Developer’s empty lots pose problem
Who should pay for the paving of streets in a Milaca housing development that may soon be in foreclosure mode?
City Council members and two partners in a finance company debated that for an hour at last Thursday’s council meeting and the result was the tabling of a resolution for those assessments until next month.
This past summer the city completed streets at Fieldstone Greene, a development that began during the last decade on the northeast side of town.
The resolution that would have passed on assessments of $4,163 each to 25 lots in the development owned by the developer was the one that was tabled after the lengthy discussion.
City Attorney Richard Schieffer, after a public hearing was opened, listed three reasons for council members why they should approve the resolution. He also said such assessments are within the city’s authority, and authorized under state law and the United States Constitution.
Those three reasons:
1. A provision in the development contract that gives the city authority to complete the project after notice is given to the contractor.
2. A city ordinance that requires that all streets be built to city standards. If there is failure to build the streets properly, the city is allowed to finish the project and assess the cost.
3. State law includes a nuisance ordinance that deals with free travel and free use of the road, and the city has corrected that condition.
Schieffer also told council members that the city must show that the cost of the improvement is reasonable, and that the city had done that by using a competitive bid process.
Dave Buelow then introduced himself as the president of All-American Commercial Title, saying that he and his partner who was present, Ron Kveton, were the financiers for the Fieldstone Greene Development.
“We own lots there and one single-family home,” he told council members.
He told council members that he and Kveton have already lost $400,000 on the deal and that they didn’t want to be associated with the developer. He said his company plans to soon begin foreclosure procedures against the developer, T & M Properties of Central Minnesota.
Buelow said that if the assessments go through, the remaining lots won’t be sold.
“In essence, you’re making the lots unsalable for the near future,” he said.
For the full story, see the Thursday, Oct. 25 print edition of the Times.