Watertown exploring options for 45 tax-forfeited acres

The city of Watertown is exploring its options for this tax forfeited property along 30th Street, tucked between Tuscany Village and the Wildflower Development. (Staff photo by Matt Bunke)
The city of Watertown is exploring its options for this tax forfeited property along 30th Street, tucked between Tuscany Village and the Wildflower Development. (Staff photo by Matt Bunke)

The Watertown City Council has an interesting dilemma on its hands — what to do with 45 acres of land that suddenly it can have for as little as $250.

It certainly doesn’t sound like much of a dilemma, but the council so far is treading carefully as it decides what to do with a tax-forfeited property on the east side of town. The 44.94-acre property is bordered by 30th Street on the south, and sits between Tuscany Village on the south and the Wildflower development on the north.

When tax-delinquent properties are seized by the state, the Minnesota Department of Natural Resources first gets to review them and has the opportunity to claim an interest in any property it wishes. From there, the list is given to the county, and any remaining properties, such as this one, are then passed on to the city.

The city of Watertown has several options when it comes to tax-forfeited properties. It can approve the land for public auction, or if the land is determined to not be buildable, it can be offered in a limited sale to a neighbor for a minimal price, usually in the range of $1. However, that isn’t an option in this case, because 15 acres of the property along 30th Street are buildable.

That leaves the final option, which is for the city to acquire the property. It can do so at the appraised value of $140,000, which would allow the city to use the land for a public use, or to sell all or portions of the land. Or, the city can acquire the property through a conditional use deed for $250.

Under a conditional use deed, the city would have 3 years to begin putting the property toward its stated public purpose. According to city administrator Luke Fischer, there are eight different possible public uses under a conditional use deed, but the two most likely to be considered by the city are a series of nature trails or a future public service building, such as a public works facility.

When first brought before the council at a special meeting on Aug. 6, the conditional use deed seemed to be the city’s preferred alternative. However, given increasing feedback the city has received in recent years against the creation of any more city parks, the council has taken its time in making a decision, and decided to wait until all property owners within 300 feet of the property in question had been notified of it status in tax forfeiture, and the city’s possible actions. The item is expected to appear on the agenda again during the Aug. 27 city council meeting.

While some Watertown residents have expressed frustration with the city’s recent emphasis on adding park land, this scenario would be different that others in the past, and could be almost impossible to ignore. Last year, for instance, the city paid fair-market value -— 115,000 — for a 1.33-acre property near Highland Park to use as a possible future addition to that park.

In this scenario, however, the city could obtain 45 acres of natural park space for just $250. That option would seem to be especially enticing for the city because the neighboring Wildflower development, one of the city’s largest residential subdivisions, currently has just a 0.3 acre park on the north side.

Potential new trails in the tax-forfeited property would likely be used for walking, biking, snowmobiling, or other recreational purposes, and would likely only be brush cut or woodchipped in order to reduce maintenance costs for the city. The $250 fee would also come at almost no risk, because if the city would eventually decide not to pursue its stated use for the land, the city would simply relinquish its interest in the property, and the process would simply start over again in 3 years.

However, if the city does acquire the land through a conditional use deed, part of the property — the 15 buildable acres along 30th Street — could potentially also be used for a public-works type facility, either at the city or county level. Fischer said Carver County has expressed past interest in relocating its current shed at the Highway 20 roundabout, and the city had inquired about the county’s interest in potentially using the property in question through some sort of a lease agreement. However, the county is only beginning to explore all its options, and has at this point made no indication it desires to make use of that 30th Street property.

While there is obvious incentive for the city to take advantage of a conditional use deed, city council member Michael Walters inquired during an Aug. 13 council workshop about the potential for buying the entire property outright for $140,000, subdividing the property, and selling the 15 buildable acres for a profit while still maintaining the other 30 acres for public use.

Fischer indicated that could be an option, but the city would have to come up with the funds up front, and pointed out that there was no guarantee that the city would recoup that money quickly. If the city was able to sell the land quickly and make a decent profit, it may make sense, but Fischer said that if it would be numerous years before the city recouped its cash, it would likely make more sense to acquire the property through a conditional use deed.

Fischer said that if the city takes the property through a conditional use deed and uses the land for its stated purpose for the next 15 years, it can then petition the state for a quick claim deed, which would relinquish any of the state’s interest or restrictions on the site and enable the city to do whatever is sees fit with the land, possibly subdividing it at that time and selling the 15 buildable acres.

Of course, there is also a possible incentive for the city to not stake a claim in the property at all, and allow it to be sold at auction. If the land is acquired for private development, the city could stand to gain tax revenue from the property.

While the conditional use deed seems to be the most likely course of action for the city, several council members noted on numerous occasions that this was a unique opportunity for the city, and they wanted to make sure the public had a chance to offer input before any decision was made. The city must notify the Carver County of its intent by Sept. 17.

Contact Matt Bunke at [email protected]