PUBLISHED OPINION
Case No.: 95-2920
†Petition for
Review Filed
Complete Title
of Case:
EARL GRUNWALD,
Plaintiff-Appellant,†
v.
COMMUNITY DEVELOPMENT AUTHORITY
OF THE CITY OF WEST ALLIS and
THE CITY OF WEST ALLIS,
a Municipal corporation,
Defendants-Respondents.
Submitted on Briefs: February 6, 1996
Oral Argument: ----
COURT COURT
OF APPEALS OF WISCONSIN
Opinion Released: May 7, 1996
Opinion Filed: May 7, 1996
Source of APPEAL Appeal
from a judgment and an order
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Milwaukee
(If "Special", JUDGE: MICHAEL P. SULLIVAN
so indicate)
JUDGES: WEDEMEYER,
P.J., SULLIVAN and FINE, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSFor
the plaintiff-appellant the cause was submitted on the briefs of Hugh R.
Braun and Jane F. Carrig of Godfrey, Braun & Hayes of Milwaukee.
Respondent
ATTORNEYSFor
the defendants-respondents the cause was
submitted on the briefs of Michael J. Sachen, city attorney and Thomas
G. Cullen, assistant city attorney of West Allis.
COURT OF APPEALS DECISION DATED AND RELEASED May 7, 1996 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-2920
STATE
OF WISCONSIN IN COURT OF
APPEALS
EARL GRUNWALD,
Plaintiff-Appellant,
v.
COMMUNITY DEVELOPMENT
AUTHORITY
OF THE CITY OF WEST
ALLIS and
THE CITY OF WEST
ALLIS,
a Municipal
corporation,
Defendants-Respondents.
APPEAL from a judgment
and an order of the circuit court for Milwaukee County: MICHAEL P. SULLIVAN, Judge. Affirmed.
Before Wedemeyer, P.J.,
Sullivan and Fine, JJ.
WEDEMEYER, P.J. Earl Grunwald appeals from a judgment
dismissing his complaint against the City of West Allis and the Community
Development Authority of the City of West Allis (collectively, West
Allis). Grunwald owned property located
in an area designated by West Allis as the Veterans' Park Redevelopment
Area. He challenges West Allis's right
to condemn his property under § 66.431, Stats. After the trial court filed its findings of
fact and conclusions of law, Grunwald filed a motion for contempt and for
appointment of a receiver. Grunwald
also appeals from the order denying his motion.
Grunwald contends that
the Veterans' Park Redevelopment Area is not a blighted area as defined by
§ 66.431(4)(b), Stats.;
therefore, West Allis cannot use eminent domain to acquire his property. He also contends that the taking of his
property is not necessary to achieve the objectives of the redevelopment
project. Further, he contends that the
taking was for a private purpose because West Allis had granted a "right
of first refusal" to a private developer.
Finally, he argues that West Allis lacked the authority to occupy his property
and collect and retain rents while the present action was pending.
We conclude that
§ 66.431, Stats., is to be
liberally construed to remove blight and prevent its reoccurrence and that the
trial court's finding that the Veterans' Park Redevelopment Area was a blighted
area within the act was not clearly erroneous.
We also conclude that West Allis had reasonable grounds for concluding
that Grunwald's property was necessary for successful redevelopment of the
area. Additionally, the outstanding
"right of first refusal" does not make the taking for a private
purpose, and Grunwald's challenge to the City's authority to collect and retain
rents is moot. Therefore, we affirm the
judgment and the order.
BACKGROUND[1]
Grunwald's property is a
one-story commercial building built in 1987 on Greenfield Avenue in West
Allis. It is located between South 69th
Street and South 70th Street. The
building was leased to two tenants under long-term leases. Grunwald acquired the property after its construction.
Pursuant to
§ 66.431(6)(b)1, Stats., the
West Allis Common Council designated the Veterans' Park Redevelopment Area as a
blighted area in need of a blight elimination project. The area is approximately 5.4 acres. It encompasses land between South 70th
Street and South 68th Street south of Greenfield Avenue to Orchard Avenue, see
Appendix A, although a forty-two unit apartment building and a veterans' hall,
located along South 70th Street, were excluded from the redevelopment
plans. Grunwald's property is located
approximately in the center of the Greenfield Avenue frontage.
The Veterans' Park
Redevelopment Area includes twenty-six parcels of land, containing twenty-eight
buildings. The area was platted into
lots thirty feet by one hundred to 125 feet.
