Dave Halverson attended a public hearing Tuesday night to request that the city postpone acquisition of his property, the former Sharkee’s Bar and Grill.
Luverne City officials had started the process of eminent domain last fall to demolish the blighted structure on South Highway 75 and to address public nuisance issues that had developed.
Tuesday’s public hearing is required by statute as part of the process, in order to allow testimony.
Halverson’s attorney, Nicholas Maxwell, Mankato, spoke on his behalf.
“We’re here to ask that the council make a choice that’s consistent with how people in this community would like to be treated in the course of government taking property,” Maxwell said.
“Eminent domain is a fancy term for taking. It’s an extreme act of government to take private property. … This is a taking.”
By statute, the city wouldn’t simply take the property; it would pay the value of the property as determined by a panel of three impartial appraisers.
Maxwell pointed out that Halverson isn’t interested in liquidating the property and he intends to take responsibility for the property.
In fact, in 2013 Halverson had worked with the city on plans improve the lot through Tax Increment Financing.
According to those plans, Sharkee’s would be demolished and reopen in its current location in 2014. The new commercial L-shaped building would also house Sears, Verizon and a drive-up coffee shop.
Series of unfortunate events
But in April of 2014 Sharkee’s closed due to health code violations, mainly basement sewage backup, that forced its shutdown.
Then on May 26, 2014, the building suffered damage from a fire reportedly set by arsonists. The arson remains under investigation but is essentially a cold case.
Halverson’s insurance carrier, Auto Owners, denied payment on the fire claim, essentially alleging that “someone close to” Halverson — a former employee — had been implicated in the arson.
While that individual had been questioned, no criminal charges were filed, so Halverson sued his insurance company.
“If someone other than you sets fire to your property, your insurance carrier ought to pay for it,” Maxwell explained after the hearing.
That lawsuit may not be settled until later this year.
Meanwhile, the property has fallen into further disrepair, and building code violations have not been addressed.
As such, city charter and state law allows the city to acquire the property through condemnation proceedings, which were set in motion September 2015.
Halverson ‘has resources’ to address code violations and ‘hasn’t been ignoring issues’
Maxwell pointed that eminent domain is often prompted by property owners’ lack of resources and/or blatant ignoring of code violations. “Mr. Halverson hasn’t been ignoring the issues, he just hasn’t been able to take steps to remedy them because of the investigation and ongoing dispute with insurance,” he said.
“He does have the resources to address the issues; his hands have just been tied.”
Maxwell’s message to the council was that Halverson would have addressed issues with his building had the arson and subsequent investigation not occurred.
He also pointed out that Halverson had started his new venture (Tailgators in Brandon) at the time Sharkee’s closed, and that venture had consumed his time during the six weeks between closing Sharkee’s and when the arson occurred.
“I know Sharkee’s was not his focus at the time,” he said.
“But had this fire not occurred, his intent was to continue the conversation on development of the property.”
Maxwell said as part of litigation against the insurance carrier, Halverson has demanded an appraisal to assess the scope of fire damage.
That information, which is expected by Aug. 23, could determine Halverson’s action on the former Sharkee’s building.
“He would like the city to not move forward with the eminent domain process,” Maxwell said. “He’s backed against a schedule of contractor timelines and a Minnesota winter.”
Halverson specifically requested the city allow him until April of 2017 to address concerns.
“That should leave enough time for Mr. Halverson to coordinated remediation and provide time for people to perform that work.”
By statute, the city could not take action Halverson’s request Tuesday night, but can address it at a future meeting.