2015-12-07 CC Agenda Packetlberty� ij� Mayor and Council Request for Action
December 3, 2015
SUBJECT: REASSESSMENT OF LOT 2, BLOCK 1, PRAIRIE RUN FOR SPECIAL
ASSESSMENTS OUTSTANDING UPON TAX FORFEITURE OF THE
PROPERTY.
RECOMMENDATION: It is respectfully requested that the Mayor and Council consider the
following:
MOTION TO: Approve Resolution No. 2015-042, Resolution Adopting Reassessment on Tax
Forfeited Property.
BACKGROUND: In 2005, the City installed storm sewer, sanitary sewer, municipal water, site
grading, and street improvements to the Prairie Run subdivision (Prairie Run Improvements) and
special assessed the costs of such improvements back to the properties in the subdivision. At the
time, the owners of the properties (Gold Key Development and Robert Heuring) agreed among
themselves as to the amount of the assessments to be levied on each lot. Both property owners
agreed to waive the right to appeal such assessments. In 2005, the City special assessed the cost
of the Prairie Run Improvements to the properties in the subdivision.
In 2007, the City widened CSAH 19 in cooperation with Wright County. The City special
assessed the benefiting commercial properties in the area. The Prairie Run Improvements carried
an interest rate of 6.5 % while the C SAH 19 Improvement carried an interest rate of 6.1 %.
The owner of Lot 2, Block 1, Prairie Run, ("Property") made no special assessment payments on
the Property at all. The Property went tax forfeit in 2013 or 2014. In 2015, the Property was
sold at auction by the County for a nominal price (about $250). The purchaser of the property
was informed by the County before he purchased the Property that the City may wish to reassess
the entire amount of the special assessments that were cancelled.
The outstanding special assessments that were cancelled at tax forfeiture were as follows:
1. C SAH 19 Improvement $ 9,941.20
2. Prairie Run Improvements $1821159.78
Total Assessments $1921100.98
The City's policy over the past several years has been to attempt to break even on the Prairie Run
development. The City incurred both construction costs and litigation costs related to this
development, all of which would have been recoverable from the developer and or its letter of
credit had the developer not gone bankrupt and the issuer of the letter of credit become insolvent.
To date, the City has acquired all of the undeveloped residential lots, has sold some, and has the
remainder under purchase agreement. The City chose not to acquire the commercial property
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Meeting Date: December 7, 2015
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Mayor and Council Request for Action — December 7, 2015
Reassessment of Special Assessments Page 2 of 3
because it believed that the market for vacant commercial land will take several years to recover
sufficiently to pay the special assessments that would be reassessed against the Property.
City Staff believes that upon sale of all of the residential lots, the City will have broken even on
the Prairie Run residential properties and will be short about the amount of the $192,100.98
special assessments outstanding on the commercial property.
The new owner of the Property has met with staff asking that the Property not be reassessed for
any of the prior special assessments, or that such reassessments be dramatically reduced. Staff
informed the owner that it could not support a reduction as the City is still out this money and
other properties are still paying their special assessments levied by the City. The owner is
expected to appear before the City Council at the December 7th public hearing on this matter.
KEY ISSUES:
• The City has the statutory right to reassess the cancelled special assessments in the
amount due at the time of cancellation.
• The County has the Property valued at $244,500 for tax purposes, but it sold the property
for $250, which, when added to the $192,100.98 in outstanding special assessments, is
far less than the assessed value of the lot.
• The new owner recently had the property appraised at $150,000.
• If the City were to reduce the amount to be reassessed, it cannot later re -impose the full
amount. Any reduction will be permanent.
• If the City reassesses the full amount, there is a possibility that the new owner will not
pay the property taxes and the property may again go through tax forfeiture in
approximately five (5) years.
• Many other properties are still paying outstanding special assessments from the CSAH
19 Improvement. All special assessments from the Prairie Run project have either been
paid (on the lots that were built upon) or were wiped out in tax forfeiture, to be recovered
in part upon the sale of the City -owned residential properties.
POLICYTRACTICES CONSIDERATIONS: To date, the City's policy has been to attempt
to break even on the Prairie Run development as a whole. The City acquired the residential lots
in an effort to control the marketing of these lots in a manner that would ensure that an individual
did not purchase them cheaply from the County and then fail to pay the taxes on the properties
when the special assessments were re -imposed. The City thought it best to let the commercial
property remain in tax forfeiture until the market for vacant commercial land recovered
sufficiently to support the reassessment of the entire amount of the outstanding special
assessments.
FINANCIAL CONSIDERATIONS: Any reduction in the amount of special assessments to be
reassessed will likely mean that the City will never recover that money and will not be able to
reimburse itself fully for the money spent on this development. City Staff estimates that the City
will be very close to breakeven if the full amount of the special assessments on the Property are
re -imposed and ultimately collected.
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Meeting Date: December 7, 2015
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Mayor and Council Request for Action — December 7, 2015
Reassessment of Special Assessments Page 3 of 3
LEGAL CONSIDERATIONS: The City Council has the authority to reduce the amount of
special assessments to be re -imposed (or eliminate them altogether). If the City chooses to
reduce the special assessments that it re -imposes now, it will likely not be able to increase the
amount of these assessments in the future.
