08-22-2007 Council Agenda - Laserfiche WebLink

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The definition specifies that ''The public benefits of economic development, including an increase in tax base. tax revenues. employment. or general economic health. do not by themselves constitute a public use or public purpose." The legislation goes on to define the terms in the third category. including blight (50% of buildings are structurally substandard): environmentally contaminated area (50% of the parcels contain contamination and cost of remediation exceeds the assessor's estimated market value); abandoned property (unoccupied /unused for one year. unmaintained, and taxes not paid for previous two years); and public nuisance (referring to the existing standard for nuisance in state law at Minn. Stat. §609.74). For you lawyers out there, the standard of review in an eminent domain case has been codified as a "preponderance of evidence ". For non - lawyers, what this means is that courts will give broad deference to a municipality's decision in these cases, given a solid written public record and clear findings of fact. The court is constrained to give extensive deference to the decision of the local government in such cases. This standard of review is somewhat more rigorous than that in common zoning cases which are reviewed under the "rational basis" test. The new law includes a series of provisions that specify the process for an eminent domain action by a local government, including appraisal requirements, public hearing and notice regulations, and the right of a displaced person to take an offer of relocation assistance to an administrative law judge. In what seems to be a unique inclusion, the public owner must offer the property back to the original owner in the event that the public use is later discontinued. Mn/DOT gets a specific exemption from this provision. The law also incorporates a number of provisions that impact "just compensation ". There are several here that will likely affect how municipalities use eminent domain. First, the legislation creates a tiered reimbursement of costs (including attorney's fees) in two cases. One case is if a court later determines that the taking was not for a public use. The second case is if a court awards an amount substantially in excess of the government's last written offer — the court must award costs if the award is more than 40% over the government's offer, and the court may award costs if the award is between 20% and 40% of the government's offer. A second category of compensation is created for "loss of going concern ". A business that is destroyed subsequent to a taking of property may be due compensation for the value of the business. It appears that a business owner (including a lessee) will have the burden of proving that a business is "destroyed ", after which the condemning authority will have the burden of showing that the business loss is not compensable under three potential exclusions stated in the statute. The third category of compensation relates to loss of business valuation in the event that driveway access is reduced. The statute states that where a business loses 51 % of its driveway access, resulting in a 51% (or more) loss of revenue, a government may be liable for up to three years' net income. In keeping with previous Minnesota decisions, 8