Posted: 3/5/03

Schneller deal takes shape

Cliff Buchan
News Editor

A negotiated settlement has apparently eliminated any need for the city of Forest Lakeís use of eminent domain in acquiring three downtown store fronts.

At a special meeting last Friday, the cityís Economic Development Authority board voted 3-0 with two members absent to accept a purchase agreement for the property owned by Perry and Lou Schneller. The approval was contingent upon receipt of a formal written agreement, which was received following the meeting.

The EDA through Dan Wilson, its development consultant, entered the picture last year when the Schnellers and FHV Development, the builders of Park Place in the downtown, could not strike a deal.

Thanks to Wilsonís brokering, that deal was reached last week, the city will not have to begin condemnation proceedings in court to acquire the property to enable the second phase of Park Place to proceed this spring

It does mean the end of three businesses now operating in the property. The Schnellerís own of the three businesses, The Balloon Shop. Officials said the business will relocate.
Dona Leís Cafe and Design by J & L, a basket shop, are the others.

Under the preliminary deal discussed last week, the Schnellers agreed to a $325,000 ìas isî purchase offer.

The city will also pay the owners a $20,000 relocation claim and $1900 for appraisal fee reimbursement while producing a clear title to the property.

The time schedule calls for the EDA to take possession on April 30.

The Schnellers on Friday gave the owners of Dona Leís and Design by J & L a 60-day notice to vacate the building.

Time sensitive

Wilson said the quick pace of the schedule was taking place in order to meet time schedules for the Park Place developers. Wilson said the developer needs access to the land by May 1 and was willing to contribute an additional $25,000 of project cost.

To meet the May 1 deadline and allow occupants 60 days to vacate the buildings, action had to come on Feb. 28, Wilson told the board.

Under the proposed agreement, the Schnellers will be paid the $20,000 relocation fee at closing time by agreeing to a $50,000 confession of judgment clause that protects the EDA should they not vacate the buildings. A closing date no later than April 1 is anticipated.
Relocation fees to Dona Leís and Design by J & L are yet to be determined.

Wilson said he would meet with the two business owners this week in an attempt to bring closure.

Dale and Donna Schultz, owners of Dona Leís, have said they will close the cafe. City officials said Friday the owners have a right to move to a new location and be paid to do so by the EDA.
Donna Schultz said Friday the cafe would remain open for business as usual throughout March and April.

More details

In approving the preliminary purchase agreement, the EDA received approval from FHV Development to amend certain terms of the development agreement between the EDA and FHV.

The revised terms are:

ïFHVís agreement to increase its payment to the EDA for the Schwarten and Schneller properties from $360,000 to $425,000 to be paid at time of sale on May 1.

ïIncrease the tax-increment financing reimbursement from $360,000 to $425,000.

In the development agreement signed last year, FHV agreed to add $360,000 for acquisition costs for the Schneller buildings and the Van Wirt Building owned by Craig Schwarten.

Last fall the EDA purchased the Van Wirt Building from Schwarten for $362,500.

Mark Finnemann, an architect and partner in FHV, said Friday the timing was critical in order to meet project schedules and enable the second phase of Park Place to begin in a coordinated fashion with the construction completed to date.

Park Place, a three-story mix of commercial, retail and housing unit space, is moving toward an October completion.

In approving the preliminary deal last Friday, EDA members Bob Morehead, Judy Bull and John Tom Lynch were in support. Members Ray Daninger and Glenn Neujahr were absent.

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