Eminent domain award proves costly for Wasilla

WASILLA — Five years after using its eminent domain powers to secure land for the Wasilla Sports Complex, the city is paying a high price.

City Council has agreed to allocate $661,028 from its general fund balance to help cover costs associated with the court case of Wasilla vs. Gary Lundgren. Lundgren sued the city and won an award of just over $1 million after the city used eminent domain to take a parcel of property he was negotiating to buy.

“I think it’s time to move on this issue, sooner than later,” Councilman Marty Metiva said about paying the settlement. With about another $300,000 in interest that accrued over the years, the council agreed with a unanimous vote and minimal discussion it needed to act quickly.

The dispute over the land began during the administration of former Mayor Sarah Palin in the late 1990s when the city and another buyer were interested in the same property, said Wasilla City Attorney Tom Klinkner. The city was negotiating with a local branch of The Nature Conservancy to buy the parcel of land where the Multi-Use Sports Complex is now located. The problem was Gary Lundgren had already begun negotiations with the national branch of the organization for the same tract of land. The city sued to acquire the land, putting it and Lundgren in federal court.

Initially, it looked as though the city would win the case, but the judge decided Lundgren should receive the land, Klinkner said. With a large amount of money already dedicated to the land acquisition, the city, by this time in the administration of Mayor Dianne M. Keller, used its eminent domain powers to finally condemn and take the parcel in December 2002.

Archie Giddings, Wasilla Public works director, said despite all the money and effort involved in the case, which could top $2 million, he still believes the city was right to use eminent domain to acquire the property. The $2 million-plus includes purchasing the land, and paying court and attorney fees.

“It made the outcome more certain,” Giddings said, adding the land serves a valuable and vital public use.

Wasilla is responsible for paying Lundgren and other costs associated with the case, Klinkner said. The city has already issued a $175,000 payment to the court, bringing the award amount to about $830,000. The city is also responsible for paying Lundgren’s lawyer fees — an amount yet to be determined. Adding the amount council recently allocated, the city has so far committed more than $836,000 toward paying down the award.

Susan Colligan, the city’s finance director, said without knowing the total cost of the award after all the fees are tallied she is unsure what impact the final settlement will have on the city’s finances. Some budget adjustments may be needed ensure adequate funds are available, she said.

Contact Chris Gillow at chris.gillow-@frontiersman.com or 352-2284.