Department/Responsible Person: Mike Couri, City Attorney and Tina Lannes, Finance
Director
Submitted Through: Adam Nafstad, City Administrator-PWD
Attachments: Resolution No. 2015-042
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Meeting Date: December 7, 2015
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CITY OF ALBERTVILLE
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION No. 2 0 15-042
RESOLiTION ADOPTING REASSESSMENT ON TAX FORFEITED PROPERTY
WHEREAS: The City of Albertville has previously levied special assessments on Lot 2,
Block 1, T Square Business Park, Wright County, Minnesota ("Property") related to
improvements to County State Aid Highway No. 19 ("CSAH 19 Improvements") and related to
the installation of street, curb, gutter, municipal water, sanitary sewer, storm sewer, ponding and
related municipal improvements serving the property ("Prairie Run Improvements").
WHEREAS: The Property has gone tax forfeit and the special assessments have been
cancelled upon the tax forfeiture of said Property.
WHEREAS: The Property has been sold at auction to a private party.
WHEREAS: Minn. Stat. 429.071, Subd. 4 authorizes the City to reassess the amount of
the unpaid special assessments to the Property upon its return to private ownership.
WHEREAS: The City has proposed reassessing the Property in the amounts of the
unpaid special assessments outstanding at the time of the cancellation of said special
assessments.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ALBERTVILLE, WRIGHT COUNTY.) MINNESOTA:
1. Such proposed Reassessment Roll, a copy of which is attached hereto and made a part
hereof, is hereby accepted and shall constitute the special assessment against the lands
named therein, and each tract of land therein included is hereby found to be benefited by the
proposed improvement in the amount of the assessment levied against it.
2. The assessment levied by this resolution shall be payable as follows:
A. The CSAH 19 Improvement reassessment in the amount of $9,941.20 shall be payable in
equal annual principal installments extending over a period of 7 years, the first of the
installments to be payable on or before the first Monday of January, 2016, and shall bear
interest at a rate of 6.1 % per annum from the date of this resolution until December 31,
2016. To each subsequent installment when due shall be added interest for one year on all
unpaid installments.
B. The Prairie Run Improvements reassessment in the amount of $182,159.78 shall be payable
in equal annual principal installments extending over a period of 10 years, the first of the
installments to be payable on or before the first Monday of January, 2016, and shall bear
Agenda Page 20
City of Albertville
Meeting of December 7, 2015
Resolution No. 20 5-042
Page 2
interest at a rate of 6.5% per annum from the date of this resolution until December 31,
2016. To each subsequent installment when due shall be added interest for one year on all
unpaid installments.
3. The owner of any property so assessed may, at any time prior to the certification of the
assessment to the County Auditor, pay the whole of the assessment on such property, with
interest accrued to the date of payment, to the City Clerk, except that no interest shall be
charged if the entire assessment is paid within thirty (30) days from the adoption of this
Resolution; and he may, at any time thereafter, pay to the City Clerk the entire amount of
the assessment remaining unpaid, with interest accrued to December 31 of the year in which
such payment is made. Such payment must be made before November 15 or interest will be
charged through December 31 of the next succeeding year, except that payment may be
made in full by January 7, 2016 with no interest accruing on said reassessment.
4. The Clerk shall forthwith transmit a certified duplicate of this assessment roll to the County
Auditor to be extended on the property tax lists of the County, and such assessment shall be
collected and paid over in the same manner as other taxes.
Adopted by the Albertville City Council this 7th day of December, 2015.
Attest:
Kimberly A. Olson, City Clerk
Jilli an Hendrickson, Mayor
Agenda Page 21
City of Albertville
Meeting of December 7, 2015
Resolution No. 20 5-042
Page 3
REASSESSMENT ROLL
PID # PROJECT AMOUNT OF REASSESSMENT
101111001020 CSAH 19 Improvement $ 9,941.20
101111001020 Prairie Run Improvements $1821159.78
Agenda Page 22
Albertville Parks Committee meeting minutes
November 2% 2015
Attendees: Tim Guimont, Andy Swanson, Sharon oakvik, LeRoy Berning, John Vetsch
City park/church fence
-City is looking to replacine the fence between the church and Central Park.
Westwind Park
- LeRoy brought some plans he drew up for suggested improvements to Westwind Park. The
committee will consider the suggestions and discuss it further at the January meeting.
Parks update
- oa kside Park gazebo is complete, turned out nice.
- Four new boards were installed at the hockey rink. They had to be retrofitted. This is a trial
and more new boards will likely be added in the future if they work well.
- Merry-go-round: estimate to sandblast and powdercoat is $1,,000. Tim suggests having the
merry-go-round in Four Seasons Park repaired to see how it turns out, and then consider also
having the one in Central Park, which is bent, repaired.
- There was more discussion about replacing the fence along first baseline at baseball field, with
consideration of adding a net to the top.
- Committee requests $150,,000 for baseball field lights and other park upgrades, majority of
upgrades will be for Westwind Park. Albertville Lions have committed to help fund the baseball
field lighting project, and other sources have shown interest.
Next meeting: January 25, 8:00
Minutes recorded and prepared by Andy Swanson, andy.swanson99@gmail.com; 763-370-2428
Agenda Page 23