;
9.z6 fbl at least one of the followiae conditions exist:
9z7 (1) 50 percent or more of the buildings in the area are structurally substandard
92s or abandoned or a combination thereof;
9.29 2 30 percent or more of the pazcels in the arcs constitute an environmentally
v.3o contaminated area; or
9.31 (3) (i) 20 percent or more of the buildings in the area are structural) substandard
9.32 or abandoned or a combination thereof. and (ii) an additional 30 percent or more of the
9.33 buildings in the area arc obsolete as evidenced by lack of investment based on limited
9.3a building permits fpr repair or improvements in the previous five years; and
9.3:> (c) at (east one of the following conditions is present:
Sec. 14. 9
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lo.l {1) diyersi9y of owners}lio or defective of unusual conditions of title prevent the
lo.z free alienability of ]and within the area;
to.3 (21 there is inadequate infrastructure in the area;
to.a (3) the crime rate in the area is hi¢her than in the remainder of the county or
to.s municipality;
to.e (4) 30 percent of the tax parcels have had delinaucnt taxes or special assessments for
to.z a period of two yeazs or more prior to inclusion in the area• or
to.s (S) negative market conditions exist in the area.
to.s Subd. 4. Enviranmentally contaminated area. "Environmentally contaminated
to.to area" means:
m.n (1) any parcel [hat would be clita~le for wntamination cleanuu erants from' the
10.12 Dcoarlment of Employment and Economic Development's contamination cleanuo 2raltt
to.t3 account under section 1167.552, subdivision 3, or 1167.554 subdivision 2 clause (2)• or
to.ta (ii) the Metropolitan Council's tax base revitalization account under section 473 252• or
lo.ls (2) an area that qualifies as a soils condition district under sec6an 469. ]74.
lo.7s subdivision 19
lo.t7 Subd. 5. Inadequate infrastructure. "lnadrguate infrastructure" means any
to.ta publicly owned physical infrastructure includin¢ sanitary sewer avsrems water systems
tote strcels wastewater treatment and pretreatment systems storm water management systems
lo.zo natural gas systems, and electric utility systems which are inadequate to serve either
io.zt existinc or proiected users in the blighted area because the system is undersized does not
to.zz meet current dcsian standards. or is si ificantly deteriorated
to.z3 Subd. 6. Market area. "Market area" means the geoi'taphic or locational
to.za de]ineation of the market for a specific catcaorv of real estate
1o.z5 Subd. 7. NeEative market conditions. "Ne¢ative mazket conditions" are evidenced
to.26 by one or more of the {ollowinc factors for similarly classified prooertr (1) market values
10.27 are lower than in the remainder of the market area are increasine at rates materially lower
lone than in the remainder of the market area or are decreasinfl compered to the remainder of
to.zs the mazket area• 2 vacanc rates aze hi her than in the remainder of the market ama
1030 or (3) other comparable evidence of neeative market conditions in the blighted area
70.31 co~ared to the market area as a whole
t o.3z Subd. 8. Public nuisance, "Public nuisance" has the meanine ¢iven in section
70,33 609.74.
