Darling Ingredients v. City of Bellevue , 309 Neb. 338 ( 2021 )


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  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    07/23/2021 08:10 AM CDT
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    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    DARLING INGREDIENTS v. CITY OF BELLEVUE
    Cite as 
    309 Neb. 338
    Darling Ingredients Inc., formerly known as
    Darling International Inc., and Darling
    National LLC, appellees, v. City of
    Bellevue, a Nebraska municipal
    corporation, appellant.
    Frank R. Krejci, Trustee of the Frank R. Krejci
    Revocable Trust, appellee, v. City of
    Bellevue, a Nebraska municipal
    corporation, appellant.
    ___ N.W.2d ___
    Filed May 28, 2021.     Nos. S-20-405, S-20-406.
    1. Annexation: Ordinances: Equity. An action to determine the validity
    of an annexation ordinance and enjoin its enforcement sounds in equity.
    2. Equity: Appeal and Error. On appeal from an equity action, an appel-
    late court decides factual questions de novo on the record and, as to
    questions of both fact and law, is obligated to reach a conclusion inde-
    pendent of the trial court’s determination.
    3. Annexation: Statutes. The issue of whether the character of the land to
    be annexed meets the legal standard prescribed in the statute is a ques-
    tion of law. Although the characterization of the land depends on the
    particular facts of each case, the question of whether the facts fulfill a
    particular legal standard presents a question of law.
    4. Municipal Corporations: Annexation: Statutes. The power delegated
    to municipal corporations to annex territory must be exercised in strict
    accord with the statute conferring it.
    5. Annexation: Taxation. It is improper for an annexation to be solely
    motivated by an increase in tax revenue.
    6. Annexation: Ordinances: Proof. The burden is on one who attacks an
    annexation ordinance, valid on its face and enacted under lawful author-
    ity, to prove facts to establish its invalidity.
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
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    309 Neb. 338
    7. Annexation: Words and Phrases. The use of land for agricultural pur-
    poses does not necessarily mean it is rural in character. It is the nature
    of its location as well as its use which determines whether it is rural or
    urban in character.
    8. Municipal Corporations: Annexation. To determine whether lands
    are urban or suburban, or rural, the test is whether a city has arbitrarily
    and irrationally used the power granted therein to include lands entirely
    disconnected, agricultural in character, and bearing no rational relation
    to the legitimate purposes of annexation.
    9. Annexation: Words and Phrases. The terms “contiguous” and “adja-
    cent” mean adjoining, touching, and sharing a common border.
    10. Municipal Corporations: Annexation. A municipality may annex sev-
    eral tracts as long as one tract is substantially adjacent to the municipal-
    ity and the other tracts are substantially adjacent to each other.
    Appeals from the District Court for Sarpy County: Nathan
    B. Cox, Judge. Reversed and remanded for further proceedings.
    A. Bree Robbins, Bellevue City Attorney, for appellant.
    Michael S. Degan, of Kutak Rock, L.L.P., for appellee
    Darling Ingredients Inc.
    James E. Lang, of Lang Law, L.L.C., for appellee Frank
    R. Krejci.
    Heavican, C.J., Cassel, Stacy, Funke, Papik, and
    Freudenberg, JJ.
    Papik, J.
    After the City of Bellevue (the City) adopted an ordinance
    to annex their land, landowners brought actions in the district
    court and obtained orders finding that the City lacked the
    authority to annex the land and enjoining it from doing so.
    The district court found the City lacked authority because the
    land in question was rural and agricultural rather than urban or
    suburban and because it was not contiguous and adjacent to the
    City’s existing boundaries. The district court did not address
    the landowners’ argument that the annexation was not lawful
    because it was motivated by an improper purpose.
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
    Cite as 
    309 Neb. 338
    In these consolidated appeals of the district court’s orders,
    we find that the district court erred by finding the annexation
    invalid for the reasons it identified. We therefore reverse, and
    remand for further proceedings so that the district court may
    consider the landowners’ improper purpose challenge.
    BACKGROUND
    Procedural Background.
    In 2019, the City adopted ordinances that provided for the
    annexation of various areas. One of the ordinances annexed
    a portion of land referred to as “Area #9.” Area #9 consisted
    of properties owned by Darling Ingredients Inc. and Darling
    National LLC (collectively Darling), and Frank R. Krejci,
    trustee of the Frank R. Krejci Revocable Trust (Krejci).
    Darling and Krejci filed separate complaints in the district
    court for Sarpy County, naming the City as a defendant. They
    asserted that the City had exceeded the authority and powers
    granted to a city of the first class by 
    Neb. Rev. Stat. § 16-130
    (Cum. Supp. 2020). They claimed that the City lacked author-
    ity under § 16-130, because the land in question was not
    adjacent to or contiguous with the existing City limits and
    was agricultural and rural in character rather than urban or
    suburban. Darling and Krejci also claimed that the ordinance
    was invalid because it was enacted for an improper purpose.
    Both Darling and Krejci asked the district court to declare the
    ordinance invalid and to permanently enjoin the City from tak-
    ing actions to enforce it. The two actions were consolidated for
    discovery and trial.
    Evidence at Trial.
    The parties did not call any witnesses at trial. Instead, they
    offered a number of affidavits and other documentary evidence
    as exhibits. The district court received all of these exhibits
    as evidence, most without objection. A summary of the evi-
    dence received by the district court is provided in the para­
    graphs below.
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
    Cite as 
    309 Neb. 338
    In 2019, the City considered an annexation package made up
    of several sanitary and improvement districts and unincorpo-
    rated parcels of land in its extraterritorial jurisdiction, includ-
    ing Area #9.
    The City’s planning director prepared a memorandum for city
    officials about Area #9 and several other unincorporated areas.
    The memorandum concluded with two different recommenda-
    tions. The City’s planning department recommended approval
    of the annexation based on the positive financial impact on
    the City and its natural growth and development. The City’s
