Gouge or fair price? Tiny parcel divides Minneapolis officials

The Minneapolis Park and Recreation Board this month approved buying a $1.8 million parcel of land on NE. Marshall Street for about $49 per square foot.

But at the same meeting, members recoiled at being asked to pay $5 per square foot for a tiny chunk of land nearby.

The reason?

Some park commissioners feel the city's development officials are gouging them by charging $14,090 for the smaller piece of land.

The Park Board's view, argued most passionately by Commissioner Jon Olson, is that the city has no other feasible buyer for that small parcel. It's about half the size of a typical city lot and sits in the shadow of a rusting high-voltage transmission line tower.

The Park Board wants the land for a planned East Bank trail that will stretch from nearby NE. Marshall Street to Boom Island Park. What frosted some commissioners is that last year they approved a no-cost agreement downriver on the West Bank that allowed the city to build a trail that runs through Bluff Street Park.

So why not return the favor, they asked. "It's completely ridiculous," Olson said, arguing that the tiny piece of land at 1326 NE. Water St. is otherwise unmarketable for the city.

But the city says this is connected to a larger deal in which the city previously sold land to the park system for the partly developed Veterans Memorial Park. According to Wes Butler, the city's manager of residential finance, the parcel in question was held out of that sale because it was encumbered with a railroad easement. The railroad agreed to lift that easement for a price, to be paid by the city and the Park Board. So the sale price was the city's way of collecting the Park Board's share of the easement price, plus the land's fair market value.

Commissioner John Erwin argued that the trail planned for 2016 will pay dividends for the city in higher property values. "I mean, this is the gift that keeps on giving," he said.

He's also concerned about what the price could mean for future land purchases.

"I shudder to think what they're going to charge for the upper harbor if they're going to charge $14,000 for this little triangle," Erwin said, referring to a piece of city-owned land that will be divided between city plans for a business park and Park Board plans for a parkway and recreational paths.

The board ordered its staff to do some harder bargaining with the city.