Eagan could use eminent domain: Minnesota This Week, Burnsville MN, 7/20/07

Despite protests by some businesses and residents, council votes to keep eminent domain as an option if negotiations fail to secure remaining Cedar Grove properties

By Erin Johnson

Although loyal customers showed up in full force to protest the move, the Eagan City Council on Tuesday voted to keep eminent domain as an option should negotiations to acquire remaining businesses in the Cedar Grove redevelopment area fail.

The city held a public hearing on the issue because, with about 14 properties left to be acquired, the clock is ticking on its ability to use eminent domain to secure them.

Minnesota last year amended its eminent domain law, restricting its use and making it more difficult for cities to acquire private property for redevelopment projects.

But cities that had redevelopment projects underway when the law changed are allowed to follow the old rules for five years after the redevelopment district was created.

For Eagan, the five-year deadline expires next July.

So far, the city has not had to use eminent domain in the area. It has already acquired about 15 properties through negotiations, but talks with some of the remaining property owners have stalled.

Director of Community Development Jon Hohenstein said the city invited businesses to conduct their own appraisals of their properties, which are then reviewed by the city’s appraiser.

According to the city, some property owners have not yet provided appraisals of the value of their property, while others have submitted appraisals that differ substantially from the city’s appraisals.

“We’ve had some situations where the seller’s appraisal and the city’s appraisal are very different, so far different that it would be difficult to close the gap through negotiations,” Hohenstein said.

The city said it will continue to try to negotiate with the remaining property owners and will use eminent domain only as a last resort.

“It remains our goal to reach 100 percent of acquisitions through negotiations,” said Mayor Mike Maguire. “We do not take the discussion of eminent domain lightly.”

But some business owners said they don’t think the city has been fair in its negotiations.

“I suggest that the walk the city has been walking doesn’t jibe with the talk it’s been talking,” said attorney Gary Fuchs, who represents some property owners in the area.

Dedicated customers of some of the remaining businesses — residents and non-residents alike — packed the council chambers to speak out against the use of eminent domain.

“It saddens me to think that the government of Eagan would bring itself down to the level to even use the words ‘eminent domain’ for some companies that have been with the city as long as they have,” said resident John Willenburg.

The majority of speakers were there to support two Cedar Grove businesses in particular that have yet to reach a deal with the city — the Mediterranean Cruise Cafe and Larson Automotive Services.

Owners of both businesses said they don’t want to leave the Cedar Grove area, where they have acquired a substantial customer base.

“We’ve been in the area almost 28 years. That’s a lot of time. That’s a lot of memories,” said Mediterranean Cruise Cafe owner Jamal Ansari. “We are here because we love what we do and we cater to the community. We do something unique that no one else does. ... We want to be treated fairly.”

Jerry Larson of Larson Automotive said that he’s spent “major” money on recent improvements to his building.

“We don’t want to sell our property, but basically you’re coming to take our properties,” he said.

Several people who attended the meeting questioned why the two businesses couldn’t be included in the redevelopment plans.

“You are doing a great thing, trying to make (Cedar Grove) the gateway to Eagan,” Ansari said. “Why can’t we be there?”

Hohenstein said the council has directed staff to work with the area’s new master developer to see if there are any options to keep more of the existing businesses in Cedar Grove.

Council members said they are open to the possibility of some existing businesses being included in the redevelopment plans. Maguire even admitted that hummus and tabbouleh from the Mediterranean Cruise Cafe have become staples at his annual fantasy football draft.

But the businesses are more than just the buildings, he said.

“They are you,” he said. “I hope on hope that we can find a way to work with your businesses, as well as all the others, to maintain your place in this community as true assets.”

Some business owners accused the city of making lowball offers on their property. Phil Fahey, who owns American Accounts and Advisors, said he knows the city has deep pockets and suggested it pay property owners “maybe double what the appraiser comes back with.”

“Share some of that wealth with the current property owners,” he said. “Why not pay us enough so we can stay viable?”

The city denied making lowball offers and said that it has to protect the integrity of its dollars for the entire community.

“Those deep pockets ... are a little bit of the pockets of every one of the 25,000 households that pays property taxes in this city,” Maguire said. “And we have to balance the interests of all of them as well.”

The council heard more than two hours of testimony from 48 people, all of whom opposed the use of eminent domain, before unanimously voting to retain it as an option.

Council Member Paul Bakken called eminent domain a necessary tool in the toolbox of public officials.

“If the city is not able to facilitate a development in that area that works, then the whole thing collapses and the city and the taxpayers are left holding the bag,” he said.

Plans to revitalize Cedar Grove have been in the works for about eight years. Once the “downtown” of Eagan and home to the first mall south of the river, the area began to decline in the 1980s when direct access to Cedarvale Mall was eliminated and Highway 13 was realigned.

The area is now primed to become an urban village with shops, restaurants, transit stations, housing and public spaces, with developers Doran Development and Pratt Homes at the helm.

City Attorney Mike Dougherty said that even if the city initiates eminent domain, it can continue negotiations with property owners throughout the process.

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