Some parcels contained more than one lot and other parcels were less
than a full lot. A few have accessory
buildings for adjoining lots. Six of
the parcels were vacant. Except for
Grunwald's property and the excluded apartment building, the improvements were
primarily built between 1900 and 1929.
Most were wood-frame buildings, and several were built a minimal
distance from the lot lines.
When West Allis began
acquisition of the property in the Veterans' Park Redevelopment Area, the area was
zoned for commercial and light manufacturing, and residential use was
non-conforming. The majority of the
buildings were used for single-family, two-family, and multi-family residential
properties. Additionally, several
buildings had mixed commercial and multi-family uses. In one case, a tavern was combined with apartments and rooms for
ten residential units. A feasibility
study, dated January 1993, indicated that there were forty-six households and
individual residential units and five businesses in the area.
Properties bordering the
Veterans' Park Redevelopment Area on the north and east originally developed as
industrial areas. The Allis Chalmers
production facilities located north of Greenfield Avenue and East of South 70th
Street closed in 1984. In 1986, the
facilities were razed. A retail
district, the West Allis Towne Centre, was completed on the site in 1987.
The industrial plants
east of the Veterans' Park Redevelopment Area were razed beginning in
1985. A retail area, Market Square, and
a bank-office building were completed in 1990.
Additional retail space was approved for the site but has not been
built. The bank-office building faces
Greenfield Avenue and South 68th Street.
The Market Square development also extends south of the eastern portion
of the Veterans' Park Redevelopment Area.
South of the
redevelopment district, between Market Square and South 70th Street, is a
relatively new forty-eight unit apartment complex. South of the apartment complex is Veteran's Park, from which the
redevelopment area takes its name. West
Allis completed improvements in the park in 1994.
Finally, West Allis's
central business district is located along Greenfield Avenue west of the
Veterans' Park Redevelopment Area.
There was testimony that West Allis had invested time and money in
revitalizing the downtown district.
South of the business district and north of Orchard Street are
single-family residences and duplexes.
Testimony indicated that the residences were built on small lots,
apparently creating the rows of older, narrow, two-story homes common in older
urban areas.
Over the years, the City
of West Allis conducted several reviews of the industrial areas and the
Veterans' Park Redevelopment Area.[2] In a 1979 update to the City's Master Plan
for Land Use, consultants recommended commercial zoning along Greenfield Avenue
with high density residential zoning for the remainder of the Veterans' Park
Redevelopment Area. The Master Plan
recognized that if Allis Chalmers left the city, additional review would be
necessary to determine the most appropriate use of its land and the surrounding
lands.
Prompted by the Allis
Chalmers closure, a comprehensive land use update was prepared in 1987. Although the update did not recommend zoning
changes, it recommended development of the Veterans' Park Redevelopment Area as
a mixed use planned unit development with small scale retail zoning along
Greenfield Avenue and residential zoning for the remainder of the land. In the appendix to the report, the Veterans'
Park Redevelopment Area was described as marginal in use and maintenance and a
possible target for future redevelopment.
Finally, a feasibility
study for redevelopment of the Veterans' Park Redevelopment Area was completed
in January 1993. The study identified
the area as a blighted area that had a negative image and a negative impact on
the surrounding neighborhoods. The
feasibility study presented three strategies for the area: code enforcement only, identification of
structures capable of preservation with clearance of the others, and total
demolition and redevelopment of the area.
If the demolition and redevelopment strategy was pursued, the
feasibility study recommended a high-density, multi-family project. The primary factor influencing this
recommendation was the concentration of retail and office uses in the
surrounding areas. The high vacancy rates
in West Allis Towne Centre and Market Square militated against additional
commercial development along Greenfield Avenue. Additionally, the new residents attracted to the area by the
housing project would support the previously developed commercial areas.
The redevelopment
authority recommended, and the Common Council approved, the strategy of total
demolition and redevelopment of Veterans' Park Redevelopment Area. When unable to reach an agreement with
Grunwald to purchase his property, West Allis commenced condemnation
proceedings. West Allis ultimately
acquired the property by an award of damages in October 1994. Prior to the award, Grunwald commenced the
present action under § 32.06(5), Stats.,
to challenge West Allis's right to condemn his property. Although Grunwald returned the award of
damages as required to continue the present lawsuit, West Allis notified the
tenants to pay rent to the City.
