ANDERSON, G. BARRY, Justice.
At issue here is the scope of a municipality's authority to adopt an interim zoning ordinance that placed a moratorium on the establishment of pawnshops within the municipality. Appellant Pawn America Minnesota, LLC, sought declaratory and injunctive relief, asking the district court to (1) declare invalid an interim ordinance adopted by respondent City of St. Louis Park that placed a moratorium on the establishment of pawnshops and the issuance of new pawnbroker licenses, (2) declare that Pawn America is legally entitled to a pawnbroker license, and (3) direct the City to issue a pawnbroker license. Pawn America and the City filed cross-motions for summary judgment. The district court concluded that the interim ordinance was validly enacted, and Pawn America was not entitled to a pawnbroker license because the property it purchased could not be used as a pawnshop under the permanent ordinance. Consequently, the court denied Pawn America's motion for summary judgment, granted the City's motion for summary judgment, and dismissed Pawn America's claims with prejudice. Pawn America appealed, and a divided court of appeals affirmed. Pawn Am. Minn., LLC v. City of St. Louis Park, No. A08-1697, 2009 WL 2447746, at *1, 6 (Minn.App. Aug.11, 2009). Because we conclude that the interim zoning ordinance was validly enacted, we affirm.
Pawn America applied to the City of St. Louis Park on June 7, 2007, for a license to operate a pawnshop at 5600 Excelsior Boulevard.
On the same day that Pawn America applied for a pawnbroker license, PAL
With the July 16 governmental-approval contingency-period deadline approaching, Pawn America's attorney contacted the City's inspections supervisor on July 13, 2007, to advise her of the contingency-period deadline and to inquire about the status of Pawn America's license application. On July 16, the inspections supervisor sent an e-mail to Pawn America's attorney stating that "[e]verything looks great for the license. I cannot, however, physically issue this license until the store is ready to be open, but as far as we are concerned, the paperwork is in order and the license will be issued as soon as the store is ready for business." The inspections supervisor also left a voicemail for Pawn America's attorney indicating that she could not issue a pawnbroker license until Pawn America had a signed lease or had the property in its name.
In September 2007 residents near 5600 Excelsior Boulevard learned that Pawn America would be operating at that location, and the residents expressed to a city council member their concerns about and opposition to Pawn America there. The council member contacted the city manager and the community development director on September 23 to relay these concerns and inquire about the status of the license application. The council member wrote in an e-mail that if there were any available pawnbroker licenses, "lets [sic] lower the number allowable asap." The city manager then instructed the inspections supervisor to wait before approving the application, but the inspections supervisor did order the required background check.
On September 24, 2007, the city council held a regularly scheduled meeting, and the city manager initiated discussion about Pawn America's license application. The city manager stated that city ordinances permitted two pawnbroker licenses; one was currently in use, and one was still available. He told the city council that in 2002 the pawnshop ordinance was amended to reduce the number of licenses available from three to two, and to impose reporting requirements on pawnshops to track stolen property. The mayor expressed opposition to Pawn America's application, apparently because of the location of the property, and said, "Here's my policy statement on it: Figure out a way to say `no.' Anybody else have anything different about it, I mean ... I don't know, I think that's a terrible location for it. That's just my take on it." A council member expressed opposition to pawnshops in general, and in particular, said that a pawnshop on Excelsior Boulevard would negatively impact the community's image because of the downtown location
On September 26, 2007, the city attorney informed Pawn America that the city council on October 1 would have a first reading of an interim ordinance and would impose a moratorium on opening new pawnshops. Because of this information, and because the inspections supervisor indicated in July that a pawnbroker license would be issued when Pawn America had a lease or title to the property, PAL Holdings entered into a lease agreement with the owner of the property on September 27, 2007, and entered into a sublease agreement with Pawn America. The next day, Pawn America submitted a signed certificate of occupancy and land use registration application, and requested immediate issuance of a pawnbroker license.
