Wasilla loses legal battle

WASILLA -- After four years of legal battles, it appears the city of Wasilla has lost in its efforts to claim nearly 150 acres near South Church Road and will have to pay not only its own attorney fees but a portion of the opponent's as well.

However, the city still owns 70 of the 150 acres that it won through eminent domain earlier this year, and the construction of the city's multi-million-dollar sports complex will proceed on schedule.

Last week U.S. District Judge John Sedwick sided with Gary Lundgren and The Nature Conservancy in a lawsuit Wasilla originally filed in 1999 that has since gone through numerous legal proceedings.

The lawsuit stems from an apparent mix-up in land negotiations in 1998 when both Wasilla and Lundgren were working on separate deals to purchase the 150 acres from The Nature Conservancy, a nonprofit group. In the end, Lundgren bought the land in contention, along with some additional acreage. Wasilla sued, claiming it had a contract with The Nature Conservancy to purchase the nearly 150 acres.

Sedwick's recent decision states that the land is Lundgren's, and that the city will have to help pay for both Lundgren's and The Nature Conservancy's attorney fees.

"We won clear title to the property that was in the eminent domain case and otherwise," Lundgren said this week. While the city will

retain the 70 acres for the sports complex and road access, Lundgren said the recent court finding means Wasilla's only claim on the land is through eminent domain, a process by which a government can take land for public use.

"The city has taken that property; they're taking it from me," he said.

Lundgren, a private developer who used to live in Fairbanks and now resides in the Virgin Islands, said he was relieved that the ordeal was finally grinding to a stop. He said he has paid hundreds of thousands of dollars in attorney fees to fight the city.

"If the city needed this property for a public purpose, it seems to me it would have been much better off taking it by condemnation in 1999 rather than go through four years of litigation," he said. "It would have cost them a lot less money, and the cost to taxpayers would have been substantially less."

That final bill has yet to be tabulated. Wasilla Mayor Dianne Keller said she could not come up with a number yet as to how much the city has invested in the court proceedings, and said Wasilla will be negotiating with Lundgren and The Nature Conservancy about how much, if any, of their legal fees the city will pay. In addition, Lundgren and Wasilla are still negotiating how much the city will pay for the 70 acres it claimed through eminent domain. Keller said the city attorney is estimating it could be another year or so before the situation is put to rest.

Despite the fact that Wasilla is the loser in this particular case, Keller said that from a larger perspective all the parties got what they wanted.

"I'm happy … We want the land for the sports complex," Keller said of the 70 acres the city ended up with. Keller said the final outcome was similar to an offer the city made to Lundgren before -- for the city to purchase the acreage needed for the sports complex and allow him to have the rest. In the end, she said, Lundgren will also come out ahead because of the city's road and utility work in the area.

"That's going to be prime land," Keller said.

While Lundgren agreed the city's improvements will increase the value of his land, he said Wasilla never offered to simply purchase the land for the sports complex and walk away from the rest.

While the disagreements continue, the two sides seem to agree on one item -- the legal battles have gone on for too long.

While the final decision will ultimately be the Wasilla City Council's, Keller said she will urge the city to not appeal the recent decision but instead get on with city business.

"I'd say, 'Let's congratulate everybody and be happy … and let's move forward,'" said Keller, who served on the city council beside then-Mayor Sarah Palin when the case was first filed in 1999.

This may be the first thing the city and Lundgren have agreed on in some time. Lundgren pointed out that he owns another 250 acres near the sports complex, in addition to the Wasilla Business Park and Alaska Mini Storage Complex, both in Wasilla. With the legal wrangling apparently drawing to a close, Lundgren said he plans to begin developing the land near the sports complex into the airport industrial park he said he had in the works since 1998. He hopes to break ground as soon as the snow is off next spring.

"We have plans to invest millions of dollars in the community," Lundgren said. "… We're in the business of developing property and we want to move forward with our plans. To do that it's absolutely essential that we have a positive relationship with the city."