The suit, filed Wednesday in U.S. District Court in Minneapolis, stands to be among a growing number of legal challenges to communities' use of eminent domain after the recent controversial U.S. Supreme Court ruling that affirmed cities' right to take land for commercial use. In its suit, Minnesota Industrial Ventures claims it has a "cloud of condemnation" over its business because of an agreement that allows the developer, Roseville Twin Lakes, to have the city use eminent domain to secure property for the project if it can't be acquired on the open market. Besides seeking to prohibit the city and developers from using eminent domain, the suit also asks for monetary damages.
The first phase of the project would cover 80 acres and include about 730 housing units, 221,000 square feet of office space and 331,500 square feet of retail and restaurant space. Part of the retail space would be occupied by a "big-box" retailer, most likely a Costco store.
Minnesota Industrial Ventures owns and manages multi-tenant properties, including industrial and office buildings in the project's designated area.
In the suit, MIV says it unsuccessfully tried to get the area where it has its properties excluded from the proposed redevelopment site. The company later rejected a purchase offer it considered inadequate, and says it now finds itself unable to find and retain tenants. The company also said it can't sell the buildings because prospective buyers fear the properties will be taken.
In effect, the suit says, the city and developers are using eminent domain to force down the market value of Minnesota Industrial Ventures' properties so they can eventually be acquired at a lower price.
The suit also claims the city and Roseville Twin Lakes, a development group whose members include Rottlund Companies, Ryan Companies and Roseville Properties Management Co., have a "profit-sharing" arrangement that grants the city a share of the developers' anticipated profits from the Twin Lakes development.
Attorneys for Roseville Twin Lakes could not be reached for comment Thursday.
Rod Krass, an attorney representing Roseville, said the suit is not well-founded because the city has not said whether it will use eminent domain to claim property for the development.
Roseville City Manager Neal Beets said "the city will vigorously defend itself against the [lawsuit's] allegations."
"We have no intent to hurt any business. If anything, the [Twin Lakes] redevelopment will enhance the area." Beets also said that there is no profit-sharing deal and that the suit's claim is "a misreading of the contract" between the city and the developers.
The suit is the latest in a series of legal challenges connected to the proposed project. Earlier this year a Ramsey County judge rejected a plea by a citizens' group seeking to halt the development for further environmental review by the state.
A separate suit by the group that contends the project would violate the Minnesota Environmental Rights Act is scheduled to go to trial in December.
Susan Feyder • 612-673-1723