On October 1, 2007, the city council met again and adopted the first reading of an interim zoning ordinance that temporarily prohibited new pawnshops, and passed a resolution directing a study to determine how the City should regulate pawnshops. The resolution also placed a hold on any further processing and approval of pending or new pawnshop licenses. As required by the city charter, every ordinance must have two public readings, with seven days between the first and second readings. In addition, an ordinance must be published in the City's official newspaper; the ordinance is effective 15 days after publication. On October 3, before the second reading of the ordinance, the City sent the interim ordinance to the official city newspaper for publication on October 11, making October 26 the effective date of the interim ordinance.
On October 4, 2007, Pawn America brought an action in district court seeking a writ of mandamus to compel the City to issue a pawnbroker license. The court issued an alternative writ of mandamus requiring the City to issue the license or appear before the court on October 8 to show cause why the City had not issued a license pursuant to Pawn America's June 7 application. At the October 8 hearing, the court denied Pawn America's petition for a peremptory writ of mandamus.
The city council held a special meeting on October 8, 2007, and adopted the second reading of the interim ordinance that temporarily prohibited the further processing and approval of pending or new applications for a pawnbroker license.
Pursuant to the resolution passed at the October 1 city council meeting, a zoning study on pawnshops was conducted, and the study was completed on December 5, 2007. The zoning study analyzed pawnshop uses, the City's existing zoning and licensing regulations, and land use controls in other cities. Based on the study, the City adopted a permanent ordinance on February 4, 2008, that became effective on February 22, 2008. Among other changes suggested by the study, the permanent ordinance amended the zoning code to make pawnshops conditional uses, and includes a distance separation requirement between pawnshops, gun shops, liquor stores, and certain other businesses, prohibits pawnshops from being located within 350 feet of residentially zoned property, and prohibits firearm transactions. Because the property at issue abuts a single-family neighborhood, a pawnshop is not permitted there under the permanent ordinance.
Pawn America moved for summary judgment, asking the district court to declare the interim ordinance invalid because it was adopted for an improper purpose (to delay or prevent Pawn America from opening a pawnshop), and to declare that Pawn America is entitled to a license. Pawn America also asked the court to order the City to issue a pawnbroker license. The City filed a cross-motion for summary judgment and asked for dismissal of Pawn America's claims because the interim and permanent ordinances do not allow a pawnshop at the property.
The district court denied Pawn America's motion for summary judgment, granted the City's motion for summary judgment, and dismissed Pawn America's claims. The court analyzed the City's actions in light of Minn.Stat. § 462.355, subd. 4(a) (2008), which authorizes a municipality to enact an interim ordinance. The court determined that the City's adoption of the interim ordinance was not arbitrary or capricious because it is permissible to preserve the status quo pending further study of zoning. The court reasoned that the mere adoption of an interim ordinance after learning of a particular proposed use of property does not, in itself, mean that enactment of an ordinance is arbitrarily enacted to delay or prevent the project. Because the court concluded that the interim ordinance was valid, and a pawnshop is not permitted by the permanent ordinance in place, the court granted summary judgment for the City.
Pawn America appealed, and the court of appeals affirmed. Pawn Am., 2009 WL 2447746, at *1, 6. The court of appeals analyzed the language of Minn.Stat. § 462.355, subd. 4(a), and concluded that the City met the statute's requirements when adopting the interim ordinance. Pawn Am., 2009 WL 2447746, at *3-4. In reaching its conclusion, the court of appeals determined that the City had not acted arbitrarily by enacting the interim ordinance even though the ordinance was in response to Pawn America's pawnbroker license application. Id. at *5-6. The court reasoned that enacting an interim ordinance in response to a particular license application does not, by itself, make the ordinance arbitrary. Id. at *5. The court found it noteworthy that the City had not reviewed its pawnshop ordinances in over five years, and Pawn America's operation was going to be structurally different than the City's other pawnshop in
The court of appeals dissent concluded that the interim ordinance and the zoning study were merely a guise to stop the Pawn America project. Id. at *6 (Stauber, J., dissenting). The dissent viewed the City's actions as "political manipulations [that] began long after Pawn America had justifiably and detrimentally relied on the city's preliminary approvals ... [and involved] open and obvious discrimination against a complying `single project.'" Id. at *6-7. This appeal followed.
