Ten years ago MnDOT, with the assistance of a City, was upgrading a 2 lane state highway. Developer Dan owns 4 commercial lots along the highway. A right of access plus a trail easement was needed for the road upgrade.
City Manager tells Developer Dan “the cost for acquiring the access rights and trail easement appraise so high on your lots that it would hurt the feasibility of the road project. I'll tell you what. The City owns this nice 5 acre lot near your land. Why don't we sell it to you for $50,000 and your right of access and the easement?”
Developer Dan agreed to the informal deal. He as busy with his development business and wasn't in any hurry to acquire more land. Finally, in 2006, a purchase agreement was signed between Developer Dan and the City for the 5 acre parcel.
Time goes by and the deal hasn't closed. And the road and trail were improved without the proper rights to Developer Dan's lots.
The City gets a call from George wanting to build a residential treatment center for substance abuse patients. George was told to call Developer Dan about the 5 acres he had under contract to buy from The City for $50,000. They strike a deal, netting Developer Dan a nice profit, and the City rezones the land to R3. Residential treatment centers are a permitted use in R3. Though George still had to go through the approval process to ensure his building and site plan fit the ordinance.
In August of 2010 the City Attorney sends Developer Dan a letter mandating a quick closing on the 5 acres.
Meanwhile, the City notices the neighbors about the planning commission hearing for the residential treatment center. The neighbor's, who objected to a day care facility in a commercial zoned area, were, well, unhappy would be an understatement.
One planning commissioner was out, the vote was 3-3, and it was sent to the City Council.
The City Council had an emergency work session and invited Developer Dan and George. A councilor was missing, but the vote was 4-2 in support of the project.
The formal City Council meeting was held. One hundred twenty five neighbors attended. Recall, its a permitted use, so the Council can't reject the treatment center on its use. But they could vote to NOT sell the land to Developer Dan. Which they did on a 7-0 vote.
Meanwhile, George as $30,000 into the approval process. Developer Dan didn't want to get sued by George. Nor did he have the energy, after all this time, to sue the City.
So he settled with the City and George, receiving maybe ½ of the money he would have gotten in 2000 to just sell the right of access and the trail easement for the highway.