Review Oak Terrace Land Sale and Development Plan

Staff has been working with City Attorney Knaak and Jonathan Septer, the Oak Terrace Attorney, for the past two years to bring resolution to a property line dispute between the City and Oak Terrace.  City Staff has also been working with the ownership of the park to work through building related and code enforcement related items not related to the property line dispute. Progress has been made in this area. This action dates back to City Attorney Langel and his position, which has been affirmed by Attorney Knaak, that Oak Terrace is trespassing and does not have any adverse possession rights over public land.  Staff previously discussed two options with the Council relating to the sale of city property to Oak Terrace. Option 1 would be to sell 12,265.7 square feet, which would bring the property into compliance (removing the encroachment) with the property line dispute and square off the lot with the adjacent parcel. Option 2 would be to sell 4520.3 square feet, which would only solve the property line dispute but would create an odd remnant that likely would lead to future encroachment by the park and its tenants.  Entering into an encroachment agreement, rather than a sale, to bring the property into compliance was also discussed, but it was not the preferred action based on the required monitoring and the likelihood that the park would spill over past the new area encumbered by an encroachment agreement.  Staff has obtained an appraisal for both Option 1 and Option 2. Staff prefers Option 1.

Oak Terrace prefers Option 1 which would square off the lot, and they are willing to pay the appraisal amount of $41,100 plus legal costs. As part of this purchase agreement / dispute settlement, Oak Terrace is asking to add six additional homes onsite to help recoup the cost of the expense of the land acquisition. It also gives them an opportunity to rearrange a few homes over city services, and to pave more area for parking.  Planning and engineering have reviewed the proposed site plan and home locations and are satisfied with the layout.  Additional easements may be obtained to ensure that City infrastructure is accessible. Staff believes the squaring off the lot prevents future issues and makes the land to the west more marketable without a small flag remnant and is supportive of the proposed purchase agreement.  It should also be noted that because this action is considered a dispute settlement, there is an allowance of the expansion of a legal non-conforming (six more homes) use that has been confirmed by City Attorney Knaak.

If the City Council determines that it would like to recommend Option 1 or 2, the Purchase Agreement would need to be sent to the Met Council (RALF Division) for review.  If the purchase agreement is deemed acceptable, Staff would bring it back to the City Council for approval at a later date.

1 to 2 months

All proceed from the sale of property would be returned to the RALF program; the City will not receive any revenue. Legal costs are being placed on the Buyer.

Economic Development Manager Sullivan
City Attorney Knaak
City Administrar Hagen

Sell land to Oak Terrace (Option 1 or Option 2)

or

Direct Staff to negotiate an encroachment agreement and bring back for City Council consideration

or

Go to court and obtain an unlawful detainer and likely have a subsequent court case centered around adverse possession and encroachment (trespass

or

Something else