When a developer proposed a 29-story tower above the oldest church in Minneapolis, threatening the stability of historic buildings, what did church leaders do? They went on the offensive and brushed up on their rights under land use and zoning regulations. That was one of several case studies presented by land use and real estate attorneys Jake Steen, Brandi Kerber, Victoria Dutcher, Bryan Huntington and Bill Griffith at a recent conference for church business leaders hosted by Larkin Hoffman.
The case involved the redevelopment of Nye’s piano bar in Minneapolis into shops and housing immediately adjacent to the historic church of Our Lady of Lourdes. “We helped the church use the heritage preservation guidelines to go on the offensive since the church was identified as historically significant,” according to Jake Steen. Steen, who spent five years in planning at the City of Minneapolis, added, “It’s also located in the St. Anthony Falls Historic District so there are district and individual protections for the church and we were able to identify historical damage that was done by similar projects.”
Ultimately, church leaders persuaded the development team to scale back the Nye’s project to six stories. City leaders required preservation of the historic elements of the Nye’s building which were incorporated in the redevelopment project. During construction, church leaders granted the developer construction rights through an easement over church property. Brandi Kerber negotiated the terms of the easement, “which allowed the contractor to swing their cranes over the church property.” Kerber said, “We put a number of provisions in the easement to address construction vibration and compensation for any damage to church property, as well as restoration of the site.”
Another case study presented by the panel involved the reconstruction of the Dorothy Day Shelter in downtown St. Paul across from the historic church of The Assumption. Victoria Dutcher and Brandi Kerber assisted the church in detailed review of title documents dating to the 1800s. “Catholic Charities approached the City to use a public right of way for parking,” according to Dutcher. “We learned that the church had underlying rights to the real estate on which the parking was proposed and investigated title for the church. In the end, this discovery led to a long-term parking arrangement between the City, the church and Catholic Charities.”
An often overlooked federal law has helped local churches negotiate with government officials in matters of land use and zoning. Bryan Huntington described how the Religious Land Use and Institutionalized Persons Act (“RLUIPA”) was recently used to secure zoning for a drop-in site for the homeless in St. Paul. First Lutheran Church has a relationship with Listening House, which provides services to the homeless. The City of St. Paul placed restrictions on Listening House, including that only 20 homeless persons a day could be served—even though there was capacity to serve many more. The church sued under RLUIPA and, following a settlement, was awarded over $300,000 in attorney’s fees. “Attorney’s fees are a powerful remedy in a land use case. The threat of attorney fee recovery dramatically changes the stakes in favor of churches and religious institutions,” according to Huntington.
Brandi Kerber also addressed the importance of understanding whether rental restrictions apply to church housing and knowing how to file for real estate tax exemption. “We were faced with trying to figure out how to transport cloistered nuns from their property for a routine property inspection,” said Kerber. “We convinced the City that the nuns were exempt from the rental housing provisions and some cities later changed their ordinances to exempt church property.”
Whether negotiating leases for cell towers, parking or charter schools, or negotiating zoning approvals, real estate issues increasingly present complex decisions for churches. Church business leaders are learning to develop sophisticated strategies and policies for protecting church assets and often turn to land use and real estate attorneys for critical advice.
Bill Griffith practices land use, real estate and municipal law at Larkin Hoffman. He represents a number of churches, charters schools, and nonprofit institutions, among his other real estate clients. Bill served as moderator of the real estate panel.