Lawsuit against city heads to court Friday

Defense seeking order for plaintiffs to post $700K surety bond

 

Clint Riese
News Editor

Round one of the lawsuit concerning the city’s municipal campus is set for this Friday, March 1, and this time, everyone involved will be ready.

The case got off to an inauspicious start last Friday at the Washington County Government Center in Stillwater, where the defendants planned to ask Tenth Judicial District Court Judge John C. Hoffman to require the plaintiffs to post a surety bond in the amount of $700,000.

After waiting 90 minutes to be heard, those assembled left in quick order: the plaintiffs’ paperwork was still processing in the court’s computer system and Judge Hoffman had yet to access it.

He ultimately left it up to the lawyers whether to proceed or reschedule, though he hinted it would be hard to act without studying both arguments.

“This is big-time litigation,” Judge Hoffman said. “…It’s just, to me, not right that one party now knows I don’t have what they gave me.”

The plaintiffs – Lakes Area Business Association, Cameron and Cassandra Piper, and William Anderson – filed their paperwork the previous evening, said their attorney, Fredric “Fritz” Knaak.

“I do feel it’s important the court review the documents we have presented. I don’t want to feel disadvantaged,” said Knaak, noting he regarded his argument as dispositive.

James Thompson, representing the City of Forest Lake and the Forest Lake Economic Development Authority, was amenable to Knaak and agreed to reschedule the hearing.

Thompson did inform Judge Hoffman that the EDA and City Council were set to vote on a contract for a construction manager this Monday and that some expenditures relating to the project were likely.

“Is it the end of the world?” Thompson asked. “No, but it will create some problems.”

The new motion hearing is set with Judge Hoffman at 2:30 p.m. Friday.

Defense’s Argument

The defense’s motion for last week’s hearing states that the bond is being sought as security for any potential loss or damage to the public agencies or taxpayers as a condition of proceeding in the case.

Between escalated construction costs and related expenses for aspects such as cost engineering and material delivery, the defense argues the lawsuit has the potential to cost taxpayers in excess of $700,000. The motion asked the court to order the bond to be posted in seven days or, if unpaid at that time, dismiss the case with prejudice.

“In summary, the pendency of this lawsuit is going to have a significant disruptive effect on the timetable for the project and could cause significant financial damages to the City and EDA,” Thompson wrote in support of the motion. “Because of the uncertainty created by the lawsuit, the city administrator has recommended to the City Council and EDA not to proceed with either site preparation or construction of the facility until a final outcome is reached in the case.”

The defense seeks the surety bond pursuant to state statutes 469.044 and 562.02, and cited several cases involving public bodies where surety bonds were affirmed by Minnesota courts.

Plaintiffs’ Argument

In the plaintiffs’ memorandum opposing the motion filed last week, Knaak argues that there is no legal basis for the surety bond, and that the defendants failed to establish potential damages beyond the realm of speculation.

“There is no present danger that any current opportunity will be lost if the project is delayed pending trial,” Knaak wrote. “The City of Forest Lake already has a City Hall. No developer has been selected. The Northland Mall isn’t going anywhere.”

Piper this week responded individually to the city’s motion.

“As is typical in this type of litigation, the city has chosen the low road of procedural maneuvering and blockades rather than allowing the courts to hear the case on its merits,” he wrote in an e-mail. “Sadly, it appears that the city would rather spend our tax dollars discouraging civic participation than allow us to vote on a project they assert we elected them to construct.”

 

  • Phil Fishman

    Easy for the City to play the “deep pockets” game when it’s taxpayer money they are playing with. All of a sudden there will be $700,000 in losses/damages if the lawsuit proceeds to hearing? Some might see making private citizens post a $700,000 bond in order to question City actions and processes as bullying…

  • Citizen K

    I wish Mr. Piper wouldn’t insinuate that this can all of a sudden go to a referendum. It certainly could have last year but now it is too far down the road and it’s set up as an EDA project approved by last year’s council. The land has been purchased, the bonds sold, the proceeds of that sale in an account somewhere I imagine. So, the only thing to do at this point is to let the court process play out. There is nothing the current council could do even if they wanted to other than to renege on the lease from the EDA which would do far more damage to the city than people realize! So, let’s trust the judicial system here to sort it out but don’t place blame where blame shouldn’t be.