    planning commission, however, recommended approving the
    annexation proposal with the exception of some parcels desig-
    nated with “greenbelt” tax valuation status, including portions
    of Area #9. See 
    Neb. Rev. Stat. § 77-1344
     (Reissue 2018).
    Rather than excluding all greenbelt lots, the City’s planning
    commission recommended annexing greenbelt lots that did not
    appear to be used for agricultural purposes.
    Following public hearings, the city council voted unani-
    mously to adopt the ordinance that annexed Area #9. Around
    the same time and while this matter was pending in district
    court, the City annexed several other unincorporated areas
    and sanitary and improvement districts. The City planned to
    provide services to all annexed areas and assess future infra-
    structure needs.
    The following map was attached to the ordinance that
    annexed Area #9. Area #9 is shaded in blue and located below
    the center line. Areas have been labeled by this court for clarity.
    The northwestern portion of Area #9 is a 55-acre strip
    owned by Krejci; it comprises the majority of the western bor-
    der of Area #9. The Krejci property has been used exclusively
    for raising crops since before 2011. It contains no structures
    or buildings; does not have City water, sewer, or gas service;
    and has no residents. Although the entire Krejci property has
    greenbelt tax valuation status, record cards from the Sarpy
    County assessor listed the location of the property as “[s]ub­­
    urban.” In an affidavit, the Sarpy County assessor stated that
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
    Cite as 
    309 Neb. 338
    Existing                                   Existing
    City of                                     City of
    Bellevue                                   Bellevue
    Existing
    City of
    Bellevue
    Area #9
    his office had determined that Krejci’s property was suburban
    in both location and character.
    Frank R. Krejci stated in an affidavit received by the district
    court that in his opinion as a purchaser, owner, and developer
    of property in the area over the preceding 50 years, the Krejci
    property and the adjoining property to the east were rural in
    nature, agricultural in character, and not urban or suburban,
    and there were no urban or suburban uses for it. The district
    court also received a real estate listing of the Krejci property
    created in 2014 and last updated in June 2019. The listing
    divided the Krejci property into several “small industrial lots.”
    The proximity to Highway 75—with visibility to 27,000 cars
    per day—and Offutt Air Force Base (Offutt AFB) were touted,
    and the City’s “Master Plan for Industrial Use” was refer-
    enced. The listing included aerial pictures of the surrounding
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
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    area that depicted Area #9, Offutt AFB, and nearby devel-
    oped areas.
    Darling owns the remaining portion of Area #9. The Darling
    property totals approximately 265 acres and includes farmland
    (Darling farmland), an industrial plant (Darling plant), and
    a fingerlike strip on the easternmost portion of Area #9. As
    with the Krejci property, record cards from the Sarpy County
    assessor listed the location of the property as “[s]uburban,”
    and the Sarpy County assessor stated that his office had deter-
    mined that the property was suburban in both location and
    character.
    Darling’s easternmost property is approximately 20 acres
    and includes no structures. According to Darling’s general
    plant manager, this portion was not suitable for development
    because it was partially wooded, was prone to flooding, and
    was accessible only by driving on the levy next to Papillion
    Creek. It did not have greenbelt tax valuation status and was
    zoned industrial.
    The Darling farmland covers 220 acres. The Darling man-
    ager stated in an affidavit that Darling purchased the Darling
    farmland in 2011, that it was used exclusively for agriculture at
    that time, and that Darling has used it exclusively for agricul-
    ture by leasing it to a tenant farmer who raises crops there. The
    Darling manager stated that Darling has no plans to use the
    Darling farmland for any other purpose. The Darling farmland
    has never been platted and has no improvements other than
    those related to agricultural purposes. Since 1995, the Darling
    farmland has been designated as greenbelt land for tax val­
    uation purposes. Records of the Sarpy County assessor reflect
    that the Darling farmland was both zoned as and being used
    for agricultural purposes. No City services were supplied to the
    Darling farmland.
    The Darling plant sits on approximately 45 acres and is
    located within the generally triangular middle portion of
    Area #9 depicted in the map above. The area has been used
    as some form of industrial plant since the 1940’s. The Darling
    plant is an industrial facility that converts animal byproducts
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
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    309 Neb. 338
    into sustainable food, feed, and fuel ingredients. It does not
    have greenbelt tax valuation status and is zoned as industrial
    by the Sarpy County assessor.
    The Darling farmland and the Darling plant are served by
    the “City of Omaha for water and sewer, Encore and Black
    Hills Energy for gas,” and Sarpy County for roads and emer-
    gency services. Emergency services are provided by the City’s
    fire department through Sarpy County.
    Fort Crook Road borders Area #9 on the west side. Highway
    75 is just outside the western edge of Area #9. Papillion
    Creek borders Area #9 on the east. The area on the other side
    of Papillion Creek, outlined in black on the map above, was
    annexed by the City in 2009. The parties agree that at some
    point that area included a baseball complex. The district court
    described the baseball complex as “failed,” and our record
    includes a 2017 newspaper article stating that the complex cost
    $6.5 million to build, but after the complex did not live up to
    revenue expectations, the City agreed to end its relationship
    with the entity that had managed it. The article also stated
    that the City’s mayor said that the land was in an area the City
    had eyed for future growth. As shown on the map above, the
    area including the baseball complex does not border the rest of
    the land within the City’s boundaries.
    Offutt AFB is to the north of both the area of the City,
    including the baseball complex, and Area #9. According to evi-
    dence in the record, Offutt AFB is the home of U.S. Strategic
    Command and a wing of the U.S. Air Force. It includes a
    nonpublic airport and about 10,000 military and other fed-
    eral employees.
