City of Watertown reaches purchase agreement for Hutchinson Road Property

By Matt Bunke, Community Editor

The city of Watertown has reached an agreement to purchase the property at the corner of Hutchinson Road and Highway 25 that had become the source of conflict as to whether the land should be used as an addition to Highland Park or developed commercially.

The property owner had previously reached an agreement to sell the land to local Subway owner Steve Erhard, who planned to develop the property into a commercial building that would house his relocated restaurant, in addition to as many as three other businesses. However, the city council essentially blocked that deal last month when it voted not to amend the city’s 2030 comprehensive plan and re-guide the property from residential to parks and open space.

Instead, the council directed city staff at that time to begin looking for a funding mechanism to purchase the property as an addition to Highland Park, which occupies the rest of the block. After meeting with the owner and real estate agent, a deal was reached for the city to purchase the land at 804 Hutchinson Road for $115,000, a figure that reportedly matches the private market deal that had been reached with Erhard. According to city administrator Luke Fischer, the property had been valued by the Carver County Assessors Office at $119,000 in 2011 and $106,000 in 2012.

The council approved the purchase agreement by a 3-1 vote, with Michael Walters – who had previously voted to re-guide the property and allow the Subway development – voted against the agreement. Councilor Nicholas Hoese was not present.

While the land is expected to be used as an addition of some sort to Highland Park, Mayor K.J. McDonald and Councilor Rick Mann, the biggest proponents of purchasing the property, indicated that additional park space was not the major factor in their decision. In fact, both indicated that the city did not need more park space, especially with the proposed development of a 40-acre community park on the other end of town, but said their decision was more about preserving the Highland Park block and its surrounding residential neighborhood, and limiting commercial development to the other side of Highway 25.

"To me, this is an investment," Mann said of the purchase. "You’re investing in the future image of Watertown and Watertown is designed in the 2030 Comp Plan to look like."

The funds to purchase the property will come from the Park Dedication Fund, which currently contains about $276,000. However, those funds were widely intended to be used for the development of the Community Park site near the Elementary School, which was the main reason the purchase was opposed by Walters.

"It gets to be a lot of money for a little piece of property that is almost unusable," Walters said of the 1.33-acre plot. "The whole problem here is that it was incredibly irresponsible for the city to guide that as parks and not have and funding to ever buy it. Now it’s time to buy it, and we have to steal from Peter to pay Paul."

The city has however, created a mechanism to replenish the funds in the Park Dedication Fund, it hopes, within 3 years. With the elimination of the city finance director position this year, the city has excess money that was levied for but won’t be spent. That money will instead be directed to a new capital improvement fund, which could be contributed back to the Park Dedication Fund until the money used for this property acquisition is replenished. The Capital Improvement fund, which would eventually be funded by a stable tax levy, would later be used for equipment needs, facility upgrades, and things of that nature.

While Walters was appreciative of the effort to replenish the funds as quickly as possible, he was still uncomfortable with redirecting money from the community park site to parks elsewhere in the city.

"That’s 3 more years that something might not be happening out at the (Community) park, and I’m having a problem with that," he said. "I’d really like to see something get going with that."

Councilor Steven Crowder, who had voted at the last meeting to amend the comprehensive plan and allow the Subway development, ultimately voted in favor of the purchase agreement this time. However, he too indicated he was uneasy about taking money away from the Community Park plans and the potential for slowing that project down. He indicated that his support for the purchase of the property at 804 Hutchinson Road stemmed mainly from a desire to "make things right" with the property owner, whom the city would leave in a tough spot if it left the land guided as Parks but did not purchase the property for its own use or allow the owner to sell the land for commercial development.

In addition to the $115,000 to purchase the property, the city will also take on the roughly $17,000 that were to be assessed to the property this year for the reconstruction of Hutchinson Road this summer. The cost to demolish the structures on the property is expected to be donated.

Prior to the council’s discussion of the topic, former Mayor and longtime Watertown resident Jerry Hirsch addressed the council in opposition to purchasing the land, saying any money the city had for park purposes should be dedicated to the community park. He also told the council he believed it "has no vision for the future, is anti-business and makes its planning decisions by being reactive instead of proactive."

However, the council members who have supported the addition to the park have emphasized that it is not about adding park land as much as it is about preserving the area. The councilors who voted against the Subway proposal also have indicated that they aren’t opposed to Subway’s proposal for a new store, just the location of it.

"It’s not an easy decision – I don’t like anything about it," Mann said. "But my belief and my job is to do what’s good for the long haul. My belief is that if there was a big concrete building there in the future, people are going to say, ‘what were you thinking.’"

McDonald also expressed confidence that this purchase will not be a significant hindrance to plans for the Community Park.

"In my heart of hearts, I honestly believe that the Community Park plan, which is a 10 or possibly even 20 year plan, will come into being, eventually," McDonald said. "The money we’re going to borrow from the current park fund also will be replenished. I’m confident of that happening."