Cliff Buchan
News Editor

The city of Forest Lake has dodged one legal bullet in the Forest Ridge dispute, at least for now.

The city and counsel from the League of Minnesota Cities was put on notice Jan. 3 that HOME Line, a non-profit housing advocacy organization, had plans to bring an administrative complaint to the Housing and Urban Development alleging violation of the federal Fair Housing Act by the city over the cityís rejection of zoning requests by the Forest Ridge project.

ìWe intend to rely on the factual allegations set out in the developerís verified complaint to argue that the cityís actions constitute both intentional and disparate impact discrimination based on race and disability,î said HOME Line counsel Jack Cann in a letter to LMC attorney Clifford Greene.

But the housing preservation project group has now softened its stand. In a brief note to the Forest Lake Times this week, Cann made that point clear.

ìWe are holding off filing as long as negotiations between the city and developer seem to be making progress,î Cann said.

Other legal issues

That will mean one less legal issue for the city to address this winter. The city is still facing legal action from Duffy Development Co. of Minnetonka and Human Services, Inc. of Oakdale, the developers of Forest Ridge, and a local citizen group, the Forest Lake Community Association.

The citizen group has sued the city and the Memorial Hospital District over decisions by Fairview Health Services to sign purchase agreements for the former District Memorial Hospital building and campus in Forest Lake.

Duffy and HSI are suing the city seeking damages for potential loss of grants and tax credits. At stake, the suit claims, is over $600,000 in federal HUD funding, $100,000 in foundation grants, $110,000 in federal block grants and over $4 million in reserved housing tax credits and other financial undertakings, including $1.8 million in financing from the Minnesota Housing Finance Agency.

In the letter to Greene, Cann said the cityís actions amount to a cover for discrimination toward the housing project. The 48-unit complex proposed by Duffy and HSI would provide 41 affordable housing units and seven units under HSI supervision and available for residents in chemical dependency recovery stages.

FLCA intervention

The delay in the complaint to HUD may be due in part to intervention last week by Richard Pecar, spokesperson for FLCA. After securing the Cann letter from the city under a formal data practices request, Pecar contacted Cann.

Pecar said the attorney was not aware of the history of the hospital campus in Forest Lake and how it came to be in 1962. Pecar said Cann ìhad no ideaî of the other uses that have been proposed for the campus in recent times, the fact the campus had gone through a formal platting in 1976, nor the fact that residents of the hospital district paid ad valorem taxes for most of the years from 1961 until the hospital closed in 1998 when the Fairview facility in Wyoming opened.

ìHe (Cann) thanked me three or four times for bringing it to his attention,î Pecar said.

In its lawsuit, the FLCA contends that Fairview defaulted its lease with the hospital district by signing purchase agreements with Duffy and a group that will buy and lease the hospital building to the Lakes International Language Academy, a public charter Spanish immersion school that has been in the building for two years.

The citizen group also contends the city 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 health care functions.

FLCA, is requesting that a judge temporarily block the sale to Fairview and void the two purchase agreements, thus freeing the city from its legal obligations in the Duffy-HSI suit.

Under its lease with the hospital board, Fairview fully intends to acquire the property for a nominal fee of $1 and would like to do so at the earliest possible date this month, according to Fairview President Dan Anderson.

More of same

Pecar said this week he was relieved that Cannís advocacy group was willing to be patient and give parties in the suit an opportunity to reach a resolution.

But even the threat of another legal hurdle is something that should never have happened, he said. Under the FLCA position, Pecar said, stronger oversight by city staff and the governing board of the hospital district could have prevented planning moves and purchase agreements that are now being contested.

ìWe feel this should never have been allowed to happen to the public,î Pecar said.

Some legal scholars have opined that the deed covenants on the hospital campus expire after 40 years. But the hospital boardís act of platting the campus in 1976 would be the starting date for any new 40 year period, Pecar said.

Those deed covenants restrict future use of the building and campus to medical and health care purposes.

They were attached to the original deed in 1959 when the Memorial Hospital Association sold the acreage to the newly formed hospital district, a municipal corporation created by the legislature.

Pecar said he and other citizens in Forest Lake are also disappointed in Fairview decisions to move on the property before it has secured ownership of the property and demonstrated clear title.

On FLCAís part, Pecar said the citizens group maintains that a city rezoning of the hospital campus parcel in November of 2004 amounted to an illegal taking of public property based on the protective covenants that are in place.

ìWe havenít opposed the (Duffy) complex,î Pecar said.

Based on his initial review, attorney Cann told Greene, ìIt is clear from the facts of the complaint that the city rejected the zoning applications necessary for this project without cause, based on community opposition. The vitriolic rhetoric used by opponents of the project, including opponents who sit on the planning commission, leave little doubt that this opposition was discriminatory.î

The group said the cityís ìgroundless and discriminatory zoning denialsî interfere with HOME Lineís advocacy efforts on behalf of low income renters in the metro area.

Top of Page

Forest Lake Times
P.O. Box 218
880 SW 15 St.
Forest Lake, MN 55025
651-464-4601
Fax 651-464-4605