10.34 Subd. 9. Structurally substandard. "Structurally substandard" means a buildine
toss that contains defects in sh~uctural elements or a combination of deficiencies in essential
1o.3G utilities and facilities, light attd ventilation and fire protection includ•n adequate cr;xesc
Sec. 14. 10
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u.t which scant defects or defteieaeies lustily substantial renovation or clearance A
t1.z building is not structurall~ubstandard if it is in wmpliance with the building code
11.3 ~licable Lo new buildings or could be modified to satisfy the building code at a cost of
tl.a less than 20 percent of the cost of constructive a new stmcture of the same square footage
1t.5 and type on the site. The municipality or condemning authority may find that a building is
t 1.G not disqualified as structurally substmdard under the previous sentence on the basis of
11.E reasonably available evidence, such as the size type and sae of the buildin¢ the avera¢e
11 s cost of plumbin¢ electrical. or sttuctwal repahs. or other similar reliable evidence The
t1.s municipality or the condemnin¢ authority may not make such a determination without an
u.lo interior inspection of the property but need not have any independent expert appraisal
1t.11 prepazed of the cost of repair and rehabilitation of the building An interior inspection
u.t2 of the vroverri is not required if the municivaliri finds that (1) the municivaliri or
1 Lt3 condemnine authority is unable to ¢ain access to the properiv after usive its best efforts to
11.ta obtain ermisaion from the a that owns or controls the r err • and 2 the evidence
1 t.ls otherwise supports a reasonable conclusion that the buildin¢ is structurally substandazd
I t.t6 Items oi' evidence that support such a conclusion include recent fire or police inspections
lt.n Con~site~ropertv tax anoraisal~or housin¢ inspections exterior evidence of deterioration
i i.ia or other similar reliable evidence. Written documentation of the fipdin sand reasons wh
11. tv an interior inspection was not conducted must be made and retained failure of a buildin¢
11.zo to be disqualified under the provisions of this subdivision is a necessary but not sufficient
t 1.z1 condition by itself to determine that the buildin is substandard.
11.22 Sec. 15. 14G9,4031 LIMITATION ON USE OF'EMINENT DOMAIN
t 1.z3 Subdivision I . Limitation, Notwithstandi nn other rovision of law no
11.z4 condemning authority under this chanter mev exerpisc the vower of eminent domain if the
11.zs property interest to be acmiired is intended to be sold. transferred or otherwise conveyed
11.zs to a crson or non ovemmental entit without the ower of eminent domain unless the
t 1.27 condemning authority finds that rho use of eminent domain is necessary to accomplish one
11.28 or more of the numoses in subdivision 2
i 1.zy Subd. 2. Purposes, For purooses of camin¢ out the powers and authority provided
11.30 under this chapter, a condemnin~+ authority with the power of eminent domain under
11.31 this chanter may exercise that power to acquire land to accomplish one or more of the
u az followin¢ purposes
11.33 a the ~ ossession occu tion or edo ent of the ]and b the eneral ublic or
1134 by public agencies'
11.35 (b) [o remedy a public nuisance;
Scc. I5. 11
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6512811299 P. 13
02/07/06 REVISOR JS1{/IvIIC 06-5594
tza c to ca out a ro to remcd or im rove an environmtmtall contaminated
la.z
12 3 ~d) to earrv out a pro¢am to rem •dv or irnnro e a bliehted area or
12.a (e) to facilitate development of housing for low or moderate income persons as
12,5 dcfined under any federal. state or local proatam
ix.a Subd. 3. Economic development The public benefits of economic development
Iz.7 including an increase in tax base tax revenues emplovmmt or amoral economic health.
12.s shall not by themselves constitute a public purpose except as prorided in subdivision 4
12.9 Subd. 4. Exceptions. Notwithstandin¢ any othernrovision oflaw a condemnin
iz.l o authority under this chapter may condemn property if one or more of the followine forms
12.11 of financial assistance are present:
tx.12 1 a ant awarded b a state a ency fot economic development related purposes if
tz.13 a~lc business receives 4200 000 or mop: of the rant proceeds
t z.la (2) a grant award to local units of ¢ovemment or development authorities under
12.15 sections 1167.551 1167.559 116).571 and 1167.8731•
t2.ts 3 a loan or the gran or urchase of a loan made b a state a enc for economic
12.17 develo meat related ur oses if a sin le business receives $500 000 or more of the loan
12.18 proCeeda;
12.19 4 a reduction credit or abatement of a tax assessed under cha ter 297A or 290
iz.zo where the tax reduction. credit or abatement applies to a eoaaphic area smaller than the
12.7.1 entire state and wasgranted for economic development related pu_ oses or
12.22 5 an a ro nation b the legislature to acquire or better proneity in whole or in
12.23 art with the roceeds of state eneral obli afion bonds authorized to be issued undo
iz.za article XI ecction 5 clause a of the Minnesota Constitution.
