In a carryover from the City Council meeting, the Ways and Means Committee considered legal action against Dean and Roman Adams over a late 2017 property sale that has yet to be finalized.
Reading from his notes, City Administrator Shannon Stassen read from his notes that the committee, on a recommendation from the City Attorney Stephen Larson, had two questions to answer regarding the delayed sale of the property to the Adams. One, is the city willing to pay the taxes on the property that the Adams contest they shouldn’t pay as they don’t have ownership (deed) of the property yet, despite currently being the key holders and renting the residence out? And two, whether to take legal action to enforce the purchase agreement and terminate a mechanics lien placed on the residence by Dean Adams?
It was also noted that a closing date, the latest of several, had been set for Wednesday, but that Larson had been informed that Roman Adams wouldn’t pay the taxes despite being in possession of the home and collecting rent. Regarding the mechanic’s lien Larson stated, “property that has a public holding shouldn’t have a mechanics lien, but it still currently shows as a cloud.”
The property taxes amounted to a total of $1,639 according to Angel Weasner, finance director. Roman Adams also claimed to have incurred $1,500 in legal fees above the $5,000 the City had agreed to pay over the past few months caused by the continued inability to close the deal.
According to the Adams, they believed they owned the property after previously signing closing documents, but after signing a housing contract with HUD they were informed by the bank that they did not own the property because Stassen and Mayor Wayne Melbye had signed a different deed than the one, they had. Since then the City had also prepared several addendums, which Stassen stated several times that Roman Adams had signed including an easement for the flood levy and a trail. The lien served to the City on the property by Dean Adams since the first signing after Adams replaced the furnace and added an egress window.
The conversation twisted several times to different aspects of the purchase agreement and addendums as to why the closing hadn’t been completed with Larson repeatedly reminding the committee they should only directly discuss the two questions asked as anything else could be permissible in court.
Councilman Bobby Baird repeatedly asked why if there were changes to the purchase agreement, which had been approved by the council, was the addendums not brought before council for their approval. A question he never did get an answer.
Jake Fee made a motion for the City to play the taxes and the closing to happen on Wednesday. Melbye began to ask the Adams if they would agree to that and close on Wednesday as scheduled when Larson said that because they are represented by legal counsel the council was unable to negotiate with them directly and their proposal would need to go through the Adams’ attorney. Dean Adams did state that, “Wednesday may not be possible because Roman’s loan approval is a year old and we’ll have to redo the papers.” After which Larson reiterated the City was ready to close Wednesday.
Fee amended his motion to remove Wednesday so that the City would pay the outstanding taxes if the closing happened soon. Councilman Steve Erickson also stated, “not the first issue, won’t be the last.”
The motion carried 9-0 on a show of hands from voting members of the committee with the understanding Dean Adams would remove the lien at closing. “We’re settling on a property that has been in question for quite some time,” said Stassen. “It looks like we’ll be able to close on Wednesday,” despite the Adams concerns the loan may not be re-approved on that timetable.
In the end, the City will pay $5,000 in Roman Adams’ legal fees as previously agreed, plus the additional $1,639 for property taxes on a deal the City won’t see any money from. Adams will be responsible for his remaining legal fees currently totaling around $1,500.
Particularly troubling is the City has merely been acting on behalf of the State, which owned the property and the revenue from the sale will go to the State.
The rest of the Ways & Means Committee meeting proceeded relatively quickly without much discussion as the two other items were the approval of the past two meeting reports, which passed unanimously and a request for a fund transfer for the Small Cities Development Program.
It was recently reported by Ken Buchanan that the Commercial Property improvement applications had been very active and in fact, the grant had requests they were unable to meet. The staff recommended that $20,000 from the revolving funds used for the Owner-Occupied Improvement Program be transferred to a Multi-County HRA to supplement the funds for this year.
Councilman Tom Vedbraaten asked what the full needs were and if it was more than $20,000 why not move more, while Councilman Clayton Briggs asked if the $20,000 was for one project or multiple. Stassen said the funds would currently be for one project and the committee always has the authority to approve another transfer if needed.
Fee also asked why the rental funds haven’t been used and whether the money was only available for downtown. Stassen informed him that he had checked whether the unaccounted-for rental funds could be used to supplement the commercial funds and was told that the grant allows commercial funds to supplement rental funding, but not the other way around. He also confirmed that grant is specific to a certain area, in this case downtown. The committee moved to pass the transfer unanimously and will bring it before the council at the next meeting.
“There has been a lot of interest in the commercial properties getting improved,” said Stassen. “There was an opportunity to help a little more and that’s what we’re doing with revolving money from previous grants and loans so it’s not coming out of the City coffers so to speak so revolving that back into the community for commercial improvements.”
