Homeowners claim threat, Spicer argues miscommunication

This article was published in the Lakes Area Review on Aug. 22, 2020

Homeowners are accusing the city of Spicer of a thinly veiled threat over a temporary easement request to survey their homes on County Road 8 for a major city development project. Though the city of Spicer alleges they were simply laying out the facts, the homeowners feel the city was trying to coerce them into signing the agreement by threatening to withhold subsidies the city set aside for the homeowners to connect to city sewer and water if they refuse to sign the easement.

On Friday, the city sent out a temporary easement request to the homes on County Road 8 so that O’Malley & Kron, a land surveying firm contracted by the city, can begin surveying properties so that the city can move forward with its water and sewer project.

The city is looking to develop 52 acres of land along County Road 8 to be sold for commercial real estate. But before the city can move forward with the development, the city needs to install a sewer and water main that would force four property owners currently on County Road 8 – who are currently using a septic system and well – onto city sewer and water. The development cost is expected to be about $1 million.

If the project moves forward, the city of Spicer will charge residential property owners no more than $15,000 to install city sewer and water. With the city capping costs they are charging the property owners significantly less than if they chose to charge the property owners the full cost of installation – with the city subsidizing the remaining costs to install sewer and water to the property owners’ homes.

The letter sent to the homeowners – who have expressed uniform contempt for the project – is requesting a temporary easement so that surveyors can locate private wells, septic and enter their homes to measure the bottom floor elevations. However routine, the letter was interpreted by some homeowners as a threat to pull city subsidies for the project if the homeowners refuse to sign the easement.

The letter concludes with: “Denying this temporary easement may jeopardize any or all special assessment provisions the City Council has set,” referring to the city capping costs at $15,000 for property owners to connect to city sewer and water.

During Tuesday’s City Council meeting both Councilmembers Shelly Munyon and Jesse Gislason received calls from homeowners about the letter, who felt the letter was nothing short of “blackmail.”

“I think they felt it was a threat if they don’t allow them in,” Gislason said.

The letter, which was written by City Administrator Leslie Valiant and Mayor Denny Baker, was sent without prior approval by the City Council.

“I didn’t know anything about this letter until I got this call,” Munyon said.

Though it was perceived to be a threat, Valiant alleges that it was a simple statement of the facts. “If they don’t allow us there then we can’t get the proper elevations for their lines,” Valiant said. “And then why would you give them $15,000 if they’re not going to let us do our proper survey and assessments.”

“To me it’s a statement. They were upset, they took it as anger. That’s the way I look at it” Baker said. “Because it’s just a fact that this is what could happen.”

Both Valiant and Baker contended that the easement request was just a miscommunication, and resolved to rewrite the letter and contact the property owners.

Kenny Fransen, a homeowner on County Road 8, is undecided if he will sign the easement – though he is leaning toward refusing the city’s requests.

He expressed frustration over the lack of communication from the city over the project. “They never tell you anything,” Fransen said. “It’s just all of a sudden one day this happened.”

Though the city assured homeowners that the surveyors would follow health protocols regarding COVID-19, Fransen said he shares a home with someone who has a preexisting condition that would make them particularly susceptible to COVID-19, and doesn’t want people entering his home due to the pandemic.

“This isn’t really the best time in history to go stomping around in people’s houses,” he said.

Both Councilmembers Gislason and Munyon stated that Jeff Bergman, who lives on County Road 8, wouldn’t sign the document. However, Bergman declined to comment on whether or not he would sign the easement for this article. The Lakes Area Review also attempted to contact the third property owner on County Road 8, Julie Rote, to see whether she intended to sign the easement, but she could not be reached before press time.

“We respect the property owner if they say they don’t want us on their property,” City Engineer Randy Sabart told the council. “We try not to fan flames.”

However, Valiant said that the city needs to survey the properties so that the residents can be properly hooked onto city water and sewer, and not signing the easement could jeopardize the project’s timeline. “If they’re not going to let us have an easement we can’t go across,” she said.

The city’s thinking is that both city sewer and water are an inevitability that Spicer residents will eventually have to contend with and by providing a subsidy to property owners, they are saving money on something that will both reflect positively on their home value and something they will have to install eventually anyway.

During Tuesday’s meeting, the council also approved establishing $9.3 million in public financing and taxes, known as a TIF district, to subsidize costs to developers to build on the land development project. Only Gislason dissented to the vote.

According to Jason Murray, a financial consultant from David Drown Associates contracted by the city, the $9.2 million project would incorporate $24 million in new market value into the city.

The city held a brief public hearing before approving the TIF district, and though there were three people present at the council meeting, those in attendance did not appear to be there for the public hearing.

In a follow-up phone interview, Gislason said that he isn’t opposed to tax breaks to encourage development – they should just be used for parts of town that need reinvestment. He also elaborated that he wasn’t sold on the city’s proposed development project, and would rather see housing complexes built than the apartment complex that is currently being proposed.

“It scares me that we are going to be building TIF districts all over the town to encourage some growth and stuff,” Gislason said. “I struggle with the fact that we are having to give a discount.”

“I feel like we are setting a precedent that every time we do some building we have to offer them a TIF district,” he said.

The city of Spicer has been in discussion with Alliance Building Corporation, a construction company out of Sauk Rapids, about the proposed project for over a year now. Though the city seems determined to move forward with the housing project, a contract has yet to be signed between Alliance and the city. When the details are complete, and if the project moves forward as expected, it will be brought to a vote by the council.

Mayor Denny Baker, who is an enthusiastic supporter of the project, said the city will try to move forward with the necessary sewer and water infrastructure required so the city can go into a developer’s agreement with Alliance. If all goes as planned, Alliance hopes to begin development in the spring.

The development doesn’t stop at the proposed apartment complex. The city hopes the property will eventually be developed into a full residential neighborhood – including senior housing, townhouses, single and multi-family homes.

This is a long standing project for the city of Spicer and its Economic Development Authority. Though the city bought the County Road 8 property just last year, the city has been speculating the land for over a decade – dating as far back as 2006 when the city proposed a sewer and water connection study for a potential development project.

Once everything is finalized, the city is looking to start construction on the project as early as fall – though if that proves too ambitious, construction of the project will begin next year.