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Cabin owners protest lot appraisals at St. Louis County Board meeting

Mark Erickson of Duluth asked county commissioners Tuesday to slow down the process of selling off county lake lots so renters don't lose their summer cabins, some of which have been in their families for generations.

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Don Graden's cabin on Little Stone lake in St. Louis County. The lot is one of 278 that St. Louis County currently leases out. (Clint Austin / caustin@duluthnews.com)

Mark Erickson of Duluth asked county commissioners Tuesday to slow down the process of selling off county lake lots so renters don't lose their summer cabins, some of which have been in their families for generations.

Erickson was among nearly 100 people who crammed the St. Louis County board room and overflowed into the hallway to protest the recent appraisals of county-owned lake lots the county wants to sell.

The county leases 278 lots on 27 lakes to people who own their cabins but rent the land underneath. The county wants to get out of the lot-leasing business. But many of the cabin owners say the appraisals for the lots are being figured unfairly and are coming in way too high.

"I know this process was set out to be fair and equitable to all concerned. But it hasn't been," said Erickson, who owns a cabin and rents a county lot on Little Stone Lake near Brimson. "I'm not asking for a bargain. I'm not looking for a deal. I'm just looking for a fair appraisal."

Like others who spoke at Tuesday's regular county board meeting - several from Linwood Lake near Whiteface and Long Lake near Makinen - Erickson said his lot on a small, boggy lake was valued too high, especially considering he doesn't have a legal easement to get there and because the cabin is only seasonal.

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But the state law passed in 2012 that allows the county to sell the lots to the cabin owners without a public auction also states that the lot appraisals can't be challenged, leaving cabin owners apparently little recourse.

"I'm not sure where to go here. It seems the scales are really weighed in the state's favor," Erickson said.

Others asked for more time to make a decision on their three choices allowed under state law - either buy the lot for the appraised value, sell their cabin for its appraised value and move out, or continue leasing for their lifetime but not pass the lease on to anyone.

Several of the cabin owners need to decide by Oct. 31 and asked for more time.

"I don't have $65,000 in the bank (to pay the appraised value for the lot). And I can't get a loan because I don't have legal access," said Ryan Gunderson of Duluth who also rents a lake lot on Little Stone Lake. "We're at the point now where we don't know where to turn to. We don't know what to do ... There are a lot of people who potentially are going to lose their cabins."

As the county finishes formal surveys and plats for the lake lots (most were informally laid out decades ago) they are sending out notices to cabin owners. That sets a six-month clock ticking for families to make a decision and pay up.

Some lot renters said that recent surveys left them with their buildings on other people's lots, or left them with nonconforming lots that can't be improved with septic systems.

But by far the biggest complaint is that the appraisals, made by a firm from Tomahawk, Wis., don't reflect true market values for smaller, less glamorous lakes in northern Minnesota.

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The appraisals were based on unequal comparison sales and are simply too high, said Patrick Murphy of Two Harbors, also on Little Stone Lake.

"I've been on this lot for 30 years. Now I have two months to get all this in order? I don't have that kind of money," Murphy said.

Commissioners took no action Tuesday as the issue was not listed on their agenda. But County Board Chairman Pete Stauber of Hermantown assured cabin owners that their concerns had been heard and that the board would try to find answers to their questions quickly.

"These are legitimate concerns. I don't have answers for you at this time, but we will get them," Stauber said.

Lands and Mineral Department head Mark Weber did say that the county has contracted with a Duluth-based appraisal expert to review the Little Stone Lake appraisals for fairness. That review is expected to be completed this week. He said other complaints and questions will be handled as quickly as possible.

But at their Committee of the Whole meeting later Tuesday afternoon, some commissioners said it may be too late in the process to make major changes in the lot sales. Commissioner Chris Dahlberg of Duluth said he understood the "heartfelt" stories of families who had been renting the lots for decades but said the lot lease system offered cabin owners a sweetheart deal that wasn't fair to county residents who pay full property taxes.

"This was not a knee-jerk decision" to sell the lots, Dahlberg said, noting the county has been moving toward selling the lots since 2012 after some lot renters asked for the option to buy their land.

Commissioner Keith Nelson of Fayal Township said he wanted no changes in the process, urging fellow commissioners and the county Land and Minerals Department to "stay the course that we as a board set them on."

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"Of all the things I heard this morning, very, very few of the had any validity in my mind,'' Nelson said.

As of Tuesday the county has mailed offers to 188 lake-lot renters. Of the 109 who have made a decision, 90 - or 83 percent - have opted to buy their land for the appraised value. Only seven have chosen to keep renting, while 12 have decided to sell their cabins to whoever is willing to pay the appraised value for the cabin and also be the highest bidder for the land it sits on.

Many cabin owners relish the chance to buy the lake lot to make it easier to get bank financing for improvements. A deed for the lot also makes it easier to sell the cabin and makes passing it on to the next generation more of a sure thing.

For the county, selling the land gets it back on the tax rolls for the first time in decades, with county officials also noting the lease fees have never reflected the true value of the land - the true property-tax equivalent.

The 278 lake lots are part of the glut of tax-forfeited land the county has managed for the state after the original private owners didn't pay the taxes in the first half of the 1900s. The county offered the leases from the 1950s to the 1980s as a way to make a little money and to provide recreation property for county residents.

The board's Committee of the Whole Tuesday did approve ordinance language that will allow renters to continue leasing, for those that choose that option.

John Myers reports on the outdoors, natural resources and the environment for the Duluth News Tribune. You can reach him at jmyers@duluthnews.com.
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