Posted: 2/12/03

FL EDA will proceed with downtown condemnation action

Cliff Buchan
News Editor

A second phase of the Park Place commercial development on the south end of N. Lake St. in downtown Forest Lake could be under construction by summer.

Action by the cityís Economic Development Authority Board on Monday set in motion a process that will lead to the acquisition of the Schneller property. The board voted 3-0 with two members absent to proceed with condemnation proceedings for the buildings which house Dona-Leís Cafe and the Balloon Shop.

If a preliminary timetable spelled out on Monday holds true, the Park Place development could be in position to start construction in early summer.

The decision to move ahead with use of the EDAís power of eminent domain was recommended by city staff on Monday.

Dan Wilson, the cityís development consultant and tax-increment financing expert, said a decision by the EDA would be needed soon to allow the FHV partnership to coordinate construction of the second phase of Park Place, a three-story mix of commercial and housing units.

The first phase from E. Broadway north to the former Van Wirt Building is heading toward a fall completion, said Mark Finnemann, Forest Lake, project architect and developer.

The EDA earlier used TIF funds to acquire the Van Wirt property from Craig Schwarten, a chiropractor. The Van Wirt property is directly south of the three store fronts owned by Perry and Lou Schneller.

With the Schnellers now retaining an attorney and willing to negotiate a purchase, Wilson recommended moving ahead but said the development group would accept any EDA decision.

Wilson said he recently met with Gene Happe, another partner in FHV Development. Wilson said the group was willing to move forward with the second phase or end its development. But with the first phase reaching a point where steps are necessary to coordinate a second phase, the developers said time was drawing short.

ìWeíre running out of time,î Wilson said.

Wilson said he was optimistic because negotiations with the Schnellers were in place and the EDA may be able to avoid going to court for condemnation.

Under a development agreement now in place with FHV, the developers will pay up to $440,000 of the acquisition cost of the Schneller property. The EDA would cover any additional cost above $440,000.

Next steps

Dave Hebert, EDA attorney, said the process approved Monday will authorize the quick taking of the property. In reality, he said the actual acquisition could take up to six months if the full condemnation proceeding is needed.

Approval of the resolution on Monday authorizes Hebert to file the matter with the Washington County District Court. Once the filing is made and a court date set, the city can proceed with notification to the property owner of the cityís quick taking of the property.

Once that notice is given, businesses would have 90 days to relocate or close. The EDA would be responsible for relocation expenses,

Wilson said the 90-day notice would likely be given in early March once Hebert completes its legal steps.

Restaurant update

Wilson said questions around parking remain as planning continues for the lakeside restaurant on what is now municipal parking lot ground.

The Lake Park Development group is yet to secure additional properties in the downtown needed to make the project work, but negotiations continue. ìThere is not a lot of room to work,î Wilson said.

DíWayne and Jackie Fladland, owners of Forest Theater Building, addressed the EDA asking about alternatives that may be in the works. If the theater building is not needed by Lake Park Development, the Fladlands said they are ready to entertain new proposals.

ìAnother developer has expressed interest in our property,î Fladland said, describing the interest as ìpreliminary.î

Wilson said it was his understanding the Lake Park group is still considering the Fladland site. The Fladlands said they have received a purchase offer and plan to respond.

In Wilsonís view the matter boiled down to a simple question: ìIs your property available, and if so, at what price?î

The Fladlands said they were confused because theyíve received mixed signals as to the buyer of their property ó the EDA or the Lake Park group.

Under the cityís development agreement with the Lake Park group, the developers have the first shot at forming a plan that incorporates the new business and utilizes downtown properties including the Fladland building.

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