Evans Creek, LLC v. City of Reno

EVANS CREEK, LLC, Plaintiff, v. CITY OF RENO, Defendant.

No. 3:20-cv-00724-MMD-WGC

United States District Court, D. Nevada

September 14, 2021

ORDER

MIRANDA M. DU CHIEF UNITED STATES DISTRICT JUDGE.

I. SUMMARY

This is a dispute about land use and development. Plaintiff Evans Creek, LLC, alleges that Defendant City of Reno has violated the Fifth Amendment's Takings Clause and the Fourteenth Amendment's Equal Protection Clause by preventing it from developing land formerly known as the Ballardini Ranch in southwest Reno. (ECF No. 1.) Before the Court is the City's motion to dismiss.^[1] (ECF No. 8 (“Motion”).) The City argues the Complaint lacks factual support sufficient to plausibly allege Plaintiff's claims, and that the claims would necessarily fail on the merits. The City also moves to dismiss or strike references to any conduct prior to 2019.

As further explained below, the Court finds both of Plaintiff's claims fail to adequately state a claim upon which relief could be granted and will therefore grant the City's Motion in part. But the Court will also grant Plaintiff leave to amend to state sufficient relevant factual allegations. Finally, the Court will deny the City's motion to exclude references to pre-2019 conduct, as that material is not properly brought in a motion to dismiss.

II.BACKGROUND

The following facts are adapted from the Complaint. (ECF No. 1.)

A. The Property

The Ballardini Ranch is a parcel of land originally comprising approximately 1, 500 acres in unincorporated Washoe County. (Id. at 5.) Although there have been past attempts to incorporate part or all of the Ballardini Ranch, the Ballardini family resisted these efforts. (Id.) In 1997, Everest Development Company, LLC (“Everest”) entered into an agreement with the Ballardini family to purchase a portion of the Ballardini Ranch. (Id.) Everest is a Minnesota company owned by the same principals as Plaintiff. (Id.) In 1998, the Ballardini family transferred title to 1, 019 acres of the Ballardini Ranch (“the Property”) to Evans Creek, ^[2] an entity formed by Everest. (Id. at 6.) Everest/Evans Creek's principals intended to move to Nevada, build a home on the Property, and develop a master planned community. (Id.)

At the time of purchase, the Property was located in the unincorporated territory of Washoe County. (Id.) The northern 419 acres of the property were located within the City of Reno's sphere of influence^[3] (“SOI”) and were therefore subject to the City's land use planning and zoning regulations. (Id.) The remaining southern 600 acres were not. (Id.)

B. Sphere of Influence and the Regional Plan

The Truckee Meadows Regional Plan (“Regional Plan”)-a comprehensive plan that controls development and manages growth in Washoe County-is updated and implemented every 20 years. (Id. at 3.) Under Nevada law, local governments that participate in the Regional Plan are required to amend their own master plans to conform with the provisions of the Regional Plan. (Id. at 4.) The City's current master plan was implemented in 2017. (Id.) Within the master plan is a land use plan which guides the City's development with the City and its SOI. (Id.)

In November 1997, shortly before title to the Property was transferred, Plaintiff requested an amendment to the City's master plan that would include the southern 600 acres of the Property in the City's SOI for future annexation. (Id. at 6.) The original planning concept for the Property called for up to 2, 226 residential units. (Id. at 7.) However, Plaintiff withdrew its initial applications to develop the property due to “the overt hostility and threats from community members and government officials from the City and Washoe County.” (Id.)

Plaintiff submitted a renewed development plan and application for a master plan amendment in 2000, which was denied. (Id.) That same year, Washoe County adopted a resolution to acquire the Property as part of its Open Space Plan. (Id.) Plaintiff asserts the purpose of Washoe County's resolution was “to prevent all attempts to develop the Property as well as to prevent the value of the property from increasing.” (Id.)

In 2002, the Truckee Meadows Regional Planning Commission circulated a draft of the revised Regional Plan. (Id. at 8.) The draft showed the entirety of the Property as located within the City's SOI. (Id.) Around the same time, Plaintiff filed its first annexation application (“2002 Application”). (Id.)