Relocation of the tenants and demolition of the building were stayed,
however, pending a final determination of this lawsuit.
Additional facts will be
presented in the discussion of the issues raised by Grunwald.
STANDARD OF REVIEW
The determination of the
necessity of exercising the power of eminent domain to take private lands
pursuant to § 66.431, Stats.,
is a matter to be determined by the condemning authority. Section 32.07(2), Stats. The invocation
of eminent domain is itself an implicit decision that the taking is
necessary. Falkner v.
Northern States Power Co., 75 Wis.2d 116, 135, 248 N.W.2d 885, 896
(1977). The condemning authority's
decision of necessity is subject to judicial review under § 32.06(5), Stats.
Judicial review is limited, however, to determining whether the decision
constitutes fraud, bad faith, or a gross abuse of discretion. Falkner, 75 Wis.2d at 132, 248
N.W.2d at 894. If the condemning agency
had reasonable grounds for its decision, the decision will be upheld. Id. The exercise of the power of eminent domain without statutory
authority lacks a reasonable basis. See
Sigma Tau Gamma Fraternity House Corp. v. City of Menomonie, 93
Wis.2d 392, 402, 288 N.W.2d 85, 89 (1980).
IS GRUNWALD'S PROPERTY IN A
"BLIGHTED AREA"?
The first issue
presented for review is whether the Veterans' Park Redevelopment Area comes
within the scope of § 66.431, Stats. Grunwald contends that the area does not
meet the definition of a "blighted area" and that West Allis is
seeking to use § 66.431, Stats.,
to illegally condemn property for economic development. If Grunwald is correct, West Allis's
decision to condemn his property is unreasonable.
Section 66.431, Stats., is the "Blight Elimination
and Slum Clearance Act." Section
66.431(1). In its findings to support
the act, the legislature determined that:
the existence of substandard, deteriorated,
slum and blighted areas and blighted properties is a matter of statewide
concern
and
that
it is
the policy of this state to protect and promote the health, safety, morals and
general welfare of the people of the state in which such areas and blighted
properties exist by the elimination and prevention of such areas and blighted
properties through the utilization of all means appropriate for that purpose,
thereby encouraging well‑planned, integrated, stable, safe and healthful
neighborhoods, the provision of healthful homes, a decent living environment
and adequate places for employment of the people of this state and its
communities in such areas and blighted properties[.]
Section
66.431(2). The legislature created
municipal redevelopment authorities and charged them with the responsibility to
prevent and eliminate slums and blighted areas and prevent their reoccurrence. Section 66.431(3)(a). "Blighted area" is defined as
follows:
any
area (including a slum area) in which there is a predominance of buildings or
improvements, whether residential or nonresidential, which by reason of
dilapidation, deterioration, age or obsolescence, inadequate provision for
ventilation, light, air, sanitation, or open spaces, high density of population
and overcrowding, or the existence of conditions which endanger life or
property by fire and other causes, or any combination of such factors is
conducive to ill health, transmission of disease, infant mortality, juvenile
delinquency, or crime, and is detrimental to the public health, safety, morals
or welfare, or any area which by reason of the presence of a substantial number
of substandard, slum, deteriorated or deteriorating structures, predominance of
defective or inadequate street layout, faulty lot layout in relation to size,
adequacy, accessibility or usefulness, insanitary or unsafe conditions,
deterioration of site or other improvements, diversity of ownership, tax or
special assessment delinquency exceeding the fair value of the land, defective
or unusual conditions of title, or the existence of conditions which endanger
life or property by fire and other causes, or any combination of such factors,
substantially impairs or arrests the sound growth of a city, retards the
provision of housing accommodations or constitutes an economic or social
liability and is a menace to the public health, safety, morals, or welfare in
its present condition and use, or any area which is predominantly open and
which because of obsolete platting, diversity of ownership, deterioration of
structures or of site improvements, or otherwise, substantially impairs or
arrests the sound growth of the community.
Section
66.431(4)(b).
The Blight Elimination
and Slum Clearance Act is a legislative determination that the acquisition,
clearance, and redevelopment of blighted areas is a public use. See David Jeffrey Co. v. City of
Milwaukee, 267 Wis. 559, 578, 66 N.W.2d 362, 373 (1954) (upholding
§ 66.43, Stats., the Blight
Elimination Act). Significantly, the
act is directed towards geographic areas and not individual structures;
therefore, municipalities may condemn vacant land and sound, conforming
buildings that are located in a blighted area.
