At a special meeting March 17, the Ramsey City Council unanimously approved a settlement with Minnwest Bank Central that will end the protracted litigation over RTC.
Councilmember David Jeffrey was absent.
The council authorized entering into a $6.75 million purchase agreement for the 150 acres on which the bank holds a $35 million mortgage, which now exceeds $36 million with penalties and interest.
The 150 acres is the remaining land in the 322-acre RTC project that remains to be sold or developed.
The $6.75 million will come from an internal fund transfer from the city’s water utility fund, a $1.5 million letter of credit put on the project by deceased RTC developer Bruce Nedegaard and $559,352 in city back taxes for the property Minnwest must pay as part of the settlement.
The purchase will free the property from foreclosure, protect the city’s infrastructure investments and position the project for additional private development, said City Administrator Kurt Ulrich.
The city will be able to re-shape the future development of the town center in a manner that is market driven and meets community needs, said Ulrich.
“In its current situation, this property doesn’t benefit the city or its residents and in fact, it puts our community at risk,” he said.
“Buying this property will allow us to put our community’s vision back on the map, move forward in a way that best meets our needs and build a better future for the entire region.”
The city will be buying 61.3 acres zoned for commercial development, 51.8 acres of residential, 30.9 acres of park land and 4.2 acres of drainage easement and roads.
Although some of the land will need improvements before it’s sold, a lot of the property is ready for the project to move forward, Ulrich said.
As part of the purchase agreement, Minnwest Central Bank will be required to pay the $1.35 million owed in back taxes, interest and penalties to the city, county and school district and provide the city with signed sale consent forms from the 25 banks that have purchased interest in the mortgage.
The sheriff’s sale on the property is scheduled for March 20 and the closing on June 26.
The closing needs to be done by June 30 to allow the city to file for tax exempt status on the property. If is not closed before then, the purchase price will be reduced to reflect the taxes the city will have to pay for 2009.
Buying the land was the last option for the city, said Councilmember Matt Look.
The purchase will protect the community’s vision for the project, safeguard the parks in RTC and allow the city to recover back taxes and prevent the property from going into tax forfeiture, he said.
According to Look, the city plans to sell the property at the purchase price or better.
This is not a bailout with people’s taxes, Look said.
That is merely the start of the report, it is well detailed, so again, here is the link.
In a perverse way, I kind of favored perpetually leaving it exactly "as is" as an ongoing monument to the stupidity and hubris and BS of the Met Council, planners, and others involved in the ill fated project's inception - those having active roles in both planning and implementation, but especially those doing the propagandizing, the Town Center Task Force folks, Met Council muck-a-mucks, and the John Feges/Bruce Nedegaard selectees; awards and almost never ending egregious self-congratulatory back patting (tent show speeches and all), that Ben Dover and all of the rest of us had to endure, ad neasueum, earlier in time.
Carping over that now is simply recognizing pay-back time, when it so clearly presents itself and those vocal earlier are now strangely silent.
However: Practically, this work-out step removes a gridlock situation and allows flexibility in the city's mop-up operation. Spending concerns were not overlooked or waved away dismissively, although the banks might have been pushed into something even less costly if more time had passed in stalemate.
That's a speculation over a policy decision and unproductive. We go with what the new council thought best and see what happens in the next few years.
Removing the stalemate and then waiting is not a bad result.
I have yet to review the special meeting full agenda online to see all detail of the settlement, but full detail and disclosure should be there on the City website - even if without a special City website homepage heads-up link to it.
Bob Ramsey's comment to an earlier Crabgrass post indicated that there was no shell-game being played, and with the special meeting approval now in place it is all public data, in all that means regarding citizen access rights.
It no longer is a matter of relative positioning over pending litigation, which is one of the public data access exclusionary provisions.
We can all have a look.
With current nationwide "stimulus" planning and budgeting not likely to yield a short-term housing and economic recovery, (absent more pump-priming than presently being allocated), more stimulus spending will have to follow. This sets the failed thing up for some federal subsidy money - federal money "socialism" and all that --- the thing that "property rights" folks and "tax league" people will endlessly rail about with much rhetoric, but with both hands extended to assure getting a share.
It is similar to Michele Bachmann and her apparent disingenuity over "pork spending."
In theory she's staked a position, in actuality she is wanting stuff for her district.
Go figure.
In a Bill Clintonesque way, I suppose it simply depends on how you define "honest" in a public spending context.
Practical adjustment to realities should usually trump inflexibility over ideological stances, with the latter being the parade-item around election time regardless of what follows when true decision-making compromise becomes necessary.
We wait. We see.
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Looking at raw numbers, $6.75 million for a total 148.2 acres works out to $45,547 per acre; and that stuff is probably not really worth that. So if it is later sold by the city for less, subject to some kind of development plan and committment, letters of credit and all, it would not be a bad deal. On the other hand, this kind of accounting sets a benchmark - and a sale for substantially less would require much scrutiny to assure no sweetheart deal was being played. Owning it, as tax free municipal holding generates zero tax income for Ramsey but does allow imposing requirements in any sale to others wanting to risk development. And with the relative areas zoned/designated/planned as the Sakry report describes, any sale to a developer with different acreage allotments again would have to be scrutinized and sanitized. There are constraints, not hard bounds, but constraints.
When I get to studying the detailed settlement papers, the question is how differently would the City have come out, if buying it at their own tax foreclosure sale, for lack of any other willing and able buyer. My guess is the same dollars and cents situation would have applied, while this settlement might allow the banks to show less of a capital loss taken on their books, presuming thin bank capitalization is a concern on that side of the litigation. But that's only an ill-informed guess.