Agenda - Planning Commission - 01/05/1999

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Z.B. December 24, 1998 -- Page 7 Amortization -- City adopts two-year amortization period for concrete plant Citation: AVR Inc. v. City of St. Louis Park, Court of Appeals of Minnesota, No. C7-98-516 (J998) AVR bought a ready-mix concrete plant in an industrial.zone in St. Louis Park, Minn. The plant was a preexisting nonconforming use. A year before AVR bought the plant, the city had amended its zoning code to eliminate such plants as permitted uses in the city. In 1980, the city adopted a new comprehensive plan and notified AVR it intended to phase out the plant and rezone the site for commercial or office use. AVR sued, asking the court to find the city's earlier zoning' amendment unlawful because it wrongfully eliminated ready-mix plants as permitted uses in industrial zones. Two courts found in AVR's favor, ruling the plant wasn't a public nuisance so the city couldn't legislate it out of existence. Several years later, the city adopted another comprehensive plan. The plan stated that such uses as concrete ready-mix plants would be phased out of the area in which AVR operated and-that the sites would be used for high-density residential use. The city council adopted a two-year amortization plan for AVR's facility. At the end of two years, AVR's legaI nonconforming status would terminate. The city relied on evidence that the plant's "useful life" had expired and that AVR had earned a 560 percent return on its investment. AVR sued the city. It claimed the amortization plan violated its due process rights and was an unconstitutional taking. The court granted the city ~udgment, and AVR appealed. It said the city was motivated by aesthetic rather than health and safety considerations and that the city treated it differently than a nearby bar, which was also a preexist- ing nonconforming use. The city did not seek to phase out the bar. DECISION: Affirmed. The city created the amortization plan based on careful consideration of the plant's useful life and other relevant factors. AVR didn't show it was discrimi- nated against. The city considered a number of factors in creating the amortization plan. It found AVR had received a return of about 560 percent on its investment and that the plant had been fully depreciated for income tax purposes. The amorti- zation would allow redevelopment to help satisfy the demand for housing and would increase property values. Whether the city enacted the plan for aesthetic reasons was irrelevant. The city enacted the plan for several reasons, including improvement of the general welfare by reducing noise, dust, and traffic. Although the city exempted all existing bars from amortization, it did not discriminate against AVR. AVR's plant was a heavy industrial use that caused significantly more noise and dust than did the bar.