Group Involved in Lawsuit Against the City Go Public

ST. CLOUD -- The group of St. Cloud residents suing the city over the sale of land in Heritage Park to developers to build the Costco Store have made themselves public. They are Chris Rice, Andy Fritz, P-IKE Investments, Chris Coborn, Mike Steil, and Tim Torborg

The lawsuit was filed in August of 2018 by a group calling themselves Citizens for Government Accountability.

At the time the lawsuit was filed, spokesman Jon Austin told WJON news the people behind the lawsuit want to remain anonymous, at least for now, out of fear of retaliation.

In December of 2018 Costco, in court documents, said it wanted to join the lawsuit because the plaintiffs are suing only the city, even though they knew Costco and the city had signed a purchase agreement.

Court documents say a date has been set for lawyers to argue whether the lawsuit should be dismissed.  The hearing between Citizens for Government Accountability, Costco and St. Cloud is scheduled for October 25th in Stearns County court.

The group sent the following letter to WJON news Monday:  

We are the Citizens for Government Accountability. Contrary to what the City wants you to believe, we’re not anonymous and we’re not strangers to this community; we are a dentist, a general contractor, a developer, a grocer, a plumber, and a real estate investment firm.

We’re St. Cloud residents and taxpayers and we share a belief that our government should be well-run, honest, and law-abiding, and that it should be a good steward of the public’s resources – whether that’s our tax dollars or our property.

Our association came together on the news that the City would be selling part of Heritage Park to Costco. Not because we objected to the sale or to Costco, but because the City sold this land – land belonging to the taxpayers of St. Cloud – for millions of dollars below its fair market value. We objected to the City claiming that the land was worth only $3,525,000 when the land has been appraised for $8,700,000. We objected to the loss of more than $5,000,000 that could have been used for other civic needs or to simply reduce the tax bill of every St. Cloud taxpayer. We objected to the fact that the City violated Minnesota law when it let this sale go forward.

On this last point, Minnesota’s subsidy law is clear: if a City sells property for more than $150,000 less than its fair market value, that difference represents a subsidy and the City is required, among other things, to hold a public hearing where the buyer has to spell out the number of jobs being created and the wages it will pay. In this case, the City sold the park property to Costco for $5,000,000 less than its fair market value but no subsidy hearing was held. No commitments on jobs and wages were secured.

Every knowledgeable real estate professional, appraiser, and developer we’ve spoken to describes the Heritage Park land as the most valuable commercial property to become available in St. Cloud in decades. Despite that, the City did not list it for sale or even market it. Just the opposite, the City entered into a “letter of intent” to sell the property to Costco, apparently to block others from purchasing the property for more money.

How does this affect us as citizens of St. Cloud? There are three major effects.

First, we lost out on millions of dollars in revenue because the City sold Heritage Park – our property – for less than its fair market value.

Second, over the coming years, the City will receive much less in property taxes because it valued the property below fair market value.

Third, if the City had entered into a subsidy agreement with Costco, Minnesota’s subsidy law would have made Costco accountable for jobs and wages for a period of five years. With no subsidy agreement, we have been denied that opportunity.

The City has tried to distract everyone’s attention from its own actions by making the identity of our group members a story. The City wants you to believe that our association is nothing more than Coborn’s trying to eliminate a competitor. Those allegations are false. While Chris Coborn is an individual member of our association, his interests – as a member of our community, as a fourth-generation leader of his family’s business, and as a tax-paying resident – are the same as the rest of us: to make sure our community receives a fair benefit for the sale of one of our most valuable assets and that our elected representatives follow the law.

This community places an incredible value on Heritage Park, as shown by the number of our St. Cloud neighbors who shared their concern overselling this historic piece of our city. If our City government has decided the better use for that property is commercial, we only ask that our City fight for what we are due – either fair market value or a subsidy agreement with the buyer.

We will continue to press our case forward to get the truth out and to see that justice is served.

Citizens for Government Accountability
Chris Rice
Andy Fritz
P-IKE Investments
Chris Coborn
Mike Steil
Tim Torborg