Cliff Buchan
News Editor

A Friday appearance before a judge could determine if there is a presumption of correctness on the part of government in a dispute over the sale and use of the former District Memorial Hospital building and campus in Forest Lake.

Michael Harnois, attorney for the Forest Lake Community Association, Inc., will ask Judge Susan Miles to deny a motion ordering the FLCA to post a surety bond to protect the financial interests of the Lakes International Language Academy.

The charter school has asked the 10th Judicial Court judge to order the surety bond in the wake of a FLCA suit against the hospital district board and the city of Forest Lake.

The lawsuit by the non-profit citizen group seeks to prevent the Memorial Hospital District from conveying the old hospital property to Fairview Health Services and calls to question the performance of local forms of government in the hospital land-use question.

In its suit, the FLCA contends that decisions by Fairview to enter purchase agreements with the charter school and Duffy Development Corporation, Inc. of Minnetonka and Human Services, Inc. of Oakdale amounts to a default of the 10-year-old lease agreement for the campus that Fairview holds with the hospital district.

Duffy and HSI, Inc. currently have plans to build a 48-unit affordable housing complex ó Forest Ridge Apartments ó on land it intends to purchase from Fairview.

LILA motion

The Spanish immersion public charter school will argue before Judge Miles that under state statute the school is a ìpublic bodyî and entitled to protection from damages from the FLCA suit.

The school argues that the legislature has enacted a statute that requires a plantiff in a civil matter to post a surety bond if the action affects a public body. If the bond is not posed, the action must be dismissed by the court with prejudice, the school argues.

In its motion, the academy states that the FLCA lawsuit may be ìinjurious to the public interest or result in loss or gain to the public taxpayers.î The academy requests that the association post a surety bond in the amount of $3.22 million, including an initial bond of $1.36 million by Feb. 10 and $1.85 million by March 10 if the claims are not dismissed.

The school, which has long range plans to expand its enrollment to 550 students, believes the lawsuit could delay its expansion plans to operate for the 2006-2007 school year.

The action before Judge Miles follows a Forest Lake City Council decision on Jan. 23 to approve land use requests for the school, including a conditional use permit.

Public body?

In its arguments Friday, the FLCA will contest the validity of the schoolís opinion that it is a public body, said Richard Pecar, spokesperson for the citizen group. He said the citizen group questions that determination based on the fact the school is subject to an annual renewal of its conditional use permit and exists with a charter at the blessing of a charter sponsor, the state Department of Education in this case.

ìIt doesnít sound like a state agency to me,î Pecar said.

ìHow can a public body and agency of the state be subject to a municipal conditional use permit that is annually renewable or denialable?î he asked. ìThe sponsorship (by the state) could be halted or canceled at any time.î

Mark Anfinson, attorney for the Minnesota Newspaper Association, says he regularly hears requests from reporters who have questions on charter school access and open records. If charter schools are a public body, shouldnít they be open as all public schools are? he asked.

ìRead together, 124D.11, subd. 1 (providing for public funding to charter schools) and 562.01 (adopting a very broad definition of ìpublic bodyî) would seem to suggest that charter schools should indeed be considered as public bodies,î Anfinson said.

ìHowever, the definition doesnít specifically mention charter schools, and so the courts are left some wiggle room. My quick review of court decisions interpreting these laws didnít turn up any previous court decision expressly applying to charter schools in this context.î

More from FLCA

FLCA contends that Section 1.2(d) of the Fairview lease of the hospital campus forbids Fairview to ìsell, lease, sublease, pledge, assign, mortgage, encumber, give, or otherwise transfer or convey any interest in its leasehold or other rights under this Agreement, or agree to do so, except as permitted herein or as agreed to in writing in advance by the District.î

Because of deed covenants on file with the hospital campus site, the FLCA also argues that since the hospital district has no power to use its property for purposes other than providing health care, the city rezoning of the hospital campus as multi-family residential in 2004 constituted a taking under the U.S. and state constitutions.

Prior to the November of 2004 rezoning, the hospital campus was zoned B-1C limited business that permits medical use only. The rezoning created an MXR3 zone that requires a conditional use permit for any multi-family housing project, according to Doug Borglund, community development director for the city.

The action by the FLCA seeks a declaratory judgment that Fairview is in default of its lease and that the lease with the hospital district is null and void.

The citizen group is also arguing that the city of Forest Lake did not enforce its ordinances for subdivision and conditional use permit requests and the hospital board is at fault for not enforcing terms of the lease with Fairview and protecting deed covenants that require the property be used for medical or healthcare functions.

A state law today indicates that such covenants are no longer in place after 40 years, but the FLCA contends that the formal platting of the hospital campus site in 1976 by the hospital board in effect attached the deed covenants to the entire parcel and not simply the existing land where the hospital was built in 1960 and 1961.

Under its purchase agreement, Fairview intends to sell some five acres of hospital campus land, including the building site, to a school group known as the Lakes International Building Company.

The building company will own the property and lease the facility to the charter school under state charter school requirements.

Cameron Hedlund, who is director of the charter school, is the only listed member of the board of directors of the building company on the March 9, 2005 certification of incorporation filed with the Minnesota Secretary of State. Lakes International Language Academy, as a state nonprofit corporation, is identified in the incorporation filing as the ìsole memberî of the building company corporation.

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