Pawn America argues that the district court erred in concluding that the City's interim ordinance was valid. In an appeal from summary judgment, we must determine whether there are any genuine issues of material facts and whether the district court erred in applying the law.
Minnesota Statutes § 462.355, subdivision 4(a), gives authority to a municipality, under certain conditions, to adopt an interim ordinance:
(Emphasis added.)
Pawn America first argues that Minn.Stat. § 462.355, subd. 4(a), requires a study to be under way or authorized before a city may adopt an interim ordinance, based on the statutory language "is conducting studies or has authorized a study to be conducted." Because the City authorized the study at the October 1 city council meeting at the same time the City adopted the first reading of the interim ordinance, Pawn America contends that the interim ordinance was invalid.
The statute does not specify whether the study must be authorized prior to the adoption of the first reading of an interim ordinance, or prior to the final adoption of an ordinance; it merely provides that a "municipality may adopt an interim ordinance." Minn.Stat. § 462.355, subd. 4(a). The city charter provides that every non-emergency ordinance must have two public
Nevertheless, even if we interpret the word "adopted" in Minn.Stat. § 462.355, subd. 4(a), to mean the adoption of the first reading of the interim ordinance, Pawn America's argument is still flawed. The statutory language provides that a city may adopt an interim ordinance if the city "is conducting studies or has authorized a study to be conducted." Minn.Stat. § 462.355, subd. 4(a). At the October 1 city council meeting, the City adopted the first reading of the interim ordinance in the same motion as the resolution authorizing the zoning study; therefore, there was a simultaneous authorization of the study and adoption of the ordinance. Although the plain language of the statute certainly contains a temporal requirement by stating that a city may adopt an interim ordinance if it "is conducting studies or has authorized a study to be conducted," that requirement is met when the authorization of the study and adoption of the ordinance occur at the same time. We conclude that even under the strictest of interpretations, the City did not adopt the interim ordinance until it authorized the study, thereby satisfying this statutory requirement.
Pawn America also argues that the interim ordinance was invalid because, according to Pawn America, the City did not adopt the ordinance "for the purpose of protecting the planning process and the health, safety and welfare of its citizens." See Minn.Stat. § 462.355, subd. 4(a). Pawn America contends that the sole purpose of the interim ordinance was to prevent Pawn America from obtaining a pawnbroker license, and that this is evidenced by numerous events, including the City's delay in processing the application and the City's efforts to make the effective date of the ordinance as early as possible.
We have not previously addressed the standard of review for analyzing the validity of an interim ordinance. Our decision in Almquist predates statutory authority for municipalities to adopt interim ordinances. Nevertheless, in Almquist we held that even without a statutory grant of authority, "where a municipality enacts in good faith and without discrimination, a moratorium on development which is of limited duration, is valid if upon enactment, the study proceeds promptly and appropriate zoning ordinances are expeditiously adopted when it is completed." 308 Minn. at 65, 245 N.W.2d at 826. The same day that Almquist was decided, April 2, 1976, the Legislature enacted the first version of Minn.Stat. § 462.355, subd. 4(a), granting municipalities statutory authority to adopt interim ordinances. See Act of Apr. 2, 1976, ch. 127, § 21, 1976 Minn. Laws 304 (codified at Minn.Stat. § 462.355, subd. 4(a)). The statute, as enacted in
Implicit in the statutory language is a requirement that a municipality not act unreasonably, arbitrarily, or capriciously because the ordinance must be legitimately tied to the planning process and public health, safety, and welfare. In this sense, the statutory language arguably embodies the Almquist good-faith requirement.
