Regents could force East Bank land sale

Paul Sand

A University Board of Regents committee will vote Thursday on whether to approve the first step in enacting eminent domain – a state law allowing the University to purchase land, even when the property owner doesn’t want to sell – on three pieces of East Bank property.

McLaughlin Gormley King Co. owns one 1.5 acre parcel and Union Pacific Railroad owns the other two pieces of property located between Mariucci Arena and the Burlington Northern rail line.

According to regents’ documents, the University has offered $650,000 to McLaughlin Gormley King, and $416,000 to Union Pacific for the properties.

Sue Weinberg, University Real Estate Office director, said the University would rather work out a purchase with both companies than proceed with eminent domain. The property plays a crucial part in the University’s recreational and intercollegiate sports district plan for that area, she said.

According to Minnesota’s eminent domain law, a governmental entity is allowed to buy property at a fair market price, provided it can demonstrate a public purpose for the land. Property owners may challenge the decision by proving the land has no public use or is unnecessary to accomplish a public purpose.

A state district court must approve the sale.

Regent bylaws require the University to meet with the surrounding community as part of the process.

The University has threatened for nearly four years to enact the law on McLauglin Gormley King’s Fifth Street property, said company President William Gullickson.

Gullickson said seizing the land is not in the University’s best interest given the uncertain future of state funding to the institution.

“We don’t think it’s an appropriate use of the University’s scarce resources, but the (University) Real Estate Office obviously disagrees with us,” he said.

Gullickson said his company is meeting with developers to discuss redeveloping one of three buildings on the property for possible commercial use. He added he would like to see how the University intends to use the property before deciding if or how to fight eminent domain proceedings.

“I don’t know how aggressively we’re going to fight this,” Gullickson said.

Union Pacific Railroad, however, has a different stance from McLaughlin Gormley King.

In two letters sent in May 2001 and November 2002, railroad officials advised the University that the property is not for sale. However, in the same November letter, officials said they would consider a 20-year lease to the University for a one-time payment of $302,000. The University currently leases the property for snow storage.

Union Pacific Railroad spokesman Mark Davis said the University and the railroad have a difference in selling price. The railroad had the property independently appraised, he said, and that appraisal price is higher than the University’s offer.

Davis said it is against Union Pacific policy to release specific information on the sale of property, including appraisal or asking price.

Davis said despite reports of Union Pacific being unwilling to sell the land, it has never been the case.

“We always have been willing to sell it. We had a disagreement in price,” he said.

Weinberg said Union Pacific Railroad has not indicated to the University that the property always has been for sale.

“That’s not it at all,” she said.

The University would rather have a negotiated sale with both companies, including Union Pacific Railroad, Weinberg said.

“We’ll go back and make them an offer, and they can counter if they want,” she said.

The University would use the McLaughlin Gormley King Company parcel to build four outdoor tennis courts to complete the Baseline Tennis Facility. These courts would be incorporated into the long-term University Park Plan – a mixed use intercollegiate athletics and recreational sports park.