Rare decision faults MSP airport for lowering property value

In a rare court victory against airport noise, a judge has ruled that landowners have a right to compensation for racket caused by a new runway built at Minneapolis-St. Paul International Airport.

The ruling says takeoffs and landings every few minutes over the old Kelley Farm, sometimes only 500 feet above ground, reduced its sales value by perhaps $630,000.

The ruling is believed to be the first of its kind against the airport and illustrates an unintended consequence of opening the runway in 2005 to divert traffic from two busier runways that irritated homeowners.

The impact of the ruling is limited because thousands of homeowners who sued over the years agreed to drop their claims in exchange for airport-paid noise abatement.

"I think we've insulated us from those kinds of claims," said Thomas Anderson, general counsel for the Metropolitan Airports Commission, which runs the airport.

Still, a lawyer for the Kelley Farm heirs who brought the suit says the ruling could influence future expansions at Minneapolis-St. Paul and other airports.

"I'm sure property owners, the MAC and cities surrounding airports will keep a careful eye on this," said William Christopher Penwell.

Descendants of James E. Kelley, who bought the land in the 1930s, argued that it lost value after the airport opened north-south runway 17-35 and they sued the Metropolitan Airports Commission and the city of Bloomington.

'Repeated and aggravated'

The end of runway 17-35 is about a mile from the farm property and roughly 450 planes fly directly over it daily.

"The impact of the noise, vibration, disturbance and pollution caused by the overflights is repeated and aggravated," the lawsuit read.

"The overflights constitute a direct and substantial invasion of ... property rights," resulting in a loss of market value.

Blaeser cited a 1974 Minnesota Supreme Court case involving south Minneapolis homes that established a right to compensation if "unduly irritating noise" and other airport impacts caused "direct and substantial" problems that deprived them of "the practical enjoyment of the property."

$18 million might be at stake

An appraiser hired by the heirs testified that the noise abatement would increase the cost to a developer of building future offices or retail on the property, reducing the price that the heirs could get for the land by about $630,000. A final decision on compensation could be made by a condemnation commission.

The Kelley Farm heirs -- Hampton O'Neill, Kelley O'Neill and James O'Neill -- have pursued an even more lucrative claim related to the runway. Their lawsuit also alleged that Bloomington reduced the value of the land by $18 million when it rezoned it to eliminate residential use in connection with the new runway -- a claim the Airports Commission could have ended up paying. While the judge rejected the zoning argument, the Minnesota Supreme Court recently gave the heirs reason for hope. Ruling in a case involving the Rochester airport, it said a property owner should be compensated for a rezoning that lowered its value.

"The issue of damages ... that part is still up in the air," said Hampton O'Neill, a lawyer in Casper, Wyo. The heirs haven't decided whether to appeal the zoning portion of the ruling.