Frustrated developers sue city of Medina, claiming it's holding land hostage

  • Article by: BEN JOHNSON , Star Tribune
  • Updated: August 21, 2013 - 5:33 PM

Dispute centers on changing designations for land that developer says were unfair.


This is a view of land located at the end of Deer Hill Road in Medina. It’s a mixture of plowed, unplanted fields and prairie grasses.

Photo: Richard Sennott ,

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Two developers have sued the city of Medina in state and federal court, alleging that the city “made every effort to be antagonistic, difficult, and delay” an application to build eight rural residential lots on 80 acres of land east of Baker Park Reserve.

The suit, filed jointly last month by Stonegate Farm Inc. and Property Resources Development Corporation Inc., also accuses Medina of conspiring with a number of government agencies to artificially inflate the natural resource value of the property and to reject any commercial development on the land.

According to the complaint, Stonegate Farm purchased 170 acres just east of Baker Park Reserve in 1994, paying an above-market price for the land because of its development potential. Stonegate was content to sit on the land while waiting for water and sewer utilities to be built out to the property, but eventually it envisioned a development of about 100 homes.

In 1997, Stonegate enrolled in the Conservation Reserve Program (CRP), which is run by a division of the U.S. Department of Agriculture. As part of the CRP, Stonegate entered a 10-year contract allowing a mix of prairie grasses to be planted and grown on 110 acres of the property. Up until that point, the land had been used as farmland for decades.

The complaint states that Dave Thill, a natural resource specialist with Hennepin County, initially approached Stonegate about enrolling in the CRP and guided it through the process, an allegation that Thill downplays.

“The CRP program is a federal program … it really has nothing to do with me or the county,” said Thill.

Stonegate later realized that the decision to turn its land into a “native mesic prairie” that Thill had allegedly pushed it toward was the first in “a series of events, that has ultimately resulted in the City and others intentionally depriving Stonegate of its investment backed expectations to develop the Property,” its suit says.

Stonegate further asserts that in the years following its enrollment in the CRP, Thill “created wetland areas which did not exist and increased the areas of existing wetlands” on the property and incorrectly classified it as native mesic prairie when he evaluated the land for various government projects.

This led to the property being classified as a “high-quality natural area” as part of the Minnesota Land Cover Classification System, making it desirable for park agencies to acquire and harder for developers to build on.

“At the time when we were doing the Natural Resources Inventory [the Stonegate property] was tallgrass prairie. It was a restored prairie, not an actual native remnant … but it was a good, quality prairie,” said Thill, who denied ever being directed or pressured to play up the property’s natural significance.

When Stonegate’s CRP contract ended in 2007, it plowed over and destroyed the prairie grasses that had bloomed over the last 10 years in an effort to shed the “high-quality natural area” classification, fearing that utilities might never be built out to an area of such perceived natural importance. Despite most of the land reverting to an agricultural use, most of the property is still identified as a “moderate- to high-quality natural area” in Medina’s 2010-2030 comprehensive plan.

Tensions escalate

On June 1, 2006, Stonegate agreed to sell the northern 80 acres of its land to PRDC, but the sale was conditional upon receiving subdivision plat approval from the city.

After working with city staff for more than a year, PRDC on Aug. 3, 2012, submitted an application to build an eight-lot rural residential subdivision called Tamarack Ridge.

On Aug. 21, the city responded with a letter listing several problems PRDC needed to address before its application would be considered complete.

One of the biggest disputes centers around whether or not PRDC owns the adequate right of way to extend Deer Hill Road to the west to service its new development.

While PRDC continued to work with city staff to get its application approved, the Medina City Council passed an ordinance on Dec. 18 that increased requirements for streets servicing new developments in the city. The ordinance was seen by PRDC as a direct attack on its proposal, and PRDC staff was infuriated because they weren’t told about the proposed changes until Dec. 7.

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  • A developer filed a civil suit last month in state and federal court, alleging that the city of Medina “made every effort to be antagonistic and difficult” in trying to delay and ultimately deny an application to develop a 170-acre parcel of land adjacent to Baker Park Reserve.

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