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HomeMy WebLinkAbout2016-060 Council ResolutionCITY OF LINO LAKES RESOLUTION NO. 16-60 RESOLUTION AUTHORIZING APPLICATION FOR ABATEMENT/ADDITION OF SPECIAL ASSESSMENT WHEREAS, the City Council for the City of Lino Lakes previously adopted Resolution No. 14-119, which imposed a special assessment on 550 Lilac Street, PIN 17-31-22-21- 0027 ("Subject Property") in the amount of $6,835.24; and WHEREAS, with interest, County costs, and penalties, the total amount of the special assessment imposed by Resolution No. 14-119 against the Subject Property is now $9,060.68; and WHEREAS, the owners of the Subject Property challenged the validity of the assessment imposed by Resolution No. 14-119 by filing an Objection to Notice of Delinquent Taxes in Anoka County District Court (File No. 02 -CV -15-690); and WHEREAS, the City Council reviewed a proposed "Abatement Agreement and Release of All Claims" regarding the property owners' dispute; and WHEREAS, the owners of the Subject Property have indicated a willingness to resolve the dispute on the terms described in the Abatement Agreement and Release of All Claims. NOW THEREFORE BE IT RESOLVED by the City Council of the City of Lino Lakes as follows: 1. The benefits to the City of Lino Lakes of the proposed Abatement Agreement and Release of All Claims is at least equal to the costs of the proposed agreement. 2. Granting the proposed abatement of the special assessment imposed by Resolution No. 14-119 is in the public interest as it will increase or preserve the tax base. 3. The Mayor and City Clerk are authorized and directed to sign the Abatement Agreement and Release of All Claims and to take any other steps necessary to finalize the Abatement Agreement and the dismissal of Court File No. 02 -CV -15-690. 4. The Director of Finance is directed to make application for abatement to Anoka County for: 550 and Lilac Street, PIN 17-31-22-21-0027 in the amount of $9,060.68 (original amount of $6,835.24) to be deleted from Fund #84677. 5. In accordance with the terms of the Abatement Agreement and Release of All Claims, the Council hereby levies a special assessment against 550 Lilac Street, PIN 17-31-22-21-0027, on the following terms: A. Principal Amount: $3,150.00. B. Duration: Five years. C. Interest Rate: 4%. D. Fund Number: 85006. 6. The Director of Finance is directed to make application to Anoka County to levy the special assessment described in Paragraph 5. 7. The Council further requests that the Anoka County Board of Commissioners takes the appropriate action to assist the City with resolution of this dispute in accordance with the terms of the Abatement Agreement and Release of All Claims and this Resolution. Adopted by the City Council of the City of Lino Lakes this 27th day of June, 2016. The motion for the adoption of the foregoing resolution was introduced by Council Member Kusterman and was duly seconded by Council Member Manthey and upon vote being taken thereon, the following voted in fav Kusterman, Manthey, Rafferty, Reinert The following voted against same: none (Absent - Maher) ATTEST: Bartell, Ci Cler Rein ayor CITY COUNCIL AGENDA ITEM 6A STAFF ORIGINATOR: Michael Grochala, Community Development Director MEETING DATE: June 27, 2016 TOPIC: Consider Resolution No. 16-60 Authorizing Application for Abatement/Addition of Special Assessment, 550 Lilac Street. VO 1E REQUIRED: 3/5 INTRODUCTION Staff if requesting City Council consideration to authorize application for abatement and addition of special assessment for 550 Lilac Street. BACKGROUND Mr. Morteza Salehi, owner of the Apollo Business Center located at 550 Lilac Street, appeared before the City Council on April 25, 2016. Mr. Salehi was present to request council consideration to abate a delinquent utility charge that was levied against his property as a special assessment. The City Council requested that the item be placed on the work session agenda for discussion. In March of 2010 a building permit for interior remodel was obtained by the former owner of the Apollo Business Center. The addition of showers, after the fact, resulted in a Met Council Sewer Availability Charge (SAC) redetermination. Based on the change in use three units of (SAC), totaling $6,300 became due. No SAC was collected. Mr. Salehi, acquired the property in September of 2010. Based on his statements he was not aware of any outstanding fees when he purchased the property. In 2012, following a SAC review by Met Council Environmental Services, the City informed the owners that SAC, in the amount of $6,300 was owed. A second notice was sent in February of 2013. In October of 2013 the City Council approved an assessment of the property for the unpaid SAC. The assessment should have been certified against the property for taxes payable in 2014. However, in October of 2014 the City was informed that the assessment had been erroneously applied against the wrong property. The SAC was reassessed as an "Add as Omitted" special assessment in for taxes payable in 2015. Mr. Salehi disputed the validity of the SAC since it was charged prior to his acquisition of the property. He subsequently filed an Objection to Notice of Delinquent Taxes with the District Court. Neither the City or Mr. Salehi received any status update to the objection. Mr. Salehi followed up on his objection in April of 2016 and found that no action had been taken. A hearing was scheduled for May 10, 2016. The hearing was delayed while the City Council and Mr. Salehi discussed resolution to the dispute. Following discussions with Mr. Salehi at the June 6, 2016 work session an agreement was reached to abate the interest and penalties and split equally the original $6,300 charge. The $3,150 would be levied as special assessment payable over 5 years. An abatement agreement providing for the special assessment has been executed