    Immediately to the south of Area #9 is the Normandy Hills
    residential subdivision. Several other residential subdivisions
    are located on the other side of Highway 75 to the west and
    northwest of Area #9. These subdivisions are within 1 mile of
    Area #9. Five of these subdivisions were annexed, at least in
    part, by the same annexation package that annexed Area #9, and
    one of those annexed parcels includes an elementary school.
    Evidence was also introduced at trial that in addition to the
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
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    Normandy Hills subdivision and Offutt AFB, there was one
    commercial establishment and six industrial establishments
    within a 1-mile radius of Area 9, including the Darling plant.
    The district court received the affidavits of several City
    officials. The director of the City’s planning department stated
    that annexation of Area #9 occurred after an annual review
    and that he “used a high degree of intelligent planning and
    ­coordination in reviewing the proposed areas to be annexed
    [and] thoroughly reviewed all surrounding areas of the City . . .
    and its future growth and development.” Similarly, the City’s
    land use planner stated that Area #9 was annexed, along with
    ­others, “to continue the growth and development for the City
    . . . . The annexations help with fulfilling the continuous growth
    and cohesiveness of the community, fill gaps within the com-
    munity, and help[] the [C]ity continue to grow together.” She
    also said that “growth and development of the City . . . contin-
    ues to expand near the subject properties.” The City’s land use
    planner referenced the City’s comprehensive plan.
    The district court received the comprehensive plan, which
    was initially created by the City in the early 2000’s and
    updated as late as 2017. It projected that the City’s population
    would increase from under 45,000 in 2000 to over 60,000 by
    2030. According to the comprehensive plan, the projected pop-
    ulation growth would require the City to double the amount
    of land it occupied. The comprehensive plan encouraged the
    City to monitor “future-growth” areas and be prepared to
    annex land before it was developed. Referring to the general
    area in which Area #9 was located, the comprehensive plan
    stated, “[I]f commercial development occurs in this area and is
    adjacent to the corporate boundary, the area should be annexed
    immediately.”
    The comprehensive plan classified the section of Highway
    75 just to the west of Area #9 as a “rural principal arterial,”
    in that it provided traffic movement for substantial statewide
    or interstate travel. It noted that increased development to
    the south of the Bellevue metropolitan area had overloaded
    existing transportation facilities and increased congestion. A
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    reconfigured interchange at the northwest corner of Area #9
    and a new interchange approximately 1 mile south of Area #9
    had been approved as “2030 Street Improvements” by the
    regional planning agency’s “2035 Long Range Transportation
    Plan,” and the same plan approved converting the area of
    Highway 75 to the west of Area #9 from four to six lanes.
    The comprehensive plan recommended the “Future Roadway
    Functional Classification” for the area just west of Area #9 as
    an “Urban Princip[al] Arterial Roadway.”
    The comprehensive plan identified the area near the Highway
    75 intersection approximately 1 mile south of Area #9 as one
    “expected to see significant population growth during the plan-
    ning period” and to become the City’s “new southern gateway.”
    It suggested planning a major regional activity center for the
    area, to include “a regional shopping mall, a number of major
    employers, and other amenities that support a large area such
    as dining, entertainment, and public and quasi-public uses.”
    The comprehensive plan contemplated that the activity center
    would serve residents of Sarpy County and the larger Omaha
    metropolitan area.
    The comprehensive plan considered Area #9 to be develop-
    able. It recommended future land use of Area #9 as light indus-
    try, heavy industry, and flex space. The term “flex space” was
    described as supporting a variety of commercial, retail, and
    industrial uses, as well as helping the market to determine the
    use of the space. The comprehensive plan based its flex space
    recommendation on Area #9’s proximity to a proposed indus-
    trial park and Offutt AFB.
    The City admitted in answers to interrogatories received by
    the district court that it was not aware of any retail establish-
    ments within 1 mile of the Darling plant or any proposed or
    planned development within Area #9.
    District Court’s Orders.
    The district court entered separate but identical orders in
    the Darling action and the Krejci action, finding in favor of
    Darling and Krejci.
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    DARLING INGREDIENTS v. CITY OF BELLEVUE
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    309 Neb. 338
    The district court determined that in annexing Area #9,
    the City had exceeded its statutory authority under § 16-130
    because the Darling and Krejci properties were neither urban
    nor suburban in character and included a substantial portion
    of agricultural lands which were rural in character. It reasoned
    that the properties were not located in close proximity to city
    amenities, they were located in the middle of an isolated and
    undeveloped part of the county, the predominant use of the
    properties and the surrounding lands was agricultural, not a
    single residence existed in Area #9, and the annexation memo-
    randum was silent as to any development plans for the annexed
    area. The district court noted that the facts in this case were
    similar to those present in Wagner v. City of Omaha, 
    156 Neb. 163
    , 
    55 N.W.2d 490
     (1952), where this court held that a city
    had exceeded its authority by annexing agricultural land that
    was rural in character.
    Alternatively, the district court found that the ordinance did
    not comply with the requirement in § 16-130 that annexed
    lands be contiguous or adjacent to the city limits. It observed
    that the City’s “boundaries” were not adjacent to the Darling
    and Krejci properties. Instead, the district court reasoned, the
    City was attempting to rely on the baseball complex area, an
    “isolated island of municipal control” completely detached
    from the body of the City. The district court characterized this
    as a separate distinct mass that was not a part of the City, such
    that it could be used for an adjacency connection.
    The district court declared the ordinance invalid and void
