Court backs Eagan's land move

The city of Eagan acted within its authority when it seized land for a major redevelopment of the Cedar Grove area, the Minnesota Supreme Court ruled Thursday.

The high court decided that the city's Economic Development Authority had the power to take land owned by several businesses to make way for the redevelopment, along Hwy. 13, just east of Cedar Avenue. And, the justices found, the city didn't need a binding agreement with a developer before it could condemn and take land, as the Appeals Court had said it did.

The justices sent the case back to the state Appeals Court, saying it had reached the wrong conclusions when it threw out a Dakota County judge's decision that favored the city.

A final decision on whether the city took the land legally is expected from the Court of Appeals within 90 days. Eagan Mayor Mike Maguire said the city is confident that the Appeals Court will affirm the Dakota County District Court's earlier finding -- that the city had a valid public purpose to acquire the properties.

The city still hopes to work out a deal with the three businesses that are suing: A U-Haul franchise, Randy Quam's engine shop and Larson Automotive Repair Services, which shut down during the suit.

"The city remains committed to working toward an amicable resolution with the property owners while the Court of Appeals continues its consideration," Maguire said.

The battle stems from the city's plan to build a $215 million development as it reinvests in the area of the old Cedarvale Shopping Center. The city tore down and relocated most of the businesses in the area.

Supreme Court justices also said the Appeals Court must address property owners' claims that the taking of the land was not necessary for public use and that the city's Economic Development Authority was not entitled to use quick-take procedures.

The heart of the case is how much power do cities' economic development authorities have. The main question is whether the city must first transfer its eminent domain power to the authority on a case-by-case basis or whether the authority has that power under state statute.

Officials said the litigation doesn't affect the first phase of the three-phase project. It will include a two-building hotel complex, a 275- to 300-unit market-rate apartment complex and a 150-unit senior housing complex.

Maguire said the litigation has been "a bit of a cloud on optimism" around the project.

"We're hopeful that at the appellate court level they'll be a resolution of the case," he said.