Carriage Hills Golf Course in Eagan is closed for the season and is likely to stay that way.
Course owner Rahn Family Limited Partnership and prominent Minnesota developer Wensmann Realty Inc. won a lawsuit Thursday against the city of Eagan, bolstering their bid to convert the 120-acre golf course into a housing subdivision and park.
Wensmann and owner Ray Rahn had sued the city in November after the City Council last summer unanimously rejected a proposal to develop the 18-hole course, located off Yankee Doodle Road on Wescott Woodlands Drive.
The city must either amend the property's zoning to allow for the housing development or begin eminent domain proceedings to take the 40-year-old public golf course, District Court Judge Patrice Sutherland ruled. Either action must begin within 30 days.
The legal loss comes as a significant blow to the council's effort to block development at Carriage Hills, one of the suburb's last bastions of open space.
"I'm very dejected. Developers used to at least need to get city approval before coming in," said Dan Bailey, a member of the Carriage Hills Coalition, a group of neighbors who have spent years fighting the course's development.
"Now, apparently, if you have enough money and can sue people, you can do what you want."
Both the city and developer received word of Sutherland's ruling Monday.
The City Council will meet tonight in a closed-door session to determine whether it will appeal the decision. Officials had no further comment Monday. "This is a big step. We know this is an important case with a far-reaching impact in this area," said Christopher Penwell, attorney for Wensmann and Rahn.
"Of course, my clients are pleased with the decision, and, of course, it's the outcome we were looking forward to. But it's premature to say anything about what happens next until we know what the city will do," he said.
Under Eagan's comprehensive guide plan, the Carriage Hills property is zoned only for parks and recreation. Wensmann had asked the council to change the area's land-use designation to allow low-density residential housing. The home builders want to add 480 housing units -- including condos, town homes and single-family houses -- while preserving 40 or more acres as parks and open space.
But the council refused to amend its comprehensive plan. And it shouldn't have to, Bailey said.
"What is a guide plan then? Why have this going into the future if it really means nothing and has no legal teeth?" he asked.
In the lawsuit, Rahn said he was losing hundreds of thousands of dollars annually and charged that the city's denial of development amounted to taking the course without paying for it.
District Judge Patrice Sutherland agreed. In her decision, she said Eagan's denial meant that Rahn had to either incur significant annual losses from the golf course's operations or abandon the property, which allowed the city and its residents to benefit from the land without paying for it.
"This one-sided benefit to the city is not only at odds with its goal of preserving public amenities such as parks and open space through private-public partnerships, it is arbitrary and capricious as a matter of law," she wrote in her 20-page decision.
"The burden on Rahn is grossly disproportionate to the burden it should be expected to bear while the city receives the advantage of property rights for which it did not pay."
Sutherland also said the developer's plans to keep a portion of the golf course as parkland supports the city's guide plan.
Rahn would say only that he heard he had won his lawsuit. In the past, he has pegged his losses at the course over the past five years at $800,000.
Rahn bought it for $3.6 million in 1996, just weeks after the Carriage Hills Coalition successfully fought a request from another residential developer to change the comprehensive plan.
"He knew full well what he was doing, so he invested the minimum amount of money possible into the golf course and waited until the market was ripe to sell it," Bailey said.
Penwell said that is nonsense.
"Mr. Rahn bought the course with the belief and expectation that it would be viable. He made significant capital improvements to the golf course, and undertook significant marketing efforts," he said. "It's simply not true that he bought it with the intent of closing it."
In Mendota Heights, a similar legal battle over a golf course is under way this week. The city will go before the state Supreme Court Wednesday to try to stop a housing development at the Mendota Heights Par 3 Golf Course.
It is the final chance for the city, which already has lost two lower court rulings.