Community Dev. Agency v. PRP Holdings

C ommunity D evelopment AgenCy of the C ity of mCC ook ,
suCCessor in interest to C ommunity D evelopment
Authority of the C ity of mCC ook , nebrAskA,
AppellAnt, v. prp holDings , l.l.C.,
A nebrAskA limiteD liAbility
CompAny, Appellee .
767 N.W.2d 68
Filed June 26, 2009. 	No. S-08-983.
1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower
court’s granting of summary judgment if the pleadings and admissible evidence
offered at the hearing show that there is no genuine issue as to any material facts
or as to the ultimate inferences that may be drawn from those facts and that the
moving party is entitled to judgment as a matter of law.
2. ____: ____. In reviewing a summary judgment, an appellate court views the
evidence in the light most favorable to the party against whom the judgment was
granted and gives such party the benefit of all reasonable inferences deducible
from the evidence.
3. Statutes: Appeal and Error. Statutory interpretation presents a question of law,
and an appellate court independently decides questions of law.
4. Contracts: Municipal Corporations: Improvements: Time. Under Neb. Rev.
Stat. § 18-2142.01(2) (Reissue 1997), a challenger has 30 days to contest the
validity of an agreement reciting in substance that it has been entered into by
a city, village, or authority to provide financing for an approved redevelopment
project. After the lapse of 30 days, the agreement shall be conclusively deemed to
comply with the purposes and provisions of Nebraska’s Community Development
Law and Neb. Rev. Stat. §§ 18-2145 to 18-2154 (Reissue 1997).
5. Standing: Words and Phrases. Standing is the legal or equitable right, title, or
interest in the subject matter of the controversy which entitles a party to invoke
the jurisdiction of the court.
Appeal from the District Court for Red Willow County:
DAviD urbom, Judge. Affirmed.
Michael L. Bacon and Steven P. Vinton, of Bacon & Vinton,
L.L.C., for appellant.
Trent R. Sidders and Austin L. McKillip, of Cline, Williams,
Wright, Johnson & Oldfather, L.L.P., for appellee.
heAviCAn, C.J., C onnolly, gerrArD, stephAn, mCC ormACk ,
and miller-lermAn, JJ.
COMMUNITy DeV. AgeNCy v. PRP hOLDINgS 	1015
Cite as 277 Neb. 1015
Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/01/2026 04:51 AM CST

C onnolly, J.
SUMMARy
In 1998, the Community Development Agency of the City of
McCook, Nebraska (the Agency), contracted with four redevel-
opers to eliminate blight through a redevelopment project. The
contract required the redevelopers to convert a building that
housed a yMCA facility into apartments.
As part of the contract, the Agency agreed to implement tax
increment financing (TIF). TIF is a financial incentive local
governments can give developers to help pay the costs of rede-
veloping blighted areas.1 When a blighted area is redeveloped,
the property tax revenue from the area should increase. One
way local governments can provide TIF funds is to freeze the
property tax base in the project area before any redevelopment
takes place.2 Any future property taxes which exceed the frozen
amount are collected and placed in a trust fund. These funds
are then used to pay redevelopment costs. This is the type of
plan used by the Agency for the project at issue; under the
contract’s terms, the TIF funds are paid to the redevelopers,
who advanced the money for the redevelopment.
here, the issue is whether the appellee, PRP holdings,
L.L.C. (PRP)—which is a successor in interest to the redevel-
opers—should have the TIF funds. The appellant, the Agency,
contends that as a successor in interest to the redevelopment
contract, PRP is not entitled to the TIF funds.
The district court determined that under Neb. Rev. Stat.
§ 18-2142.01(2) (Reissue 1997), PRP should have the TIF
funds, 	and 	entered 	summary 	judgment 	for 	PRP. 	Under
§ 18-2142.01(2), the Agency had 30 days after the parties
formally entered into the redevelopment contract in 1998 to
contest its validity. The Agency filed this declaratory judgment
in 2006. We agree that § 18-2142.01(2) forecloses the Agency’s
challenge. We affirm.
1 Prime Realty Dev. v. City of Omaha, 258 Neb. 72, 602 N.W.2d 13
(1999). See, also, Todd A. Rogers, A Dubious Development: Tax Increment
Financing and Economically Motivated Condemnation, 17 Rev. Litig. 145
(1998).
2 See Neb. Rev. Stat. § 18-2147 (Reissue 1997).
1016 	277 NeBRASKA RePORTS