Reading the requirement in Minn.Stat. § 462.355, subd. 4(a), that a city must enact an interim ordinance "for the purpose of protecting the planning process and the health, safety and welfare of the city's citizens" in light of our prior case law, we review the validity of an interim ordinance by determining whether the ordinance is reasonably related to the planning process and the public health, safety, and welfare,
The thrust of Pawn America's argument is that the City acted arbitrarily and impermissibly by aiming its actions only at Pawn America. Pawn America relies heavily upon the court of appeals' decision in Medical Services, Inc. v. City of Savage, 487 N.W.2d 263, 267 (Minn.App.1992), where the court, citing Almquist, stated that "[a] municipality may not arbitrarily enact an interim moratorium ordinance to delay or prevent a single project," and struck down an interim ordinance as arbitrary.
The court of appeals opinion in Medical Services, however, besides only having persuasive authority, is distinguishable. Unlike the city council in Medical Services, which delayed in acting for nearly two years before enacting an interim moratorium ordinance, id. at 267, the city council here only became aware of Pawn America's plans in late September 2007.
The City does not deny that Pawn America's plan to open a pawnshop prompted the adoption of the interim ordinance. But awareness of one particular application does not, in itself, make the City's actions arbitrary or unreasonable. See Duncanson, 551 N.W.2d at 252 ("[T]he good faith effort demonstrated here to plan for orderly development ... must ... defeat any objection that this ordinance is directed at a single project."). The City had not previously conducted a zoning study of pawnshops in order to analyze the land use impact of pawnshops and to determine if the City should place additional restrictions on opening pawnshops.
Further, the City did in fact complete the study on December 5, 2007, and adopted a permanent ordinance on February 4, 2008, based on that study. These facts support the conclusion that the City was not acting arbitrarily. See Almquist, 308 Minn. at 65, 245 N.W.2d at 826 (placing importance on whether "the study proceeds promptly and appropriate zoning ordinances are expeditiously adopted when it is completed"). If we were to view the City's preservation of the status quo pending further study as constituting unreasonable, arbitrary, or capricious action, any city's use of Minn.Stat. § 462.355, subd. 4(a), would be presumptively questionable.
At the same time, there is little doubt that there was hostility about locating a pawnshop at Pawn America's proposed site. And there is no doubt that the City also intended the interim moratorium to apply to Pawn America. In fact, prompted by Pawn America's application for a pawnbroker license and attempt to open a pawnshop at the property, the City took specific measures to ensure that the interim ordinance became effective as soon as possible. Nevertheless, nothing in the statute precluded the City from adopting the interim ordinance when the City knew that the ordinance would affect only one particular entity—Pawn America—and further, nothing in the statute prevented the City from adopting the interim ordinance in an effort to preserve the status quo in response to Pawn America's pending application. Had the City enacted the interim ordinance and adopted a permanent ordinance without conducting a study, a different result might very well obtain.
We conclude that the interim ordinance here was not unreasonable, arbitrary, or capricious, even though one of the purposes of the interim ordinance appears to have been to temporarily prevent Pawn America from operating a pawnshop at the property. Although the Pawn America application undoubtedly prompted the City's concern about pawnshops and the City took steps to preserve the status quo, the record indicates that the City adopted the interim moratorium ordinance not merely because of Pawn America, but to protect the City's planning process with respect to pawnshops in the City in general, and to examine the impact of pawnshops on the health, safety, and welfare of its citizens.
Because we conclude that the City's interim moratorium ordinance was validly enacted, thereby placing a moratorium on the issuance of pawnbroker licenses, and under the current ordinance Pawn America does not meet the conditions for a pawnbroker license at the requested location, we hold that the district court did not err in concluding that the City is not required to issue a pawnbroker license to Pawn America.
Affirmed.
STRAS, J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case.