The city of St. George has initiated eminent-domain proceedings to acquire approximately 65 acres of property known as the Riverview Hills Addition at the eastern edge of the community.
The city seeks to acquire the property, which has some internal improvements to 54 lots, but has sat vacant for nearly two years, causing erosion problems and leaving the city with the potential financial burden of bond payments.
“This is the very beginning of the process for the city acquiring those properties,” St. George City Attorney Norbert Marek said.
According to the public notice, the St. George City Council initiated the eminent-domain action because the developers have abandoned the property; property taxes and specials have not been paid; and the property continues to create erosion and drainage issues with an adverse impact on the city and adjacent landowners.
Further, title to the property “has become clouded by two lawsuits and out of state property owners subject to contractual obligations ...,” the public notice states.
Marek said the city plans to seek the consent of Terra Firma to proceed with the eminent-domain action. The out-of-state owner of the property “is bust, for all practical purposes,” he said.
Although there are streets, water and sanitary sewer improvements to the 54 developed lots, there is no electricity, and the owner apparently can’t come up with the $80,000 up-front money necessary to get power to the development to make the lots saleable.
“It’s a mess,” Marek said. “This is the city’s method of saying, ‘Okay, we’re going to try to straighten this out.’ ”
Essentially, the city of St. George is the largest creditor for the property, Marek said. Two other creditors are involved, he said, adding that “they may like it (eminent domain) because it forces the issue.”
The city has a couple of options if the eminent-domain effort is successful and the city obtains ownership, Marek said, develop the lots itself or sell the property to an interested developer.
“The city’s goal is they want to see houses up there,” Marek said. “There are 54 lots with sewer, streets and water up there. It just needs electricity.”
The next step in the eminent-domain process is for the city to file a lawsuit and ask for a court-appointed panel of three appraisers to place a value on the property. After that value is established, the city would have 30 days to determine if it wished to purchase the property or have the suit dismissed, Marek said.
Another option is to seek permission from the Pottawatomie County Commission for the city of St. George to sell the parcels at a city-sponsored tax sale.
“A tax sale could be done by the city if the county commission gives permission,” Marek said. “The statute provides for that. You would assume the commission wouldn’t care, because the county has expressed concern over the erosion issues.”
The two-year delinquency requirement is September of 2012 for the 54 Riverview Hills lots, currently appraised at $10,000 each.
“Whoever buys it,” Marek said, the number-one thing is that the city gets enough to cover the specials the city’s already fronted for the bond payments.”