1aa5 Financial assistance dons not include a cots b tha state of aids and credits under
iz.zc chapter 273 or 477A to a political subdivision
12.27 Subd. 5. Disclosure. All licants must indicate on a lications for financial
i2.za assistance under subdivision 4 whether the lise of eminent domain ma be accessary to
1259 acquire propeliv forthe proieet
1236 Sec. 16. EFFECTIVE DATE
1231 Sections 1 to 6 and 10 and 11 are cflectlve for condemnation roceedin s that
t2.JZ are commenced on or after Au st 1 2006. Sections 7 8 and 9 are effective for all
tz.33 a~uisitions in which ille initial notice of elieibility is given on or after Au¢~~st 1
iz.3a 2006. Sections 12 to 15 a 1 to an roe that is included in a rcdevelo mep[ plan
12.35 established, on or after Aueust 1 2006
Scc. 16. 12
TOTRL P. 13
FEB-09-2006 17 40 LERGUE OF MN CITIES
_ 02/oRroa p0:03 PM HUUSE RESFARCN
6512811299 P.02
)Mi3 UUIIG
I'I A bill for an act
i = rclntiny to cmincnc domain; defining public use or purpose; prohibiting the use
i.± of eminent domain for economic development; requiring clear and convincing
a evidence for certain takings; providing far attorneys tees' :md other additional
i.5 clcmenls of compensation making ocher changes in the exercise of eminent
i e dontain; amending Minnesota S[a[utes 2004, sections 117.025; 117.075,
i ~ suhdivision I; proposing coding l~or new law in Minnesota Statutes, cltap[cr 117.
i H BL' 1T ENACTED BY THE LEGISLATURE OI"I'HE STATE OF MINNESOTA:
~ ~ Section 1. (117.0101 PRE);MPTION• NO [MPI,IF,D AUTHORITY.
~,iu Subdivision 1. Prcemotinn. Notwithslandinr env other provision of law includine
i,n an charter ruvision ordinance slatttte ors ecial law al] condemnin au lllorilies.
~ ~' includine home talc charter cities and all other policical subdivision oC the state. mart
i. i a exercise the ppwe[ of eminent domain in accordance with the provision} of this chaos
i.i~ includine all procedures definition; remedies and limitalionc. Additional nrxedureJ
i5 remedies, or limitations that do not deny or diminish the subshntive and prpcedural rit,hts
~.ir, and ~rorections of awncrx under this chapter arty be provided by other Iaw ordinance,
~.~'/ or chatter.
~ ~ es Suhd. 2, No implied anthority. The power of eminent danain cannot be implied.
~. iv In ordu~ to exercise the newer of eminent tlomuin, the condemninz> authority mull hive ~tn
i~?~/ ~~res >rant pf eminent domain authority.
'~ 'i Scc. 2. Minnesota Statutes 2004, Seclion 117.025, is amended to read:
isz 117.025 Dr1~1NITIONS.
~~<? Subdivision ]. Words, terms, and phrases. ..
~'J4 ~ for the nurposcs of this chapter 'tad any
Scc.
FEB-89-2096 17.41 LERGUE OF MN CITIES 6S12B11299 P.03
07J08/UG 00:07 PM 110USf3 R145EARCH IMA DDl l li
2 i o~hcr general nr special law aulhori-rin~ the •zerci a of thq~[uwcr of cminem domain, the
2.1 worth. terms, and phrases dofined in this section have the meanings given [hom.
z., Subd. 2. 'Caking. Tnkipg and all words and phrases of like import include every
~~ interlcrence, antler the right of cminem (lomain, wish the possession, enjoyment, m' value
as of private property.
'z.r, Suhd. ]. Owner. "Owu~.r" includes all persgns intt~e~leel-jtracteFt with anv interest
z? in the pmpetgy spb~ucl„~o a taking. whether tl. proprietors, tcnantc, life estate holders.
