Northfield is attempting to acquire two large pieces of tax-forfeited land that were part of a big housing project abandoned several years ago by its now-defunct developer.
The City Council this month submitted a request to acquire the parcels to Rice County, which is overseeing their disposition on behalf of the state. They total about 40 acres.
Heritage Development of Minnesota began building only one of three phases of Fargaze Meadows, envisioned as a 155-acre subdivision with 300 single-family homes and 330 units of multi-family housing.
In 2006, three years after starting work on it, the Little Canada developer sold the undeveloped portions to another business entity. The vacant parcels went into foreclosure in 2008.
Rice County records show more than $76,000 in taxes, penalties and other fees owed on the two parcels.
Northfield’s acquisition of the tax-forfeit land wouldn’t be an outright purchase. The City Council chose an option that allows it to pay nothing except minimal fees and special assessments. But this option limits what the city can do with the land for public uses such as parks, trails and civic facilities like fire stations. The city would have to implement its plans within three years.
“This gives the city time to assess uses for the land, to lay out a detailed plan and to work with Rice County,” said City Administrator Tim Madigan. “It’s a valuable tool the state Legislature has made available to municipalities.”
City Council Member David DeLong agrees but wonders whether the city might have increased its odds of claiming the land if it had chosen to actually buy it. “I was in favor of ponying up some cash. I think it makes our chances better,” he said.
The county is expected to make a decision in 30 - 60 days on Northfield’s request, one of several believed to have surfaced for the properties.
Fran Windschitl, the county’s auditor/treasurer, would not disclose the number and identities of other interested parties. “We have received some requests from others and will be reviewing their claims,” he said. He declined to say whether the County Board would give preference to actual purchase offers.
Windschitl said he has never encountered a tax-forfeiture case like this one.
“Usually, the properties that go tax-forfeited are ones that don’t have a lot of value,” Windschitl said. “You usually don’t see developable land for sale in this kind of circumstance.”
Windschitl said the county assessor most recently valued the two lots around $362,000. That’s down from the pre-recession peak of about $826,000.
That decline in value is one reason DeLong believes the timing might have been right for an outright purchase. Buying the lots would give the city more choices in what to do with the land, like conducting a lottery to resell them to homebuilders, he said. Like many communities, Northfield is seeing an increase in single-family construction from its downturn in the recession. It recorded 18 single-family permits last year, the highest total since 2007.
But DeLong is glad the city put forward a request for the land, even if it’s not the alternative he preferred. “Something is better than nothing,” he said.