    and permanently enjoined the City from taking any action to
    enforce it. The district court did not address whether the ordi-
    nance was enacted for an improper purpose.
    The City timely appealed both actions. We docketed its
    appeals as cases Nos. S-20-405 and S-20-406 and consolidated
    them for oral argument and disposition.
    ASSIGNMENTS OF ERROR
    The City’s assignments of error in cases Nos. S-20-405 and
    S-20-406 are essentially identical. It assigns, consolidated,
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    that the district court erred by finding (1) that the Darling and
    Krejci properties were rural in character and thus could not be
    annexed and (2) that the Darling and Krejci properties were
    neither contiguous nor adjacent to the City.
    STANDARD OF REVIEW
    [1,2] An action to determine the validity of an annexation
    ordinance and enjoin its enforcement sounds in equity. SID No.
    196 of Douglas Cty. v. City of Valley, 290 Neb. l, 
    858 N.W.2d 553
     (2015). On appeal from an equity action, an appellate
    court decides factual questions de novo on the record and, as to
    questions of both fact and law, is obligated to reach a conclu-
    sion independent of the trial court’s determination. 
    Id.
    [3] The issue of whether the character of the land to be
    annexed meets the legal standard prescribed in the statute is a
    question of law. 
    Id.
     Although the characterization of the land
    depends on the particular facts of each case, the question of
    whether the facts fulfill a particular legal standard presents a
    question of law. 
    Id.
    ANALYSIS
    Legal Framework.
    [4,5] We begin by reviewing the legal principles that govern
    this challenge to the City’s proposed annexation. The City’s
    power to annex territory is not absolute. It must be exercised in
    strict accord with the statute conferring it. See Cornhusker Pub.
    Power Dist. v. City of Schuyler, 
    269 Neb. 972
    , 
    699 N.W.2d 352
    (2005). In this case, the City’s annexation power is controlled
    by § 16-130, which provides in relevant part:
    (2) . . . [T]he mayor and city council of a city of the
    first class [located in whole or in part within the bound­
    aries of a county having a population in excess of 100,000
    inhabitants but less than 250,000 inhabitants] may by
    ordinance at any time include within the corporate limits
    of such city any contiguous or adjacent lands, lots, tracts,
    streets, or highways as are urban or suburban in charac-
    ter and in such direction as may be deemed proper. Such
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    grant of power shall not be construed as conferring power
    upon the mayor and city council to extend the limits of
    such a city over any agricultural lands which are rural
    in character.
    (3) The invalidity of the annexation of any tract of
    land in one ordinance shall not affect the validity of the
    remaining tracts of land which are annexed by the ordi-
    nance and which otherwise conform to state law.
    In addition to the statutory limitations expressed in § 16-130
    and other similar statutes, we have also held that it is improper
    for an annexation to be solely motivated by an increase in tax
    revenue. SID No. 196 of Douglas Cty. v. City of Valley, supra,
    citing Witham v. City of Lincoln, 
    125 Neb. 366
    , 
    250 N.W. 247
     (1933).
    [6] The burden is on one who attacks an annexation ordi-
    nance, valid on its face and enacted under lawful authority, to
    prove facts to establish its invalidity. County of Sarpy v. City
    of Papillion, 
    277 Neb. 829
    , 
    765 N.W.2d 456
     (2009). See, also,
    Williams v. County of Buffalo, 
    181 Neb. 233
    , 
    147 N.W.2d 776
    (1967) (passage of ordinance presumes finding that conditions
    and limitations in delegating statute exist). The City claims
    Darling and Krejci failed to meet this burden in these cases.
    We address its arguments below.
    Character of Area #9.
    The City first contends the district court erred in finding
    that, in annexing Area #9, the City exceeded the power con-
    ferred to it by § 16-130(2) to annex lands that are “urban or
    suburban in character” but not “agricultural lands which are
    rural in character.” We have defined the term “rural” as “of or
    pertaining to the country as distinguished from a city or town,”
    and we have defined the term “urban” as “of or belonging to
    a city or town.” See Wagner v. City of Omaha, 
    156 Neb. 163
    ,
    168, 
    55 N.W.2d 490
    , 494 (1952). In asserting that Area #9
    is urban or suburban in character, despite being largely used
    for agriculture, the City points to commercial and industrial
    establishments and housing developments nearby, as well as
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    other annexations in the vicinity and future land use designa-
    tions for Area #9. The City also relies on the opinions of the
    Sarpy County assessor and its land use planner that Area #9 is
    urban or suburban in character.
    Like the district court, Darling and Krejci primarily analo-
    gize this case to Wagner v. City of Omaha, 
    supra.
     In Wagner,
    we held that 90 to 103 acres of unplatted agricultural lands
    were rural in character. The entire area annexed was composed
    of 490 acres that, in addition to the unplatted agricultural
    lands, included 588 dwellings and 2,116 residents, a limited
    retail area, and several small industries. 
    Id.
     Under the law
    applicable in Wagner, we declared the entire annexation ordi-
    nance invalid. Darling and Krejci argue that Wagner is disposi-
    tive here, given the size and agricultural use of Area #9 and
    the relative lack of residents, structures, improvements, city
    services, and development in the immediate area. The annexed
    area in Wagner does share some similarities with Area #9, but
    as we quite recently observed, our jurisprudence on this topic
    has developed in the decades since our decision in Wagner. See
    County of Sarpy v. City of Gretna, ante p. 320, ___ N.W.2d
    ___ (2021).
    In County of Sarpy v. City of Gretna, supra, we reviewed
    the factors our cases have considered in deciding whether an
    area is rural or urban or suburban in character. We explained
    that in addition to current uses, we have considered other fac-
    tors, including the location of the area, its character, its prox-
    imity to growth areas, the degree of development of the land
    involved, and contemplated future development. Id., citing SID
    No. 196 of Douglas Cty. v. City of Valley, 
    290 Neb. 1
    , 
    858 N.W.2d 553
     (2013); Swedlund v. City of Hastings, 
    243 Neb. 607
    , 
    501 N.W.2d 302
     (1993); Voss v. City of Grand Island, 
    186 Neb. 232
    , 
    182 N.W.2d 427
     (1970); Sullivan v. City of Omaha,
    