-',~ cncumbrancets. beneficial interest holders, or MI)CI'wise.
2.~ Subd. a. Cpndetnuine aulhndty. "Condenmine authority" mcans'mv person or
i, nl untity wish the power gf eminent domain.
?. i i Subd, 5. Abandoned property.,_Abnndoncd properly" means proper[v not occupied
^^-~i? by alerson with a Ic~,al or eglii,tablc ri<•ht to occupy it and For which the candcmnin
z.i7 amhofi.(y is unable u) identify and conltlcl the owns despite makiue relsonable elforls.
z.ia Subd. G. [ili~ht_,.` ed area, (a) "I?li=bled ;lre[I" means, exclusively at the lime of ,~
z. i5 condemnation, an area' (1) [hart is zoned end aced I`or urban use' and (2) where mote than
2.Ir 50 percent of the buildings ~ ~e dilauidulcd
z n Sul.xl, 7. Dilapidat, ed baildine. ^OtlapidateJ builQink" means, cxclusivcly. a
2.IS buildin
2 ie (1) that was inspected by the 'tppropriate local eovemmen[ and cited f or one of more
23n buildin, coda violations at Icast 12 months before the condemnation is eommcneed~
''=t ? in which the building code viohlione cited have not been remedied as
z.z? decennined~_a[ ]cast unc rcinsnection that fiudt noncompliance after the due date Fgr
223 compliance with al) order to correct a buildin£ code violation' and
a.za (3) that, as of the dale the condemnation is commenctd, is unfit for human use
'~ bacuusc it is unsafe eg'uentrally unsound, or lacking. in basic equipment.
zaa Subd. R. F,nvitronmenlally contaminated area Environmcnfally contaminated
7.27 area means an area
2.2b' {1) that contains un or below more lhtm 5U percent of its surface arcs any suhu~llct,
1.zo ur substances delined re ul'I(cQ~or listed as a hazardous substance. hazardous material.
z.'~o hazardous waste toxic waste pollut'Int cgnl'tmin~ml or toxic substance, or idcntiGed as
2.3 i hazardous to human heal(hpr the environment under stale or federal law or rc ulalion, and
~...-
for which the a>sts of inveslieuliun. monitarina and testing. and remcdi~l -cation
z.3'. qr removal. as dclincd in seaion t 150.02, subdivisions 16 and 17 respectively includin
z,~a anv slate cysts of remcilial notions. exceed I qU percent of the assessor's estimated market
2 ?? value for rho conuuninatcd arcs, as tie[errnincd under scaion 273.11, for DroperlV lazes
^-.?t~ puvnblo iu the year in which the. cuntlumnatiun cnmmcncrtl
Sec. ?.
FEB-89-2006 17 41 LERGUE OF MN CITIES 6512811299 P.04
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?.I Suhd. 9. Puhlic nuisance. 'public nuisance" ntcans [public nuisancu under
..z section 609.74,
!-? Subd. 10, Public service rnrporalion 'Public carnnration" means ~ uublic utili(v'
3,~ i!as, electric, tclephooe or cahlc comnlullltaliOnS company COOpeI"allvC aSSOCitliOn~
? S n:uw'nl ~•as pinelinc cgmpanv; cntde oil orpctraleum products pipeline comp mr
ab plunicinal tnility~ municipality when oucra[ing its municinallY owned u[ililiei; tn-
?? municipal nowet' aeutcv as ylhcrwise reeulale~ under chanters 237 300 and 30oA.
?~s Suh[L 1 L Puhlic u5c, public purpose {n)'Public uu" ur "uublic nurnoce' meins,
?.'1 exclusively: -
', w I the ioygession occunatimt owpershin, and eniovment of the land by the xt:neral
7. i i public, or bV public a encics~
?.i~ 2 the cre.ttion or lunctionin^ of 'I public acrvict: -ornortlian• or
+.i? (3) mitication of ^ blighted area rcmcdiation of an envirounenhlly cont~unistlcd
?~ia ~rrt, reduction of ahandoncd ro ert pr removal of a ublic nuisance.
