## Facts

- Minneapolis and the Minneapolis Community Development Agency (MCDA) designated part of south Nicollet Mall as Development District No. 57 and as a tax increment financing (TIF) district to advance redevelopment and economic goals.
- The redevelopment plan contemplated construction of a retail store to be owned and operated by Dayton Hudson Corporation, with Ryan Companies selected as developer pursuant to a development agreement.
- Opus Northwest, LLC owned two adjacent parcels within the district and sought to develop the site itself but was not selected, in part because it lacked a committed retail anchor tenant.
- MCDA initiated condemnation proceedings in Hennepin County District Court to acquire Opus’s parcels for the redevelopment project.
- Opus objected, arguing (1) the taking was not justified because it proposed a privately funded $120 million office development, and (2) the redevelopment/TIF project was unlawful because Dayton Hudson had not yet filed an affirmative action plan required of an owner-occupant of a TIF-financed project before “doing business.”
- The district court granted MCDA’s condemnation petition and rejected Opus’s challenges; Opus appealed.

## Issues

1. Whether the condemnation served a valid public purpose and satisfied Minnesota’s public use/necessity requirements for redevelopment takings.
2. Whether the redevelopment/TIF project was “not permitted by law,” and thus the condemnation improper, because the proposed owner-occupant had not yet filed a statutory affirmative action plan.
3. Whether a court may invalidate a redevelopment condemnation based on a competing private development proposal that the municipality declined to select.

## Decision

- The Minnesota Court of Appeals affirmed the order permitting condemnation.
- The court held the redevelopment taking served a public purpose and the necessity determination was not arbitrary, capricious, or unreasonable.
- The court rejected Opus’s argument that the unfiled affirmative action plan rendered the TIF project unlawful at the condemnation stage.
- The court declined to second-guess the municipality’s selection of the retail corridor plan over Opus’s proposed office project.

## Legal Principles

- Municipal determinations that a redevelopment condemnation serves a public purpose and is necessary are upheld unless shown to be arbitrary, capricious, or unreasonable.
- Economic redevelopment goals, including strengthening a retail corridor and improving employment and the local economy, may constitute a public purpose even when a private party will own or operate the completed project.
- Courts generally do not choose between competing development proposals when the municipality has made documented findings supporting its selected plan.
- A statutory requirement that a TIF project’s owner-occupant file an affirmative action plan before “doing business” operates as a compliance condition tied to operation, not as a prerequisite to district designation or initiation of condemnation; a failure to file at that stage does not, by itself, void the project or the taking.

## Conclusion

The court upheld MCDA’s condemnation of Opus’s parcels for a TIF-supported retail redevelopment, deferring to the municipality’s documented public-purpose and necessity findings and concluding that the absence of an affirmative action plan filing at the time of condemnation did not invalidate the project or bar the taking.


Minneapolis Cmty. Dev. Agency v. Opus Nw., LLC, 582 N.W.2d 596 (Minn. Ct. App. 1998)