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How much is Sharkee's property valued at?

Subhead
City accepts appraisal at council meeting, considers next step
By
Lori Sorenson

A commercial appraisal of the Sharkee’s property on South Highway 75 has been completed, and Luverne City Council members reviewed that information at their Tuesday night meeting.
That appraised value — which is not public information — will be used to develop a purchase agreement between the city of Luverne and owner Dave Halverson and his creditors.
According to City Administrator John Call, the appraisal is part of the process for acquiring the property through eminent domain.
 
Closed since April 2014
Sharkee’s bar and restaurant has been closed since April 2014 when health code violations, mainly basement sewage backup, 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.
Meanwhile, the property has fallen into further disrepair, and Halverson has reportedly ignored notices of building code violations in April 2014 and April 2015.
As such, city charter and state law allows the city to acquire the property through condemnation proceedings, which were set in motion September 2015.
 
What’s it worth?
One of the first steps in eminent domain proceedings is to have the property appraised in order to determine a fair payment to the owner.
The appraisal accepted Tuesday will be used to negotiate a purchase price for the property.
The city’s attorney, Robert Scott of Flaherty and Hood, St. Paul, will work with Halverson’s attorney, Damon Eisma, Luverne, to negotiate a purchase agreement.
If they arrive at an agreement, the city will use this price to buy the property from Halverson. That action would come to a future council meeting.
If not, the next steps in the process of eminent domain will begin. This includes a panel of three commercial assessors that would determine a fair price that the city could buy the property for.
The eminent domain process requires the city to reimburse Halverson up to $5,000 for his own appraiser, should he decide to hire one.
“The whole thing hinges on a lot of appraisals,” Call said. “The process is in motion, and this is another step in that process.”
 
Meanwhile city looks to also improve adjacent Mert’s lot
The city is also buying the Mert’s Repair lot (for $160,000) to the east of Sharkee’s, and has sold Marlin Kracht a new lot in the Industrial Park (for $10,000) for his planned expansion.
Once the city owns both the Sharkee’s and Mert’s Repair properties (roughly four acres total), the plan is to demolish the buildings on the lots and use Tax Increment Financing as a tool to work with a private developer to redevelop the properties.
When a tax increment district is established, the property owner pays property taxes based on the higher market value after the improvements are made. 
The original amount of taxes based on the unimproved property continues to be paid to the county, city and school district.
The difference between the two amounts (the old taxes and what would be the new taxes based on the property’s improved value) is used to pay off the debt accrued to pay for the improvements.
The Luverne City Council set a public hearing on the proposed TIF establishment for 5 p.m. Tuesday, May 24, in Luverne City Hall.

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