With available new housing lots dwindling in the community, the City of Crookston is more than happy to take a home lot in Evergreen Estates off the hands of the owner who no longer plans to build on it.
But the city doesn't want to pay to get it back.
At a Finance Committee meeting Monday evening, a compromise with Amy Ray, owner of the lot, was proposed. Ray, who owns the Northland Inn with her husband, Bhupen, had purchased the lot in 2006 at the discounted price of $5,000, as part of the city's housing incentive program. But, City Clerk/Treasurer Betty Arvidson explained, the discount comes with the requirement that construction on a home start within two years. If that doesn't happen, the full lot price without the discount is assessed on the property owner. For Ray, that amounts to about $19,000 on top of the $5,000 she initially paid, Arvidson said.
So Ray offered the lot back to the city for $5,000, meaning the city would essentially give her back the $5,000 and forgive the assessment for the rest of the price.
Fearing it would set a precedent that the city should avoid, council members on the committee and Mayor Dave Genereux agreed that buying back lots that people don't build on is not the way to go.
"I don't like going down this road," said council member Keith Mykleseth.
"Doing this could almost encourage speculation," Genereux added.
There are seven lots left for the city to sell in the northeast subdivision. "I know their circumstances may have changed, but we possibly could have resold that lot," Mykleseth said. "Some of the lots that remain maybe aren't as desirable as the ones that were purchased earlier. ...We shouldn't have to pay them to get the lot back."
City Administrator Aaron Parrish proposed the compromise, which would still forgive the assessment facing Ray.
Council member Wayne Melbye liked the idea.
"There have to be some kind of repercussions for backing out," he said. "It's like putting down earnest money on a house."
"We don't want people buying stuff and then thinking they can get out of it," Mykleseth added. "That's not good business."
It's a situation that's only occurred once before, Arvidson said. In that case, the city gave the property owner an extension, and construction started within the extended timeframe. "When you think of how many lots we have sold, this is a process that overall has gone pretty smooth," she said.
The proposal will be pitched to Ray, Parrish said. If she declines, the assessment will remain. She could try to sell the lot on her own, too, he added.
