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Real estate deal bogs down county board; commissioners reject late bid

I don't think we're very good at selling real estate," said St. Louis County Commissioner Keith Nelson. And he later reiterated his position as the county board spent about two hours in discussion Tuesday before deciding not to accept bids on an ...

I don't think we're very good at selling real estate," said St. Louis County Commissioner Keith Nelson.

And he later reiterated his position as the county board spent about two hours in discussion Tuesday before deciding not to accept bids on an obsolete garage in Duluth.

The county had four bids for the property on Morris Thomas Road and came pretty close to making a deal. But the highest bid had actually been submitted 10 minutes late.

Bids were to be in by 4 p.m. Sept. 30 and three met that deadline. The fourth -- a bid for $100,000 from James Bechthold of Duluth -- was received at 4:10 p.m. The other bids were: John Stauber, $90,000, Brent Harju, $80,000 and Chad Binsfeld, $35,000. The two higher bids had contingencies of city approval for their plans.

The 3.6 acre property had been appraised in 2000 for $170,000, and the county has occupied it as a nonconforming use under city zoning.

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Commissioner preceded to discuss the bids and were initially leaning toward giving Bechthold the nod. He wanted the site for a car repair business. In addition to putting in the highest bid, his was not contingent on getting favorable zoning from the city, which has been an issue with other county property.

Bechthold said he had financing lined up and would buy the property without contingencies. Commissioner Mike Forsman moved to approve contingent on getting financing in place in 40 days. However, Commissioner Steve Raukar raised the issue of the late submission and the likelihood at the board action would be challenged. He also thought new bids might come in higher.

County Attorney Alan Mitchell said the safest legal course would be to reject all proposals. Nelson wanted to reject all bids and turn the property over to a broker. Sweeney also favored using a real estate agent. That led to some more discussion, with commissioners Joanne Fay and Bill Kron in favor of awarding the bid.

Nelson restated his position on the county's lack of real estate skills and argued for using a broker to maximize the return. A motion to reject all bids passed, but the one to bring in a broker to sell the property failed. As a result, county staff will come next week to recommend a course of action. The county is in the process of developing a policy for selling surplus real estate.

In other action, the board approved the 2004-05 preliminary service agreement for the Minnesota Family Investment Program and the Child and Community Service Act, which includes county crises fund guidelines. The county has to submit the service agreement to the state to receive funding.

The board also agreed to submit the following five projects for consideration for state bond financing: Duluth Courthouse HVAC, old jail demolition, Chris Jensen capital improvements, Nopeming abandoned building abatement and the Hibbing Annex renovation.

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