No resolution in lawsuit against city

Judge mulling defense’s motion


Clint Riese
News Editor

Is the group suing the city made up of astute watchdogs or a pack of sore losers?

The plaintiffs in the case were categorized as both during Friday’s motion hearing in Tenth Judicial District Court.

The lawsuit’s outcome remains uncertain while a judge mulls the matter of a $700,000 surety bond, but those who trekked to Stillwater for the hearing heard plenty of fiery rhetoric.

Judge John C. Hoffman centered his questions around each side’s specific interpretations of state statutes, but both attorneys pulled no punches in appealing to the emotion that has been linked to the lawsuit’s subject for months.

Three residents and Lakes Area Business Association are suing in an effort to make the City of Forest Lake and the Economic Development Authority hold a referendum prior to building a municipal campus at a total cost of up to $22.5 million.

In his rationale for asking the plaintiffs to post a bond to protect the city from potential lawsuit-related expenses, the city’s attorney on Friday said that those bringing the lawsuit picked a moral fight in a legal setting.

“The feeling I get from their brief is ‘This really stinks. You shouldn’t do it this way,’” said James Thompson. “That’s an honorable position to have, but that should be left to the legislature.”

“They might not like what’s been done, but the remedy is not here in court,” he said later in his 40-minute opening argument.

Thompson noted several statutes he felt showed the city and EDA did not need to hold a referendum in order to bond for the project.

He also presented what he felt were similar cases where defendants’ motion for surety bonds were carried.

In addition, Thompson argued that the mere existence of the lawsuit is serving as an injunction; an option the plaintiffs have not even asked for.

“They can’t proceed with demolition or construction unless they know for sure this lawsuit isn’t going to prevent that, and right now just the proceeding of this prevents that,” Thompson said.

“Even though I don’t think there is any merit to this lawsuit, it is still pending and we have to deal with that.”

Attorney Fritz Knaak, meanwhile, cast his clients as protagonists who blew the whistle on an attempted bypassing of the law.

“What I first saw when I saw this,” Knaak said of Thompson’s list of precedents, “was a list of people who had gotten away with something. This is the first time that the citizens have essentially caught their city and demanded what should be the proper procedure here.”

He said this case is unique and will be a litmus test for whether lease revenue bonds rather than general obligation bonds can be used for such facilities.

“A lot of people in here are happy it’s gone their way and the specific question hasn’t gotten asked,” Knaak said of the need for a referendum. “Too bad, it’s getting asked now.”

Knaak asked Judge Hoffman to consider that a surety bond requirement could prevent the crux of the plaintiffs’ case from being heard.

“This is obviously about an election and our concern is, with the imposition of a $700,000 bond, that question would go away,” Knaak said. “The most fundamental, central question could go ignored here.”

Judge Hoffman repeatedly sought clarification on each side’s interpretation of several statutes, then, after more than two hours of discussion, took the defense’s motion under advisement. He has 90 days from last Friday to provide a written finding, but there is a thought his response will come in a relatively quick manner given the time-sensitive nature of the case.

When reached this week, Knaak said he was pleased with the hearing.

“I thought we had a fair hearing,” he said. “I know the city tries to keep throwing more things into the bucket. Frankly, I think they’re getting worried.”

Thompson declined to comment while the matter was under advisement.