878 N.W.2d 252
Iowa2016Background
- Pleasant Hill created the Copper Creek Urban Renewal Area (URA) and plan in 1994 (economic development TIF), with language permitting amendments and stating a 20-year term plus time while obligations remain outstanding.
- The city later created additional URAs (1995, 2000) and in 2006 consolidated the Industrial and East URAs into Copper Creek (renamed Pleasant Hill URA), adding territory and enabling sharing of TIF revenues across the consolidated area.
- In 2013 Pleasant Hill annexed ~238 acres, created a new economic development area, amended the urban renewal plan to incorporate the annexed land into the Pleasant Hill URA, and attempted to extend the original Copper Creek URA/TIF for an additional 20 years.
- Concerned Citizens and the Southeast Polk School District sued, challenging (1) the 2013 extension of the Copper Creek URA, (2) use of Copper Creek TIF revenue for development outside the original Copper Creek boundaries, and (3) conformity of the Amended Plan with the city’s Comprehensive Plan.
- The district court granted summary judgment to the city on the first two issues (relying on pre-1995 grandfathering and Fults consolidation precedent) and found the Amended Plan conformed to the general plan; the court of appeals affirmed; the Iowa Supreme Court granted further review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the city could extend the Copper Creek URA/TIF for 20 more years after consolidating URAs | Grandfathering ends when a plan/URA is amended or consolidated; extension violates the 1994 20-year limit | Grandfathering depends on plan approval date (pre-1/1/1995); later amendments don’t void grandfathering | Extension was impermissible: once the pre-1995 URA was consolidated in 2006 it ceased to exist as a separate area and could not be extended in 2013 |
| Whether Copper Creek TIF revenue may be used to fund projects outside original Copper Creek boundaries | Plaintiffs: TIF funds from that URA cannot lawfully be used outside its boundaries after the original term | City: consolidation permits allocation of TIF across merged URAs (per Fults); thus revenue can be shared | Consolidation allows sharing of TIF revenue across the merged URA, but city cannot both consolidate (eliminating the old URA) and later claim the old URA’s grandfathered perpetual term to avoid sunsets |
| Whether the Amended Plan violated the city’s Comprehensive Development Plan | Concerned Citizens: Amended Plan contemplated industrial/warehouse uses and street projects inconsistent with the 2005 comprehensive plan | City: Amended Plan’s listed infrastructure projects conform to or accelerate the comprehensive plan; proposed private development is not part of the urban renewal plan | Amended Plan did not conflict with the comprehensive plan; court affirmed conformity finding |
| Proper legal effect of consolidating URAs on grandfathering/sunset of TIF | Plaintiffs: consolidation terminates grandfather protection for pre-1995 URA | City: consolidation should not strip grandfathering from pre-1995 URA portions | Consolidation terminates the pre-1995 URA’s separate existence and thus its grandfathered exemption from the 20-year limit; grandfathering is area-based |
Key Cases Cited
- Fults v. City of Coralville, 666 N.W.2d 548 (Iowa 2003) (upholding municipal consolidation of URAs and sharing of TIF revenues within the consolidated area)
- McMurray v. City Council of the City of West Des Moines, 642 N.W.2d 273 (Iowa 2002) (urban renewal plan conformity with comprehensive plan is assessed by comparing the plan’s stated undertakings to the general plan)
- Knudson v. City of Decorah, 622 N.W.2d 42 (Iowa 2000) (discussing review of city action for conformity with comprehensive plan)
- Richards v. City of Muscatine, 237 N.W.2d 48 (Iowa 1975) (prior-law limitation on freezing tax valuation only within areas being physically redeveloped)
- State v. Finders, 743 N.W.2d 546 (Iowa 2008) (interpreting grandfather provisions and rejecting an interpretation that would produce absurd results)