TSB HOLDINGS, L.L.C. and 911 N. GOVERNOR, L.L.C., Appellants,
BOARD OF ADJUSTMENT FOR THE CITY OF IOWA CITY, Appellee. TSB HOLDINGS, L.L.C. and 911 N. GOVERNOR, L.L.C., Appellants,
CITY OF IOWA CITY, IOWA, Appellee.
review from the Iowa Court of Appeals.
Appeals from the Iowa District Court for Johnson County,
Mitchell E. Turner and Chad Kepros, Judges.
seek further review of a court of appeals decision affirming
the district court's orders denying them relief in
certiorari proceedings against a municipality.
Charles A. Meardon of Meardon, Sueppel & Downer P.L.C.,
Iowa City, and James W. Affeldt of Elderkin & Pirnie,
P.L.C., Cedar Rapids, for appellants.
Elizabeth J. Craig and Sara Greenwood Hektoen, Assistant City
Attorneys, Iowa City, for appellee.
on a 1987 court order, developers sought the right to build
apartments on certain adjoining properties they owned in Iowa
City. After the City denied their site plans, the developers
brought separate actions against the City and its Board of
Adjustment. The district court ruled against the developers
in both actions. The developers appealed. The court of
appeals affirmed both judgments on the ground that
enforcement of the 1987 order was barred by Iowa Code section
614.1(6) (2013), which provides that actions "founded on
a judgment of a court of record" may only be brought
within twenty years after the cause of action accrues.
See Iowa Code § 614.1, .1(6). The developers
asked for further review, which we granted.
further review, we find the Board of Adjustment should have
permitted the developers to proceed in accordance with the
1987 decree. We conclude the statute of limitations does not
bar enforcement of the decree. We further conclude the
developers are entitled to enforce the decree as
"successors and assigns." Additionally, we reject
the Board of Adjustment's argument that the decree had
expired by its terms because "a use [had] been developed
or established" on the properties. Therefore, we vacate
the decisions of the court of appeals, reverse the district
court judgment in favor of the Board of Adjustment, and
remand with directions to enter judgment in favor of the
developers in that proceeding.
Background Facts and Proceedings.
Kempf Decision and the Resulting Remand Order.
properties at issue are six numbered, adjoining lots in Iowa
City. Lots 49-51 on the west front on North
Dodge Street. Lots 8-10 on the east front on North Governor
properties were the subject of our decision in Kempf v.
City of Iowa City, 402 N.W.2d 393');">402 N.W.2d 393 (Iowa 1987). Wayne
Kempf and his partnersbought a four-acre tract in the near north
side of Iowa City. Id. at 395-96. At the time of
Kempf's purchase, the City had zoned the properties as
R3B, a classification that permits office buildings and high
density, multifamily residential housing. Id. at
planned to build one office building and five apartment
buildings on the lots, and invested $114, 500 to purchase the
whole tract and develop it for construction. Id. at
395-96. Kempf had completed construction of the office
building on lots 8 and 9. See id. at 396. This
building is located at 911 North Governor Street. Kempf then
began construction of a twenty-nine unit apartment building
on a part of lot 50. See id. This building is
located at 902 North Dodge Street. Following vigorous
neighborhood protests against the construction of the
apartment building, the City revoked Kempf's building
permit. Id. at 396-97.
commenced litigation. Id. at 397. The district court
ordered the City to reissue the building permit and enjoined
the City from preventing further construction. Id.
After the completion of the apartment building in 1977, the
City imposed a moratorium on all construction with the
exception of single-family and duplex development.
Id. In 1978, the City rezoned Kempf's tract and
other tracts in the area. Id.
filed an amended petition, arguing the City's rezoning
was arbitrary, capricious, and discriminatory, and the
rezoning was an unconstitutional taking. Id. at 398.
Litigation between the parties culminated in our
we held the application of the rezoning to the lots and
portions of lots in the remaining 2.12 acres of the tract
would be unreasonable. Id. at 400-01. We reasoned
overwhelming evidence showed it would be economically
unfeasible because "the cash flow income would not
retire the debt[, ]" "lending agencies [would not]
be willing to loan for such purposes in these circumstances[,
]" and "there would be no market for single-family
or duplex residences on the remaining Kempf tract."
Id. at 398, 400.
we considered the present and future status of the remaining
lots. Id. at 401. We held
ordinances numbered 78-2901 through 78-2906 may apply to the
Kempf property, provided, however, that Kempf shall be
permitted to proceed with the development of apartment
buildings, as shown by the record in this case, to the extent
that such buildings conform to the ordinances in effect prior
to the 1978 rezoning . . . . The [C]ity shall be enjoined
from prohibiting this use of the property by Kempf. Further
development or redevelopment of the property beyond that
contemplated by Kempf as shown by this record and noted in
this opinion, whether carried out by Kempf or future owners,
will be subject to the amended ordinances above designated.
remanded the case to the district court to enter a ruling
consistent with our opinion. Id.
remand, the district court issued an order that described the
undeveloped 2.12 acres of the Kempf tract, specifically lots
10, 49, a part of 50, and 51. The court further provided,
The owner or owners of said properties, and their successors
and assigns, shall be permitted to develop those properties
with multiple dwellings (apartments) in accordance with the
provisions applicable to the R3B zone in effect on May 30,
1978, prior to the rezoning of said real estate[, ] which was
finalized on June 28, 1978.
. . . The City is and shall be enjoined from interfering
with development of those properties as herein provided.