    • http://www.EricLangness.com Eric Langness

      You’re right. The mayor and his council followers should have put this to a referendum before many citizens sought out to force them to do it with existing state law. If the mayor had really wanted the voice of the people he would have not put the city in a position to have a lawsuit!

  • John

    Paul, you are absolutely right. The city is a bully and using every bit of this position against the residents and businesses.

  • Matt

    The city argues that “the lawsuit has the potential to cost taxpayers in excess of $700,000″? Uhm, I thought the EDA is paying for the project with revenue bonds? You know, so that they could avoid a public hearing and deny the public any recourse through petitioning for a referendum? According to state law, the full faith and credit of the city and its taxpayers only guarantee general obligation capital improvement bonds. Revenue bonds are to be paid with incoming revenue, not tax dollars. Oh, that’s right, the city is paying the EDA “rent”!

    The city can’t have it both ways. If a slight delay to make sure the city didn’t break state law can cost taxpayers just south of a million dollars, clearly the project should’ve been funded with GO capital improvement bonds and not revenue bonds in the first place.

    The city of Forest Lake is utterly and totally corrupt. These kind of schemes and shenanigans can be expected in D.C. – it is so depressing to see it so close to home. Kudos to the Pipers for their attempt to make the city actually follow the law.

    • John

      Matt,

      I can understand if people disagree with decisions that are made, but stating that the City of Forest Lake is ‘uttterly and totally corrupt’ is over the top. I have followed this issue for sometime and everyone on both sides seem to agree that a public facility is needed.
      How do you get to the point that there is total corruption?

      • http://www.CamPiper.com Cameron Piper

        John,

        It becomes corruption when the city purposefully structures projects and legislation to avoid the will of the people. If this project is needed as you assert, then why go to such lengths to make sure that the people aren’t allowed a say? If the people truely wanted it, then a referendum on the issue would have passed easily…

        Cameron

  • http://www.CamPiper.com Cameron Piper

    For those that would like to take a stand for freedom, we would like to invite you to attend the surety bond hearing tomorrow. Help us show the judge that the citizens of Minnesota are interested in this case and cause, and are watching the process to see that justice is properly administered. The more people we can get there, the greater the potential impact.

    Our case will be in Court tomorrow (Friday) at 2:30 PM at the Washington County Government Center in Stillwater. The courtrooms are open to the public and do have seating for those that would like to view the proceedings. The presiding Judge is the Honorable John C. Hoffman, and his assigned courtroom will be listed on the electronic billboard just inside the main entrance.

    If you have questions or comments, please don’t hesitate to post them here.

    14949 62nd St. N., Stillwater, MN 55082-6132

  • John

    Please note that the comment posted by “John” and addressed to Matt is from someone different than me who posted the comment replying to Paul. I thoroughly disagree with the second “John’s” comments.

  • Other John

    From the actual Forest LakeTimes archives. Full disclosure should work both ways:

    “The Lakes Area Business Association has elected Richard McNamara as president. During its recent election of officers, the association named Bob Linwood of Shoreline Express as vice-president, Karen Freed as secretary, and John Freed as treasurer. Clyde McCaskey of Forest Lake Desktop Publishing, and Brian Quehl of K and B Small Engine repair were elected as directors. John Freed of Forest Engineering, Richard McNamara of McNamara Insurance, and Dick Tschida of Forest Lake Arctic Cat continue in their terms.”

  • Just Wondering

    Does anyone know if any of the people who are suing the City ever have the real estate listing for the Northland Mall property? I believe at least one of the people who filed the lawsuit is a commercial real estate agent.

    • http://www.CamPiper.com Cameron Piper

      Just Wondering,

      The Property at Northland Mall is not currently listed for sale. I am a licensed real estate agent and am also a plaintiff in the lawsuit. I can assure you that I have never been involved in any way with the listing, sale, or lease of any property at The Northland Mall site. Interesting question though, “just wondering” where your thought process was taking you.

      Cameron Piper
      Coldwell Banker Burnet

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