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Equal Time

February 24, 2007 1:18 AM

It doesn't sound like the land sale issue is going to be resolved any time soon. It seems only fair to hear from the landowners' representatives as they try to explain what's going on. This is from WCCO TV in tonight's news:

Feb 23, 2007 6:41 pm US/Central
Landowners In Twins Ballpark Project: Not Greedy

John Reger
Reporting

(WCCO) The landowners in the Twins ballpark project don’t like being portrayed as greedy.

The stadium plan is stalled right now over how much the land is worth, pitting Hennepin County against the group that owns the land. The landowners said the problem is that the County isn’t keeping an agreement to have an arbitration board set the purchase price.

"We've never, ever said that you can have the property for a price you name," said Richard Pogin, a general partner of the landowner group.

He said from the start, the deal with government officials has been that if a fair value couldn't be agreed on, the property would be taken by eminent domain and a Hennepin County court would arbitrate.

"They knew that going back to 2004,” said Pogin, “it's the same as it is now, we have never ever changed that position."

Hennepin County Commissioner Mike Opat said the county never has had such an agreement.

Pogin said the County's offers have been too low, and the county’s now holding up arbitration since the parties can't agree on a price. He said it's like anyone selling their house to the government, but they can't agree on a price.

"And you say to them, well I don't agree to it," said Pogin, "but I'll agree to some independent arbitration of what the value of my house is, to which the government says, 'No we won't agree to that,' and you for asking for an independent arbitration, you are greedy."

Pogin said he's responsible to his group's investors, and he'd be sued for mismanagement if he accepted less than fair market value.

"Nobody would do that," he said, "and if we even proposed it, we would be removed as general partners, that's crazy."

Opat said the county has tried to negotiate in good faith, but the landowners want more than $40 million. Opat said the land is currently valued for property taxes at $8 million.

(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)

I must admit that I don't exactly understand this argument, which is summed up in this sentence:

...if a fair value couldn't be agreed on, the property would be taken by eminent domain and a Hennepin County court would arbitrate.

This admits that the first method of setting the value could be through negotiation. Then, if that failed, they would be happy to accept condemnation with valuation by an outside party. But I think everyone admits there has been no negotiation here. The county said a price, the owners said a price, and the two were so far apart that no one has ever said anything else since.

So it seems as if the owners realized as soon as Pawlenty's signature was dry that they could probably do better with an outside arbiter since the county was limited by the infrastructure cap in the law. Rather than bother with pointless negotiations, they just set their price well above what they knew the county had to offer. Really, it's a pretty good strategy from their point of view.

But it ignores that any dollar amounts had ever been used in the past. Pogin makes it sound like the landowners are in the same position as someone whose house is being involuntarily seized for something like freeway construction. This conveniently ignores the fact that Land Partners II has been more than just a willing partner in this project up to this point. In fact, they initiated the whole idea of building on their land!

Asking for arbitration is certainly not a sign of greed in itself. In fact, we shouldn't fault them even if profit is the sole motivating factor. They bought the land hoping it would increase in value, and it has. Pogin is right in saying that he'd be fired if he suggested selling for less than market value.

But even they would surely admit that one of the key factors in determining the "market value" of this particular piece of property is its designation by law as the site for a new multi-million dollar sporting facility. Were there no law at all, or if the law were site-neutral, this surface parking lot would be worth a whole lot less (like, say, oh about $14MM). As Craig pointed out in a comment to my previous post, bad legislation is really the culprit here. The Legislature probably thought they were giving the county leverage by imposing a cap, when in fact they removed all leverage simply by mandating which piece of land the county needed to buy.

Perhaps the amendment to seek from the Legislature is not to raise or remove the infrastructure cap, but to simply strike the site-specific language. Just make it possible to legally consider other sites within Hennepin County and see what that does to the "market value" of this particular surface parking lot.

It was mentioned elsewhere, but there is still a similarly-sized parcel of vacant land next to the new Guthrie Theater (designated, for now, as park land). Lots of people still really think the ballpark should be on the river somewhere...

Comments


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Actually, it IS a park. It was finnished last fall.

Posted on February 24, 2007 at 10:15 PM by Andrew Highlight this comment 1

"So it seems as if the owners realized as soon as Pawlenty's signature was dry that they could probably do better with an outside arbiter since the county was limited by the infrastructure cap in the law. Rather than bother with pointless negotiations, they just set their price well above what they knew the county had to offer. Really, it's a pretty good strategy from their point of view."

In actuality however, before even bothering to negotiate, Hennepin County began eminent domain proceedings back in November of '06. The first negotiation session didn't happen till January of '07. Don't put this on the heads of LPII. If Hennepin County didn't want an arbitrator involved they should've tried to negotiate first, or they should drop the suit now. It would be beyond niave for LPII to enter into "good faith" negotiations with Hennepin County while being sued by the very same entity for the very same matter they are supposed to be negotiating on!

"But it ignores that any dollar amounts had ever been used in the past. Pogin makes it sound like the landowners are in the same position as someone whose house is being involuntarily seized for something like freeway construction. This conveniently ignores the fact that Land Partners II has been more than just a willing partner in this project up to this point. In fact, they initiated the whole idea of building on their land!"

No, he makes it sound like someone who agreed to let the government buy their home, but the government wants to give them significantly less money than it's worth. Certainly LPII initiated this whole idea in the first place, but that was under the assumption that they would recieve fair market value. Being a willing seller (which LPII is) doesn't mean that the buyer can name any price he so chooses! Someone selling their house is certainly a willing seller, but that doesn't mean I can walk in their with five dollars and then become indignant when they refuse to part with it for such a price, claiming that they initiated the whole transaction by putting a "for sale" sign in the yard.

"But even they would surely admit that one of the key factors in determining the "market value" of this particular piece of property is its designation by law as the site for a new multi-million dollar sporting facility. Were there no law at all, or if the law were site-neutral, this surface parking lot would be worth a whole lot less (like, say, oh about $14MM). "

Again, simply not true. The intended purpose of the land legally cannot factor into the value in eminent domain proceedings. And I'm amazed at your ability to pick a number like 14 million. Are you by chance a liscensed appraiser?

Posted on February 27, 2007 at 9:22 PM by Ralph the Dog Highlight this comment 2

Haha. I woke up down today. You've chereed me up!

Posted on August 18, 2011 at 7:04 PM by Kristanna Highlight this comment 3

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