The City of La Vista will be allowed to annex an industrial area that includes Rotella's Bakery, Streck Laboratories and United States Cold Storage after its 2009 decision was upheld Friday by the Nebraska Supreme Court.
La Vista has sought since 2009 to annex Sanitary Improvement District 59. That area includes business parks and private residences in Brook Valley, along the west side of 108th Street between Giles Road and Harrison Street; Oakdale Park, located on the southeast corner of 108th and Harrison streets; and Brook Valley II, located southwest of 114th Street and Giles Road.
A lawsuit had blocked the annexation while the courts considered the case, and La Vista tried in 2011 to annex the nonindustrial portions of SID 59 but was met with another challenge by SID 59, arguing the city had to wait for the original lawsuit to be resolved.
The Sarpy County District Court upheld La Vista in both cases in March 2012, and an appeal sent the case to the Nebraska Supreme Court, which also upheld the annexation. Now the annexation should move forward without any further action required.
The dispute arose when the La Vista City Council voted in December 2009 to annex SID 59 following two months of notification and a public hearing. United States Cold Storage filed a class-action lawsuit shortly after the ordinance was adopted, arguing the City of La Vista could not annex the industrial tract without the consent of the owners of a majority of the area's assessed valuation.
United States Cold Storage is in the Oakdale Park subdivision just north of the La Vista's District 2 fire station. The company's facility at 10711 Olive St. is valued at $5.67 million.
The 210-acre tract of land along 108th Street south of Harrision Street was designated a legal industrial area by the Sarpy County Board of Commissioners in 1969 before the formation of SID 59 in 1971 to provide utilities and services to the industrial area and surrounding properties.
By receiving the designation from county governments, industrial areas receive certain protections under Nebraska statutes including requirements impacting municipalities that help such areas avoid unwanted annexation.
But in 1991, the state statute was amended to allow the annexation of industrial areas in counties with at least 100,000 people — such as Sarpy County — when the annexing entity did not approve of the formation of the area. Since La Vista's zoning jurisdiction didn't reach that far west when the Brook Valley area formed, the city was not the government that approved of forming the industrial area.
The lawsuit argued U.S. Cold Storage and others had vested rights from the pre-1991 statute to require the consent of property owners be given prior to annexation. The court concluded the primary benefit of avoiding annexation is a lower tax rate, and thus the companies do not have vested rights to avoid the annexation by the City of La Vista.
Had the area been annexed in 2012, property owners in the industrial area would have paid 55 cents per $100 of assessed valuation. But as part of SID 59, the property owners were only assessed 27 cents — just under half the property tax assessment of city residents.
The Sarpy County Assessor's Office said SID 59 had total valuation of $137,598,226 in 2012, so the tax rate difference amounted to a savings of $385,275 in taxes last year for those property owners. For United States Cold Storage, the savings was about $15,876 in property taxes in 2012.
Beyond the requirements for designated industrial areas, U.S. Cold Storage argued La Vista didn't meet state requirements for landowner notification, which the Nebraska Legislature changed in 2009.
The courts concluded La Vista hadn't provided the 10 working day notice required under state statute, but both the Sarpy County District Court and the Nebraska Supreme Court concluded the city had made a reasonable attempt to comply with the law.
City officials told the court that notices were mailed late because they relied on computer software that did not recognize Columbus Day and Veterans Day as non-work days. A city official also testified she misread a requirement that an email address or website be given as part of the notification.
“La Vista offered a reasonable explanation as to why the notices were not sent 10 working days prior to the hearings,” the Supreme Court found. “It is also clear that the notices were sent 9 working days prior to the hearing, and thus everyone affected had reasonable notice.”
The court also rejected an argument by United States Cold Storage the annexation was done only to generate revenue for the city, which is against state law. SID 59 was described as “an island in the city's area” that would be “a logical extension of the city” to promote orderly growth of the city and would avoid jurisdictional issues in providing civic services.
Gerald Friedrichsen, an attorney who represented La Vista in the case, said the city won't have to take any further action on the annexation, just wait for the process to be completed in the courts.
“They won't have to do anything,” Friedrichsen said. “They don't need to put it on the City Council agenda or anything like that.”
The partial annexation in 2011 is moot because the city's original 2009 annexation was upheld.