Excelsior finds itself on hook for development review costs

Excelsior spent months considering developer Jon Monson's pavilion proposal for a waterfront park, all the while expecting Monson to cover the city costs associated with the review.

But when the city sent Monson a bill for nearly $24,000 for the services of an engineer, planner and attorney, Monson contested the billing.

"We went through a year of meetings where Mr. Monson presented his proposed pavilion," said City Council Member Mary Jo Fulkerson. "It was always our feeling, as citizens of Excelsior, that ... Monson was paying the cost."

The disagreement has lawyers on both sides working toward a compromise to share the costs, with the city paying the larger share. A final deal could come before the council for approval on Monday. Fulkerson is the sole council member opposing a compromise.

Mayor Nick Ruehl said he will consider a deal, though "I fully expected Jon to be responsible for the costs associated with this project. Had I known that this was going to be borne by Excelsior, I would have argued very, very strongly against" reviewing it.

The city now has a policy requiring developers to agree in writing and put money in escrow to cover consulting costs if they want the city to consider their plans. "That was a hard lesson to learn," said City Manager Kristi Luger.

City officials had relied in the past on verbal agreements with developers about consulting costs, and they thought they had such an understanding with Monson, Luger said. "It is particularly hard to collect the money when the project has not been approved."

Cash up front to be required

In the future, with every application that involves a consultant, developers will have to put down money "before we would even talk to them," Luger said. "We are a small city. We don't have the staff. So we do need to get our cost back."

Monson approached the city in September 2007 with a proposal to build a pavilion, complete with shops, a restaurant and wide verandas, like one that stood on the city's Lake Minnetonka waterfront from 1902 to 1922.

The proposal set off intense debate over whether the city should allow development in the waterfront park that gives Excelsior its signature view of the lake. Hundreds of people turned out for meetings.

Ultimately, the City Council voted unanimously last April to keep the land as a park. Then in November, city residents passed a charter amendment saying the Commons Park and Port of Excelsior "are to be preserved as parkland in perpetuity."

Monson's position on the bill is described in a letter from his attorney, Beverly Aho, to the city. The Feb. 20 letter says he agrees that at a council work session in November 2007 he acknowledged that the city would bill his development group for its expenses in reviewing the pavilion. But he believed at the time that he would be permitted to submit a land use application for the project and get formal city review.

Request denied early in 2008

In January 2008, the City Council denied Monson's request to submit a land use application. After that, Monson believed he was making presentations "at the request of the council and for illustrative purposes only," according to his attorney's letter.

The city ordinance requires fees to be paid only when an application has been submitted, Monson said. When he was not billed as the city's review went along, he took that as confirmation that the city was shouldering the costs. Monson received the city bill in October 2008.

City Attorney Kevin Staunton has advised the council to accept a compromise.

But Fulkerson said she was surprised by Monson's position. "This man does wonderful work. He has done a lot of work with the city. Why would he balk and get everyone in the city mad at him?"

Laurie Blake • 612-673-1711