An eminent domain dispute between two Iron Range schools was called “unique” by a 6th Judicial District judge during a condemnation hearing Tuesday in Virginia.
Eminent domain allows government entities to acquire property, typically private property, for public use, in this case, a public school, as long as just compensation or fair market value for the property is paid.
Eminent domain in Minnesota also allows government entities to acquire property from other government entities for a higher public use.
Virginia Public Schools purchased property from Spectrum Health Services for $2.1 million in 2019. The building, located at 2000 Siegel Boulevard, Eveleth, is currently occupied by East Range Academy of Technology and Science, a charter school of about 170 students.
The academy’s lease runs through June 20, 2023, with a one-time five-year renewal option. It rents the space for nearly $200,000 annually.
Eveleth-Gilbert and Virginia school districts have been working to consolidate and create a new career academy high school; construction is scheduled to start in July. Voters from both districts approved a nearly $180 million referendum in May 2019 that allowed the districts to move forward with building two new elementary schools and a new high school. Voters approved the consolidation of the two districts May 12.
The property in question is the planned site of the new high school.
Negotiations to buy the academy out of its lease broke down, leading Virginia to move forward with eminent domain proceedings. Attorneys representing both schools argued Tuesday before Judge Richard Friday. The judge was physically present in the St. Louis County Courthouse in Virginia while the attorneys attended the hearing virtually.
Attorney Trevor Helmers, on behalf of Virginia Public Schools, argued the property is the only feasible site not subject to mineral rights.
There are currently two plans on the table: one that uses the existing building and one that demolishes the building to make way for an athletic complex. Helmers said the threat of a lawsuit by East Range to stop construction of the new high school is a chance Virginia can’t take, and said any delay could cost taxpayers millions.
Attorney Jeff Storms, on behalf of the charter school, argued that Virginia Public Schools did not have the authority for condemnation because the district is not considered sovereign, like the state or the federal government is. Storms argued that because the property is already in public use, Virginia can't take it.
Helmers argued that because the lease is held by a private nonprofit corporation, it is considered a private property lease and therefore subject to eminent domain laws. Storms disagreed, saying the public use of the property converts the private lease to public.
Judge Friday said he would issue a ruling by July 24. He encouraged both parties to spend the next 30 days trying to work out a resolution.
“There are outs in this case that are better for both parties and any ruling has significant risks to both sides,” Friday said. “When this case is boiled down it’s ultimately about eminent domain, but it is a unique case within eminent domain.”
Storms implied during the hearing if Friday ruled in favor of Virginia, East Range plans to appeal the decision.
Friday told attorneys he came into the hearing with no clear direction and is leaving it with no clear direction as the court was not able to find an identical case in Minnesota.
David Schultz, a professor of political science at Hamline University and a law professor at the University of Minnesota, told the News Tribune he agreed this case was unique in terms that it is school versus school.
“Charter schools are both private and public at the same time in Minnesota, which puts them in this kind of odd position in Minnesota law,” Schultz said.
Schultz said government entities have incredibly broad power of eminent domain in Minnesota, so it is incredibly rare for a defendant to fight against a petition of eminent domain.
“But this case is extremely unique, which makes it interesting,” he said.