BACKgROUND
On September 11, 1998, the Community Redevelopment
Authority of the City of McCook, Nebraska, predecessor
of the Agency, entered into a redevelopment contract with
the four above-mentioned redevelopers: Retro Development
of Nebraska, Inc.; McCook yMCA Apartments I, Limited
Partnership; Peter A. Spoto; and Douglas e. hiner. The com-
munity redevelopment authority agreed to provide TIF funds
for converting the yMCA building into apartments. The con-
tract imposed obligations on the redevelopers and burdens on
the property, which obligations bound successors. The contract
established the tax valuation at $700,000. It also provided that
neither the property’s owner nor the owner’s successors could
challenge the valuation. In exchange, the redevelopers would
receive TIF funds for advancing the money to complete the
agreed construction.
McCook yMCA Apartments I, Limited Partnership (herein-
after yMCA), not only was a redeveloper under the contract,
but also owned the yMCA building. Its ownership was subject
to a deed of trust held by its secured lender, First National
Bank (the Bank) of Omaha. The Bank was both the trustee and
the beneficiary of the deed of trust. In 2005, yMCA defaulted
on the deed of trust. Through a trustee’s sale, PRP purchased
the yMCA building from the Bank.
Since entering into the contract, PRP or its predecessors
have paid property taxes at the valuation established in the
contract. Under the redevelopment contract, taxes attributable
to the property’s increase in value above its valuation before
the redevelopment have been paid into a special fund held by
the Agency. The Agency, however, has not paid the TIF funds
to the redevelopers.
In August 2006, 8 years after signing the contract, the
Agency 	filed 	this 	declaratory 	judgment 	action. 	It 	sought
to have the redevelopment contract declared void ab initio
because the contract and its implementation failed to com-
ply with Nebraska’s Community Development Law (CDL).3
3 See Neb. Rev. Stat. §§ 18-2101 to 18-2144 (Reissue 1997). See, also, Neb.
Rev. Stat. § 18-2153 (Reissue 1997).
COMMUNITy DeV. AgeNCy v. PRP hOLDINgS 	1017
Cite as 277 Neb. 1015

Alternatively, the Agency asked the court to decide which
party should receive the TIF funds. As of February 1, 2008,
the Red Willow County treasurer had collected $42,454.79 in
real property ad valorem taxes. The taxes on the property have
continued to accumulate, and the McCook treasurer is holding
accumulated TIF funds for the Agency.
The district court concluded that § 18-2142.01(2) foreclosed
the Agency from contesting the contract’s validity. Under
§ 18-2142.01(2), a challenger has 30 days to contest the valid-
ity of a redevelopment contract that provides financing for an
approved development project. The record shows the Agency
waited 8 years before filing suit.
But because PRP was not a signatory to the contract, the
court concluded, the only rights it could have to the TIF funds
stemmed from interests it purchased at the trustee’s sale. The
court determined that under Neb. Rev. Stat. § 76-1010(2)
(Cum. Supp. 2008), PRP acquired all right, title, and interest
of yMCA in the redevelopment contract through the trustee’s
sale. Thus, the court found PRP a successor in interest to
yMCA’s rights under the redevelopment contract.
The court concluded that because the redevelopment con-
tract bound PRP to its restrictions, PRP should also have any
benefits under the contract, including the TIF funds. The court
granted PRP’s motion for summary judgment and ordered the
Red Willow County treasurer to pay the TIF funds to PRP
under the terms of the contract. The Agency appeals.
ASSIgNMeNTS OF eRROR
The Agency assigns, restated, that the district court erred
in determining that PRP is a successor in interest entitled to
TIF funds under the redevelopment contract. Specifically, the
Agency asserts that the court erred in the following rulings: (1)
The trustee’s sale did not terminate yMCA’s interest in the TIF
funds; (2) the TIF funds were real property interests subject to
conveyance through a trustee’s sale; (3) PRP should have the
TIF funds although it was not a signatory to the redevelopment
contract; (4) PRP should have all the funds promised to the
redevelopers, not just a percentage; and (5) the contract was
not void ab initio.
1018 	277 NeBRASKA RePORTS

