By Sara Strong
The city of Luverne, Rock County and the Luverne school district are all defendants in a lawsuit filed in U.S. District Court of South Dakota by developer Donald Dunham Jr., Sioux Falls.
The suit involves the community daycare and related abatements that the three governmental units and Dunham agreed upon and later disputed over specifics.
The community daycare would have been located in the City Centre Apartments, Luverne, the former elementary school.
County Attorney Don Klosterbuer declined comment except to say he is working on a reply to the suit.
Dunham alleges in the lawsuit that defendants violated the agreement to abate his taxes in exchange for providing a rent-free community daycare space.
Dunham is asking for judgement against the defendants because of a "wrongfully terminated" agreement.
He is also seeking reimbursement for real estate taxes paid and damages "well in excess of $75,000 for renovation, remodeling and improvement expenses, lost real estate tax abatements, expenses incurred for purposes of testing, inspection, planning and development and for costs of closing the purchase."
Although the property involved in this action is located in Minnesota, the abatement payments would have been made to Dunham in South Dakota, so the suit was filed there.
Five years ago …
Dunham purchased the City Centre Apartments in September of 1998. The building was no longer needed as the Luverne Elementary School because the school had recently constructed the new one.
In December 1998, the city, county and school agreed to an abatement agreement for the property in exchange for Dunham providing community daycare space.
The agreement said in part "… renovation shall provide sufficient space and facilities, constructed in accordance with applicable codes, for a day care facility, including infant care, of not less than 50 children. Further, that during the term of the abatement, the said day care space shall be made available to a licensed day care operator without rental charges ..."
Rock County, the city of Luverne and the school all agreed to reimburse Dunham for his taxes paid from 2000 to 2009 because the community daycare was thought to be such an important issue for the area.
Dunham wasn't reimbursed for property taxes because the three government bodies disagreed with Dunham that he actually followed through with his portion of the agreement.
Dunham said he was providing the space for a day care as expected, but the city, county and school said he needed to provide a "finished" space, not just the square footage.
The suit was filed May 7.