Commentary; Posted: 3/15/06
Hereís why Tschida resigned
Dick Tschida
Guest Columnist
If you think my resignation was predicated on the issues of affordable housing or diversity, you are wrong. It is about community heritage, blood, sweat and tears.
There is always two sides to every story. In my view, this is the ìDavid (the citizens) vs. Goliath (political power, money and egos) syndrome. Maybe when you see both sides of the story you will be able to make your own decision of what was most appropriate.
Letís look at the facts and what was at stake for the community. In the 1950-1960s a vision for a local hospital district was born. A contribution drive gathered $115,000. This was the start for what was to become District Memorial Hospital in the Memorial Hospital District.
In 1960 Melvin and Violet Swanson gifted land to the project with ìperpetualî covenants in accordance with the Articles of Incorporation of Memorial Hospital, Inc.
In 1976 they gifted additional land to form todayís campus site. The districtís governance was by an elected hospital board directly responsible for the physical site and a fiduciary responsibility for the ad valorem taxes collected.
Over the years about $2.5 million in taxes were collected. To get a perspective in current dollars, the assessed value today, according to Washington County, exceeds $7 million. One could say this in the communityís asset value.
What has happened to the asset?
In 1995 the hospital board entered into a lease with Fairview with an option to purchase for $1 on Jan. 1, 2006. Was this acted upon? According to the citizen lawsuit it wasnít. Thatís one of many defects cited by their lawsuit. So what did happen?
In 2004 Fairview entered into a purchase agreement with Duffy Development to purchase eight acres of he campus for $600,000. This is a year and a half before Fairview was allowed to exercise its purchase option and appeared to violate the lease.
It is obvious that adherence to the lease, covenants and zoning were of question, as the content of the lease was specific, the covenants were still recorded and the comp plan zoning didnít change until Nov. of 2004.
Did Duffy and Fairview have that much foresight, or was this project being orchestrated by unknown forces? Now the plat is getting thicker.
Fairview entered into a lease and then a purchase agreement with Lakes International Language Academy. This led to the city of Forest Lake giving the school a conditional use permit covering the entire campus.
Now there are two purchase agreements on one piece of land that hasnít been subdivided, covered by one CUP and the Fairview purchase option hasnít been exercised.
Now enters Duffy armed with an entourage of attorneys and supported by Washington County HRA, HSI, HUD Minnesota Housing Finance and the county attorney. Why all this interest in the project?
HRA supported it because itís part of their plan. HSI is a Duffy partner in the project. There is HUD funding of $600,000, $110,000 in block grants, $100,000 in foundation grants and the MHFA granted Duffy $4.2 million in tax credits plus $1.8 million in financing, and the county attorney thinks Duffyís claim of discrimination should be addressed.
All the heavy hitters are accounted for. The lawsuit by the citizens and Duffy are on the table. Where does it go now?
In January, the city council denied the Duffy request for a CUP and subdivision on grounds the property already had a CUP on it and the recorded covenants prohibited this use, thus precipitating the lawsuit.
The citizens lawsuit questioned the legality of the hospital boardís action in enforcing the lease and perpetual covenants in an effort to block the sale to Fairview. What happened next was bizarre.
The council granted the school an expansion of their CUP, reduced the land covered by the CUP and approved a request to support the $7 million in Pine City bonds.
What effect did this have? It allowed the school to show potential damages if they were detained forcing the citizens to post a bond for $3 million. Where does the citizen group get monies to post that amount of a bond? They canít, so they settle the suit.
What about the Duffy suit? On Feb. 15, the council reversed its decision on a 3-1 vote and gave Duffy his CUP and subdivision. Did that take away the lawsuit? No, but it did cave in to the leverage of Goliath.
Whatís the bottom line? The community loses the $7 million asset, the validity of the covenants is not resolved and the purpose of the gifting, blood, sweat and tears for a public purpose is gone forever.
On the other side, Duffy gets $4.2 million in tax credits, over $2.5 million in grants and finances, while stuffing his project down the publicís throat.
Where are his supporters? Fairview, the hospital board and other power mongers just fade away as if they were never there.
Is this a done deal? Not until Duffy settles his suit with the city. Already there is talk of free water, sewer, park land donations and other construction considerations being made at a $300,000 plus cost in taxpayer expense to buy off Duffy.
Watch for the consent and decree as there may be more surprises.
Knowing the whole story, I chose to support the heritage of the community and all those who worked so hard to make Forest Lake what it is.
This did not afford me the intestinal fortitude to sit on a city council that directly opposed the business community with the Broadway roundabouts and medians and then cave in to the Duffy project litigation.
Now you have my side of the story.
Dick Tschida is a former councilman in Forest Lake.
Forest Lake Times
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