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History Buys Only So Much Protection
by Ron Davis

Shopping center developers in Minnesota should now be able to compete on a level playing field with merchants located in downtown business districts designated as "historic."

That's because of a recent Minnesota Court of Appeals ruling that, in essence, prevents merchant groups from thwarting retail developments in outlying areas just because those developments might lure customers of downtown retailers.

In the case that prompted that ruling, a group of local residents of Northfield had opposed the construction there of a shopping center project of Dayton-Hudson Corp. The project would have included a Dayton-Hudson Target discount department store, and the Northfield group had raised the issue of the development's impact on downtown merchants whose stores are in buildings protected as "historical resources."

The Northfield group claimed that not only are the downtown buildings protected, but also the business district as a "functioning economic entity" is also protected. They added that a new Target store would lead to a decline in downtown store sales, which would lead to merchants going out of business, which would lead to abandoned buildings, which would lead to the physical deterioration of those buildings.

In response, Dayton-Hudson argued that although the law is quite broad as to the protections offered to historical resources, that law does not encompass the economic vitality or way-of-life concerns that the Northfield residents contend are covered. Dayton-Hudson added that the law's criteria primarily address "buildings and other places" rather than actual businesses conducted there.

Dayton-Hudson also argued that to favor businesses that happen to be located in historic buildings or districts would give those businesses an unfair and unlawful competitive advantage.

The Minnesota Court of Appeals agreed with that argument, explaining, "There is no dispute that the buildings in the central business district of Northfield are protected historical resources, and the evidence presented suggests that the new Target project is likely to materially adversely affect those buildings.... But that argument is speculative and tenuous. If successful, the Northfield residents position would convert the historical resources law from an environmental protection law to an economic regulation." (Stansell v. City of Northfield, 618 N.W.2d 814 [Minn.App. 2000])

Decision: November 2000
Published: January 2001



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