Id. at 580, 584-85, 66 N.W.2d at 374, 376-77.
Grunwald argues that the
definition of "blighted area" must be strictly construed. He relies on the general rule that because
condemnation statutes are in derogation of the common law, they are to be strictly
construed. See Maxey v.
Redevelopment Authority of Racine, 94 Wis.2d 375, 399, 288 N.W.2d 794,
805 (1980).
Relying on this
strict-construction standard, Grunwald focuses on the individual properties to
argue that the Veterans' Park Redevelopment Area is not a blighted area. Grunwald's position is apparent from the
testimony of John Raffensperger, an appraiser, who testified on Grunwald's
behalf. Raffensperger expressed the
opinion that the area was not a blighted area because the individual properties
were not blighted. He concluded that
while the structures needed varying amounts of maintenance, they were
serviceable. He testified that, in his
view, blight means conditions making a preponderance of the properties in an
area close to unusable or requiring repair well beyond the worth of the
property. Grunwald also argues that
West Allis failed to present any specific evidence that the incidence of crime,
illness, infant mortality, fire, and similar incidents of blighted conditions
were high.
West Allis argues that
Grunwald's interpretation is too narrow, especially since the statute directs
that it is to be construed liberally to effectuate the purposes of the
act. See § 66.431(17), Stats.
Although witnesses for West Allis presented evidence about specific
properties, they generally focused on the overall condition of the Veterans'
Park Redevelopment Area and the general condition of the properties within the
area.
David Weinheimer, the
planning and zoning manager for the City, testified that in his professional
opinion, the area was blighted. He
noted the age of the structures and the problems frequently inherent with
seventy to ninety-year-old buildings, including dried wood and non-compliance
with current building codes.
Additionally, most structures evidenced varying degrees of exterior
deterioration and lack of upkeep. The
land use was overly intense (on some lots, buildings covered most of the lot
area, eliminating side yards, front setbacks, and off-street parking), street and
traffic patterns were outdated, and vacant lots tended to attract refuse and
garbage.
Theodore Atkinson,
director of the City's Department of Building Inspection and Zoning, testified
that the area presented a fire hazard because the wood-frame buildings were
built on or close to property lines, allowing a fire to move easily from
building to building. He also
identified light and ventilation problems where bedrooms opened to adjacent
walls. John Stibal, West Allis's
Director of Development, testified that the area was experiencing a more dramatic,
negative change than other locations in the city. In his opinion, seventy-five percent of the properties were
classified as blighted because they were older, deteriorating buildings. There were no requests for building permits,
denoting disinvestment in the area.
Low-income tenants would not request repairs from landlords or complain
about code violations because of fears of rent increases. Additionally, Stibal testified that the
redevelopment area presented a very beaten down image at a very visible
location, i.e., on an arterial street between the central business district and
two major renovations.
The 1993 feasibility
study identified inadequate building setbacks and illegally parked vehicles as
hampering efforts to collect trash and clear snow. The same conditions potentially impeded access for fire-fighting
equipment.
The correct standard to
be applied to determine whether an area is blighted presents a question of
statutory construction. Construction of
a statute presents a question of law, which this court reviews de novo. Hiegel v. LIRC, 121
Wis.2d 205, 215, 359 N.W.2d 405, 410 (Ct. App. 1984). Here, the controversy is not over the meaning of the specific
words used in the statute but the flexibility in applying the statute to particular
conditions.
Grunwald correctly
argues that generally eminent domain statutes are strictly construed. This maxim does not apply, however, where
the language of the statute clearly, unambiguously, and peremptorily dictates
otherwise. Maxey, 94 Wis.2d
at 399, 288 N.W.2d at 805. The Blight
Elimination and Slum Clearance Act contains a specific direction to construe
the statute liberally to effectuate its purposes. Section 66.431(17), Stats. Thus, § 66.431(17) controls, and the
statute is to be liberally applied.
The purpose of the act
is to eliminate blighted areas and prevent their reoccurrence. Section 66.431(2), Stats. The focus is
on geographic areas and not individual properties. A blighted area is an area that, because of certain physical
conditions, presents a menace to public health, safety, morals, or welfare;
substantially impairs the sound growth of the city or the provision of housing;
or constitutes an economic or social liability. The physical conditions that must be present include dilapidated,
deteriorating, obsolete, or substandard buildings; inadequate ventilation,
light, and open spaces; high-population density and overcrowding; and
conditions endangering life or property through fire, crime, or the
transmission of disease.