Once a use has been developed or established on any of the
above-described properties, further development or
redevelopment of that property shall be subject to the zoning
ordinances in effect at the time such further development or
redevelopment is undertaken.
parties, including the City, approved this language prior to
the court entering its decree.
entry of the remand order, Kempf constructed a twelve-unit
apartment building on a part of lot 50. This building is
located at 906 North Dodge Street. Kempf also granted the
local energy company an electrical easement across parts of
lots 49 and 50 to provide utilities to the new apartment
building. Other than the twelve-unit apartment
building and the electrical easement, Kempf did not further
develop the properties.
Events Leading Up to the Current Litigation.
time, Kempf and his partners divested themselves of the
properties. In 2005, AB Investments, L.L.C., a Kempf-related
entity, sold lots 49-51 to Main Street Partners. Later that
year, Main Street Partners conveyed the lots to Iowa-Illinois
Square, L.L.C., a company owned by the Clark family. In 2009,
Iowa-Illinois Square, L.L.C. sold the lots to TSB for $3.4
million. Thus, TSB has acquired lots 49-51, although it did
not acquire them directly from Kempf.
addition to the land itself, TSB now owns the twenty-nine
unit apartment building situated on lot 50 whose address is
902 North Dodge Street and the twelve-unit apartment building
situated on lot 50 whose address is 906 North Dodge Street.
2012, AB Investments, L.L.C. sold lots 8-10 to 911 North
Governor, L.L.C. The sale included the office building that
Kempf had built on lots 8 and 9 in the early 1970s. TSB has
since acquired 911 North Governor, L.L.C. Therefore,
through series of transactions, TSB now owns or controls the
lots that are the subject of the Kempf litigation
and the remand order.
November 2012, the City amended its comprehensive zoning plan
to designate properties in the area, including the properties
at issue in this case, as single family and duplex
residential properties. On March 19, 2013, the City rezoned
the properties to comply with the comprehensive zoning plan
by passing ordinance 13-4518. This ordinance provides in
WHEREAS, the City of Iowa City has initiated a rezoning of
property located at 906 North Dodge Street from Multi-family
(R3B) to High-Density Single-Family Residential (RS-12);
property located [at] 911 North Governor Street from
Commercial Office (CO-1) to High-Density Single-Family
Residential (RS-12); property located at 902 and 906 North
Dodge Street from Multi-family (R3B) to Medium-Density
Multi-Family Residential (RM-20) in order to bring the
properties into compliance with the City's Comprehensive
WHEREAS, City plans and policies, including the Comprehensive
and Strategic Plan, have changed considerably in the last 40
years, with the current Comprehensive Plan and Historic
Preservation Plan containing policies to encourage
preservation of the single family character of the City's
older single family neighborhoods and policies that serve to
stabilize these neighborhoods by encouraging a healthier
balance of rental and owner-occupied housing rather than
redevelopment for housing that serves primarily short-term
WHEREAS, the Central District Plan indicates that R3B
zoning is obsolete and the properties with this designation
should be rezoned to a valid zoning designation;
. . . .
WHEREAS, the Comprehensive Plan policies in place during the
1960s that led to the R3B zoning on Dodge Street encouraged
demolition and redevelopment of older neighborhoods at higher
WHEREAS, the City's Zoning Code no longer includes the
R3B zoning designation due to its inconsistency with the
City's current comprehensive planning goals and polices;
. . . .
City, Iowa, City Code § 13-4518 (2013). The ordinance
went into effect on March 28.
January 10 of that same year, before ordinance 13-4518 had
been published, TSB submitted a site plan to obtain the
City's approval for development on 902 and 906 North
Dodge Street. Julie Tallman, the City's regulation
specialist, evaluated the site plan under the Kempf
remand order and noted various deficiencies with it.
January 22, the City announced the rezoning and imposed a
moratorium to prevent the approval of any site plan in light
of the anticipated rezoning. Nevertheless, on January 31, TSB
submitted a revised site plan that proposed developing lots
9, 10, 49, 51, and a portion of lot 50, and demolishing the
existing parking area on lots 9, 10, 49, and a portion of lot
had not developed lots 10, 49, and 51, and they had no
buildings on them at the time TSB submitted this site plan.
Kempf had developed only a very small portion of lot 50, with
substantially all of lot 50 remaining vacant at the time TSB
submitted its site plan.
February 7, without evaluating the implications of the
Kempf remand order on the site plan, Tallman denied
the site plan on the ground that multifamily dwellings
(apartment buildings) did not comply with the existing
commercial office (CO-1) zone or the proposed high-density
single-family residential (RS-12) rezone.
April 18, TSB submitted a new site plan, which proposed
construction of apartment buildings on lots 10, 49, and 51
only. Tallman denied this plan on April 29, viewing it as
materially identical to the January 31 site plan. The City
also noted the March 28 effective date of ordinance 13-4518
did not alter the situation because the moratorium had been
in effect at the time of the January 31 site plan, and the
moratorium mandated compliance with the proposed rezoning.
Action Against the City.
February 2013, after ordinance 13- 4518 had been proposed but
before it had been adopted, TSB filed a petition for
declaratory relief and temporary injunction against the City.
In count I, TSB requested "a declaratory decree
adjudging the [City] may not alter the zoning of the
propert[ies], and that if the [City] does so, that the
altered regulation is, to the extent it applies to the
propert[ies], unconstitutional and void." In count II,
TSB sought a temporary injunction that would restrain the
City from rezoning the properties until a hearing.
April, following the approval of ordinance 13-4518, TSB also
filed a petition for writ of certiorari against the City
directly challenging the legality of ordinance 13-4518.
Specifically, TSB alleged
[t]he change i[n] the zoning classification was improper,
unreasonable, arbitrary and capricious, illegal, contrary to
prior rulings of the Supreme Court of Iowa and of the Johnson
County District Court, and would result in ...