STANDARD OF ReVIeW
[1-3] We will affirm a lower court’s granting of summary
judgment if the pleadings and admissible evidence offered
at the hearing show that there is no genuine issue as to any
material facts or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled
to judgment as a matter of law.4 In reviewing a summary judg-
ment, we view the evidence in the light most favorable to the
party against whom the judgment was granted and give such
party the benefit of all reasonable inferences deducible from
the evidence.5 But the issue we are asked to decide—whether
§ 18-2142.01(2) applies—presents an issue of statutory inter-
pretation, a question of law.6 And when reviewing questions of
law, we review the questions independently of the lower court’s
conclusions.7
ANALySIS
[4] PRP argues that § 18-2142.01(2) forecloses all of the
Agency’s arguments because the Agency failed to contest the
contract within 30 days. The statute provides in part:
In any suit, action, or proceeding involving the validity
or enforceability of any agreement of a city, village, or
authority brought after the lapse of thirty days after the
agreement has been formally entered into, any such agree-
ment reciting in substance that it has been entered into
by the city, village, or authority to provide financing for
an approved redevelopment project shall be conclusively
deemed to have been entered into for such purpose and
such project shall be conclusively deemed to have been
planned, located, and carried out in accordance with
4 See, Jardine v. McVey, 276 Neb. 1023, 759 N.W.2d 690 (2009); Thone v.
Regional West Med. Ctr., 275 Neb. 238, 745 N.W.2d 898 (2008).
5 See id.
6 See Lagemann v. Nebraska Methodist Hosp., 277 Neb. 335, 762 N.W.2d
51 (2009).
7 See id.
COMMUNITy DeV. AgeNCy v. PRP hOLDINgS 	1019
Cite as 277 Neb. 1015

the purposes and provisions of the [CDL] and sections
18-2145 to 18-2154.8
The Legislature has set a specific window of time dur-
ing which a party can challenge a redevelopment contract.
Under the statute, after the window has closed, the con-
tract has conclusively complied with the CDL and Neb.
Rev. Stat. §§ 18-2145 to 18-2154 (Reissue 1997). In short,
§ 18-2142.01(2) provides finality and gives all parties to a
contract that provides financing for a redevelopment project a
green light to proceed. The only exception is if a suit or other
proceeding is initiated within 30 days of the parties’ formally
entering into the contract.
The Agency and redevelopers entered into the redevelop-
ment contract on September 11, 1998. The Agency concedes
that it did not challenge the contract’s validity or enforceability
within 30 days after the contract was signed. The Agency filed
for a declaratory judgment on August 3, 2006. Because the
Agency failed to contest the contract’s validity within 30 days
of the parties signing the contract, § 18-2142.01(2) precludes
the Agency from doing so now.
But the Agency argues, rather obliquely, that PRP cannot
rely on § 18-2142.01(2) as a defense. It argues that only a party
that has standing can rely on § 18-2142.01(2). It claims that
PRP does not have standing because it has not been harmed.
The Agency’s argument wilts after a quick analysis.
[5] Standing “is the legal or equitable right, title, or interest
in the subject matter of the controversy which entitles a party
to invoke the jurisdiction of the court.”9 Obviously PRP has an
interest in the TIF funds. But it is the Agency as the party that
initiated this suit that must meet the standing requirement—not
PRP, who is a defendant. The Agency invoked the district
court’s jurisdiction and sued PRP as a possible successor in
interest to the original redevelopers. The Agency’s standing
argument fails. The district court did not err in holding that
8 § 18-2142.01(2) (emphasis supplied).
9 Adam v. City of Hastings, 267 Neb. 641, 646, 676 N.W.2d 710, 714
(2004).
1020 	277 NeBRASKA RePORTS

§ 18-2142.01(2) precluded the Agency from contesting the
contract’s validity.
Because we conclude that the contract is valid, we next
determine if PRP succeeded to yMCA’s interest in the TIF
funds through the trustee’s sale. In the redevelopment contract,
the Agency agreed to pay the four redevelopers part of the TIF
funds. A “redeveloper” is “any person, partnership, or public
or private corporation or agency which shall enter or propose
to enter into a redevelopment contract.”10 The other three
redevelopers the Agency contracted with have either failed to
respond to this lawsuit or have disclaimed their interest in the
TIF funds. PRP, as a possible successor in interest to yMCA,
is the only potential redeveloper claiming an interest in the
TIF funds.
In 2005, after yMCA defaulted on the deed of trust, its
secured lender, the Bank, sold the redeveloped property to PRP
at a trustee’s sale. Although PRP is not a redeveloper under the
CDL, it claims to have succeeded to yMCA’s interest in the
contract. But the Agency argues that yMCA’s right to receive
the TIF funds was terminated at the trustee’s sale and was not
conveyed to PRP. We understand the Agency’s argument to be
that because the redevelopment contract was recorded in 1999,
the year after the Bank filed its deed of trust, the trustee’s sale
only terminated and did not convey yMCA’s interest in the
contract and TIF funds. In support of its position, the Agency
cites § 76-1010(2), which provides that the sale of trust prop-
erty operates to convey to the purchaser
the trustee’s title and all right, title, interest, and claim
of the trustor and his or her successors in interest . . . in
and to the property sold, including all such right, title,
interest, and claim in and to such property acquired by
the trustor or his or her successors in interest subsequent
to the execution of the trust deed. All right, title, interest,
and claim of the trustor and his or her successors in inter-
est . . . including all such right, title, interest, and claim
in and to such property acquired by the trustor or his or
her successors in interest subsequent to the execution of
10 § 18-2103(14).
COMMUNITy DeV. AgeNCy v. PRP hOLDINgS 	1021
Cite as 277 Neb. 1015