+~ Is h Thcpublic benefits nt' economic development including an inerelse in tax base
7. i e tax revenues em to mcnt. or enertl economic health. do not by themselves consliwm
? u :Jntblic use or public nurnoce
a.ls Sec. 3. [117.0271 CONDFMNATION FOR RI IGHTMITIGATION
?.iii CONTAMINA'1'fON RCMCDIATION
?.2u Subdivision 1. Npn-dilapidated buildings in areas of bli ht tniti ation• absolute
?~~ ~ necessity. bt takiu ro urL to miti ate bli hl. a condemning authority mull not lake
?„ non-dila idalcd buildin sin the area unless it is absulutcl ncccssar in order to remove
?.a? the dilapidated buildings,
~.z4 Subd. 2. Uncontaminated property iu environmental contamination
?ss remedialion areas• absolute necessity In taking nrpnerty to remediate environmental
? 2e contamination. a condenutit~ aulhori tv must not take uncontaminated mtcels in the arel
+ 2~ unless it is absolutely necessary in order to comolete mmcdi tLion of the contaminated area
? zs Subd_3. Contribution to condition by developer disallowed if a developer
3.29 involved in the rcdevclonmwu of the proicct area conaibuted to the bli~h[ or envil rntment tl
?.?o wntaminalion within the nroiect ve i Us condition cong'ibuted to by the devclopa must
?.?I not he used in the detem?inatiolt oC bli~,hl Or enviropmztital contamination.
?.?z sec. 4, [117.(1311 AT"fO1tNI:Y FP;P:S.
?' (u) II thu final judgment or •tw•ud for d;imaxes, as determined at any Icvcl in the
??~+ etnlnem domain procea or by the narti~s themselves. is more than 20 ucrcctn eresstrr Ih~tn
Via: 4,
?
FEE-89-2(496 17 41 LERGUE OF MN CITIES
6512811299 P.95
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4I the. last written ol7br of com ensation made h the condcmnin aulhorit riot to the
^' filing oC the petition. the coup >hall aware[ the owner reasonable attorney feca litigation
a.s expenses 'toursic•ll Fees, other exncrls lees and odder related costs in addition to other
^ ^ compensation and lee; authoriicd, by this section.
^ 5 b In anY cafe where the court defernlines that u ]akin is Ilul f
or a ublic u.cc or
a.e is onL•twFOL the court shttll awaf<I the nwnor reasonable auomey Cccs and other rclased
+ ~ cx lenses fees and costs in addition to other comncnsation and fees authorised by this
;s .iuciioll.
a.v Sec. 5. Minnesota Smtules 2004, section 117.075, subdivision I, is amended to read:
^.lo Subdivision 1. Hearing on Irking; evidentiary standard. ~Upun proof being
a. i ~ filed of the .cervicc of such notice, the taut], at the time and place therein lixcd or to which
^. i ~ the hea, illg may be adjourned, shall hour :Ill competent evidence offered for ur aoains[ the
a.~ ~ granting of the pc[itiun, regulating the order of proof us it may deem best,
a.lq h 11• the [akin' is Cor the miti +ation of a hli hted area rwnedialion of an
a.ls environmental] connminated area, rcduciu abandoned ro er or rcmovin a
a.la public nuisance then notwithstanding vlv other m•ovisiun of eneral or snec{a1 law, a
a.i~ cundemnin> euthori must show h clear and conviucin evidence to the disu•ict cow-[
^.is chat the [nkin>; is necessary and for the tlesienated oublie use.
a.ie c Ip arty apDea] of [he district courts dctcrmilld[ion of whether the takill
a.zo tioccssat'v end Cor a oublie ace the court of appeals must review the district couru
~.al determination of facts and law de nova
~..~z Sea 6. 117,186] COMPFNSAI'ION FOR LO55 OF GOING CONCERN.
