State Court Finds Fault with Minneapolis Airport for Lowered Value of Nearby Property

SEPTEMBER 19, 2012

A Hennepin County district judge has ruled that landowners have a right to compensation for disturbances caused by aircraft using a new runway built at Minneapolis-St. Paul International Airport. Judge Robert Blaeser concluded that takeoffs and landings every few minutes over the plaintiffs' property, sometimes as low as 500 feet above ground, reduced the sale value of the property.

The new runway was opened in 2005 to divert traffic from two busier runways that irritated homeowners under the flight paths of those runways.

The lawsuit was brought by heirs of the former Kelley Farm, a 60-acre parcel in Bloomington adjacent to the Minnesota Valley National Wildlife Refuge and near the Mall of America, the Hiawatha light-rail transit, and major highways. Its location has long made it a prime development target. Descendants of James E. Kelley, who bought the land in the 1930s, argued that it lost value after the airport opened north-south runway 17-35 and they sued the Metropolitan Airports Commission, which runs the airport, and the City of Bloomington.

The end of runway 17-35 is about a mile from the farm property, and about 450 planes fly directly over it daily. In their lawsuit the plaintiffs said, "The impact of the noise, vibration, disturbance and pollution caused by the overflights is repeated and aggravated." "The overflights constitute a direct and substantial invasion of ... property rights," resulting in a loss of market value.

An appraiser hired by the plaintiffs testified that noise abatement would increase the cost to a developer of building future offices or retail on the property, reducing the price that the heirs could get for the land by about $630,000. A final decision on compensation could be made by a condemnation commission.

Thousands of homeowners who sued over the years agreed to drop their claims in exchange for airport-paid noise abatement. Still, a lawyer for the Kelley Farm heirs who brought the suit says the ruling could influence future expansions at Minneapolis-St. Paul and other airports. "I'm sure property owners, the MAC and cities surrounding airports will keep a careful eye on this," said William Christopher Penwell.

Judge Blaeser ruled that "a potential buyer of the property would assume in determining the purchase price that these invasions would be repeated and aggravated and would continue into the future." Blaeser cited a 1974 Minnesota Supreme Court case involving south Minneapolis homes that established a right to compensation if "unduly irritating noise" and other airport impacts caused "direct and substantial" problems that deprived property owners of "the practical enjoyment of the property."

The plaintiffs had also alleged that the City of Bloomington reduced the value of their land by $18 million when it rezoned their land to eliminate residential use near the new runway. While the judge rejected this claim, the Minnesota Supreme Court ruled last year, in a case involving the Rochester airport, that a property owner should be compensated for rezoning that lowers the value of the property. (See DeCook v. Rochester International Airport Joint Zoning Board, Minn. Sup. Ct., 796 N.W.2d 299.)

"The issue of damages ... that part is still up in the air," said Hampton O'Neill, a lawyer in Casper, Wyo. The heirs haven't decided whether to appeal the zoning portion of the ruling.

Anderson said the airport hasn't decided whether to appeal Blaeser's ruling on noise.

Source: Based on reports in the Star Tribune