Months of back-and-forth between parties comes to a head in council chambers this week
The Crookston City Council Ways & Means Committee agreed Monday to pay a local man’s 2018 taxes, up to $5,000 in legal fees and appraisal for a property he originally signed a purchase agreement on in July 2016 after over a year’s worth of disagreements. The 2018 property taxes for 515 Bridge Street, purchased by Roman Adams, which includes an amount from the 2017 HUD (Housing & Urban Development), totals $1,631.81.
The property is set to close Wednesday (December 12, 2018) at 12 p.m. with the mechanic’s lien, that was put on by Roman’s father, Dean Adams, for work done on the furnace and installation of an egress window, released from the property as part of the agreement.
In an April 2018 Times story, with information provided by Dean, Adams’ attorney, David Meyers, of St. Cloud firm Rink Nonnan Law Office, said that the City of Crookston sent a deed to the closing company for the property on November 1, 2017 that did not match the legal description of the July 27, 2016 purchase agreement that the City Council approved February 13, 2017 in a resolution.
In other words, the original deed was changed/altered to show a different property description than what was first agreed upon, signed, and passed by the Council.
Since the discovery, City Attorney Stephen Larson of Fitzgerald, Reynolds, Harbott, Knutson & Larson, P.L.L.P. and Meyers have been going back and forth attempting to come to a fair agreement between the two parties.
At Monday’s Ways & Means Committee meeting, City Administrator Shannon Stassen said they were still set to close on Wednesday but pointed out that he recently discovered Roman “did not intend” to pay the 2018 property taxes though Roman has been in possession of the home and collects rent. Stassen also pointed out that a mechanic’s lien remains on the property put on by Dean (for work done after Roman received the keys from Crookston Housing & Economic Development Authority (CHEDA) in late November 2017) and should be released as it’s “not legal” to do on public property.
“Why are we here; who changed the deed that we passed in February?” asked At-Large Council Member Bobby Baird at the meeting, according to meeting audio.
“There’s been an addendum signed since then and that’s been cleared,” Stassen answered.
Baird said Mayor Wayne Melbye and Stassen signed a different agreement than what the Council passed on February 13 (2017) which was sent to the abstract company who then said it was not the same agreement that was passed by the Council.
“Full lot 48 and 49, and now it’s a partial lot?” asked Baird.
Larson explained that former city attorney Charles Fitzgerald prepared the deed without the flood levee easement and an addendum was signed “very recently” with a reservation of the flood levee easement.
“The city doesn’t want to give it’s flood levee to someone,” Larson added. “Mr. (Roman) Adams unusually got possession of the property without actually closing so he doesn’t own the property but he has been in possession of the property.”
“The city administrator is looking for direction; do we want to be responsible for those taxes and confer that benefit to the Adams or, if not, than your only choice is to enforce this agreement and that’s called a specific performance action,” Larson continued.
“That’s not answering my question, if it was wrong why wasn’t it brought back to the council right away?” asked Baird. “It takes a year and a half, and thousands of dollars for this?”
Larson said he made a recommendation back in March and said he agreed that it’s taken “forever” to get resolved.
Stassen said there was a recommendation to consider litigation, but they’ve tried at “every turn” to make a resolution happen.
Ward 6 Council Member Tom Vedbraaten asked how much they’ve (the city) spent on legal fees, and after a few moments of silence, and Vedbraaten asking again if anyone had “any idea”, the mayor replied with a “no” and Stassen said “very minimal, no where near that.” Vedbraaten then said if they had to pay the taxes versus go to court they should just “get this thing settled and get it done.”
“The thing I got a problem with is if I take possession of a property and start renting it out, I sure as heck should own it and I sure as heck should be responsible for the taxes,” said Mayor Melbye.
When talk about the property description from the original purchase agreement came up, and Mayor Melbye said there was a piece about having to maintain the levee that they “couldn’t sell”, Ward 1 Council Member Jake Fee said it wasn’t just for the flood levee.
“We said to sell the lot as-is; it went against council resolution,” explained Ward 1 Council Member Jake Fee. “Go sit there to close and now they try to take your backyard away from you, it’s going to be a conflict.”
Dean asked why the city was singling this property out for an easement when two of Adams’ other properties that have a dike in the back have no easement.
“I can’t speak for what happened before but we’re not going to have a flood protection system without an easement, that just won’t happen,” answered Stassen.
“Why wasn’t this done before you sold the property to us?” asked Sheryl Adams, wife of Dean and mother to Roman. Stassen said the purchase agreement “did indeed” have an easement on it, but the things that did not match were not made whole immediately but was rectified quickly. Baird then asked again why the changes were done without the council’s knowledge and asked who had the authority to change it.
“In order to sell it you have to make it legal,” answered Melbye.
It was also said that the state still owned the property and it was being sold on behalf of the state so the city does not profit from it.
Larson warned the council that since they hadn’t yet decided if they wanted to go to litigation on it that they should be careful of what was said during the meeting.
“It’s a mess, it needs to get done,” reiterated Vedbraaten.
Ward 2 Council Member Steve Erickson asked Dean Adams about coming to an agreement or splitting the taxes and Adams answered saying they’ve incurred another $1,600 in legal fees going back and forth after they were supposed to close last week but the mayor was out of town.
