In 2018, a Planning Commission meeting attracted a crowd with signs for and against the 2040 Plan. (Leila Navidi, Star Tribune/The Minnesota Star Tribune)

A Minneapolis city attorney argued that a lower court erred when it tossed the city's 2040 Comprehensive Plan at a hearing Thursday in the Court of Appeals.

The appellate court's three-judge panel heard oral arguments in a case that raises important legal questions about whether a city's comprehensive plan — a speculative plan that guides future land use citywide — can be challenged under the Minnesota Environmental Rights Act (MERA).

In the past, only individual development projects have been subject to mandatory environmental review under MERA.

The lawsuit "will have lasting future impact through the state, whether the order is affirmed or reversed," wrote District Judge Joseph Klein in June when he allowed the city to keep approving developments under its 2040 Plan pending appeal in order to circumvent "potential chaos."

A trio of environmental groups including the nonprofit Smart Growth Minneapolis, the Audubon Chapter of Minneapolis and Minnesota Citizens for the Protection of Migratory Birds sued Minneapolis in 2018 over its 2040 Plan, which allows for more density citywide and eliminates single-family zoning. The groups' lawyer, Jack Perry, argued that the "massive densification" permitted under the plan likely would increase polluted runoff to local waters, exacerbate flooding due to more impervious surfaces and diminish air quality due to traffic congestion.

In 2021, the Minnesota Supreme Court said the lawsuit could continue. This June, the District Court ruled in the environmental groups' favor by ordering the city to stop implementing the 2040 Plan.

Judge Klein found that while Perry had satisfied his burden to provide scientific evidence showing that a full build-out under the comprehensive plan — 150,000 new residential units — would cause environmental harm, the city's lawyers failed to provide an affirmative defense.

The city immediately appealed.

The Court of Appeals does not accept new evidence, but only decides whether a lower court has made a mistake.

The city of Minneapolis is now arguing that the District Court improperly ruled in the environmental groups' favor based on an erroneous assumption of a full build-out, and that merely adopting a comprehensive plan should not be considered the cause of any environmental harm that comes out of the construction of specific projects.

"The development anticipated and projected by respondents — and accepted as true by the District Court — did not, as a matter of fact, occur," wrote City Attorney Peter Ginder in a brief. "The undisputed record shows that in 2020 and 2021, the City issued only 15 permits for new, converted or remodeled triplexes. ... At a rate of 24 new units every two years, it would take 12,365 years to achieve the full build-out relied on by the [environmental groups' expert report]."

During oral arguments on Thursday, judges Kevin Ross, Michelle Larkin and Jeffrey Bryan questioned Perry and Assistant City Attorney Ivan Ludmer, hinting at how they leaned in the case.

Judge Larkin said she was having a hard time seeing how the District Court erred when the Supreme Court already has accepted the presumption of a full build-out of the 2040 Plan as an acceptable metric by which to measure environmental harm.

"What's wrong with the notion that we would expect an environmental assessment to be consistent with what is permissible under the plan?" Larkin asked. "Wouldn't it be best to assume the full build-out because that is in fact what is authorized?"

Ludmer argued that even after the Supreme Court ruled that the lawsuit could continue, the environmental groups had an obligation to show that the presumed full build-out would be likely, but that they failed to do so.

Judge Bryan asked Perry to concede that the city's act of adopting the 2040 Plan in response to projected population growth did not have an environmental impact on its own.

Perry admitted it is the execution of the plan that could cause environmental harm. However, the city did not submit any expert reports to counter the environmental groups' expert report, he said, leaving the District Court to rule on a one-sided battle of the experts.

"With regard to 150,000 new units, they were approved not as discretionary but as a matter of right," Perry said.

The case has pitted environmental groups against each other.

Several green organizations including Neighbors for More Neighbors, Sustain St. Paul and the Sierra Club have filed amicus briefs in defense of the city of Minneapolis. These organizations say the dense development allowed by the 2040 Plan benefits the environment because concentrating population growth in walkable urban cores with public transportation actually reduces per capita carbon emissions.

The Metropolitan Council also filed an amicus brief in favor of the city.

"Most, if not all, of the opinions advanced by Respondents' expert are not supported by the realities of comprehensive planning or reasonable expectations for the development or redevelopment of new units in the city under the timeframe covered by the 2040 Plan," according to the council's brief.

Minneapolis is forecast to add 24,829 households by 2040.

The appellate judges have 90 days to issue their opinion.