a.zy Subdivision 1. Compensation far loss of oin conrern. If a business or trade is
^.2a destroyed by a mkine the owner shall he com lensated for loss of oin concern unless the
a.zS condemnirn+ authorit ~ establishes any of the lbllowine bV clear and convincing evidence,
a.zn ~thc lo.es js not caused h the tukin^ n1• the co ert or the in ur to the retnaindcr•
a,z7 (2) the loss eau be reasonably ^rev~
._ ntcd by rclotatine the business nr tr•lde in the
"~'-* same or a Simi tar and reasonnhl suitable location xs the ro crI that was taken of b
a"/ utkin_ sle ~ and ado tin + >roccdures [hut a rcasonabl rude]]] rrson of a similar a e
'i sn and Under similar conditions as the owner, would take and ado l in reservin the oin
a.3i concern of the business or trade or
^~!= ~comnensation ftn• tltc_loss of going cpncem will he duolicaled in the
a.?3 conlpeusation otherwise awarded to the uwncr.
Src G.
FEB-09-2006 17 41 LERGUE OF MN CITIES 6512811299
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s.i Suhd. 2. C;oine concern delined for pumo.ces of [his eeuion "wing concern"
5 2 means the benefl tti that accrue to a business or tt'ade as n result of its location re oration
5.3 For deoendt~bility, skill or quality customer base, enpd will. Or anv other circumstances
s,a resultine in nrobablc retention of old or ecyuisition of new natronaee
`~~ Subd. 3. Procedure. In all cases where an owner will seek compen "uion 1'or lose of
'.(` "silo 1f; Lpnecrn, the damaees i(';toy shall in [he first in<rtncc be determined and roporlCrJ
5.7 b_y the commissioners under section 117.105 as nart of the comoenseuiun due to the
s x owner. 'fhe owner shall nolii the Condcmnim* auhorit of the owner's intent to claim
5.9 COmp2115ahUIl fur loss of opine concern no later than '1U dws prior to the commissioncls
s. n1 hearings. Tho commissionor'c decision rc~ardine anv awed for loss of mine concern
s, i I maV ha aDOCalcd by anv Om'ty in accordance with section l 17.145.
s.i' Scc. 7. j117.1871 MINIMUM COMI'ENSAI'IUN.
5.~3 Whcn an owner must rclocalc the amount of damaees savable at ~ minimum must
5.11 be su(Yicicm for an owner to purchaee a similau• house or huildine of eguivdent size in
S.is the communit and not less than the condemmn authorit '.c amen[ or de psi[ under
5.te scctirn[ 117A42.
S.i~ Scc. 8. [117.1887 LIMITATIONS.
s.l e The condcmnine authority may not require the owner to accept as part of the
s.l`J cm~nsation due anv subs[in1[e or replacement property Nor shall the condemning
s?o autltorily roc wire the owner [o age [the return of ro er[ ac aired or an onion thet'eof.
5.=~ Scc. 9. (117,1891 PUBLIC SF,RVICG CORPORATION EXCEPTION
5.2Y Sections I1 i.031, 117.IR1, I l7 187itmd 117.188 do no[ apply to puhlie service
5,21 cotpprat10nS.
Sal Sec. I(1. .117.190] PL1Bi,IC IiEARIN(;
5.15 Subdivi.aion 1. Definitions. (a) Por the purposes of [his section "lord p~wemmenC'
s.ao means the dccted ovcmin hod of a sWttttor or home rule chaser cit cqunt br
5.27 U>wnshlD.
A2x (h) For the oumoscs o1'th' • ccelicm "agcney° means anv Subdivision, agency.