“We’ve given you the easement and we’ve given you the trail, Roman hasn’t asked anything in return,” Adams explained. “We were given possession of the house; Angel reported that the deal was over and done with in December (2017) and Roman believed he owned this house when he entered into a contract with HUD.”
Soon thereafter, Fee made the motion to approve paying the taxes for Roman with the exception that the mechanic’s lien be released. Baird followed with the second. After more back and forth discussion and clarification on the closing documents, the council approved paying the taxes, up to $5,000 of Roman’s legal fees, and the appraisal with a vote of 9-0 by a show of hands.
Before the vote, Erickson squeezed in a comment saying “It’s not the first issue and it won’t be the last, we gotta stay out of it; if we don’t know what we’re doing we need to walk away from it” before being stopped by Stassen and Melbye.
Dean then requested that Larson send something to his attorney outlining the details that were discussed at the meeting to which Larson said he thought an email would suffice.
The original purchase agreement signed on July 27, 2016 between Roman Adams and the City of Crookston agreed to the sale of “Lots Forty-eight (48) and Forty-nine (49), in Block One (1), Jerome’s Addition to Crookston, Minnesota.” with, in paragraph 5, the City agreeing to deliver a Warranty Deed to Roman “conveying marketable title to the Property” subject to six listed conditions, including a public easement for a multi-use trail along the river.
The purchase price was $40,000 and the Seller (City) had 90 days from the date of the Purchase Agreement, July 27, 2016, to rescind the Agreement if the City could not get approval of the sale from the Minnesota Commissioner of Management and Budget which was later reported that they received on October 2, 2017.
“On February 13, 2017, Crookston City Council adopted (the attached) Resolution No. 26498, declaring that it was in the best interest of the City to sell and transfer all of Lots 48 and 49, Block 1 of Jerome’s Addition (Crookston, Minnesota) to Roman Adams,” Attorney Meyers explained in an early 2018 email that was shared with the Times. “The legal description of the full Lots in the Resolution is consistent with the City’s obligations under the Purchase Agreement to convey all of Lots 48 and 49.”
The City scheduled closing for November 27, 2017, at Strander Title and Abstract in Crookston to which the City “selected” the closing company and Roman “agreed,” the email continued.
On November 27, Roman’s bank wired “sufficient” funds to the closing company to pay the City for the Lots, plus closing costs, and Roman signed the Mortgage and all other closing documents.
Roman then, reportedly, stopped at the Crookston Housing & Economic Development Authority office and was given the keys and possession of the Property.
At the CHEDA board meeting on December 19, 2017, City Finance Director Angel Weasner reported that the final flood rental had been sold and transferred. On December 27, 2017, CHEDA provided Roman Adams the rental deposit.
The “Addendum to Purchase Agreement”, dated July 27, 2017, which neither Roman nor Dean Adams say they were given or shown until after the November 2017 closing, pertaining to the purchase and sale of the property at 515 Bridge Street, property description read: “Lots Forty-eight (48) and Forty-nine (49), in Block One (1), Jerome’s Addition to Crookston, Minnesota, except that part of said lots lying northerly of the following described line: Beginning at a point 75.00 feet north of the southwest corner of said Lot 48 as measured along the west line of said Lot 48; thence running in a northeasterly direction to a point on the East line of said Lot 49 being 130.00 feet North of the Southeast corner of said Lot 49 as measured along the east line of said Lot 49 and said line there terminating.—“
“The closing company rejected the Deed because it did not match the Purchase Agreement and other documents,” said Meyers. “According to Strander Abstract, the Deed was returned to the City with the request that they execute and deliver to the closing company a deed that matched the Purchase Agreement for the full Lots.”
“A.K., from Grand Forks Abstract and Title, part of Strander Abstract, the closing company, states in the January 4, 2018 email message that the City has known of the problem with the deed since December 1, 2017,” Meyers added.
Meyers continued saying the same day as closing, November 27, 2017, the City EDA sent Roman a Section 8 Housing Agreement to sign as owner-landlord of the Property. Then, on December 11, 2017, after the City was aware of the deed problem, the City EDA sent Roman as owner-landlord the list of items to repair. The letter stated that the City would withhold payment until the home was repaired. (The house at 515 Bridge Street is a rental property.)
Dean Adams was denied a building permit for the work done at the Bridge Street property with reasoning being that the permit was applied for after the work began, but Meyers stated that is was “common” for Dean to start the work then pull the permit as other past permit copies show.
“The City has denied the permit here, despite the fact that the City EDA instructed Roman to make the repairs in its December 11, 2017 Deficiency Report,” Meyer wrote. “The repairs had to be made in order for rent to be paid.”
On January 3, 2018, the City asked Roman to sign the addendum to purchase agreement to change the legal description to match the City’s deed.
Then, Adams Heating Cooling and Construction, which is owned by Dean Adams, took a Mechanic’s Lien out on the Bridge Street property and served the city (via certified mail on March 14, 2018) saying that $11,279.31 in work was done from December 2, 2017 to February 19, 2018. The mechanic’s lien was released Wednesday, December 12, 2018 right before closing.