In light of the purposes
of the act and its direction for liberal construction, we reject Grunwald's
proposed standard for determining whether an area is blighted. It is too restrictive to require that a predominance
of the buildings be close to unusable or have minimal value and that there be
specific evidence of an increased incidence of fire, crime, infant mortality,
or illness. Rather, the municipality
may focus on the general overall character of the area and its structures and
consider the area in the context of its surrounding neighbors.
Here, the trial court
found that the non-conforming uses in the Veterans' Park Redevelopment Area
adversely affect public health, safety, and welfare and that the non-conforming
uses create potential fire safety hazards and unsafe conditions for residents
and businesses in the area; construction that is substandard by today's codes
results in inadequate ventilation, light, air, and open space; and the building
services have not been updated to current codes. The trial court also found that repairs to the buildings over the
years have been superficial at best and that fire and structural hazards and
defects have intensified as the building continued to age and deteriorate. These findings are sufficient to satisfy a
liberal interpretation of the act.
Further, our review of the record convinces us that the trial court's
findings were supported by the testimony of West Allis's witnesses and by
exhibits admitted into evidence. The
trial court's findings are not clearly erroneous; therefore, this court cannot
set them aside. See
§ 805.17(2), Stats.
IS TAKING GRUNWALD'S PROPERTY NECESSARY?
West Allis does not
claim that Grunwald's property is blighted.
It is uncontested that the property is less than ten years old and that
it conforms to building codes.[3] At the time West Allis commenced
condemnation proceedings, the building was fully leased under long-term leases.
Grunwald contents that
his property is not necessary to accomplish the objectives of the redevelopment
project. To support this claim, he
takes issue with West Allis's redevelopment plan. He questions the feasibility of locating a multi-family
residential development along an arterial street. He criticizes West Allis for considering the vacancy rates in the
West Allis Towne Centre and in Market Square, without evidence that there would
be similar vacancy rates in commercial property fronting Greenfield Avenue in
the redevelopment area. He asserts that
West Allis failed to present sufficient proof that redevelopment of his
property was necessary or that the Greenfield Avenue frontage can not be used
for commercial purposes without jeopardizing redevelopment of the remainder of
the redevelopment area for residential use.
The determination that a
particular property is necessary to a redevelopment project undertaken pursuant
to § 66.431, Stats., is for
the condemning authority. Section
32.07(2), Stats. The role of the courts is not to weigh the
evidence and decide if condemnation is necessary. Rather, the court's role is to decide if the condemning
authority's conclusion was based on reasonable grounds and not the result of
fraud, bad faith, or a gross abuse of discretion. Falkner, 75 Wis.2d at 132, 248 N.W.2d at 894. Property is necessary if it is reasonably
requisite to accomplish the public purpose for which the property is sought.[4] Id. If the condemning authority's finding of necessity is supported
by evidence, it will not be set aside regardless of the motive for condemning
the property. Sigma Tau Gamma,
93 Wis.2d at 409, 288 N.W.2d at 93.
Addressing the need to
include Grunwald's property in the Veterans' Park Redevelopment Area,
Weinheimer indicated that acquisition of the property was necessary to give any
new development of the area frontage and visibility on Greenfield Avenue, to
allow for a thirty-foot setback of green space, and to allow the city to vacate
South 69th Street. He opined that no
developer would be interested in developing the Veterans' Park Redevelopment
Area without Grunwald's property because the property would obstruct the image
a developer would wish to project to Greenfield Avenue.
This belief was
confirmed by Stibal who testified that informal contacts with developers had
confirmed a lack of interest in any project that did not include Grunwald's
property. Stibal also noted that there
was a high vacancy rate in office buildings and retail properties in the city,
making commercial frontage unnecessary.
Stibal testified that the development department ultimately recommended
use of the Veterans' Park Redevelopment Area for senior multi-family
housing. This recommendation was based
on the various land use studies, including the 1993 feasibility study, and the
current conditions in the adjacent redevelopment projects.
We note that the 1979
Master Plan for Land Use had identified a need for housing for the elderly in
the eastern part of the City.