s.2v authority nr other entity of th~~ loc•tl ~vernmem including ~ port tlnlhority economic
5?u development authorit housin `and rcdcvclo anent authorit or other similar emit
s.t i cstahlishetl under general or succial law
P.06
ti;:c. 10 5
FEB-b9-2(da6 17 41 LERGUE OF MN CITIES 6512811299 P.07
uatnRi06 00:03 PM I{OUSE RESEARCH JMd DDIIG
a t Subt1~2. Public hcarine, vete h local overnmenl nvernin bod . BcEore a
~~'- local eovernment_or aeency acnuires_property by the excreisc of the power ul' eminent
a a domain~thc Incal covernmcm muu nntifv •t,ch nropeny ow t •r in ritine of i uublic
n.c hcarine on the ro Deed [akin+ osl the ubGc hearing information on the local
r,.c govcrnntenl's Web site if an trod uhlish notice of the public hearing in the official
n.c ncwsoaper. Notice must be u'ovideti at least 3(l Ague but not more thlu GO dates be1'a'e [hc
n.7 hearinc. Any interectad ocrsun mint be allowed reasonable time to present teslimon nt
r+.k the public hearing,. The orocoodinpe of the hetu~inR must he recorded and available fo the
!,'~ public lin-revipw and connmcm al reasnnablc times and a rca< ^`
Doable place. Ac the next
a. ur reAttlar mcclinp of the local Government that is at Tests[ 30 du s after [he ublic hearin the
e.i i local tovetmmcnt must vote op the nutetion a! wheitter to authorize the local oyernment
l.12 or a ency LO use enllpelm domain to ac(IUirc the prnuertV.
e. i + Scc. 11. REVISOR'S INS1'12UCTION,
6.ia The Revisor shall chap a tht prase '7i ht of eminent domain" whare found in
e.ls 'v(inneso[a Statutes and Minnesota Rules to " ower of eminent domain."
n.ie Scc. 12, EFFECTIVEDA'1'1;.
!~~~~ This act is tlTcctive the da fullowin final enactment and a lies to condemnation
e.ia procecdin~s commenced on or lfter March 12006
s~~. i?.
G
TOTRL P.(~7
Responsible eminent domain use in Minnesota
Erir Willette and Rachel Walker
The Nov. 30 issue of Cities Brdletin
highlighted the results of an LMC
survey of Minnesota cities on their
^se of cnrincnt domain. In addition to
the survey, League staff conducted case
studies of cities [hat have used emi-
nent domain in recent years for proj-
ects where land was or will be turned
over m a private owner.The case smd-
ies complement [he survey results by
exploring the circumstances in which
cities have used eminent domain
and how the projects have positively
impacted communifies.The case smd-
ies looked at the previous condition
of the property involved, the nature of
the project, the public process that was
followed, and the benefits to the com-
mm~iry.
Case study findings
Citdes have used eminent domain
responsibly. The case smdies made
clear that the city councils consid-
ered [he use of eminent domain very
carefully. Cities have negotiated with
property owners in order to try to
avoid using enxinent domain (e.g.,
Brooklyn Center, Brooklyn Park,
Coon Rapids, Columbia Heights). In
White Bear Lake, the council suc-
cessfully negotiated with eight ten-
ant businesses and did not have to use
eminent domain in the first phase of
its redevelopment project.The eight
businesses relocated and now own
their properties.The dty also revised
its redevelopment plans in order to
address conmuniy concerns about the
city's initial plan to acquire the home
of an ddecly resident with entinent
domain. Cities also followed regula-
tions pertaining to relocation benefits
and enlisted the help of relocation con-
sultants to work with business owners
(e.g., Bemidji, Coon Rapids).
Redevelopment and economic
development projects are nitical ele-
ments oj'cities' long-term plans or
community visions. Cities sought pub-
lic input on their projects and engaged
their communities through public
meetings, focus groups and citizen
taskforces (e. g., Brooklyn Park, Coon
Rapids, Little Canada). In Chaska, for
example, community members partic-
ipated in a visioning process focused
on maintaining the viability of the
downtown area by adding housing
units.The process led [o long-[enn
redevelopment plans for the down-
town area.
