Fall construction projects on the west side of Ramsey’s The COR could be in jeopardy.
Ramsey city staff and its legal counsel have been negotiating since February to purchase the Wiser Choice Liquors, 14590 Armstrong Blvd. N.W., which is owned by Ramsey City Councilmember Jeff Wise, because the city will need portions of the one-acre property for an existing road project and most of the property for the future Armstrong Boulevard/Highway 10 interchange project.,
But a state statute makes it illegal for a city council member to buy from or sell property to the city, according to City Attorney Bill Goodrich.
That gave three council members reservations on continuing,
This deal has been worked on since February and the city had made sure that it was following a process to address potential conflicts, said Councilmember Sarah Strommen.
So, why is the council just hearing about this state law now, she said at the Oct. 9 council meeting.
Goodrich said no one thought to look at state criminal statutes.
The statute, which covers goods and services, makes it a gross misdemeanor for the council member to purchase from or sell property to the city in which he serves on the council, he said.
According to a Minnesota Attorney General’s opinion, the city’s Housing and Redevelopment Authority (HRA) could authorize the purchase contract and it would not be considered illegal as the state statutes gives the HRA additional powers, said HRA Attorney Tom Bray.
The law allows the HRA to do things it does not allow the city council to do and in many instances the HRA has more power than the council, he said.
The legal staff could find no state statute that covered cross conflict that addressed the city council and the HRA membership, Bray said.
As the HRA is made up of the same seven people as the council, that looks like a shell game, said Councilmember David Elvig.
“I don’t want to step in the bear trap,” he said.
The planned purchase was originally an HRA project, but it was shifted to the council for the Sunwood road improvement, said Ramsey Development Manager Darren Lazan.
The council would be shifting the project back to the original body, he said.
While the council agreed to address the issue as the HRA, Council/HRA members Randy Backous, Elvig and Strommen did not support the $1.1 million purchase of the Wiser Choice Liquors property and business from Wise.
During the HRA meeting, Strommen said she has a couple of concerns.
If the legal staff knew about this state criminal statute since mid-September, why did the council members not know, she said.
“This is a pretty serious issue and I am not happy that (the council) was not notified for three weeks,” Strommen said.
While the council and the HRA have separate statutes governing them, there is still a perception that the council could be using the HRA as a tool to get around the state statutes, she said.
There was a clear process in place for this purchase to make sure everything was transparent and now that has unraveled, Strommen said.
To avoid any conflict, Strommen suggested waiting until Wise’s term is up at the end of December – Wise lost in the August primary election – before proceeding with the purchase of his existing property and business and sale of property in the COR to him.
This is a good purchase and the city has tried to maintain a transparent process, but there are now problems, Backous said.
The lines between the HRA and the council are blurred and the council will have to transfer money to the HRA for the purchase, he said.
“It does not smell right,” Backous said.
This could lead to legal trouble, he said.
While he has supported this purchase, he can no longer support it while Wise is a sitting councilmember in light of the state criminal statute, Backous said.
There are two other property sales that are contingent on the purchase of Wiser Choice and the subsequent sale of a COR parcel to Wise, said Lazan.
The city also needs the rights of way from the property for Armstrong Boulevard project currently in progress, he said.
According to Lazan, delaying the purchase would impact the construction of a convenience store, sit-down restaurant, a fast food restaurant as well as the new Wiser Choice Liquor store.
All of those things go out the window in face of the spirit of the statute, Backous said.
“I am not going against the state law,” he said.
“Nothing has changed,” said Mayor Bob Ramsey.
It still the same deal that has been under negotiation since February, he said.
What has changed is that council members now know about the state criminal statute, Strommen said.
“If we had known all the facts before, I would have said time out,” she said.
The council did not have all the facts when the negotiations started and she cannot go forward with a clear conscience, Strommen said.
The HRA would not be violating any laws and it is ridiculous to stop now, Ramsey said.
There is a lot that hangs on this purchase, said HRA Chairman Colin McGlone.
This decision will likely make this purchase more expensive in the future, he said.
When final vote was taken at the HRA, only McGlone and Ramsey supported the sale.
HRA member Jason Tossey was absent and Wise did not take part in the decision or the vote.
Tammy Sakry is at email@example.com