Kladek Protests City's Eminent Domain Proceedings

A "steamroller job."

That's how former owner Larry Kladek describes the eminent domain proceedings the city is pursuing to secure 28,000 square feet of Kladek's property near 66th Street in Inver Grove Heights.

On Monday, the Inver Grove Heights City Council voted 3-1 to approve the use of eminent domain against Kladek. Councilor Bill Klein was absent, and Councilor Chip Grannis cast the dissenting vote.

City officials want to construct a 10-foot-wide pedestrian trail between Heritage Village Park and the Rock Island Swing Bridge—a portion of which falls on Kladek's property near the King of Diamonds gentlemen's club. Kladek no longer owns or operates the King of Diamonds, but he does own the land upon which the club sits.

Eminent domain proceedings are a rare occurence, according to City Administrator Joe Lynch, who says this is the first case he's seen in the five years that he's been employed by the city. The process of eminent domain allows local or state officials to acquire private property for public use, according to Minnesota law. The government body is required to pay "fair market value" for the property.

The city, Lynch said, only pursues the power of eminent domain as a last resort—and usually only after negotiations with a property owner have failed.

The city will forfeit $92,000 in grant funding earmarked for the proposed trail if it does not complete construction of the trail by June 30, 2012. The city must begin eminent domain proceedings now if it is to avoid losing the grant funding, Lynch said.

"We have some deadlines, and if we don’t meet those deadlines, we lose the use of those funds," Lynch said. "It's contentious. People don’t like to have their property taken away from them, and we understand that."

The city originally approached Kladek this summer with the offer to swap the 28,000-square-foot parcel for a piece of city-owned land directly south of Kladek's property, Kladek said. But after Kladek expressed interest in the land swap, city officials returned and told him they did not have clear title to the land south of the club, Kladek said.

Twice in August and once in September, Park and Recreation Director Eric Carlson sent written offers to Kladek to purchase the property for $56,548, according to a memo written by City Attorney Tim Kuntz.

But Kladek felt the offer was too low, rejected it and has hired his own appraiser to assess the property, he said.

"I’m very surprised that they’re doing it as fast as they’re doing it," Kladek said. "The land is worth way more than what they offered me, and now they’re going to steal my land."

A number of council members expressed reluctance over pursuing eminent domain proceedings.

"I don't like the use of this, but we made an honest effort," said Councilor Dennis Madden, who eventually voted in favor of the move. "It’s the only way we can move on, and it’s for a public purpose."

Correction: The article above has been changed to correct an inaccuracy. Kladek was convicted of filing a false tax return.