Iowa Court of Appeals upholds ruling dismissing Cargill rail yard lawsuit

CEDAR RAPIDS — The Iowa Court of Appeals has upheld a district court's ruling dismissing a lawsuit challenging Cargill’s construction of a now-completed rail yard in southeast Cedar Rapids.

In the ruling issued last week, a three-judge panel of the state appellate court sided with the Cedar Rapids City Council over votes taken in 2019 to rezone a 28-acre lot to allow industrial use and amend the city’s future land use map in the 200-year flood plain that paved the way for construction of a 12-track, 200-car rail yard between the Rompot neighborhood and Prairie Park Fishery, near Cargill’s corn milling plant on Otis Road SE.

Construction of the rail yard began in 2021 and is fully operational.

Former Democratic state Sen. Rob Hogg and his wife, Kathryn, who live in the neighborhood, along with other neighboring homeowners, tried to halt to the rail yard’s construction until all legal issues were fully resolved, but were unsuccessful. Work continued even as the Iowa Court of Appeals previously ruled neighborhood residents were wrongly denied a hearing in district court when they challenged the rail yard’s construction and sent the case back to district court.

Neighbors argued the rail yard will generate noise and air pollution, harm the environment, erode property values and pose safety risks, The Gazette reported.

Following a hearing, the district court found the city’s actions “were not unreasonable, arbitrary, or capricious” and granted summary judgment in favor of the city. Hogg, his wife and attorney James Larew, on behalf of neighbors with Protect the Prairie Park Corridor, appealed, arguing the rezoning and land use amendment are invalid.

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The residents argued the city’s actions “caused a grave injustice for a working family neighborhood where residents and homeowners relied in good faith on the city’s plans for our neighborhood,” which included developing the property as a “prairie pollinator zone.” Instead, the city approved Cargill’s request to rezone city-owned land south of Stewart Road SE to allow industrial use in a residential neighborhood.

Company officials said the new rail yard will allow it to remain competitive and protect jobs at the company’s corn-milling plant. City officials said the new rail yard would reduce train traffic through downtown, and secured a commitment from Cargill to convert other acres in the vicinity to native pollinator habitat.

And while Cargill proposed building a large berm between the rail yard and the neighborhood, residents argued it will not be “tied in” at either end, meaning floodwaters from the Cedar River still could flow around the ends of the berm into the neighborhood.

“When we bought and invested in our properties, we reasonably expected the City would adhere to its land use and flood prevention plans for our neighborhood, not destroy the Prairie Pollinator Zone (wildlife refuge) in favor of an industrial rail yard and a berm that sticks like a pier into the middle of the flood plain that was inundated in our neighborhood in 2008,” residents said in court documents.

The district court, though, noted it “considered the changing conditions of the area, and found there was a reasonable basis for spot zoning,” as the site is located next to an existing rail line and is near Cargill’s Otis Road SE facility, making the site “suitable and peculiarly adaptable for the intended use allowed by the rezoning decision.”

The appellate court panel agreed, adding the economic development benefits of the rail yard are consistent with Cedar Rapids’ comprehensive land use plan and its goals to “support existing businesses, fostering entrepreneurism, and targeting industry-specific growth.”

“Here, again, we come full center to what is a difference of opinion about the benefit of these changes to the community at large,” presiding Judge Sharon Soorholtz Greer wrote. “As the City did demonstrate reasons for the changes, which some citizens opposed, we cannot substitute what opinions we might have about the public involved with this change. Although the neighbors do not agree that the changes are beneficial to the public good, they have a remedy at the ballot box.”

Hogg said he and his wife are reviewing the decisions and their options.

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“But we are disappointed that a city’s flood and land use plans, some of which are required by federal and state law, can be disregarded and violated by a city,” Hogg told The Gazette. “If the decision is correct, residents and taxpayers should know that those plans are essentially meaningless.”

The Cedar Rapids city attorney’s office declined to comment on the decision. A Cargill spokesperson did not immediately respond to a message Monday seeking comment.

Larew, who represented the homeowners, said his clients have yet to decide whether to further appeal to the Iowa Supreme Court, but said the ruling “probably brings (the legal dispute) to a conclusion.”

Like Hogg, he said his clients are disappointed with the result, and took issue with the court’s suggestion that neighbors’ best recourse is at the ballot box.

“When a small group of neighbors are adversely affected by decision of a city council, they rarely if ever have political strength sufficient to successfully challenge the decision by municipal elections,” he said. “That’s rarely happened in the history of the city. It’s really not a recourse, as it's not a large number that’s adversely affected.”

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Larew added that “time will tell whether it has been a good use of resources to allow the construction of an industrial rail yard to be located on land dedicated for public park use adjacent to a long-established residential neighborhood.”

Comments: (319) 398-8499; tom.barton@thegazette.com