But Washoe County opposed the Regional Plan draft that included the southern 600 acres of the Property within the City's SOI. (Id.) The Truckee Meadows Regional Planning Governing Board ultimately adopted an updated draft that excluded the southern 600 acres of the Property from the City's SOI and service area. (Id.) Plaintiff withdrew the 2002 Application. (Id.)

The next year, Plaintiff filed its second annexation application (“2003 Application”). (Id.) Again, Washoe County opposed. (Id.) The City denied the 2003 Application. (Id.)

In 2004, Washoe County initiated eminent domain proceedings to acquire the Property. (Id.) Plaintiff filed suit in response, and the parties reached an agreement in 2006. (Id.) As part of the settlement agreement, Washoe County agreed not to oppose Plaintiff's attempt to include the Property in the Truckee Meadows Service Area. (Id.)

The City then “encouraged” Plaintiff to apply for acceptance of the 600 southern acres into the City's section of the Truckee Meadows Service Area (“Service Area”), as the northern portion of the Property was already included. (Id. at 10.) The City represented to Plaintiff that the Property's inclusion in the Service Area would be the first step towards development, with annexation and other approvals to follow. (Id.) Accordingly, Plaintiff applied to include the southern 600 acres in the Service Area in 2007. (Id.) The City approved the application, and the Property was included in the City's section of the Service Area. (Id.)

After the entirety of the Property was placed within the City's Service Area, the City then passed a resolution to change the zoning designation for the Property's southern 600 acres. (Id. at 11.) Although the northern 419 acres were zoned for single-family residential use, the southern 600 acres suffered from significant hurdles to development. (Id.)

Plaintiff again applied for annexation in 2014 (“2014 Application”). (Id.) Along with the 2014 Application, Plaintiff submitted a proposed amendment to the master plan that would rezone the northern and southern part of the Property for mixed-residential and single-family residential use, respectively. (Id.) Plaintiff also supplemented the 2014 Application with traffic and fiscal analyses, at the City's request. (Id. at 12) City staff then recommended the 2014 Application be denied. (Id.) Upon learning of the recommendation, Plaintiff terminated the 2014 Application. (Id.)

C. The 2020 Annexation Application and City Council Hearing

On January 27, 2020, Plaintiff again submitted an annexation application (“2020 Application”) for the Property. (Id. at 13.) City staff recommended approving the 2020 Application. (Id. at 14.) The 2020 Application was publicly noticed for a two-part public hearing on May 13 and May 27, 2020, for the City to receive public comment. (Id. at 16.)

At the second meeting, the City denied the 2020 Application, “primarily based on the following reasons: (i) Evans Creek did not submit a master plan amendment request; (ii) there is no demand for the mixture of land use types proposed on the Property; (iii) there are alleged private party water rights disputes on the Property; and (iv) fire danger.” (Id.)

Plaintiff asserts that these reasons are pretextual. (Id. at 17.) The City expressed different concerns in response to Plaintiff's previous annexation applications, including the City's “desire to maintain open space, ” the risk of exacerbating “the shortage of neighborhood parks, ” “deficiencies in emergency access to nearby subdivisions, ” that development “may cause harm to unidentified and unknown archaeological sites on the Property, ” that development “would create an annexation island of non-contiguous City property, ” and that development would “overburden Washoe County School District.” (Id.)

Plaintiff alleges that the City's refusal to grant annexation has wholly deprived the Property of any viable commercial use. (Id. at 18.) Plaintiff further alleges that it was treated differently from other developers because it is not aware of any other instance in which the City has similarly denied an annexation request. (Id.)

III. LEGAL STANDARD

A court may dismiss a plaintiff's complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A properly pleaded complaint must provide “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). While Rule 8 does not require detailed factual allegations, it demands more than “labels and conclusions” or a “formulaic recitation of the elements of a cause of action.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). “Factual allegations must be enough to rise above the speculative level.” Twombly, 550 U.S. at 555. Thus, to survive a motion to dismiss, a complaint must contain sufficient factual matter to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570).

In Iqbal, the Supreme Court clarified the two-step approach district courts are to apply when considering motions to dismiss. First, a district court must accept as true all well-pleaded factual allegations in the complaint however, legal conclusions...