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new growth and substandards streets.” In addition, the resolution granted authority to establish interchange TIDs, under which <br />the city purportedly could seek to collect costs related to the construction of interchanges. Undeveloped land within an <br />established TID would be charged a fee—to be imposed at the time the property owner sought development approval—that <br />would be based upon a formula attempting to attribute and quantify the impact of development of the land upon area <br />transportation infrastructure. The formula for TID fees that was devised by the city engineer and adopted by the city council <br />first determined an estimate of the total cost for projected transportation improvements needed in a TID as a result of <br />development of undeveloped land in that district. Then the fees to be charged to the undeveloped property owner would be <br />calculated based upon a formula that took into account the acres of developable land on the site, the zoning of the land, and <br />the projected traffic that would be generated by the site when fully developed. <br />The SJC property became part of what Rochester established as the Willow Creek Transportation Improvement District (Willow <br />Creek TID). When the city established the Willow Creek TID, it identified all developable property within the district, determi ned <br />the nature and extent of development that this land could support, projected the amount of traffic the fully developed land wou ld <br />generate, and, in turn, projected the total cost of the transportation improvements that would be needed within the Willow Creek <br />TID to support the increased traffic from development. This exercise produced a figure of some $15 million that the city projected <br />for the cost of future transportation improvements it believed would be needed for the Willow Creek TID. Transportation <br />improvements in the immediate vicinity of the SJC property included the expansion of 40th Street SW from a two-lane to a <br />four-lane road, which became the city-funded portion of the improvements, and the construction of a grade-separated interchange <br />at 40th Street SW and TH 63, which was a state and federally funded project. <br />During the entire period of Rochester’s regional transportation planning process dating back to 1995, Kottschade had been <br />attempting to develop the SJC property and, to that end, had made numerous development proposals to the city. At the time <br />the city adopted its TID program and the Willow Creek TID, Kottschade had before the city a proposed commercial development <br />for some 70 acres of the SJC property adjacent to TH 63. The city approved a general development plan and gave preliminary <br />plat approval to this proposal, subject to Kottschade entering into a development agreement with the city. The development <br />agreement included a requirement that Kottschade pay over $1.7 million in TID fees that had been calculated by the city based <br />upon the developable acreage within the SJC property, the zoning, the projected traffic that full development would generate, <br />and the total cost of all transportation improvements that the city determined would be required within the Willow Creek TID. <br />When Kottschade objected to the TID fees, the city invoked Minn. Stat. Ch. 429 to levy the precise amount of the TID fees as <br />special assessments against the SJC property. Kottschade exercised his statutory right to appeal the assessments to Olmsted <br />County District Court, where the appeal was tried before the court in January 2008 and decided in July 2008. <br />The SJC Decision <br />Because Rochester had levied the TID fees as special assessments, the fees were subjected to judicial scrutiny under the legal <br />standards applicable to special assessments. Primarily, this meant determining whether the amount of the special assessments <br />exceeded any special benefits conferred on the SJC property.17 A “special benefit” means an increase in market value of the <br />property resulting from the improvement. Another legal consideration in special assessment appeals is whether the assessments <br />are “uniform upon the same class of property.” That is, whether all properties that have specially benefited have been treated <br />the same. <br />Key issues at the special assessment appeal trial were what portions of the 40th Street SW transportation improvements, if <br />any, provided special benefit to the SJC property; what was the highest and best use of the SJC property before and after the <br />40th Street SW improvements; and whether the assessments were uniform. Appraisers, traffic engineers, and civil engineers <br />gave testimony related to these issues. <br />The city argued at trial that both the improvements that widened 40th Street SW from a two-lane to a four-lane road and that <br />created the grade-separated interchange at 40th Street SW and TH 63 should be considered in determining the special benefit <br />conferred upon the SJC property. The district court found that the only improvements appropriately considered in determining <br />the amount of special benefit conferred on the SJC property were those improvements that were funded by the city, which <br />excluded the grade-separated interchange—a state and federally funded project. Moreover, the district court found that the <br />expansion of 40th Street SW to four lanes provided only limited benefit to the SJC property because topographic challenges <br />precluded any access point from the SJC property to 40th Street SW except at the northeast corner, near TH 63. The court <br />further found that the traffic levels on 40th Street SW to the west of this access point (which led traffic away from, not toward, <br />the city proper) did not justify a four-lane road to the west—either currently or even in the year 2025, which was the traffic- <br />projection year relied on by the city. <br />The district court also found that the highest and best use of the SJC property before the 40th Street SW improvements