Additionally, the 1993 feasibility study indicated that the increasing
traffic flow on Greenfield Avenue made ingress and egress impractical and
unsafe at any area not controlled by a traffic signal. Property abutting Greenfield Avenue should
be accessible only through a side street.
Even Raffensperger,
Grunwald's expert, acknowledged that it was a matter of opinion whether his
plan, which allowed commercial development along Greenfield Avenue, was better
than a multi-family development for the entire redevelopment area. He stated that both uses were reasonable.
We conclude that West
Allis had reasonable grounds for concluding that Grunwald's property was
necessary for successful redevelopment of Veterans' Park Redevelopment Area.
Grunwald also argues
that the determination that acquisition of his property was necessary to the
redevelopment project was a gross abuse of discretion. He relies on the city's issuance of a
building permit in 1986, and the building's compliance with zoning and
comprehensive use plans until 1991. He
also argues that the refusal to exempt his property while exempting two parcels
fronting on South 70th Street was also an abuse of discretion. He asserts that neither of the exempted
structures conforms to the redevelopment plan.
Charles W. Causcer, the
director of planning for HNTB Corp., testified regarding the change in use
along Greenfield Avenue. HNTB served as
consultant on the Veterans' Park Redevelopment Area for the 1987 and later
studies. Causcer indicated that the
change from commercial use recommended in the 1987 plan to the 1993
recommendation of multi-family housing reflected the changes in need that had
occurred as the other redevelopment projects were completed. The high concentration of commercial
development, especially in the West Allis Towne Centre and Market Square,
decreased the need for additional commercial units along Greenfield
Avenue. This commercial concentration
also made a higher-density residential project appropriate.
Causcer's explanation
provides a rational basis for the proposed change in use from 1986 to 1993 and
defeats Grunwald's claim of a gross abuse of discretion. For a court to hold otherwise would inhibit
a municipality's ability to adapt its land use plans to changing circumstances.
Likewise, West Allis
offered a reasonable explanation for excluding the South 70th Street parcels
and not excluding Grunwald's property.
Weinheimer testified that while the veteran's hall was an inconsistent
use, it was a small lot in the southwest corner of the redevelopment area and
that its demolition would add nothing to the plans. It was a remnant whose omission would not deter the likelihood of
redevelopment.
Stibal testified that
the two properties were excluded because they were located off to the side and
were in sound condition. Further, they
were not needed to accomplish the project's objectives. He acknowledged that he tried to avoid
demolishing buildings in order to keep the cost of the project lower. Stibal testified that he would have
preferred not to acquire Grunwald's property because of the cost involved,[5]
but not taking the property would have diminished the possibility of a good
development for the project. Again,
West Allis had a rational reason for excluding the South 70th Street parcels,
and there was no gross abuse of discretion.
RIGHT OF FIRST REFUSAL
In 1989, NDC, Inc., the
developer of Market Square, obtained a right of first refusal to purchase
property acquired by West Allis in the Veterans' Park Redevelopment Area on
terms and conditions to be determined by West Allis. According to Stibal, the right gave NDC the first opportunity to
develop the land for the use and on the terms dictated by West Allis. Stibal also testified that NDC would be
waiving its right because West Allis proposed a multi-family development in
which NDC was not interested.
Condemnation may be
invoked only to acquire property for public use. Schumm v. Milwaukee County, 258 Wis. 256, 261,
45 N.W.2d 673, 676 (1951). Grunwald
mischaracterizes the right of first refusal as committing West Allis to sell
all of the acquired land to an identified private developer before the
Veterans' Park Redevelopment Area was even established. Based on this mischaracterization, Grunwald
argues that the condemnation is for a private, not a public, use.
The statute under which
West Allis acted contemplates that acquired land may be redeveloped by private
parties. Section 66.431(9), Stats.
The short duration of public ownership does not deprive the taking of
its public use, and the sale or leasing of the land to private interests is
incidental to the act's main purpose. David
Jeffrey Co., 267 Wis. at 581-82, 66 N.W.2d at 375. The right of first refusal was subject to
West Allis's determination of how the property should be redeveloped; NDC
acquired no control over the process.
Furthermore, according to the testimony, NDC was waiving its right and
would not be acquiring the property.
The right of first refusal does not change West Allis's acquisition of
Grunwald's property into something not contemplated by § 66.431, Stats.
Therefore, West Allis did not condemn the property for private use.