by Mr. Salehi for consideration by the City Council. The proposed interest rate is 4% based on the City's Public Improvement Financing Policy. RECOMMENDATION Staff is recommending approval of Resolution No. 16-60, Authorizing Application for Abatement/Addition of Special Assessment. ATTACHMENTS 1. Resolution No. 16-60 2. Abatement Agreement and Release document ABATEMENT AGREEMENT AND RELEASE OF ALL CLAIMS This Agreement is entered into on , 2016, by and between the City of Lino Lakes, a Minnesota municipal corporation, Namar Property, LLC, a Minnesota limited liability company and Dena Property, LLC, a Minnesota limited liability company (Namar Property and Dena Property collectively referred to as "Owners"). Recitals A. Owners hold title to the parcel located at 550 Lilac Street in Lino Lakes, PID 17- 31-22-21-0027 (the "Property") on which is located a building known as the Apollo Center. B. In March 2010, the former owner of the Property obtained a building permit for construction of an Anytime Fitness facility within the Apollo Center. At that time, three units of Sewer Availability Charges ("SAC") became owed in the amount of $6,300, pursuant to state and local regulations. The SAC were not collected when the building permit was issued. C. The Owners acquired title to the Property in September 2010. In November 2012, the City informed the Owners that SAC in the amount of $6,300 was owed. D. In October 2013, the City Council approved an assessment of the Property for the unpaid SAC. E. Anoka County erroneously applied the assessment against the wrong property. F. In October 2014, the City assessed the SAC against the Property as an "Add as Omitted" special assessment pursuant to Minnesota Statutes chapter 272. G. The assessment remains unpaid and as of the date of the execution of this Agreement, is in the amount of $8,865.13, including penalties, interest and County costs. H. The Owners dispute the validity of the SAC given that it was assessed subsequent to their acquisition of the Property, and filed an Objection to Notice of Delinquent Taxes (Court File No. 02 -CV -15-690). I. The Parties wish to amicably resolve this dispute without further expense. NOW, THEREFORE, in consideration of the above, the covenants and promises contained in this Agreement, including the relinquishment of certain legal rights, and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties agree as follows: 1. The City will take all necessary steps to abate the "Add as Omitted" special assessment against the Property. 2. The City will replace the "Add as Omitted" special assessment with a special assessment in the amount of $3,150, payable over five years, at an interest rate to be determined at the time the special assessment is levied. 3. The Taxpayers agree that the special assessment described in Paragraph 2 is proper and waive all rights to challenge the special assessment described in Paragraph 2 of this Agreement. 4. Within one week of the execution of this Agreement, the Owners will file a stipulation of dismissal with prejudice with the Anoka County District Court, File No. 02 -CV -15-690. 5. In consideration of the City's abatement of the "Add as Omitted" special assessment and its replacement with the special assessment described in Paragraph 2, the Owners, for themselves, their heirs, administrators, representatives, successors and assigns, and anyone who obtains rights or claims from any Owner, hereby unconditionally releases and forever discharges the City, its current and former City Council members, agents, employees, representatives, insurers, and attorneys ("Released Parties") from any and all actions, causes of action, liability, claims, and demands whatsoever that are based on the "Add as Omitted" special assessment and/or the special assessment described in Paragraph 2. This release of all claims specifically includes, but is not limited to, any claim or demand for payment by the City based on alleged loss revenue, inability to develop the Property, or denial of any permit to the Property because of the unpaid assessment amount, as well as any and all claims regarding the validity of the "Add as Omitted" special assessment or the Special Assessment described in Paragraph 2 or the authority of the City to levy either special assessment. This release of claims applies to claims that are known, unknown, asserted, or unasserted as of the date of this Agreement. 6. This Agreement will be governed by the laws of the State of Minnesota. 7. The provisions of this Agreement shall be severable, and if any provision hereof or the application of any such provision under any circumstance is held invalid, it shall not affect any other provision of this Agreement or the application of any provision hereof. 8. The Agreement shall for all purposes be deemed to have been mutually drafted. 9. The effective date of this Agreement is the date upon which it is fully executed by all Parties. 10. This Agreement constitutes the entire agreement between the Parties relating to the subject matter discussed herein. No Party has relied upon any statements or promises that are not set forth in this Agreement. No changes to this Agreement are valid unless they are in writing and signed by all the Parties. By signing below, each Party acknowledges that it read this Agreement, that it had an opportunity to review this Agreement with legal counsel, and that it understands and agrees to be legally bound by this Agreement. NAMAR PROPERTY, LLC CITY OF LINO LAKES Dated: Dated: By: By: Morteza Salehi-Mashaei, Manager Jeff Reinert, Mayor 313 Heritage Trail 600 Town Center Parkway Circle Pines, MN 55014 Lino Lakes, Minnesota 55014 DENA PROPERTY, LLC ATI EST: Dated: Morteza Salehi-Mashaei, Manager Dated: 313 Heritage Trail By: Circle Pines, MN 55014 Julianne Bartell, City Clerk 600 Town Center Parkway Lino Lakes, Minnesota 55014 RRM: 232646