Communities have peen positively
impacted by projects where (and is
turned aver to private owners. Cities
have or will make invesunents in public
facilities and in&astmctuxe such as
parks and trails as par[ of redevelop-
ment projects (e.g., Anoka, Columbia
Heights). Projects have also spurred
secondary investments like the open-
ing of new businesses and private
property improvements (Beuaidji,
Brooklyn Pack, Edina, Osseo). After
new housing units in a Brooklyn
Center neighborhood replaced homes
in structural decay, property owners in
adjacent areas began making improve-
ments to [heir properties- Projects
have also allowed cities to rake advan-
tage of natural amenities and reincor-
served nmltiple purposes. Some filled
gaps in the types o£housing available,
including housing for empty nesters,
seniors, and the homeless (e.g., Coou
Rapids,White Bear Lake, Duluth)-in
Columbia Heights, the city has not
added new housing foe decades. A
large redevelopment project will add
550 housing units to the community
over the next flue years. Conunuriities
also guned public facilities such as riv-
er&ontparks, alibrary, apolice station,
and a senior center (e.g. Brooklyn
Center, Edina).
Citdes have used eminent domain
to make communities snjer by elinti-
nnting hazardous buildings and mit-
igating contamination. Property
acquired for redevelopment, eco-
nomic development, or housing proj-
ects needed remediation for a range of
hazards, iududing lead, asbestos, and
petroleum waste (c. g., Coon Rapids,
Edina, Little Canada,White Bear
Lake).The dty of Silvee Bay is work-
ing to clean up severe asbestos and
lead pollution on the site of an aban-
doned aparnnent complex i[ acquired-
In Robbinsdale, a severely blighted
house was demolished to make way
for a new house that is the best on the
block, spurring several other property
owners to make majoe improvements.
The Cities Bulletin article about
the LMC survey of Minnesota cit
ies on [heir use of eminent domain is
available on the League's web site at
porate them into conmmnity life (eg-, www.lmnc.org. Ifyou have questions
Chaska, Brooklyn Park)- regarding these case smdies or the
Projects have met or will meet a
critical community need. The rede-
velopment and economic develop-
^rent efforts of case study does oken
survey, contact Eric Willette, LMC,
at (651) 281-1245 oc wIDette@lmnc.
org; or Rachel Walker, LMC, at (Fi51)
281-1236 or rwalker@hnnc.org. ~
Sondra Erickson , E6 13 200
State Representative
District 16A
Benton, Mille Lacs, Morrison and
Sherburne Counties
Minnesota
K House of
- _- - Representatives
COMMITTEES: CHAIR, ETHICS
VICE-CHAIR, EDUCATION POLICY AND REFORM
EDUCATION FINANCE
REGULATED INDUSTRIES
GAMING DIVISION
Febntary 2, 2006 i /~ ~ /
Deaz Friends, /~
This letter invites you to apre-session legislative hearing on eminent domain conducted
by the Civil Law Committee of the House of Representatives in Princeton on Thursday,
Februazy 16 from 7 to 9 p.m. at the Princeton Partv House. This facility is located in the
mall in downtown Princeton east of the lights at the intersection of Rum River Drive and
First Street. There is plenty ofpazking in the rear lot off Second Avenue or in the front in
the mall parking lot. You may enter by either the front or rear doors.
As you probably know, the legislature has received many concerns about the use of
eminent domain, so legislation has been drafted to make changes. The keen interest in our
area is the reason I have notified you, as I want your input into changes in law before we
finalize any new proposals.
I look forwazd to your attendance.
yours,
State
District 16A
1947 Ridge Road, Princeton, Minnesota 55377 (763) 389-4498
State Office Building 100 Rev Dr Martin Luther King Jr Blvd St Paul Minnesota 55155-1296 (651) 296 6746
i0' FAX. (651) 296-3949 TTY: (651) 296-9896 Email: rep.sondra.erickson®house.mn (600) 709-0578