                                    No. 95-4070



Charles Goss,                            *
                                          *
                    Appellant,            *
                                          *   Appeal From the United States
              v.                          *   District Court for the
                                          *   Eastern District of Arkansas.
City of Little Rock, Arkansas,            *
                                          *
                     Appellee.            *



                            Submitted:   May 16, 1996

                           Filed:    July 23, 1996


Before BOWMAN, HEANEY, and WOLLMAN, Circuit Judges.


HEANEY, Circuit Judge.

        Charles Goss filed suit asserting that by conditioning its approval
of plaintiff's rezoning request on his dedication of property, the City of
Little Rock (Little Rock) violated the Fifth and Fourteenth Amendments to
the United States Constitution and Article Two, § 22 of the Arkansas
Constitution.      The United States District Court dismissed the complaint.
We reverse.


                                    BACKGROUND


        In September 1971, Charles Goss purchased 3.7 acres located next to
a two-lane state highway in a rural, unincorporated area outside Little
Rock.    Goss has operated a convenience store, gas station, laundromat, and
car wash on the premises ever since.           In 1985, Little Rock annexed a
portion of its surrounding area that included the Goss property.              In
accordance with the city code, the
annexed area was classified by default as an "R-2" district for single-
family residences.        Under the city ordinances, Goss' business activity
would be limited to "C-3" general commercial district zones; nevertheless,
Goss was permitted to continue his operations pursuant to a nonconforming
use exception.


       Although    Goss   continues      to    utilize   his   property     in   the   same
commercial capacity in which it has been used for the past twenty years,
he    asserts   that   sale   of   his   commercial      enterprise   and    property    is
contingent on rezoning.        (Jt. App. 31).       In April 1993, Goss petitioned
Little Rock to have his property rezoned as a "C-3" zone.                 In May, Little
Rock's Staff and Planning Commission agreed to recommend to the Little Rock
Board of Directors that the area be rezoned, but only on the condition that
Goss dedicate a portion of his property to Little Rock for future expansion
of the adjacent highway.       The demanded dedication ran the entire length of
Goss' property (633.68 feet) and 55 feet into the lot.                The total acreage
of the demanded dedication approximates eight-tenths of an acre, or twenty-
two percent of the total property.             Goss objected to the condition.


       The Planning Commission finally submitted its recommendation for a
conditional rezoning to the Board of Directors on February 21, 1995 along
with a request by Goss to waive the dedication condition.                   The Planning
Commission recommended that the Board deny the requested waiver.                         On
February 21, 1995, the Board refused to rezone the property without the
dedication.     It reasoned that the Little Rock treasury would otherwise have
to pay condemnation damages for the future road expansion.                  (Complaint ¶
8).


       On March 20, 1995, Goss filed suit in the United States District
Court for the Eastern District of Arkansas alleging that the imposition of
the dedication condition violated the Fifth and Fourteenth Amendments to
the United States Constitution and Article 2, § 22 of the Arkansas
Constitution.     On September 25, 1995, the




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district court dismissed the suit for a failure to state a claim.                  Goss now
             1
appeals.


                                            ANALYSIS


        We review the district court's dismissal de novo.              Coleman v. Watt,
40 F.3d 255, 258 (8th Cir. 1994).            In considering a motion to dismiss, the
court       must   construe    the    complaint   liberally   and   assume   all   factual
allegations to be true.              Id.   Dismissal should not be granted unless it
appears beyond a reasonable doubt that the plaintiff can prove no set of
facts that would entitle relief.               Conley v. Gibson, 355 U.S. 41, 45-46
(1957).


        Since the seminal case Village of Euclid v. Ambler Realty Co., 272
U.S. 365 (1926), the Supreme Court has often affirmed the propriety of a
state's utilization of its police powers to regulate land use.                See, e.g.,
Agins v. City of Tiburon, 447 U.S. 255 (1980); Penn Central Transp. Co. v.
New York City, 438 U.S. 104 (1978).            The Court has specifically upheld the
use of zoning laws to effectuate such regulation.              See Village of Euclid,
272 U.S. at 387.              The Court has cautioned, however, that there are
constitutional limits on the exercise of this police power:                  "[A] strong
public desire to improve the public condition is not enough to warrant
achieving the desire by a shorter cut than the constitutional way of paying
for the change."        Pennsylvania Coal Co. v. Mason, 260 U.S. 393, 413, 416
(1922).


        Rezoning decisions are vested in the discretion of municipal zoning
authorities and these legislative decisions are not subject to judicial
scrutiny as to their providence.            Burns v. City of Des Peres, 534 F.2d 103,
108 (8th Cir. 1976) ("Courts are not to assume




        1
     Appellee objects to the inclusion of certain items within the
joint appendix.   Appellee's motion to strike those portions is
hereby denied.

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the role of a super zoning board.").    Notwithstanding the admonition that
courts should not reverse a zoning commission merely because a contrary
result may be permissible, id., courts must ensure compliance with minimal
constitutional limitations.   To this end, the Supreme Court has held that
"[t]he application of a general zoning law to particular property effects
a taking if the ordinance does not substantially advance legitimate state
interests or denies an owner economically viable use of his land."    Agins,
447 U.S. at 260.   We focus on the former: advancement of a legitimate state
interest.


