The city of St. George has asked the Pottawatomie County District Court judge to sign an order releasing liens on property obtained by the city through the process of eminent domain.
If the judge signs the order, it will give St. George clear title to the property and clearance to market the 54-lot subdivision formerly known as the Riverview Hills Addition at the city’s east edge off Chapman Road.
Pottawatomie County, meanwhile, likely will never collect approximately $233,000 in back property taxes and special assessments accrued on the property over the years.
“You have no ability to forgive the $233,000, but your ability to get it is very limited,” County Counselor John Watt told Pott County Commissioners Monday. “The back taxes remain due and owing, but the county’s only recourse is to sue the previous owner.”
The previous owner––Terra Firma, an out-of-state development company––“is bust, for all practical purposes,” Norbert Marek, St. George city attorney, said late last year when the city initiated eminent domain proceedings against the property.
“It’s a mess,” Marek said. “This (eminent domain) is the city’s method of saying, ‘Okay, we’re going to try to straighten this out.’”
According to the public notice published late last year, the St. George City Council initiated the eminent domain action because the developers abandoned the property; property taxes and specials had not been paid; and the property continues to cause erosion and drainage issues with an adverse impact on the city and adjacent landowners.
As a result of the condemnation, the city of St. George paid $250 per lot in the subdivision, the price determined by a panel of three court-appointed appraisers. The $9,000––less the fees for the appraisers––will be paid to the county by the city and will be applied to back property taxes, Watt told county commissioners.
Proceeds from future sales of the condemned property will go into St. George City coffers, although the city must pay for condemnation proceedings and has already made bond payments for infrastructure in the abandoned subdivision.
“Will they (St. George) come out smelling like a rose? No,” Watt said. “They’re just making the best they can of a bad situation.”
It was noted Monday that the city of St. George had previously released Terra Firma from a letter of credit for infrastructure improvements in the subdivision, apparently leaving the city on the hook for those bond payments.
“It appears to me the city of St. George keeps shooting themselves in the foot and we keep having to pay for it,” said Commissioner Stan Hartwich. “It’s cost the county a lot of money over the years.”
Commission Chairman Gary Yenzer said the matter has been costly for St. George, as well.
“They’ve dumped a lot of money into that––the city––but if they could get somebody in there to develop it they could recover some of that,” Yenzer said.
As Marek noted late last year when the eminent domain action was initiated, “The city’s goal is they want to see houses up there,” he said. “There are 54 lots with sewer, streets and water up there. It just needs electricity.”