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Zuendel Inv., Inc. v. Board of Trs. of Waterworks & Elec. Light & Power Plant of City of Winterset

Court of Appeals of Iowa

February 5, 2014

ZUENDEL INVESTMENT, INC., Plaintiff-Appellant,

Editorial Note:

This decision has been referenced in a "Decisions Without Published Opinions" table in the North Western Reporter.

Appeal from the Iowa District Court for Madison County, Richard B. Clogg, Judge. A real estate development company appeals from the district court's grant of summary judgment in a certiorari action.

Daniel L. Manning of Lillis O'Malley Olson Manning Pose Templemann L.L.P., Des Moines, for appellant.

Christopher D. Hagenow and Kendra Arnold of Whitaker, Hagenow & Gustoff, L.L.P., and Steven P. Wandro of Wandro & Associates, P.C., Des Moines, for appellee.

Considered by Tabor, P.J., and Bower and McDonald, JJ.



Zuendel Investment, Inc., (hereinafter " Zuendel" ) appeals from the district court's grant of summary judgment in favor of the Board of Trustees of the Waterworks and Electric Light and Power Plant of the City of Winterset (hereinafter " the Board" ). At issue is the legality of a lease agreement between the Board and the Madison County Sportsmen's Club, Inc. (hereinafter " the Club" ). The lease authorizes the Club to operate an outdoor shooting range on the City of Winterset's (hereinafter " the City" ) property in exchange for one dollar in annual lease payments. In the district court, Zuendel contended the lease is an illegal gift of city property in violation of Iowa Code section 364.7 (2011). On cross-motions for summary judgment, the district court held the issue was not preserved for judicial review. The district court also addressed the merits, holding the lease agreement was, in fact, a license and section 364.7 therefore did not apply. The district court also held that even if the lease agreement were a true lease rather than a license, the lease agreement did not constitute a gift because the lease was supported by consideration other than the dollar in nominal lease payments. We affirm the judgment of the district court.


Zuendel is a real estate developer that owns and develops residential property in Winterset. The southeast corner of Zuendel's property development meets the northwest corner of the City's property on which the Club operates the shooting range. The property at issue comprises approximately seven acres of a larger tract zoned conservation-open space that is owned by the City and managed by the Board. The Board is a political subdivision of the City and governed by Iowa Code chapter 388.

The continuous use of this property as a shooting range dates to more than thirty years ago. In 1980 or 1981, the Madison County Conservation Board, the Iowa State Conservation Commission, the U.S. Fish & Wildlife Service, the Club, and local officials, planned, funded, permitted, approved, and developed the shooting range. Initially, the Board provided the land for the range and entered into an agreement with the county conservation board to operate the range on the property for ten years at the nominal rate of one dollar per year. In the beginning, the Club provided assistance to the county conservation board in operating the shooting range. In 1988, pursuant to a shooting range management agreement, the county conservation board turned over operation and management of the shooting range to the Club to be operated for public benefit under the supervision of the county conservation board.

In 1991, the Board entered into a twenty-year lease agreement with the Club. The lease agreement permitted the Club to operate the range on the property now at issue in exchange for rent of one dollar per year. The Board reserved the right to revoke the lease agreement if the " activities carried on" constituted a hazard or danger to the public. As before, the Club operated the shooting range for public benefit, making the space available to the public for a variety of uses, including, but not limited to, law enforcement training, shooting meets, hunter education and training, and shooting facilities for the general public.

In 2011, the 1991 lease agreement was expiring and the Board considered entering into a five-year, renewable lease agreement with the Club to operate the shooting range. The Board provided public notice and conducted public hearings on the issue. Mr. Zuendel appeared before the Board with his attorney. At the Board meeting, Mr. Zuendel raised noise, health, safety, and environmental concerns about the shooting range. Zuendel also claimed the ongoing operation of the shooting range on the property was contrary to zoning ordinances and was inconsistent with the City's development plans for the area. In response, the Board conducted an investigation and held additional public hearings. The Board obtained expert opinions regarding range safety and environmental issues. The Board conducted homeowner interviews of those likely to be impacted by renewal of the lease agreement. The Board reviewed the zoning classification of the property at issue, the long-term planning and zoning objectives for the area, and any promises or understandings concerning continued operation of the shooting range after the 1991 lease agreement expired.

On May 23, 2011, the Board entered into a new lease agreement with the Club. The " Lease--Business Property" (hereinafter " 2011 Lease" ) provides for a five-year " lease" of the property " only to operate Sportsmen's Club activities and a shooting range," with two additional five-year renewal periods. Zuendel filed a petition for writ of certiorari in the district court, asserting the 2011 Lease was prohibited as an illegal gift under Iowa Code section ...

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