Civic beat: Stone Arch lawsuit

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November 9, 2009 // UPDATED 9:22 am - November 9, 2009
By: Cristof Traudes
Cristof Traudes
Developers sue over rejections of Stone Arch plans

Before the City Council rejected variance and conditional-use permit applications from developers seeking to build a second phase of the Stone Arch Apartments, several council members allegedly already had had back-door dealings to prevent approval. That’s according to a lawsuit filed against the city late last month.

Bluff Street Development, a partnership of developers Steve Minn — a former council member — and John Wall, has wanted to construct a six-story, 98-unit mixed-use building on a triangular plot it owns at 600 Main St., currently a parking lot between the existing Stone Arch Apartments and the Southeast Steam Plant. That plan was rejected in the spring; two downsized versions were rejected this fall.

Bluff Street’s lawsuit, filed Oct. 29, alleges that those decisions were based on “aldermanic courtesy,” which it calls an illegal policy at City Hall where “elected officials conspire to deny applicants for City approvals their rights by agreeing to go along with the decision of the council member from the ward where a project is located.” The suit goes on to allege that 3rd Ward Council Member Diane Hofstede actively lobbied both the Planning Commission and the City Council to deny the project.

The Bluff Street suit says Hofstede, who recently won reelection to the City Council, wanted the plot of land to become a park to please constituents and win support. Several plans do identify it as future green space, but none of those are binding.

Along with the city, the suit names Hofstede, Council Members Gary Schiff (9th Ward) and Sandy Colvin Roy (12th Ward), Planning Commissioner Ted Tucker and other “unknown co-conspirators” as defendants. Bluff Street is seeking approval of its original 98-unit proposal, as well as damages for “deprivation of its established property rights.”

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Court of Appeals dismisses appeal in Parc Centrale case

The Minnesota Court of Appeals will not review a September district court ruling that City Council Member Lisa Goodman’s bias denied a developer his rights — for now.

Hennepin District Judge Stephen Aldrich ruled Sept. 16 that Goodman (7th Ward) failed to remain impartial during the “quasi-judicial” review of a proposed 2004 Loring Park development, the 21-story Parc Centrale residential tower. The city appealed the decision nine days after the ruling, just as hearings were set to begin on damages.

But the Court of Appeals on Oct. 27 dismissed the appeal, saying the city was ahead of itself because Aldrich’s ruling was not a final judgment. Once a judgment does come in, the city could appeal again, the court’s opinion says.

The case now returns to the district court level. A motion hearing is scheduled for Dec. 4, and damages hearings are set for Dec. 21–23.

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Yes — Rybak’s running

It had been less than 48 hours since he’d found out that he would be mayor again, but R.T. Rybak already had entered another election contest: He’s running for governor.

In an e-mail to supporters Nov. 5, he said he had filed paperwork to create a R.T. Rybak for Governor Committee, the first official step to running for higher office.

“I’ve been open with people as I’ve considered this important step,” Rybak said, “so I doubt this will be a surprise.”

The mayor joined 11 other Democratic-Farmer-Labor Party gubernatorial candidates, including fellow Minneapolitans such as House Speaker Margaret Anderson Kelliher and Rep. Paul Thissen.

Rybak had made little secret over the past two years that he was interested in replacing Gov. Tim Pawlenty — so little, in fact, that complaints were filed that he was using his mayoral campaign to run statewide. The state Campaign Finance and Public Disclosure Board looked into those complaints and came out partly agreeing.

On Nov. 6, the board released a decision that Rybak’s gubernatorial campaign had really kicked off in May when the mayoral campaign commissioned a survey that collected feedback on which of Rybak’s statements played best to likely 2010 voters. His gubernatorial campaign was ordered to reimburse his mayoral campaign the survey’s $26,500 cost.

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Report: City needs more auditors

For a city of its size, Minneapolis doesn’t have as many internal auditors as it should, according to an independent report unveiled Oct. 28.

Places such as Atlanta, Portland and Seattle have as many as 15 full-time internal audit employees. Minneapolis, meanwhile, has one. As a result, high-risk areas such as payroll and inventory management currently are not regularly audited.

That could leave the city vulnerable to fraud, according to the report, which was prepared by a group of audit experts. They suggest the city hire at least two or more full-time employees as soon as possible.

The Board of Estimate and Taxation requested the report — ironic, because the board’s role as internal audit’s oversight was one of the experts’ key concerns. The board isn’t closely related to city departments, which has made internal audit a fairly separate group within City Hall, according to the report.

The board recently survived what was essentially a referendum to have it eliminated. The report says that’s OK; the board should continue to have oversight of internal audit. However, auditors should also begin working regularly with the city coordinator’s office so they can have more consistent interaction with city departments, the report concludes.