    183 Neb. 511
    , 
    162 N.W.2d 227
     (1968); Bierschenk v. City of
    Omaha, 
    178 Neb. 715
    , 
    135 N.W.2d 12
     (1965); and Wagner v.
    City of Omaha, supra. We thus proceed to consider the evi-
    dence in our record as to those factors.
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    We look first to Area #9’s location. The district court char-
    acterized Area #9 as “isolated” and “well removed from the
    [C]ity.” It likened Area #9 to the rural lands in Wagner v. City
    of Omaha, supra, and distinguished it from the annexed area
    in Swedlund v. City of Hastings, 
    supra,
     and Bierschenk v. City
    of Omaha, supra. We recognize differences between Area #9
    and the cases distinguished by the district court, but they and
    other cases are nonetheless instructive because they consider
    features of an area’s location that influence its character.
    Those features include the disputed area’s proximity to hous-
    ing developments, parks, schools, industry, local thoroughfares,
    and other common features of urban or suburban life. See,
    Swedlund v. City of Hastings, 
    supra;
     Bierschenk v. City of
    Omaha, supra. See, also, Shields v. City of Kearney, 
    179 Neb. 49
    , 
    136 N.W.2d 174
     (1965).
    After considering the evidence in the record regarding what
    is present in the surrounding areas, we conclude that Area #9 is
    not isolated and is instead near features that suggest an urban
    or suburban character. Highway 75, a major arterial roadway,
    runs just outside the western edge of Area #9. On the other
    side of Highway 75, less than 1 mile from Area #9, are several
    residential subdivisions and an elementary school. Another
    residential subdivision, Normandy Hills, is immediately south
    of Area #9. While not part of the City, we find that Offutt AFB,
    located less than 1 mile north of Area #9, is also informative as
    to Area #9’s character. The nearby presence of a military base
    that employs approximately 10,000 people suggests an area
    that is urban or suburban rather than rural in character. Also
    within a 1-mile radius of Area #9 at the time of trial were a
    commercial storage establishment and six industrial establish-
    ments, including the Darling plant. Finally, the baseball com-
    plex to the east of Area #9, even if attempts to operate it had
    been unsuccessful as of the time of trial, is also more indicative
    of an area that is urban or suburban in character than one that
    is rural in character.
    As for current uses, Area #9 is not entirely used for agri-
    culture. A part of Area #9—the Darling plant—has been used
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    for industrial purposes since the 1940’s. The easternmost por-
    tion of Area #9 is zoned industrial, and there was no evidence
    that it had ever been put to any particular use.
    [7] Much of Area #9 was zoned and being used for agricul-
    tural purposes at the time of trial and had been used in that
    fashion for years before. But in applying the same statutory
    requirements to cities of various classes, we have long held
    that the use of land for agricultural purposes does not neces-
    sarily mean it is rural in character. See, e.g., Swedlund v. City
    of Hastings, 
    supra;
     Omaha Country Club v. City of Omaha,
    
