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Memo Eminent Domain - RamsgateCITY OF HOPKINS MEMORANDUM Date: August 13, 1991 To: Honorab�lp Mayor & City Council From: Tom Harmening, Community Development Director Subject: Eminent Domain - Ramsgate Townhouse Property I. Purpose On 8/6/91, the City Council requested that staff investigate the City's use of eminent domain to acquire the Ramsgate townhouse site owned by Mark Z. Jones. II Background Information What follows is a brief analysis of the issues pertaining to this matter. a. What are the legal requirements for undertaking eminent domain? Please see attached memo from Jerre Miller, City Attorney which explains the eminent domain process. Staff is conducting additional research on the process which hopefully will be available for the City Council meeting. b. What are possible sources of funds to allow for this acquisition? o Undertake a park bond referendum. o Utilize general fund reserves. 'Currently, the balance in the general fund reserve is below what is considered to be a desirable level. o Divert existing park referendum funds. It appears possible to divert funds from the 1990 "Park Bond to purchase this site. This action would divert funds designated for the purchase of Maetzold Field. o Utilize gifts /private donations. o Attempt to secure a grant or grants. Staff has not been able to obtain any information regarding an "Urban Forest" program. Staff will continue to research this item. c. What are the costs associated with eminent domain? It is very difficult for staff to estimate the cost the City may experience relating to legal expenses as well as land costs. To determine the value of the land, appraisals are completed. A court appointed body reviews these appraisals and makes a determination of the appropriate value. According to the City's relocation consultant, the values recently determined for other eminent domain proceedings in Hennepin County significantly exceeded the appraised values for the properties. The City Assessor roughly estimated the value of the land at $90,000. The Hiawatha Association appraiser valued the land at approximately $125,000. The expense the City would experience relating to legal services is dependent on how strongly the land owner f ights the eminent. domain process. If the process goes very smoothly and without appeals, the City.'s legal costs could be less than $5,000. If the land owner fights the process, the City's legal and administrative costs become much greater.. It is not possible for staff to put a figure on how much this expense might be. d. What are examples of other situations in Hopkins which may be affected by the City's acquisition of the subject site? There are two examples, one a past issue and one possibly a. future issue, which are similar in nature to the question regarding the acquisition of the subject site. The Council may want to consider the implications of the Ramsgate acquisition as related to these issues: o Knollwood Association /Private Pond - In the late 1980 the Knollwood Association approached the City of Hopkins and inquired as to the City's interest in taking over ownership and maintenance responsibilities for a private pond located in their neighborhood. The City responded by indicating that it would be willing to take over these responsibilities provided the property could be opened to the public's use. The Knollwood Association indicated they were not interested in this type of arrangement if the property would be available for the public in general. o Park Valley Neighborhood /Minneapolis Floral Site - Based upon discussion with the Park Valley Neighborhood, it has been mentioned that this neighborhood is interested in having the Minneapolis Floral site (16 acres) acquired by the City and converted into a park area in order to avoid development of the site into residential dwellings. e. Should the Park Board review this matter? Staff would suggest that, in all cases where the City is contemplating the acquisition of park land, that a systematic approach be utilized as a part of the decision making process. One component of this formal review process would be the solicitation of. comments or recommendations from the Park Board. It may also be appropriate to approach the Planning Commission for comments. City staff will be approaching the Park Board during its meeting on August 19th and pose the following two questions: 1. Should the property in question be acquired for park purposes? If so, how does this site fit into the City's overall park system /priorities and what benefits would be derived by having this property included in the City's park system? 