Jul. 22—After six years of legal wrangling, Afton officials have agreed to pay $850,000 to the owners of the Afton House Inn to settle a case involving easements the city obtained to build a community sewer system and improve its flood levee.
The settlement, announced at Tuesday night's council meeting, will allow the city "to put this behind us and move forward," Mayor Bill Palmquist said.
"Although there were matters of law upon which we felt confident in going to appeal and seeking a new trial, what became obvious to the council was that the only people who would benefit from that were the lawyers," Palmquist said.
The settlement decision comes just a few months after a Washington County District Court judge ruled the city should pay the Afton House Inn more than $800,000 in damages and compensation and more than $250,000 to cover its attorney fees and expert costs.
The fight started in 2015 when the city of Afton began condemnation proceedings to acquire property from several landowners in the city's Old Village area to build a new sewer system and improve its levee.
Before commencement, the city made a written offer to Afton House Inn owners Gordy and Kathy Jarvis and their sons, Dave and Dan Jarvis to purchase the property easements. A written offer of $105,100 was made in December 2014, which the Jarvises appealed.
In May 2019, a three-person condemnation committee determined the Afton House Inn should receive $518,000 in damages and compensation. City officials appealed that decision and took the matter to Washington County District Court.
In March 2020, a six-person jury ruled the Afton House Inn should get significantly more — $805,700, to be exact.
Because the figure reached by the jury was more than 40 percent over the city's original offer of $105,100, the city also had to pay the Afton House Inn's attorney fees and expert costs, which totaled $264,000.
In October, Washington County District Judge Tad Jude ruled against the city's request for a new trial and partial judgment in the case. A month later, city officials brought a motion to vacate in the case, basing their motion on a lack of jurisdiction and claiming that the award was based on damage to lands outside the petition, but Jude ruled in favor of the Afton House Inn in May.
"The ruling was fair," Gordy Jarvis said Wednesday. "It's what the city should have paid in the first place. I want the community to know that the city was at fault in this, not us. We had to use the legal process to make it right. The city council and the mayor really cost the citizens of this community a significant amount of money. If they would have treated us fair from the beginning, it would not have cost the city the additional amount of money they had to spend."
'GET THIS BEHIND US'
City Administrator Ron Moorse said the city has already paid the Afton House Inn owners $305,100 — the initial appraisal offer, plus an additional $200,000 paid out in May. The remaining $545,000 must be paid by mid-August, he said.
"We still believe that the amount is substantially beyond what the actual value is, but at this point in the process, we have made the determination that this is the best solution to get this behind us," Moorse said.
City officials expect to receive "significant funding" from its project partners to help the city cover the additional costs, Palmquist said, noting that the city has already secured additional funding from the Minnesota Department of Natural Resources.
HELP PAYING FOR PROJECTS
The city undertook four major projects in the town's Old Village — a community sewer system, a better flood levee, reconstruction of St. Croix Trail and storm sewer improvements. The majority of the $18.1 million spent on the four projects came from state agencies, Washington County and the city, but some of the cost — an estimated $2.1 million — was assessed to about 100 homes and businesses in the Old Village.
The new $6 million wastewater collection and treatment system replaced private septic systems that could cause problems when the St. Croix River floods.
"I don't want us to lose sight of are the incredible benefits this project created — not just environmental, but historic preservation and economic stability for our commercial district," Palmquist said. "We have a cleaner river, and these properties are now out of the floodplain.... The long-term future of our historic district is secure. These are the things I hope we can get back to celebrating and building upon."