    214 Neb. 3
    , 
    332 N.W.2d 206
     (1983); Voss v. City of Grand
    Island, 
    186 Neb. 232
    , 
    182 N.W.2d 427
     (1970). We have said
    that “[i]t is the nature of its location as well as its use which
    determines whether it is rural or urban in character.” Sullivan
    v. City of Omaha, 
    183 Neb. 511
    , 514, 
    162 N.W.2d 227
    ,
    229-30 (1968). We have also emphasized that land need not
    already be zoned and developed into a nonagricultural use
    before it can be annexed. See SID No. 196 of Douglas Cty. v.
    City of Valley, 
    290 Neb. 1
    , 
    858 N.W.2d 553
     (2015). Instead,
    lands may be currently utilized in an agricultural fashion and
    yet, due to other factors, be urban or suburban in character
    and thus subject to annexation. See Voss v. City of Grand
    Island, 
    supra.
    One factor we have found that can render land urban or
    suburban in character despite being currently put to an agri-
    cultural use is contemplated future development. In SID No.
    196 of Douglas Cty. v. City of Valley, supra, we considered
    evidence of contemplated future residential development as
    a justification for the City’s classifying the subject property
    as urban or suburban and upheld the annexation. Similarly,
    in County of Sarpy v. City of Gretna, ante p. 320, 332, ___
    N.W.2d ___, ___ (2021), we were not convinced that the city’s
    annexation was invalid, even where its plans for development
    of the annexed land “will take time.” That is to say, future
    development plans for the annexed land need not be imminent
    as Darling suggested at oral argument.
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    Here, the evidence reflects contemplated future development
    to transition Area #9 from agricultural use to nonagricultural
    use. According to the comprehensive plan, the City anticipates
    the whole of Area #9 will be used for industrial and other non-
    agricultural purposes in the future, based on its proximity to a
    proposed industrial park and Offutt AFB.
    The City was not the only party that envisioned develop-
    ment in Area #9’s future. As noted above, the Krejci property
    was listed for sale. The listing’s division of the property into
    several “small industrial lots,” its references to nearby major
    thoroughfares and the thousands of cars that drive by the
    property each day, its depiction of the property in reference
    to nearby developed areas, and its statement that the property
    was included in the City’s “Master Plan for Industrial Use” all
    suggest that Krejci, a longtime owner and developer of real
    property in the area, viewed the farmland as ripe for indus-
    trial development. Krejci counters that the real estate listing,
    if anything, demonstrates the rural and agricultural character
    of the property, because the property has not actually been
    sold. We are not persuaded. There are many factors that may
    prevent a property from selling, and we have no evidence that
    explains in any meaningful detail why Krejci’s attempts to
    market his property as a site for industrial development have
    not proved successful.
    We have also considered evidence of development in the
    vicinity of the contested area to determine its character. See
    County of Sarpy v. City of Gretna, supra, citing Bierschenk v.
    City of Omaha, 
    178 Neb. 715
    , 
    135 N.W.2d 12
     (1965). In this
    case, the City was not aware of any proposed or planned devel-
    opment of Area #9 itself. However, affidavits by City officials
    cited continuous and future growth and development in the
    area as a reason for annexing Area #9. The City’s comprehen-
    sive plan projected population growth between 2000 and 2030
    requiring the City to double its footprint and encouraged the
    City to annex land before it was developed. In particular, it rec-
    ommended immediate annexation if commercial development
    occurred in the region of Area #9. The comprehensive plan
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    anticipated significant population growth in the area around the
    intersection southwest of Area #9 and expected it to become
    the City’s “new southern gateway.” The comprehensive plan
    classified the section of Highway 75 bordering Area #9 as a
    principal arterial and recommended planning a major regional
    activity center for the area southwest of Area #9. Changes to
    Highway 75 and intersections near Area #9 had been approved
    to address existing congestion caused by development in the
    area and anticipated population growth. Maps in evidence
    show that in 2019, several neighborhoods just to the west and
    northwest of Area #9 were annexed as part of the same devel-
    opment plan that annexed Area #9. The City had also initiated
    procedures to annex the Normandy Hills development immedi-
    ately south of Area #9.
    [8] In evaluating all of this evidence, we also bear in mind
    that the standard we have articulated for determining whether
    an annexation is invalid based on the character of the land
    sought to be annexed is deferential to the municipality. Not
    only is the proposed annexation presumed to be valid with
    the challenger bearing the burden to demonstrate invalidity,
    our test asks whether the city has used the power of annexa-
    tion “arbitrarily and irrationally . . . to include lands entirely
    disconnected, agricultural in character, and bearing no rational
    relation to the legitimate purposes of annexation.” County of
    Sarpy v. City of Gretna, ante p. 320, 329, ___ N.W.2d ___, ___
    (2021), quoting SID No. 196 of Douglas Cty. v. City of Valley,
    
