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L Street Investments v. Municipality of Anchorage

Supreme Court of Alaska

August 23, 2013

L STREET INVESTMENTS, Appellant,
v.
MUNICIPALITY OF ANCHORAGE, and Anchorage Downtown Partnership, Ltd., Appellees.

Page 966

Christopher J. Slottee, Atkinson, Conway & Gagnon, Inc., Anchorage, for Appellant.

Sean Halloran, Littler Mendelson, P.C., Anchorage, for Appellee Anchorage Downtown Partnership, Ltd. Deitra Ennis, Assistant Municipal Attorney, and Dennis Wheeler, Municipal Attorney, Anchorage, for Appellee Municipality of Anchorage.

Before: CARPENETI, Chief Justice, FABE, WINFREE, and STOWERS, Justices.

OPINION

STOWERS, Justice.

I. INTRODUCTION

The former Anchorage Municipal Code provided for the creation of special assessment districts for public capital improvements. On June 11, 1996, the Anchorage Municipal Assembly (Assembly) enacted Anchorage Ordinance 96-77(S-I) to broaden " special assessment districts" to include the provision of services and to authorize business improvement districts. In 1997 the Assembly passed Anchorage Ordinance 97-51, which created the Downtown Improvement District (District) for a period of three years. When passing this ordinance, the Assembly amended the boundaries of the proposed District to exclude some properties on K and L Streets. The building at 420 L Street, the property owned by appellant L Street Investments, was in the original proposal but subsequently carved out by the Assembly. In 2000 the Assembly extended the life of the District for ten years. Beginning in 2009, the Anchorage Downtown Partnership canvassed businesses hoping to extend the life of the District again and expand the District to include businesses between I and L Street. After the majority of business owners in the proposed District approved the extension and expansion, the Assembly extended the life of the District and expanded it to include businesses between I and L Streets, including the building at 420 L Street.

L Street Investments filed a complaint arguing: (1) Section 9.02(a) of the Municipality of Anchorage's Charter does not authorize the Municipality to finance services within the District by an assessment— rather, the Municipality can finance services only by a tax levy; and (2) the District is a " service area," and AS 29.35.450(c) prohibits the expansion of a service area unless a majority of voters in the area to be added vote in favor of expanding the service area. The Anchorage Downtown Partnership intervened, and all parties filed cross-motions for summary judgment. The superior court granted summary judgment to the Municipality and the Anchorage Downtown Partnership. We affirm.

II. FACTS AND PROCEEDINGS

In late 1994 and early 1995, a group of Anchorage business and civic leaders formed the Downtown Action Committee to develop a vision to revitalize downtown Anchorage. In April 1995 the Committee decided to develop a " business improvement district" to provide services that enhanced the beauty, safety, convenience, and vibrancy of downtown Anchorage. In January 1996 the Committee incorporated under the name Anchorage Downtown Partnership, Ltd. (Partnership).

At the time, Title 19 of the Anchorage Municipal Code provided for the creation of special assessment districts for capital improvements; it did not provide for the creation of districts for public services such as a business improvement district. On June 11, 1996, at the urging of the Partnership, the Assembly enacted Anchorage Ordinance 96-77(S-I) to broaden " special assessment districts" to include the provision of public services, thereby authorizing business improvement districts.[1] The Anchorage Municipal Code now states:

A special assessment district, including a business improvement district, may be initiated for public capital improvements or for public services as specifically defined by the ordinance creating the assessment district, as provided in this section.[[2]]

Page 967

A special assessment district can enhance but not replace city services already provided:

Assessment districts for services shall provide an enhanced or supplemental public service or new public service not provided by the municipality generally. The establishment of an assessment district for services shall not operate unilaterally or by implication as a substitute for or to reduce or eliminate the nature or extent of services provided by other means.[[3]]

A special assessment district can be initiated either by a petition of property owners in that district or by the Assembly, but it " may be created or extended only with the approval of the property owners who would bear more than 50 percent of the estimated cost of the improvement or service." [4] The Assembly then holds a public hearing " upon the necessity for the proposed improvement or service." [5] After the public hearing, the Assembly decides whether to proceed with the proposal:

[T]he assembly shall adopt an ordinance determining either to proceed or not to proceed with the proposed improvement or service. The ordinance to proceed shall find that the improvement or service is necessary, of benefit to the properties to be assessed, and that the petition for the improvement or service has been approved by sufficient and proper petitioners. The findings of the assembly are conclusive.[[6]]

In 1997 the Assembly passed Anchorage Ordinance 97-51, which created Assessment District 1 SD97 for a period of three years.[7] When passing AO 97-51, the Assembly amended the boundaries of the proposed Assessment District to exclude some properties on K and L Streets. The building at 420 L Street, the property owned by L Street Investments (L Street), was included in the original proposal but subsequently carved out by the Assembly.

The boundaries of the District were Gambell Street to the east, Ninth Avenue to the south, and First Avenue to the north; the western boundary ran from Ninth Avenue to Sixth Avenue on K Street and from Sixth Avenue to Second Avenue on I Street. The enumerated powers of the District were:

A. Maintenance, repair and upkeep of public capital improvements located in the area of the assessment district;
B. Maintenance, snow removal, dust suppression, cleaning, beautification, and decoration of public parks, places and pedestrian rights-of-way;
C. Visitor and tourism services;
D. Security services, but not including law enforcement services;
E. Promotion of the assessment district and the promotion of public events within the assessment district; and
F. Other closely similar public services promoting the vitality, stability and ...

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