Empty Woodbury development slated for auction next weekThe Highland Knoll development that sat empty since it was created in 2004, with the exception of one single family home, will be sold at a public auction at a minimum price of $1,568,000.
By: Riham Feshir, Woodbury Bulletin
For the first time in recent history, an entire tax forfeited development in Woodbury will be auctioned off next week.
The Highland Knoll development that sat empty since it was created in 2004, with the exception of one single family home, will be sold at a public auction at a minimum price of $1,568,000.
“The minimum bid that has been established for the sale will make the city whole on all costs for the development,” said city planner Eric Searles.
The development is located south of the Eagle Valley development and west of Cottage Grove Drive.
“Highland Knoll LLC” was created for the purpose of purchasing and developing about 24 acres of property in Woodbury.
The development was owned by Jenik Ventures, LLC and LDI Enterprises, LLC, which went into foreclosure to Main Street Bank that later became Central Bank, according to court documents.
The property was forfeited last year to the state of Minnesota for nonpayment of property taxes since 2007.
“We had five years of taxes out there,” said Steve Gransee, Washington County division manager for taxpayer services. “A majority of the taxes that were on those parcels were actually the special assessments that were put on by the city of Woodbury.”
Woodbury had platted the development and assessed property owners for water, sewer, streets and utility work.
The total assessments owed are now $51,000, including interest and penalties for the 28 forfeited lots, Searles said.
Why the entire development?
Auctioning off a group of single family lots as one sale is a unique situation, according to county and city officials.
Often times when the county is faced with a forfeited lot, it’s offered to the previous owner in a purchase agreement, Gransee said.
Those are usually “small slivers of land” that are in most cases sold to adjacent property owners who plan to keep them empty, he added.
But in this case, the entire development must be sold to one developer to start collecting the taxes and make it a simpler process to follow, Searles said.
The bank or previous owners would’ve lost a substantial amount of money if they were to repurchase the lots in the auction.
“It’s just simple economics, where the amount they would’ve paid to purchase those parcels is more than the amount they would get to sell those parcels,” Gransee added.
Washington County’s first priority is to reimburse the city’s assessments lost in the forfeiture.
After that it’s selling the lots to get them back on the tax roll and giving an empty development some life.
“Hopefully we can get some homes built out in that area so the neighbors that live around there don’t have to look at all the weeds and grass growing,” Gransee said.
City staff has already seen some interest from developers on the properties that have been appraised at a fair market value.
“City staff contacted the top 15 builders within Minnesota and also a number of developers to market the project to them,” Searles said. “And we’ve had good reactions to those efforts.”
He added that this is the only development that has been foreclosed on and forfeited, while other developments acquired in the same time period have been successful.
“The lack of development in Highland Knoll is not a reflection of the quality of the housing market in Woodbury,” Searles said. “It was a unique circumstance with the developer going through foreclosure and the bank taken over by the FDIC was a unique situation outside of the city’s control.”
More than $1.5 million
The auction will be held Wednesday, March 21. County and state officials don’t doubt there will be more than one bidder to offer more than the minimum price tag.
If that’s the case, the city would get all of its overdue assessments. A formula would be used to allocate the rest to the county parks system, other county and city funds, and the school district.
Although it’s a substantial investment, Gransee is optimistic about the auction.
“I wouldn’t be surprised if this sale is over in half an hour,” he said.