    290 Neb. 1
    , 
    858 N.W.2d 553
     (2015) (internal quotation marks
    omitted). See, also, Voss v. City of Grand Island, 
    186 Neb. 232
    ,
    
    182 N.W.2d 427
     (1970).
    Given the evidence we have discussed regarding Area #9’s
    location, its present use, and its contemplated future uses
    and existing plans for development, we cannot conclude that
    the City acted arbitrarily or irrationally in annexing Area #9
    or that Area #9 bears no rational relation to the legitimate
    purposes of annexation. Accordingly, we find that the district
    court erred in finding the ordinance that annexed Area #9 to be
    invalid based on the character of Area #9.
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    We reach this conclusion even though some of the land
    within Area #9 had greenbelt tax valuation status and the
    City’s planning commission recommended against annexing
    such land. In County of Sarpy v. City of Gretna, supra, we
    found the greenbelt tax assessment status of the annexed ter-
    ritory not to be evidence of rural character. We reasoned that
    greenbelt status involved a legislative determination regarding
    taxation and market value and found nothing to support it as a
    restriction on the city’s annexation authority.
    Contiguous or Adjacent Requirement.
    [9,10] Having concluded that the district court erred in deter-
    mining that the character of Area #9 precluded the City from
    annexing it, we must continue on to consider the City’s asser-
    tion that the district court incorrectly determined that Area #9
    was not “contiguous or adjacent” to the City as required by
    § 16-130. We have used the terms “contiguous” and “adjacent”
    synonymously to mean adjoining, touching, and sharing a
    common border. See County of Sarpy v. City of Papillion, 
    277 Neb. 829
    , 
    765 N.W.2d 456
     (2009). A municipality may annex
    several tracts as long as one tract is substantially adjacent to
    the municipality and the other tracts are substantially adjacent
    to each other. 
    Id.
    There is no dispute that the Darling property shares a com-
    mon border with the area of the City that includes the baseball
    complex and that the Krejci property is substantially adjacent
    to the Darling property. There is also no argument that the
    annexation of Area #9 amounted to what we have described
    as “strip” or “corridor” annexation, in which a municipality
    impermissibly attempts to establish adjacency by seeking to
    annex a relatively narrow piece of land bordering its corpo-
    rate limits to reach a larger tract of land some distance away.
    See, e.g., County of Sarpy v. City of Gretna, 
    273 Neb. 92
    , 
    727 N.W.2d 690
     (2007); Cornhusker Pub. Power Dist. v. City of
    Schuyler, 
    269 Neb. 972
    , 
    699 N.W.2d 352
     (2005); Johnson v.
    City of Hastings, 
    241 Neb. 291
    , 
    488 N.W.2d 20
     (1992). This,
    the City contends, should be the beginning and the end of
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    any argument as to whether Area #9 is contiguous and adjacent
    to the City.
    The district court, however, was persuaded by Darling’s
    and Krejci’s argument that the annexation was invalid because
    the area that includes the baseball complex did not share a
    border with the rest of the City. The district court dubbed
    this an “island” annexation and determined it was contrary
    to the adjacency requirement of § 16-130. The district court
    found support for its conclusion in County of Sarpy v. City of
    Papillion, 
    supra.
     In that case, we observed that our prior cases
    had explained the reason for the adjacency requirement “is the
    idea that a city, both by name and use, is one entity, a collec-
    tive body of people gathered together in one mass, not sepa-
    rated into distinct masses, and having a community of interest
    because they are residents of the same place.” 
    Id. at 837
    , 765
    N.W.2d at 464.
    We find that Area #9 is adjacent and contiguous to the City
    for purposes of § 16-130. Darling’s and Krejci’s true adjacency
    objection is to the 2009 annexation of the area that includes
    the baseball complex. That area does indeed appear to be iso-
    lated from the rest of the City, and its annexation may well
    have created “distinct masses” within the City. See County of
    Sarpy v. City of Papillion, 
    supra.
     But the annexation of the
    area including the baseball complex was not before the district
    court in this case, and it is not before us now. Not only was
    that annexation not challenged in this case, but under 
    Neb. Rev. Stat. § 18-1718
     (Reissue 2012), any action or proceeding
    brought to contest an annexation by a city must be brought
    within 1 year from the effective date of the annexation or be
    forever barred. Even if the annexation of the area including
    the baseball complex was improper, the time for challenging it
    has long since expired.
    Because the area including the baseball complex was
    annexed into the City and was not subject to challenge in this
    case, it can be used to establish adjacency. And there is no
    dispute that Area #9 is adjacent and contiguous to the area of
    the City that includes the baseball complex. Consequently, the
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    district court erred in finding that Area #9 was not contiguous
    or adjacent to the City under § 16-130.
    Purpose of Annexation.
    In addition to the arguments discussed above, Darling and
    Krejci alleged in the district court that the annexation was
    invalid because it was solely motivated by an increase in tax
    revenue. They now argue that we should affirm the district
    court’s decisions on this basis.
    The district court, however, found it dispositive that the
    ordinance was invalid under the character and adjacency
    requirements of § 16-130, and it did not address the improper
    purpose challenges. We will not consider this issue that has
    not been addressed by the district court. See, e.g., Speece v.
    Allied Professionals Ins. Co., 
    289 Neb. 75
    , 
    853 N.W.2d 169
    (2014). However, because Darling and Krejci challenged the
    annexation ordinance on this basis, we remand the causes to
    the district court for further proceedings to consider Darling’s
    and Krejci’s improper purpose challenges. See 
    id.
    CONCLUSION
    For the reasons explained above, we reverse the decisions
    of the district court finding that Area #9 did not satisfy the
    requirements of § 16-130 and remand the causes for further
    proceedings.
    Reversed and remanded for
    further proceedings.
    Miller-Lerman, J., not participating.
    Cassel, J., concurring.
    In County of Sarpy v. City of Gretna, 1 a majority of this
    court untethered certain municipalities 2 from the traditional
    understanding of the statutory prohibition against annexation
    1
    County of Sarpy v. City of Gretna, ante p. 320, ___ N.W.2d ___ (2021).
    2
    See 
    Neb. Rev. Stat. § 17-407
    (2) (Cum. Supp. 2020) (applicable to cities of
    second class and villages located wholly or partially within county having
    population greater than 100,000 but less than 250,000).
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    of “agricultural lands which are rural in character.” 3 Although
    I dissented from that decision, I recognize that it is now bind-
    ing precedent. 4
    The statutory language applicable here governing certain
    other cities 5 is in all relevant respects identical to the statute
    in City of Gretna. 6 Unsurprisingly, the court’s language here
    follows that precedent. At least, in the instant case, the tracts
    at issue were essentially surrounded by properties which might
    reasonably be characterized as urban or suburban in character.
    But this court’s path rewards municipal overreach in a race
    to extend boundaries to capture future growth in Sarpy County.
    This court should not be “shocked” 7 at the wave of preemptive
    annexations likely to follow.
    3
    See 
    Neb. Rev. Stat. § 16-117
     (Cum. Supp. 2020). Accord, County of Sarpy
    v. City of Papillion, 
    277 Neb. 829
    , 
    765 N.W.2d 456
     (2009); Wagner v. City
    of Omaha, 
    156 Neb. 163
    , 
    55 N.W.2d 490
     (1952).
    4
    See, e.g., State on behalf of Kaaden S. v. Jeffery T., 
    303 Neb. 933
    , 
    932 N.W.2d 692
     (2019).
    5
    See 
    Neb. Rev. Stat. § 16-130
    (2) (Cum. Supp. 2020) (applicable to cities
    of first class located wholly or partially within county having population
    greater than 100,000 but less than 250,000).
    6
    See, City of Gretna, 
    supra note 1
    ; § 17-407(2).
    7
    See Casablanca (Warner Bros. 1942).
    