     Little Rock contends that "the relationship between its regulatory
action in denying the rezoning request and [Little Rock's] public health
and safety concerns over regulating traffic that rezoning would likely
entail is direct and substantial."     (Appellee's Br. at 18).    The Supreme
Court has explicitly acknowledged the state interest in containing the
effects of urbanization:

           Traditional land-use regulation (short of that which
     totally destroys the economic value of property) does not
     violate [the principle of the Compensation Clause]
     because there is a cause-and-effect relationship between
     the property use restricted by the regulation and the
     social evil that the regulation seeks to remedy. Since
     the owner's use of the property is (or, but for the
     regulation would be) the source of the social problem, it
     cannot be said that he has been singled out unfairly.
     Thus, the common zoning regulations requiring subdividers
     to observe lot-size and set-back restrictions, and to
     dedicate certain areas to public streets, are in accord
     with our constitutional traditions because the proposed
     property use would otherwise be the cause of excessive
     congestion.

Pennell v. City of San Jose, 485 U.S. 1, 20 (1988) (Scalia, J. dissenting);
accord Agins, 447 U.S. at 261 & n.8.   Were Little Rock's regulatory action
a simple denial of a rezoning request, we would agree.      This portrayal,
however, oversimplifies and mischaracterizes Little Rock's action.




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      The Little Rock action in question was the conditioning of its
approval of the rezoning request on the dedication by Goss of a portion of
his property.   The use of conditions in conjunction with the exercise of
police powers has been the subject of a great deal of judicial attention.
See, e.g., Nollan v. California Coastal Comm'n, 425 U.S. 825 (1987); Dolan
v. City of Tigard, 114 S.Ct. 2309 (1994).       This attention derives from the
frank acknowledgement that states might use conditions in combination with
the exercise of their discretionary power to elude the confines of the
Constitution and accomplish what might otherwise be clearly impermissible.


      In   Nollan   v.   California   Coastal   Commission,   the   Supreme   Court
considered whether the California Coastal Commission could condition a
rebuilding permit on the applicant's grant of a public-access easement
across the property's beachfront.      425 U.S. at 834-37.    The Court held that
where a state could refuse an applicant's request pursuant to its police
powers, it can also attach conditions to its approval so long as there is
a nexus between the attached conditions and the justification for which the
state might have prohibited the applicant's action.       Id. at 836.    The Court
reasoned that "the Commission's assumed power to forbid construction of the
house in order to protect the public's view of the beach must surely
include the power to condition construction upon some concession by the
owner, even a concession of property rights, that serves the same end."
Id.   In Nollan, the justification for denying a rebuilding permit--
protection of the ocean view--would not have been advanced by the required
easement; therefore, the condition was unconstitutional.            Id. at 841.


      Like Nollan, if Little Rock had simply required the dedication of
Goss' property, rather than conditioning a rezoning application on its
grant, it would have been a taking.           Thus, the question is whether the
condition was in response to a legitimate concern regarding the proposed
rezoning or whether Little Rock was using




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its police powers as leverage to extract the concession of a constitutional
right--compensation for property taken.


     The Court further elaborated its permissible condition analysis in
Dolan v. City of Tigard, 114 S. Ct. 2309 (1994).   In Dolan, a city planning
commission granted a permit to develop the applicant's property subject to
the condition that the applicant dedicate portions of her property toward
the improvement of the area drainage system and a pedestrian/bicycle
pathway.   114 S.Ct. at 2313.       The required dedications were part of a
community development code.   Id.   In contrast to Nollan, in Dolan the Court
found that a nexus between the legitimate state interest--commercial
development resulting in more runoff and higher traffic concentrations--and
the conditions imposed on the permit.    In addition to the requisite nexus,
the Court went on to require that the city2 demonstrate that the degree of
the extractions demanded in the condition bears "rough proportionality" to
the projected impact of the applicant's request.      Id. at 2318-20.   This
requirement ensures that the conditioning of a discretionary benefit does
not force "some people alone to bear public burdens which, in all fairness
and justice, should be borne by the public as a whole" in violation of the
Just Compensation Clause.     Pennell, 485 U.S. at 9 (quoting First English
Evangelical Lutheran Church of Glendale v. County of Los Angeles, 482 U.S.
304, 318-19 (1987)).


     Given that the allegation of facts might entitle relief in this case,
dismissal of this action was inappropriate.        The record suggests that
Little Rock's staff based its condition on a concern




      2
       Although the property owner carries the burden of proving
that   the   imposition   of   the   regulatory  action   violates
constitutional norms in cases evaluating most generally applicable
zoning regulations, see Keystone Bituminous Coal Ass'n v.
DeBenedictus, 480 U.S. 470 (1987), in cases where a city makes an
adjudicative decision to condition petitioner's application on an
individual parcel, the burden properly rests on the city. Dolan,
114 S.Ct. at 2320 n.8.

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that a different, heavy traffic-producing business could be erected on the
property if rezoned.3      The sparsity of the record, however, does not permit
an inquiry by this court into the existence of the required nexus or, if
a   nexus   exists,    whether    the   demanded   dedication     bears   some   rough
proportionality       to   the   projected   impact   of   the   proposed   rezoning.
Therefore, we reverse the district court's dismissal and remand it for
further proceedings consistent with this opinion.


      A true copy.


             Attest:


                  CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.




        3
        The fact that the current use of the property is "C-3"
undercuts the claim that a different "C-3" business, developed in
place of the present enterprise, might add to the traffic burden.
Cf. W.J. Jones Ins. Trust v. Fort Smith, Ark., 731 F. Supp. 912,
914 (W.D. Ark. 1990) (addition of convenience store to a gas
station would have a de minimis impact on traffic burden).

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