Although West Allis
presented significant evidence to support its redevelopment plan, Grunwald also
argues that the decision to convert the Greenfield Avenue frontage to
multi-family residential property is "illogical, if not
irrational." He then goes on to
accuse NDC of controlling this decision through its right of first refusal and
suggests that NDC was motivated by a desire to preclude additional commercial
competition for its own project. Not
only does Grunwald fail to show how the right of first refusal could dictate
West Allis's decision regarding the proposed use of the property, there is no
evidence in the record that NDC had any significant input into West Allis's
actions regarding the Veterans' Park Redevelopment Area. The argument is totally without merit.
WEST ALLIS'S RIGHT TO COLLECT AND
RETAIN RENTS
West Allis served the
jurisdictional offer for the condemnation of Grunwald's property on Grunwald in
August 1994. Grunwald timely commenced
the present action to challenge West Allis's right to condemn his
property. The condemnation proceeding
continued, and an award of damages was made to Grunwald in October 1994. Pursuant to § 32.05(7)(c), Stats., title to the property vested in
West Allis when the award of damages was paid and the award was recorded in the
office of the register of deeds.
In order to protect his
right to challenge the condemnation, Grunwald returned the damages payment to West
Allis and obtained an injunction prohibiting West Allis from relocating the
building's tenants and razing the building.
After the trial court enjoined West Allis from relocating the tenants,
West Allis collected and retained the monthly rent for the building. In September 1995, Grunwald filed a motion
to find West Allis in contempt for communicating with the tenants about
relocation and for the appointment of a receiver to collect rent during this
appeal. The trial court denied his
motion.
Grunwald contends that
while the present action is pending, West Allis lacks the right to occupy his
property and collect rents and to also retain the full amount of the damage
award. He represents that this issue
has not been considered by an appellate court, and he asks that this court do
so regardless of the outcome of his appeal.
We decline his invitation.
Because of our decision on the merits of this appeal, Grunwald's claim
is moot. The condemnation was
proper. Grunwald is not entitled to
return of his property. Title passed to
West Allis in October 1994, and it was entitled to collect rents from that time
forward.
By the Court.—Judgment
and order affirmed.
AN EXHIBIT HAS BEEN ATTACHED
TO THIS OPINION. THE EXHIBIT CAN BE
OBTAINED UNDER SEPARATE COVER BY CONTACTING THE WISCONSIN COURT OF
APPEALS.
COURT OF APPEALS
OF WISCONSIN
ROOM 231, STATE CAPITOL EAST
POST OFFICE BOX 1688
MADISON, WISCONSIN
53701-1688
TELEPHONE: (608) 266-1880
FAX: (608) 267-0640
Marilyn L. Graves, Clerk
Court of Appeals
[1] The descriptive information about the Veterans' Park Redevelopment Area, the areas surrounding it, and the redevelopment project is based on trial testimony, exhibits received during the trial, and the trial court's findings of fact.
[2] The Veterans' Park Redevelopment Area was not designated as such until established by the Common Council in 1993. For convenience, however, this opinion uses this name to refer to the area included within the redevelopment district.
[3] Whether the property was in strict compliance with the zoning ordinances is not clear from the record because it lost some parking area when the City acquired ten feet to widen Greenfield Avenue.
[4] The
present case is distinguishable from Mitton v. DOT, 184 Wis.2d
738, 516 N.W.2d 709 (1994). In Mitton,
the Department of Transportation attempted to condemn over six acres for a
highway widening project. Id.
at 739, 516 N.W.2d at 710. Five acres
were for a historic preservation site. Id.
at 740, 516 N.W.2d at 710. The
Department lacks statutory authority to condemn property for historical
preservation, and it sought to rely on federal statutes to justify the taking
of the additional acreage. Id.
at 740, 744, 516 N.W.2d at 710, 712.
The court held that the federal regulations did not require a particular
course of action and, after reviewing the record, it concluded that the
Department unreasonably attempted to take more property than was necessary for
the specific public use of transportation.
Id. at 747-48, 516 N.W.2d at 713-14. Judicial determination of necessity was proper
under § 32.07(3), Stats.
In the present case, however, § 66.431(5)(a)3, Stats., specifically grants West Allis authority to condemn property located in a blighted area, and the authority includes property which is not blighted. Section 32.07(2), Stats., places the determination of necessity with West Allis and not the courts.