Supreme Court denies Cave case

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Last week the Minnesota Supreme Court refused to hear the case of Ed Cave & Sons, Inc. (Sam Cave) vs. city of Two Harbors, which means the Agate Bay property saga may be nearing some resolution.

“I do not know of any other appeals or court procedures he can take,” Two Harbors City Attorney Steve Overom wrote in an email.

The court decision was an expected one in a legal battle that has lasted for six years.

“I was not surprised,” Overom said. “I felt all along that an agreement had been reached between Mr. Cave and his companies and the city of Two Harbors. This view is now shared by Judge (Ken) Sandvik, the Minnesota Court of Appeals and the Minnesota Supreme Court.”

Cave said Monday the denial was expected. He said his attorney was “convinced” they were in the right but Cave ultimately knew things wouldn’t go his way.

The battle has been over property Cave purchased from DM&IR Railroad in 2002 along Agate Bay, including parcels surrounding the Two Harbors Lighthouse. He had plans to build a hotel and condominiums.

The city, after a public outcry about losing a say on development along the harbor, disputed some of the land ownership and told Cave he couldn’t build under current zoning. The city offered to work with Cave on the zoning and offer some tax breaks on Agate Bay and Pork City Hill development in exchange for a transfer in ownership of the wooded property on Lighthouse Point and some other areas along the bay.

Cave said the city needed to guarantee it would annex his 140 acres on Pork City Hill because it couldn’t offer tax increment financing or other development incentives without the property still in Lake County’s hold.

Cave and the city came to an agreement but then he backed out, the city contended. Several lawsuits ensued along with the running dispute over whether the original agreement was binding.

A motion to hear the settlement dispute was originally dismissed by Sandvik. It then went through the appeals process and eventually to the state Supreme Court.

What does this mean for the city?

“The settlement agreement that [city representatives] … worked so hard to achieve has been determined to be binding on Mr. Cave and his companies,” Overom said. “The city can now move forward in accordance with the agreement.”

Two Harbors Mayor Randy Bolen, who was the city council president during much of the legal wrangling, said he remains “cautiously optimistic” since the decision. The council’s litigation committee will meet in early January, he said, and look at where the city should go now. Because it will meet with the city attorney to discuss strategy, the meeting won’t be open to the public.

Cave said he’s glad the lawsuit is over and he can move on. He’s more than happy to turn the land over to the city and abide by the zoning process and other restrictions on development along the bay.

As for his own development plans in Two Harbors, Cave said there aren’t any. “We kind of missed the good economic times,” he said. “I can’t say that I have a plan.”

He said after six years of legal weaving, he may be “past his prime” and lacks enthusiasm for any project. He hopes the proposed small craft harbor on Agate Bay will ease opposition to changes in the area.

Cave said he simply wanted development in Two Harbors to enhance the quality of life and improve the tax base. “I guess some people just want a place for trees to grow,” he said.

At stake

Highlights in the original agreement between Sam Cave and the City of Two Harbors include:

- Cave will give the city title to land along the waterfront, including the forested area of Lighthouse Point, Van Hoven Park, the land surrounding the community center and certain roadways.

- Cave will dismiss all lawsuits against the city.

- The city will allow Cave to extend utilities, at his cost, to his commercial property on Minnesota Highway 61, and to Pork City Hill.

- Plans for condominium developments on Lighthouse Point are subject to the city’s normal review and approval process. If the city fails to approve the developments, the settlement agreement will be voided.

- Two Harbors will create a tax-increment finance district on Cave’s 140 acres on Pork City Hill that will last for 25 years. Cave will be reimbursed 80 cents of every dollar he owes the city in property taxes, with the city retaining 20 cents. Cave’s proceeds will be used for infrastructure improvements for the developments.

- Two Harbors will use its best efforts to annex the Pork City Hill property through an orderly annexation with Lake County.

Tags: two harbors, sam cave, waterfront development, news