Business owner claims city promised upscale restaurant; officials deny claims
The Lakeville City Council unanimously approved a preliminary and final plat May 6 for development of an auto parts business, although the owner of a neighboring business has threatened legal action because of the plans.
The property, located off Kenwood Trail between Culver’s restaurant and NTB (Formerly Tires Plus), has been approved for a lot split and construction of an Advance Auto Parts building on one of the lots.
Dave Malmberg, owner of the neighboring building that houses RE/MAX Advantage Plus owned by his son Eric Malmberg, claims Eric Malmberg was verbally promised by city officials that the property would be nothing other than a high-end sit-down restaurant.
In an April 29 letter to the city, the Malmbergs’ attorney, David J. McGee, referenced possible legal action, citing numerous breeches of an easement agreement he said Dave Malmberg has with United Properties that restricts changes in common areas, including parking and building setback requirements.
The letter also stated concerns Dave Malmberg’s property value would be reduced because his building would face the rear of the Advance Auto Parts building.
According to McGee’s letter, the Malmbergs “vehemently” oppose construction of the Advance Auto Parts building, and according to minutes, Dave and Eric Malmberg appeared before the Lakeville Planning Commission April 4 to cite concerns about the project; they attended the city meeting as well, but Lakeville Mayor Matt Little did not open the issue for public comment before the council’s vote.
City Attorney Roger Knutson wrote in a May 2 letter to Lakeville Planning Director Daryl Morey that the city is not party to the agreement “and has no authority to enforce it.”
Knutson wrote that the city’s role was to determine if the plat complies with city ordinances and statutory requirements.
“If it does comply, the city must approve it,” Knutson wrote. “The city cannot consider private agreements in making that decision.”
In the letter, Knutson also noted a clause in the development contract that holds the city, its officers, employees and agents harmless from claims, damages sustained or costs incurred resulting from plat approval and development.
Keith Ulstad, senior vice president of Retail Development for United Properties, told Planning Commission members the company bought the property in 2004 and there has been no interest in it until Advance Auto Parts approached them, according to meeting minutes.
He reportedly said they want to divide the lot to avoid building a multi-tenant building, considering the recent lack of interest in the site.
Meeting minutes state that Dave Malmberg said they originally wanted to build where the Advance Auto Parts building is proposed, but United Properties denied them because there was going to be a high-end, sit-down restaurant there.
Eric Malmberg said that in the summer of 2004, he had lunch with Community and Economic Development Director Dave Olson and former City Administrator Bob Erickson, who “made it very clear to him that there was not going to be any options for this site other than a sit-down restaurant, period,” minutes state.
In an interview with Sun Thisweek, Erickson denied ever having made that comment or going to lunch with Eric or Dave Malmberg, noting at that time he was interim city administrator, working part time to help transition City Administrator Steve Mielke into the position.
“I guarantee you, there has never been a commitment to a sit-down restaurant in that location,” Erickson said, adding that when he was administrator, city officials did not conduct business over lunch to discuss development projects.
“It’s something I didn’t believe in,” Erickson said.
Mielke said there is no written city documentation restricting the property use to a high-end, sit-down restaurant.
“We were meticulous,” Erickson said. “If we promised it, it would be in writing, not just a willy-nilly statement.”
According to the minutes, Dave Malmberg said they spent over $100,000 on soil improvements to construct the current building and parking lot, and the plan does not allow them enough parking because the shared parking agreement was based on night-time restaurant use versus RE/MAX’s daytime use of the lot.
In his letter, McGee, stated that the Malmbergs may pursue “any and all legal remedies” to either stop the construction or fairly compensate him for the damage it will suffer.
When asked if they are going to file a lawsuit, Eric Malmberg stated in a text message they “are going to exhaust all possibilities in an effort to find an amicable resolution.”