2. What funding source would the Park Board recommend to allow for the acquisition , of this site? f. What is th status of th three zoning applications made by Mark Z. Jones? Mark Z. Jones made application in January, 1991 for a Conditional Use Permit, Preliminary Plat approval, and Comp Plan Amendment for the proposed project. City staff has asked that the City Attorney outline what the City's obligations are to act on these applications. Attached is a memo from Jerre Miller which responds to this question. III. Alternatives a. The City Council could determine that the purchase of the subject property is not in the City's best interest and take the necessary action to approve or disapprove the three zoning applications made by Mark Z. Jones. b. The City Council could determine that the purchase of the property is in the City's best interest and instruct staff to obtain an appraisal of the property and undertake negotiations with the owner. If negotiations were unsuccessful, the City Council could then undertake formal eminent domain proceedings. This would involve adopting a resolution which identifies the public purpose of the acquisition and authorize the commencement 'of the various steps necessary to acquire the property by eminent domain. As a part of this process, the Council should also undertake the following activities: o The Council should define the funding source it would desire to be used to allow for this acquisition. g Act on the three zoning application made by Mark Z. Jones as per the recommendation made by the City Attorney. (See attached) Attachments: o Memos from City Attorney regarding eminent domain process and zoning applications. o Brief outline of steps in eminent domain process. 0 Letter from attorney representing Mark Z. Jones. C I T Y O F H O P K I N S MEMO Date: August 13, 1991 To: Jim Kerrigan From: Jerre Miller Re: Hiawatha You have asked for a memorandum concerning the factors relevant to a resolution by the Council to take the Jones - Hiawatha property by eminent domain. Chapter 9 of the City Charter empowers the City to acquire property by eminent domain "for any public use, convenience or purpose The proceeding is initiated by a resolution to proceed in taking the parcel following a determination that the taking necessary and in fulfillment of public useage. Minnesota Statute Section 465.01 grants all cities the right of eminent domain "for any purpose for which it is authorized by law to take ". Minnesota Statute Section 117.011 require all bodies, public or private who have eminent domain rights to exercise them in the manner prescribed within this statute in spite of a different procedure outlined in the charter of a city. An opinion of the Attorney General (1947) has stated for a y} village to acquire a piece of land as an addition to a park by condemnation it is necessary for the village council first .to determine the public need and necessity before acquiring the property. In an opinion the Attorney General stated the City of Rochester was not entitled to condemn property which was to be used for a private purpose (1945) A taking for park purposes meets the. public purpose and necessity requirement. Whether a City has been given the power to take private property for the purposes it has expressed for the taking and whether that purpose meets a public purpose are questions that would be determined by the Court. State v. District 1010 First Street South, Hopkins, Minnesota 55343 612/935 -3474 An Equal Opportunity Employer Court F ourth Jud icial District (1916) 158 N.W. 240. In other words, the the City has the right has been remaining issue is Court must determine if contested whether right to condemn certain property. Once the adjudged in favor of the City, the only the amount of compensation.to be paid. I have found no cases relating to eminent domain proceedings to preserve small tracts of "urban forest areas ". In furtherance of the public purpose issue, if - private property is taken for a use that isn't public, the Court will prevent an abuse of discretion where the owners' constitutional rights are threatened thereby. Authority v. Groppoli 202 N.W.2d 371 (1972). If the purpose for which the private property was sought to be taken cannot be accomplished, the taking is unauthorized. The burden of proving a public purpose is on the petitioner. Minnesota Canal & Power Co. v. Fall Lake Boom Co., (1914) 148 N.W. 561. HRA v. Schapiro (1973) 210 N.W.2d 2110 The term "public use" isn't defined by the State Constitution and its application is expansive because of new needs created by a growing civilization. Forthis reason, the term "public purpose" is flexible and is not limited to concepts of public use or purpose that were traditionally adhered to in the past. For that reason, a public use includes whatever is of benefit to any considerable portion of the public concerning its health, material prosperity or other welfare. Even aesthetic considerations may have weight in determining a public use. HRA v. Greenman ,'(1959) 96 N.W.2d 673. The action is commenced by a petition on interested parties assuming the Court pursuant to a hearing and evidence submitted grants the petition. The Court will order appointment of three disinterested commissioners and two alternates to determine the