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January 19, 2007

In case you didn't see these comments

Some pretty smart people read the Greet Machine, and in case you missed these comments I think they are important enough to put on the front page. Check out this comment from BP Twin:

Land Partners II in their 2005 purchase agreement with the City of Minneapolis asked for $12.95 million for their property. http://www.mntwinsville.com/topics/plan/documents/LandOption_000.pdf

That is why the state only budgeted aprox. $13m for the land. It was the Fair Market Value set by Land Partner II in 2004. Given the downturn in the real estate market-especially the condo market- the value of the land, if anything, has decreased since then.

Aha! Finally we have a real number to refer to concerning the value of the ballpark land: $12.95 million. That is some fine detective work BP Twin! So, in January of 2004, the County and Land Partners II agreed to sell and purchase the land for $12.95 million. According to the document above, and if I am reading it correctly, that agreement expired in December 2005, so the agreement is no longer legally binding in any way. But as BP Twin says, if anything the market has turned south since then and the land should actually be valued less. So, what is Land Partners II asking for it today? What should they be asking for?

Let's assume that Land Partners II isn't going to settle for anything less than $12.95 million. In fact, let's assume that they want much more (I know, tough assumption). Let's also assume that the land has not actually decreased in value. Given that this agreement was forged in 2004, and given that the typical rate of inflation is 3%, could we assume that the land today is worth approx. $13.73 million? I think that is a very fair assumption and would be a very fair dollar figure for the land.

I guess what I'm saying is given the land was valued at $12.95 million in 2004, if Land Partners II is asking anything over $14 million for the land they are way out of line.

As I've said in previous posts, Land Partners II could be asking for a price for the land that takes into account it is the future home of the Twins new ballpark. It has been my contention that the County does not want to go through a condemnation process because they know the land will be valued much higher than they have budgeted for.

Enter comment number two by Expatriate Minnesotan:

Minnesota state law says: "Any increase or decrease in the fair market value of the property from the project to be constructed may not be considered." Mpls-St. Paul Sanitary District v. Fitzpatrick, 277 N.W. 394 (Minn. 1938).

Cribbed from Mark D. Savin, An Introduction to Eminent Domain Law and Practics: A Primer After the Grand Forks Flood (MSBA CLE June 5, 1997), at http://www.abanet.org/rppt/katrina/MarkSavin-INTRODUCTIONTOEMINENTDOMAIN.pdf.

The case cited above may not be good law anymore, I suppose, but it's not often that a precedent as well-settled as that gets overturned.

So, there you have it. Another fine piece of detective work! Thank you Expatriate Minnesotan! A condemnation judge would probably not take into account the fact that a new Twins ballpark would be built on the land. This is a "well-settled" precedent from the days of the Grand Forks flood.

So, the question then is: what is the hold up? Why won't the county just go through with the condemnation process and be done with it? A judge would probably decide in their favor and find that the land should be valued at a pre-ballpark legislation price.

The answer is time. A condemnation process truly jeopardizes the project because of the time it would take to finish the hearings. The project is on a tight deadline and any delays literally cost millions in increased construction costs. The county would much rather negotiate a price for the land outside of condemnation proceedings just to keep the project on track.

So, I can imagine that Hennepin County started negotiations for the land within the framework of the January 2004 agreement. Land Partners II predictably said the land is worth much more now, and is demanding a higher price. Land Partners II has also said they would be willing to go through a condemnation process knowing that the County does not want to go down this path. It would just take too long. This obviously forces the County to settle on a price now, and Land Partners II is hoping that the price is higher than what they would get in a condemnation process.

What do you think? Is my logic flawed in any way? It probably isn't as cut and dry as I am making it out to be, but I think, thanks to the comments from BP Twin and Expatriate Minnesotan, that this is what we are dealing with.

The heart of the matter, thoug is this: if Land Partners II is asking for more than $14 million I can see why the County is balking. The land isn't worth that much. Let me know what you think.

Posted by snackeru at January 19, 2007 9:48 AM

Comments

Here is an excerpt from Sid Hartman's column the other day. If this is accurate, it sounds as though perhaps all parties could agree to move ahead, assuming a price can be reached at some point in the near future. Let's hope so.

A lot more will be known about the condemnation of the land for the new Twins stadium when a crucial meeting is held Jan. 22, according to Dan Rosen, lawyer for the land owners' group. Rosen claims the Twins could be building the stadium while condemnation hearings are being held to determine the price.

Posted by: Derek at January 20, 2007 11:12 AM

This is absurd. The Twins are at fault for not finalizing this situation before the bill was passed. I fully support the Twins Stadium and am more than willing to pay some taxes, but the Twins have to pay for any cost overruns that are they fault for not doing their work, I think Carl can afford it.

Posted by: Chad at February 9, 2007 8:04 AM

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