the trust deed, shall be deemed to be terminated as of the
time the trustee or the attorney for the trustee accepts the
highest bid at the time of the sale.
(emphasis supplied.) The Agency argues that under the sec-
ond sentence of § 76-1010(2), yMCA’s interest in the TIF
funds was terminated by the trustee’s sale and not acquired by
PRP. The Agency presents a sketchy argument at best. It can
make this argument only by taking the quoted language out
of context.
Under the first sentence of § 76-1010(2), the purchaser of
trust property clearly acquires any interest the trustee has in the
property. This includes any interest the trustor had in the prop-
erty, whether acquired before or after the execution of the trust
deed. The second sentence of the statute simply clarifies that
the trustor and trustee retain no interest in the property after
trustee’s sale because their interest has been conveyed to the
purchaser. As PRP suggests, the Agency’s tortured interpreta-
tion of § 76-1010(2) would render it nonsensical and internally
inconsistent. Under the Agency’s interpretation, no trustor’s
interest could be conveyed to the purchaser.
At the trustee’s sale, PRP acquired yMCA’s rights, title, and
interests in the redeveloped property. That interest included
the obligations and benefits under the redevelopment con-
tract. Under the terms of the contract, the original redevel-
opers agreed to redevelop the property, accept an artificially
inflated tax valuation, and not sell the property to a tax-exempt
entity. In return, the Agency agreed to pay the redevelop-
ers the TIF funds. Thus, the redevelopment contract operates
like a covenant.11 We conclude that through the trustee’s sale,
PRP assumed yMCA’s obligations under the redevelopment
contract. Accordingly, it should receive any benefits payable
under the contract. Because all other redevelopers have either
disclaimed their interest in the TIF funds or have had default
judgments entered against them, PRP is entitled to the TIF
funds as successor in interest to yMCA. We have considered
11 See, generally, Skyline Woods Homeowners Assn. v. Broekemeier, 276 Neb.
792, 758 N.W.2d 376 (2008).
1022 	277 NeBRASKA RePORTS

the Agency’s other assignments of error and conclude they
lack merit.
We conclude that § 18-2142.01(2) forecloses the Agency
from contesting the redevelopment contract’s validity. Because
the contract is valid, PRP acquired yMCA’s interest in the con-
tract through the trustee’s sale. All other redevelopers entitled
to TIF funds under the contract have disclaimed or forfeited
their interest in the funds. We conclude that the district court
correctly determined that PRP, as yMCA’s successor in inter-
est, should have the TIF funds.
A ffirmeD.
Wright, J., not participating.
IN Re INTeReST OF eLIAS L. 	1023
Cite as 277 Neb. 1023
in re interest of eliAs l., A ChilD unDer 18 yeArs of Age .
stAte of nebrAskA, Appellee , v. Jennifer m. AnD
miChAel l., Appellees , AnD the ponCA tribe
of nebrAskA, AppellAnt.
in re interest of evelyn m., A ChilD unDer 18 yeArs of Age .
stAte of nebrAskA, Appellee , v. Jennifer m., Appellee ,
AnD the ponCA tribe of nebrAskA, AppellAnt.
767 N.W.2d 98
Filed June 26, 2009. 	Nos. S-08-1182, S-08-1183.
1. Statutes: Appeal and Error. Statutory interpretation presents a question of law,
which an appellate court decides independently of the determination made by the
lower court.
2. Interventions: Pleadings: Appeal and Error. In considering a motion to inter-
vene, an appellate court assumes that the petition’s allegations are true.
3. Juvenile Courts: Appeal and Error. An appellate court reviews juvenile cases
de novo on the record and reaches conclusions independently of the juvenile
court’s findings.
4. Federal Acts: States. generally, federal law preempts state law when it conflicts
with a federal statute, when a state law does major damage to clear and sub-
stantial federal interests, or when the U.S. Congress explicitly declares federal
legislation to have a preemptive effect.
5. Indian Child Welfare Act: Jurisdiction. When the state law affects Indian
tribes, state jurisdiction over an action or issue is preempted if it interferes or is
incompatible with federal and tribal interests reflected in federal law, unless the
state interests at stake are sufficient to justify the assertion of state authority.