Duluth City Council blocks sale on Skyline Parkway

The Duluth City Council has rejected plans to sell a piece of property on West Skyline Parkway for $20,000, likely setting the stage for a new auction and prompting an effort to rewrite notification rules for such sales.

Council members said the city could get more from the property if it were marketed more effectively. Several neighbors living above the property, located on the lower side of Skyline in the 900 block, said they didn't even know the land was for sale until it was too late.

Mark Jennnings said that for 23 years he and other members of the neighborhood have tended the property, voluntarily trimming trees under the guidance of city staff to preserve views from Skyline Parkway. He said he had approached the city about buying the property across from his home but was told the land wasn't for sale.

Jennings said he learned of the recent auction only after it had occurred.

Frank Hennessey submitted the sole bid for the property, proffering $20,000 for it, the minimum amount the city said it would consider.

Hennessey said he learned Tuesday morning that the council had voted 8-1 to turn down the sale of the property. Tim Howard, supervisor of real property for the city of Duluth, broke the news to him.

"I'm very disappointed. Apparently, they want to re-auction it off to a higher bidder," Hennessey said.

Upon submitting the winning bid for the Skyline property at a July 9 auction, Hennessey cut a check for $2,000 -- 10 percent of the total -- as required by the city.

Within a few days, the check cleared.

"Once they cashed my check, they accepted the bid in my eyes," Hennessey said. "My father taught me that a handshake is a handshake."

Hennessey reported he had not yet been refunded his deposit. Reflecting on the recent turn of events, he said: "It seems un-American to me."

But Council President Sharla Gardner objected to the low price the city was offered for the property.

"I could not in good conscience vote to approve the sale when I didn't believe a fair market value had been established," she said.

Gardner noted that the block-long parcel contains eight lots, although only five of them have been deemed buildable, due to setback requirements and access challenges. She considers the property an attractive site for development.

"It offers one of the most spectacular views of the city around. That's why we have the overlook there."

Jennings contends that if more people had been aware of the auction, the bidding would have been more competitive. He said a neighbor informed him that a "For Sale" sign on the property was removed from the site just five hours after it was posted.

Howard said that in addition to posting a sign on site, the city also advertised the pending land auction in the Duluth News Tribune and on the municipal web site. In all, 19 other "surplus" city properties were put up for sale at the same auction.

"All the other properties were sold the same way, and then the council reneged on this one because it was Skyline," said Jay Fosle, the only city councilor to vote for approval of the sale to Hennessey on Monday.

Fosle said he felt bad for Hennessey, who played by the rules and submitted an honest bid.

"I'd be really mad if I won the bid and then the council decided to take it away from me," he said.

While Councilor Patrick Boyle said he sympathizes with Hennessey, he defended the decision to reject the sale of property to him. He said the city must maximize its revenue from land sales, especially in light of recent cuts in state aid.

"I don't think the city got a fair deal at first, and I think we will get a better offer this next time around," Boyle said.

Gardner and Boyle have introduced an ordinance that would require the city to give written notice of pending land auctions to anyone owning property within 200 feet of a parcel that's going up for auction.

"I really think the notification letter is important," Gardner said. "It levels the playing field for everyone and helps ensure that actual bidding occurs."

Hennessey, who owns property at 923 W. Skyline Parkway, said he hasn't decided whether he will participate in another auction for the property.

Jennings said he hopes property owners in the neighborhood, including Hennessey, will come together to discuss the situation.

"It will take some time to heal. This has created divisions in the neighborhood that weren't there before. The view always united our neighborhood. But this proposed sale has created conflicts and divisions," he said.

"We need to be adults. We need to look at the pieces lying on the floor and put them back together again."