value of the property to be taken. The commissioners then inspect the property and take testimony from interested parties and finally determine an award which is filed with the Court which normally takes 90 days Thereafter, within 40 days from the filing of the report, either party may appeal to the District Court. An appellant may be entitled to a jury trial. After the jury trial has been concluded and an award made, either party may appeal to the Appellate Court. It is difficult to predict the amount of time expended because it depends on the complexity of the issues and how far either party carries the battle. Major expenses would include : attorney. fees, filing.fees and appraisal fees in addition to the amount of the award itself. When a condemnation proceeding once commenced is dismissed by the Petitioner such dismissal depending on the time frame in which is occurs may allow the owner to recover reasonable costs, expenses and attorney fees as provided in Minnesota Statute 117.195. If more information is desired concerning condemnation then is contained in this brief outline, please let me know.` JAM W C I T Y O F H O. P K I N S MEMO Date: August 15, 1991 To: Jim Kerrigan 3 From: Jerre Miller Re: Hiawatha You have asked me to comment on deadlines that may be applicable to Council action regarding the Mark Jones Application for development on Hiawatha Avenue. The Council has already acted on the environmental review agenda item. The remaining items consist of a Conditional Use Permit, platting and amendment to the comprehensive plan. The only time frame that should concern the Council is a 90 day requirement to act on the preliminary plat. The is set forth in City Code 500.11 which requires action by the Council within 90 days of the date on which it was heard by the Planning Commission. It is my belief that the time involved in the EIS study would not be counted in calculating the running of the 90 day period. In all other respects, there are no specific time constraints and the Council is to be guided by the rules of reasonableness Undue delay without reason would be arbitrary and capricious and hence subject to challenge. In this instance however, each continuance was based on evidence gathered at a hearing and supported sufficient reasons to support the delays, although the developer could argue such continuances were without sufficient basis and designated to .discourage the development. I have also reviewed Minnesota Statute 462.356 of which Subdivision 2 states no publically owned interest in real property should be acquired until after the Planning and Zoning Commission has reviewed the proposed acquisition to determine its compliance with the comprehensive municipal plan. The statute also allows the Council by a 2 /3rds 1010 First Street South, Hopkins, Minnesota 55343 612/935 -8474 An Equal Opportunity Employer resolution to dispense with this requirement when it finds the proposed acquisition has no 'relationship to the comprehensive municipal plan. This appears to apply to the Jones' property. 3 FELHABER, LARSON, FENLON AND VOGT, P.A. ATTORNEYS AT LAW RICHARD S. FELHABER (1905-1987) GUSTAV A. LARSON (1913 -1990) ROBERT J. FENLON THOMAS M. VOGT EDWARD J. BOHRER DAVID R. HOLS RUSSELL J. SUDEITH, JR. WILLIAM K. ECKLUND HONNEN S. WEISS CHARLES F. BISANZ JAMES J. CRONIN AMES M. DAWSON RONALD R. KIRCHOFF JAMES A. BLOMQUIST ROBERT L. BACH STEPHEN J. BURTON JAN D. HALVERSON TIMOTHY J. PABST JOHN R. MCBRIDE BYRON D. OLSEN 900 MERITOR TOWER PAULETTE KANE FLYNN 444 CEDAR STREET TERRANCE M. CULLEN DAVID M. CREMONS SAINT PAUL, MINNESOTA 55101 -2126 LINC S. DETER 612 222 -6321 DAVID C. VANNEY THOMAS J. DOYLE FACSIMILE 612 222 -8905 CHRISTOPHER S. HAYHOE DENNIS J. MERLEY 1935 PIPER JAFFRAY TOWER KAREN G. SCHANFIELD THOMAS F. MILLER 222 SOUTH NINTH STREET PAUL J. ZECH MINNEAPOLIS, MINNESOTA 55402 -3337 ROBERT S. HALAGAN PAUL H. CADY 612 339 -6321 ALEC J. BECK FACSIMILE 612 339 -4714 PENELOPE J. PHILLIPS OF COUNSEL SAMUEL BEARMON CLARK C. GRIFFITH August 8, 1991 KAREEN R. ECKLUND STEVEN L. ROSS REPLY TO: Minneapolis Direct Line: 344 -1935 Mayor Nelson Berg City of Hopkins 1010 First Street South Hopkins, MN 55343 RE: Ramsgate Townhomes Dear Mayor Berg: This letter is written in response to the request made at the City Council Meeting of August 6, 1991 that we indicate whether Mr. Jones is now prepared to grant the City an easement, apparently without compensation, across a portion of the Ramsgate Apartments property for sanitary sewer and related purposes. The short answer is no, Mr. Jones is not prepared simply to sign the easement. He recognizes that issuance of the Conditional Use Permit applied for will require resolution of the sanitary sewer problem that has been identified in the staff reports on the development application, but is not now willing to grant the easement without first resolving the issues relating to the Ramsgate Townhomes. Mr. Jones takes this position without apologies. The simple truth is