The owners of Carriage Hills should not be forced to lose money on the now-closed golf course so the city of Eagan can preserve a public amenity.

Conversely, the City Council should not have to change its comprehensive plan and allow development to bail out a failed business.

It's up to the Minnesota Court of Appeals now to decide which side is right: Does a city's land-use plan trump a private landowner's development rights?

In an open-space battle that's simmered for nearly two years, lawyers for the city and the 18-hole public course presented their oral arguments before a three-judge appellate panel Wednesday, sparring and fielding the judges' questions for 35 minutes.

The debate came after the council in January abandoned the settlement it had reached with Rahn and developer Wensmann Realty Inc., which wants to build homes on much of the course.

The city decided to appeal the developer's lawsuit largely because of a recent - and divided - state Supreme Court ruling that allows neighboring Mendota Heights to preserve a smaller golf course there against the property owner's wishes.

In that ruling, the court decided a city had a rational basis to deny a land-use change when it has "a legitimate interest in reaffirming a historical comprehensive plan designation and in protecting open and recreational space."

"That case is almost directly on point," Eagan attorney George Huff said, while Carriage Hills attorney Christopher Penwell argued the Mendota Heights case was a narrower ruling that didn't wholly apply to Carriage Hills.

The 120-acre course, located on Yankee Doodle Road on Wescott Woodlands Drive, is one of the suburb's last private green spaces. Eagan has fought its redevelopment since August 2004, when the council denied Wensmann's plan to rezone the 40-year-old course.

The city's comprehensive plan - essentially its blueprint for development - has called for the property to be zoned only for parks and recreation for decades. After the city refused the zoning changes, the owner and developer sued in district court.

Rahn closed the course in the spring and said he wanted to sell the golf course, which he bought in 1996 for $3.6 million, because it was losing hundreds of thousands of dollars annually.

In April, District Judge Patrice Sutherland ruled against Eagan and ordered the city to either amend its comprehensive plan and the property's zoning or begin eminent domain proceedings to buy it. Sutherland ruled that the city's denial of development amounted to taking the course without paying for it.

The course is now appraised at just $1 million, noted Judge R.A. (Jim) Randall, who asked why the lower price appears to buck the trend of increasing property values. Hoff cited an overbuilding of golf courses in the metro area as one reason and said it wasn't the city's fault the land was no longer worth as much.

"So Minnesota can no longer have a golf course and a horse farm for every citizen?" Randall teased.

Penwell said the Rahns were in a no-win situation, with "no reasonable or viable use (for the land) under the current zoning."

"This is the worst of both worlds," he said. "The course is of no use to anybody right now."

The court's decision is expected within 90 days.