Public Law Alert Re: Wren (August 2005)

RELOCATION BENEFITS

IN RE WREN

On July 28, 2005, the Minnesota Supreme Court issued its decision in In the Matter of the Kenneth Wren Residential Relocation Claims.  The Wren decision addresses relocation benefit eligibility under the Minnesota Uniform Relocation Act (MURA).  MURA requires the payment of relocation benefits in all “acquisitions undertaken by any acquiring authority.”  

In Wren, the Supreme Court held that an acquisition is “undertaken” requiring relocation benefits where the activities of a Housing & Redevelopment Authority (HRA) and a private developer were “sufficiently intertwined.”  Based on this standard, private redevelopment activities might be “deemed to have been jointly ‘undertaken’ by the city and the developer, making the city liable to pay relocation benefits under MURA.” [1]  The Court also clarified that an earlier interpretation[2]of MURA – holding that “acquisition” means “to come into possession, control or power of disposal” over property – does not mean that the public agency must undertake such acquisition itself.  Rather, the Court focused on the nature of the public agency’s involvement in the private redeveloper’s activities. 

In Wren, the Court emphasized that: (a) the HRA was contractually obligated to use its eminent domain powers to acquire property should the redeveloper’s private negotiations fail; (b) the HRA had “frequent and direct communications with property owners” that “influenced [the owner’s] negotiations with the developer”; (c) the HRA financed the property acquisitions and; (d) the HRA was responsible for the ultimate success of the project.  Based on these factors, the Court concluded that “the HRA became an important ‘partner’ in the acquisition.”

The dissent (B. Anderson) concluded that the HRA did not undertake an acquisition under MURA and criticized the majority’s “sufficiently intertwined” standard because it ignores the reality of redevelopment projects.  The dissent also noted that the “logical reaction of municipalities and other acquiring agencies to the majority opinion is to quit informing residents of activity occurring in connection with redevelopment projects.” 

Based on the Wren decision, public agencies involved in development or redevelopment activities must carefully consider the nature of their relationships with developers.  Public agencies should discuss the ramifications of these relationships, and particularly the terms of development contracts and financing relationships, with legal counsel.

This is not intended to be legal advice and is distributed for informational purposes only. If you have any questions, please contact Bob Vose at 612-337-9275 or at rvose@kennedy-graven.com.

[1] The Court relied on Young v. Harris, 599 F.2d 870 (8th Cir. 1979), in reaching this conclusion.

[2] Gilliland v. Port Authority of Saint Paul, 270 N.W.2d 743 (Minn. 1978).