Richfield Mulls Eminent Domain Taking of Car Dealership

To clear the way for a newheadquarters campus for Best Buy Inc., the City ofRichfield could start condemnation proceedings soonafter Aug. 11 against Walser Buick, a car dealershipthat is in the way of the project.If the City takes that route, however, the $150million development project could be delayed,according to officials with Minnetonka-based OpusDevelopment, which is developing the project.

Walser Buick officials say talks are not going wellwith Best Buy regarding its 7 acres, and it expectsthe city will use its eminent domain authority tostart condemnation proceedings in a week or so.Several weeks ago, the Richfield’s Housing andRedevelopment Authority voted to use its eminentdomain authority to pursue condemnation proceedingsagainst Walser, but asked city officials to delay suchaction if there is a still chance for a negotiatedagreement.

This week, Walser received a letter fromthe city reiterating the offer for the property andadding that if Walser doesn’t respond by Aug. 11, thecity would begin condemnation proceedings.The current offer is no where close to what Walsercould accept, according to Barbara Jerick, executive vicepresident and general counsel to Walser AutomotiveGroup, which owns several car dealerships in the TwinCities. “It’s unfortunate that the City is pressing us ashard as they are,” Jerick told GlobeSt.com.”I don’t think the state legislature had that area inmind when it came up with eminent domain – clearly,it’s not blighted.”

Given that such proceedings can take three months ormore, starting them does not restrict a negotiatedsettlement – a conclusion to the process that would bebetter than going through condemnation for Best Buy,the city and Walser, says John Stark, the City’scommunity development manager.

Best Buy plans to spend $150 million to build a newheadquarters campus in the redevelopment area, whichis north of I-494 between I-35W and Penn Ave. The newlocation is more centrally located for its employeesand offers mass transit options, according to Best Buyofficials. The new complex, which will total 1.5million sf of office space spread out amongfour or more buildings, can handle up to 7,500employees.

Although Walser could be the first to facecondemnation proceedings, it isn’t the only holdout inthe process. About a dozen of the 68 homeowners in theaffected area have yet to sign purchase agreementswith Best Buy and Opus, and about seven of the 15business or apartment buildings affected have yet tosign, says Tim Murnane, an Opus executive working onthe project.