Minneapolis can enforce 2040 Plan — for now

Minneapolis officials announced Tuesday that they will resume work on development projects that had been postponed after a judge tossed the 2040 Comprehensive Plan that guides development in the city.

Hennepin County District Judge Joseph Klein on Tuesday granted city officials a reprieve that allows them to enforce the 2040 Plan while they appeal his earlier ruling overturning it.

Klein wrote in a six-page order that he sought to weigh environmental concerns brought by local activists against the city's arguments that blocking it from enforcing the plan would cause a cascade of logistical and legal problems.

"There is little doubt that this case presents an important legal question," Klein wrote, noting that it was the first of its kind in Minnesota. "In a case of first impression that is of such potential import, as is the present case, this court acknowledges the prudence of a stay pending an appeal."

Interim City Attorney Peter Ginder said in a statement that city officials were pleased with Klein's latest ruling. "This will allow previously postponed matters to move forward, and allow continued review and approval of building permits, rezonings, and other matters covered by Minneapolis 2040, pending the outcome of the underlying appeal," Ginder said. "Projects that were in limbo will now move forward for City Council decision."

The final decision about whether Minneapolis will be able to use its 2040 Plan in the long term will likely be made months from now, after arguments are heard in appeals courts. The 2040 Plan was dubbed one of the most progressive housing policies in the nation when it eliminated single-family zoning, clearing the way for the construction of more duplexes and triplexes. It also allowed for the creation of "indoor villages" to increase the number of beds available for people experiencing homelessness and laid the foundation on which the city's transportation plans, zoning updates and a slew of other ordinances were crafted.

Klein blocked the city from enforcing the plan last month, and the city filed an appeal. His order on Tuesday grants the city a reprieve — for now — and allows it to use the plan while that appeal is pending.

At the heart of the case is a question of whether the city needed to do an environmental review for the 2040 Plan or whether it could choose instead to evaluate projects on an individual basis.

Three groups who sued the city in 2018 — Smart Growth Minneapolis, the Audubon Chapter of Minneapolis and Minnesota Citizens for the Protection of Migratory Birds — argued that a full build-out of the 2040 Plan could cause environmental damage and the city should have conducted a review required under the Minnesota Environmental Rights Act (MERA).

Attorneys for the city, meanwhile, argued that it was unlikely the plan would reach its full scale anytime soon and that officials could instead review each project's impact individually.

"The full build-out presumption and whether a comprehensive zoning plan is an appropriate stage at which to bring a challenge under MERA are important questions of law, and their ultimate resolution will have lasting implications for a large metropolitan community," Klein wrote in his order Tuesday.

In court arguments earlier this month, the city said it could face lawsuits if it doesn't have a proper development plan in place and that forcing it to revert to a prior plan while the appeal is pending would drain city resources and throw near-term development into doubt. Jack Perry, an attorney for the groups that brought the lawsuit, argued that the city had yet to provide evidence to back up its "bold allegation."

"Quite plainly," Klein wrote, "there is risk to the City under both scenarios."

He added: "Because the City has pledged to conduct environmental reviews on a project-by-project basis and because the appeal period is short compared to the duration of the comprehensive plan, the court finds any potential environmental harm is not irreparable or disproportionate."

In a call Tuesday, Perry said the groups that brought the lawsuit don't intend to challenge the judge's order, in part because the appeal is moving at a swift pace, with the possibility that a hearing could happen as early as this fall.

"He has very carefully analyzed the risks at issue and prudently issues an order that advises the city of its risk under both scenarios," Perry said. "I think that's the key: The city is in a dilemma, and it is of their own creation."

It wasn't immediately clear how many projects might be impacted by Klein's latest order.

Four housing projects that required rezoning had been scheduled for City Council approval on June 16. But when the initial district court order to cease implementation of the 2040 Plan came down the day before, all four projects were postponed, holding up the development of 116 units of housing. The City Council is now set to hold a special meeting Friday afternoon to consider them.

The four projects are:

Representatives for companies working on those projects either did not respond to messages or said they were still digesting the impact of the judge's order.

City Council Member Lisa Goodman, who chairs the Business, Inspections, Housing & Zoning Committee through which many of those types of projects passed, said, "I'm hopeful that we can get this taken care of sooner rather than later."

Staff writer Susan Du contributed to this report.