that Mr. Jones has no obligation to solve the sanitary sewer problem that some of the Minnehaha Oaks homeowners have raised as a basis for denying Mr. Jones development of his property. The responsibility for resolution of that problem is as much the responsibility of those homeowners as it is Mr. Jones's. This is true despite the efforts of Mr. Heikkila and others to make Mr. Jones's granting of this easement without compensation a "litmus test" of his worthiness to receive a Conditional Use Permit mcsh79.1tr Mayor Nelson Berg August 8, 1991 Page 2 for development of his property. While I may have offended Councilmember Shirley by suggesting that an intent exists on the part of some people to blackmail or coerce Mr. Jones into granting the easement by subjecting Mr. Jones to public ridicule and embarrassment, I think the conclusion is inescapable that some persons who have been involved in this process have intended to link these issues -- in other words, unless Mr. Jones grants the easement to the City, he does not deserve favorable consideration of his development request. I make these points not because Mr. Jones's psyche is so fragile that it cannot withstand some public criticism or scrutiny, but instead because the tone of the attack being leveled against this project is becoming increasingly personal. Mr. Jones does not need to apologize to anyone for his record as a property owner and taxpayer within the City of Hopkins. As you probably know, Mr. Jones now owns and manages more than 800 apartment units within the City and, during 1991, will pay in excess of $1,000,000 in property taxes. He has not asked for any variance, bending of the rules, favors or special treatment in his application for development of his land. Indeed, he has even resisted the temptation personally to lobby any Councilmember, preferring instead to permit the public process of project evaluation to proceed. Every reasonable objection or request for modification has been addressed and accommodated. The project meets or exceeds every existing development standard (and even some that have no application to a project of this kind). All environmental objections have been addressed, resolved and dismissed. That is enough. Mr. Jones is now entitled to a vote on the merits of his application; any further delay can only be interpreted as a de facto denial of his application, which, in turn, can only result in more expense to all and a totally unnecessary prolonging of this excruciatingly slow process. Mr.. Mayor, as 1 stated at the meeting on August 6, Mr. Jones is not interested in selling the property. It is not for sale. He was asked to state a price at which he would be willing to relinquish ownership as an alternative to proceeding with development of the land. That price was stated. Whether it is reasonable or not is irrelevant. He has no obligation to sell and will resist any efforts to condemn the property by the City. We believe that there is no "public purpose" at issue here. We instead believe that the 13 property owners who have fought so desperately to defeat this project have assumed the mantle of environmentalists because they perceive it to be in their personal, private interest to do so. mcsh79.hr Mayor Nelson Berg August 8, 1991 Page 3 There is nothing wrong with advancing their own agenda in opposing this project. Neither is there anything wrong with their seeking to enlist persons to oppose the project who may sincerely view Mr. Jones's trees as a resource worth preserving. It distorts the situation for these opponents to suggest, however, that Mr. Jones is or has been insensitive to the environmental consequences of his development. Mr. Jones will preserve, as you know, some 18 of the largest oak trees as part of the development and will plant more than 100 new trees and shrubs to replace those lost as a consequence of the new construction. That is all he can reasonably (or legally) be expected to do. While the neighborhood constantly refers to the trees as "our trees," the fact is that these trees are owned by Mr. Jones. The property is his to develop as he sees fit within the regulatory limits established by the City. His application meets all applicable criteria. The City should not try now to take that land away from Mr. Jones at public expense simply because some neighbors (whose homes stand on lands previously containing oak trees similar to those currently located on Mr. Jones's property) oppose any development of the property. Their concerns (both reasonable and unreasonable) have been aired, addressed, and, to the extent possible, accommodated. No more can be expected or required of Mr. Jones as a condition of development of his land. We will look forward to a final resolution of his application at the meeting on August 20, 1991. Thank you for the opportunity to communicate our position on these matters. Very truly yours, Christopher . Hayhoe dmj cc: Mark Z. Jones Hopkins City Council Neil Heikkila mcsh79.1tr