In a recent case in Olmsted County, the district court ruled that the City of Rochester over assessed 200 acres of undeveloped land by more than $1 million. The court ruled that the city's $1.7 million special assessment impermissibly attempted to impose a disproportionate and illegal burden for regional transportation improvements upon a single group of related local property owners using as a funding mechanism fees charged to the property owners in a City-designated Transportation Improvement District (TID).

The court was critical of the city’s use of a TID, through which the city sought “voluntary” participation of undeveloped property owners in agreeing to TID fees as a condition to development of their property. Soon after the plaintiff in this case refused to agree to the TID, the city levied a special assessment against his properties in the exact amount as the TID fees.

In addition to concluding that “the city’s special assessments constitute a taking without a just compensation in violation of the 14th Amendment,” the court held that the “TID fees cannot be imposed involuntarily as they are not authorized under Minnesota law. The TID fee has the characteristics of a road impact fee, which is not legally sanctioned.” The court ordered that the $1.7 million in special assessments be set aside, and awarded costs to Larkin Hoffman’s clients and remanded the case to the city for reassessment.

The bottom line: It is imperative for property owners to understand Minnesota’s statutory requirement (Minn. Stat. 429.036) that appeals be filed within 30 days after the adoption and publication of a resolution levying special assessments, so they do not miss the opportunity to appeal potentially costly levies. It is also important to invest in hiring qualified experts to provide data to aid the in determination of a fair assessment.

Contact Gary Van Cleve, Rob Stefonowicz or Peter Coyle for more information.