Commissioner buys Newport bar in transit development area

  • Article by: KEVIN GILES and LIBOR JANY , Star Tribune staff writers
  • Updated: December 21, 2013 - 10:05 PM

In her public role, Autumn Lehrke influences policy and spending in Newport. In her business role, she bought a bar in a project zone.

A Washington County commissioner who wields significant influence over taxpayer-funded construction has bought a commercial property in a key transit redevelopment area in Newport.

Autumn Lehrke, a first-term commissioner, abstained from the most recent vote to award a construction contract for a new transit station in the river town, but her $300,000 investment in the nearby Red Rock Saloon has raised questions about a potential conflict of interest at a time when the county is studying the surrounding area for an infusion of public money.

“Conflicts happen all the time and the ethical thing to do is to abstain from the vote,” Lehrke said. “I wanted to remove myself as much as I could to avoid that issue.”

Autumn Lehrke and her husband, Derrick Lehrke, a City Council member in nearby Cottage Grove, plan to renovate the blue-collar Red Rock Saloon into a microbrewery with an outdoor patio. A block of houses and small businesses separates the saloon from the transit site, but a much wider area that includes the saloon is under study for potential new parkland, retail businesses and housing.

The Lehrkes bought the bar in November, about the time the Washington County Regional Rail Authority, which Autumn Lehrke chairs, was immersed in decisions about the future of the land west of Hwys. 61 and 10 and south of Interstate 494. She abstained from the Nov. 5 vote to award a $970,000 contract for construction of the transit station, although on Oct. 22 she voted in favor of a $1.3 million contract for grading, utilities, paving, landscaping and irrigation on the 5-acre site.

The rail authority, which is the five-member County Board by another name, makes decisions about local rail service.

Newport’s transit station will open next fall as the first component of the 30-mile Red Rock Corridor that will stretch from St. Paul to Hastings. The commuter route will begin with express buses but could eventually include bus rapid transit or even light-rail service.

Autumn Lehrke also chairs the 11-member Red Rock Corridor Commission, a multi-jurisdictional government panel that oversees transit development.

Microbrewery location

Lehrke, 32, said that “a few months ago” she and her husband started their brewing company, Opinion Brewing Co., LLC.

They decided to buy the Newport saloon, which she said appeared on the market unexpectedly, only after looking at prospects in Cottage Grove and Hastings. Buying the Red Rock Saloon was cheaper than renting a building, she said, and they were drawn to its proximity to the freeway.

“I realized that people might perceive a conflict of interest,” she said. “When we saw the building, it’s a couple of blocks away from the transit station, so right away I was like, ‘Oh, no.’ ”

The bar’s location on 21st Street also falls within a much larger project area being studied for revitalization by the Washington County Housing and Redevelopment Authority (HRA), an agency whose mission includes economic development. The HRA, although independent of the County Board, relies on it for some funding each year.

Newport Mayor Tim Geraghty said a conflict of interest would arise “if there’s development going on in that immediate area,” particularly if Lehrke continues “promoting activity that promotes business developments which would benefit their business.” Construction of the transit center could be an economic boon for the area, Geraghty said.

Commissioners weigh in

Lisa Weik, who chairs the Washington County Board and whose district borders Lehrke’s district near Newport, said public concern runs deep over her purchase of the bar.

Critics have described the transaction as “instant equity,” Weik said, and it raises questions about whether Lehrke will profit personally from public-policy decisions related to the redevelopment zone.

“Why would you even risk that or invite that?” Weik said. “I’m just sensing a general public distaste for anything where the perception is not crystal clear. It’s said that when people run for office they should represent their community and not their personal interests and personal financial gain.”

Lehrke said she saw postings on Facebook calling her purchase of the property into question. “I just don’t understand what I should have done,” she said. “Had I waited to put in the offer after the vote, that would have been shady.”

Other commissioners said that they saw no conflict of interest but that they recognized that some people would perceive it that way.

“I don’t think this can be viewed as any insider knowledge,” Gary Kriesel said.

Fran Miron said that because elected officials operate in the public realm, information about the long-term financial benefits of the Newport development were available to anyone, not just commissioners.

“The thing so many people forget about all of us is that we are residents of the county, we do business within the county and we pay taxes in the county,” said Miron, a Hugo dairy farmer. “It’s hard to separate sometimes what we do with the county and what we do with our own jobs.”

But Jen Peterson, a Cottage Grove City Council Member who has monitored the transit station project, disagreed, saying Lehrke is “going to have to decide whether she’s a county commissioner or a property owner.”

“There were other votes that she was involved in and there will be more votes that will take place in the future, and if she has to continuously recuse herself from votes that will affect her district, I have a problem with that,” Peterson said. “I just think the infrastructure and road work that will happen in that area to accommodate the traffic, Commissioner Lehrke will have to vote on some of those things. And if she can’t, then she really isn’t representing the district.”

‘A reason to stop’ in Newport

George Kuprian, who heads the civil division at the Washington County attorney’s office, said Lehrke had asked him whether she should abstain from voting on the transit center.

“We basically told her there’s a possibility of an accusation later on about it,” he said. “That’s why I took the question seriously. Problems could arise if she voted in favor of it.”

Kuprian said the law doesn’t clearly establish a conflict of interest in her purchase of the bar. However, he acknowledged that she could profit from its eventual sale.

“She felt there’s a real likelihood that a bar will benefit from a transit station,” he said.

Lehrke said she hasn’t purchased a commercial property since she was elected to the County Board in 2010. She and her husband also own rental property in the county.

She said that she would consult with the county attorney’s office on any subsequent votes and that Opinion Brewery would be good for Newport.

“This is just what they’ve been waiting for, a young entrepreneur to come in and get rid of some of the blight,” she said. “If anything, people are now going to have a reason to stop in Newport.”

She denied that she and her husband bought the bar to gain financially from commuter traffic.

“People that go to that park-and-ride lot are going to be leaving Newport,” she said. “There’s nothing there.”

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