H&J Wins MN Supreme Court Case: Article in Finance & Commerce

“State’s high court sides with Abdul”

Posted: 7:05 am Fri, September 27, 2013
By Chris Newmarker

The Minnesota Supreme Court this week set the clock ticking for historic preservation decisions around the state — and perhaps resurrected a Warehouse District office project that the Minneapolis City Council buried three years ago.

In a decision filed Wednesday, the court ruled that an application for certificate of appropriateness with a historic preservation commission is “related to zoning” under Minnesota statutes, and therefore falls under rules that require zoning decisions to be decided within 60 days.

The Minneapolis City Council, on July 31, 2009, denied a certificate of appropriateness that developer Ned Abdul filed to renovate and add stories to the four-story, 105-year-old former warehouse building at 500 Third St. N.

But because the council’s decision came more than 60 days after an Abdul-related entity called 500 LLC submitted an application with the Minneapolis Heritage Preservation Commission, the project should be considered automatically approved, the Minnesota Supreme Court ruled.

Condos were floated earlier this year for the vacant, nearly 19,000-square-foot Green & DeLaittre Co. Wholesale Grocery Warehouse Building.

But after the Supreme Court ruling, the office project could be back on, said Blake Nelson, a lawyer at Edina-based Hellmuth & Johnson representing Abdul.

“We’re very happy with the Supreme Court decision and plan to seek to implement it, which would ultimately be moving forward with getting approval of the project that was originally approved and derailed by the lawsuit,” Nelson said.

Attempts to reach Abdul at his Minneapolis-based Swervo Development were unsuccessful on Thursday.

The city placed historical significance on the structure because it provides an early example of reinforced concrete flat-slab design. Its history is also connected with the prominent DeLaittre family whose members included John DeLaittre, the city’s 10th mayor.

Lower courts had previously sided with the city of Minneapolis on the lawsuit filed by Abdul in 2010, agreeing that historic preservation decisions are not linked to zoning decisions.

But Supreme Court Associate Justice David Stras in his majority opinion wrote: “Interpreting the foregoing terms together, the phrase, ‘a written request relating to zoning’ is unambiguous and refers to a written request that has a connection, association, or logical relationship to the regulation of building development or the uses or property.”

Minneapolis will apply the court’s ruling in how the Heritage Preservation Commission staff handles cases such as Abdul’s in the future, said city spokesman Matt Lindstrom.

“We now have clarity that the 60-day rule applies to these types of applications,” Lindstrom said.

A City Council decision will have to come within 60 days of application with the commission, though the city within reason could extend the deadline under statute. An example would be if prior approval is required by a federal agency.

Developer Kelly Doran, however, is skeptical that the Minneapolis Heritage Preservation Commission will change.

“You can never get them to acknowledge you have a complete application, and then the 60 days doesn’t start until the application is complete. They keep throwing more stuff at you,” said Doran, owner and principal of Bloomington-based Doran Cos.

Still, “they can’t just pocket-veto an application by sitting on it,” said Paul Anderson, an attorney at Minneapolis-based Messerli & Kramer.

Such a broad interpretation could also open the door for lawsuits related to development agreements and other city actions that take more than 60 days to reach a City Council vote, said Kevin Dunlevy, a partner and real estate lawyer at Minneapolis-based Beisel & Dunlevy.

“Almost everything a developer does with a city has some connection with zoning,” Dunlevy said.

The full Supreme Court ruling is available here.

Originally Published in the Friday, September 27 Edition of Finance & Commerce.

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