Document Info

Docket Number: S-20-405, S-20-406

Citation Numbers: 309 Neb. 338

Filed Date: 5/28/2021

Precedential Status: Precedential

Modified Date: 7/23/2021

Authorities (14)

Sullivan v. City of Omaha , 183 Neb. 511 ( 1968 )

Wagner v. City of Omaha , 156 Neb. 163 ( 1952 )

Shields v. City of Kearney , 179 Neb. 49 ( 1965 )

Voss v. City of Grand Island , 186 Neb. 232 ( 1970 )

Swedlund v. City of Hastings , 243 Neb. 607 ( 1993 )

Bierschenk v. City of Omaha , 178 Neb. 715 ( 1965 )

Williams v. County of Buffalo , 181 Neb. 233 ( 1967 )

Johnson v. City of Hastings , 241 Neb. 291 ( 1992 )

Cornhusker Public Power District v. City of Schuyler , 269 Neb. 972 ( 2005 )

County of Sarpy v. City of Gretna , 273 Neb. 92 ( 2007 )

Omaha Country Club v. City of Omaha , 214 Neb. 3 ( 1983 )

County of Sarpy v. City of Papillion , 277 Neb. 829 ( 2009 )

State on behalf of Kaaden S. v. Jeffery T. , 303 Neb. 933 ( 2019 )

Darling Ingredients v. City of Bellevue , 309 Neb. 338 ( 2021 )

View All Authorities »

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