Appeal appears unlikely
April 30, 2009 · Updated 1:34 PM
Council looks at impact fees to pay $6 million verdict
By Dennis Box
The City Council is leaning toward not appealing the verdict in the Schuur property condemnation suit, but the final decision has not been made.
"There is very little likelihood we would appeal it," Deputy Mayor Dan Swatman said. "But we are checking to see if we can use our impact fees to pay for the park. We could get sued if we don't do this properly. "
The council voted to condemn a 12.55-acre parcel next to Allan Yorke Park owned by Schuur Brothers Construction in May 2004.
The city and Schuur Brothers were unable to negotiate a settlement and the case went to trial July 28.
A Pierce County Superior Court 12-person jury decided Aug. 5 the city must pay $5 million to Schuur Brothers Construction, plus legal fees, court cost and 12 percent interest from the time the land was taken by the city. The final cost to the city would be about $6 million.
"It could have taken up to three years in court to appeal," Mayor Bob Young said. "We know where we are now and this is costing the city $1,100 a day in interest. The minute the money is put into an escrow account with the court the interest stops."
During the Aug. 16 council workshop the members discussed a proposed ordinance by the administration to pay for the land through loans from the general funds and sewer fund, paying the loan back through increased park impact fees over a 10-year period.
Pointed questions were raised by council members about the financial condition of the city and a memo sent to the staff by the mayor ordering a decrease in spending and ending overtime.
Councilman Neil Johnson also questioned the mayor about a memo directing staff to not share information with the council members with consulting the mayor.
"When I found out about these memos I really got mad," Johnson said. "When he says we are in a financial crises that's not true. There's money in the budget for City Hall."
Johnson pointed out the administration has saved money by not filling budgeted positions and equipment.
"That's not being efficient," Johnson said. "The mayor promised last December he would fill those positions. People pay these taxes. What do we give them back?"
Young admitted to sending out the belt-tightening memo because of the cost of the Schuur property settlement.
"This is my standard letter I usually send out in October," Young said. "I just sent it out earlier because I know about $6 million is going out. I wanted to make sure we don't get into trouble. I think it is prudent. I think it is disingenuous of the council to put the city in a spot to pay $6 million in 30 days and not be worried about the budget."
Swatman suggested during the council workshop the city could sell the nearly 13-acre property near the Target store along Fennel Creek that was purchased for $1.1 million in January with the intent of building a new City Hall.
"If there is a financial problem I don't see why he doesn't say it and then we look at it and fix it," Swatman said. "I have absolutely no use for City Hall next to Target. The downtown core are is the best area."
Young was adamant the Fennel Creek property should not be sold.
"Absolutely not," Young said. "That land is paid for. We got 12 acres with 10 usable acres for 1.1 million. It's now worth $7 or $8 million. The council got 12 acres with six useable for $6 million."
At the workshop Councilman Mark Hamilton reminded the members they agreed at their council retreat earlier this year to delay any decision about City Hall until after the November general election.
Johnson said in hindsight the purchase of the property might not have been a good move.
"It's fine to purchase property, but we have to build on it," Johnson said. "But we should have a plan in place before we consider selling the property. I do think if we build a City Hall it should be in the downtown area and it should be a multipurpose type facility, not a Taj Mahal."
Dennis Box can be reached at email@example.com.