James J. Hill heir sues North Oaks over blocked housing development

Heirs of railroad magnate James J. Hill meticulously designed and built the private community of North Oaks over seven decades, espousing quality and conservation as core values guiding development.

Now the North Oaks Co., owned by Hill's great-granddaughter, is suing the northern Ramsey County city that it helped to create — accusing a new majority on the City Council of blocking a development, a move it called an "extraordinary display of willful defiance" of its statutory and contractual obligations.

It's a rare public airing of grievances for this wealthy and private enclave of 5,300 where the roads and open spaces are private and uninvited visitors can be charged with trespassing.

In a suit filed in Ramsey County District Court, the company is asking a judge to order the City Council to approve final plans for Gate Hill, which calls for the construction of 73 homes — a mix of detached townhouses and twin homes — on a 32-acre site. Its one of the last planned neighborhoods in North Oaks before the posh community is considered built out.

The City Council on a 3-2 vote denied final approval at its Sept. 9 council meeting, going against a staff recommendation to approve the plans. The denial also belies a previous North Oaks City Council's preliminary approval of Gate Hill in November 2020.

"We believe the design responds to input of the planning commission, the North Oaks Home Owners' Association and the previous City Council," said Mark Houge of the North Oaks Co. "Doug and Mari Harpur, the owners of the North Oaks Co., have worked very hard to accommodate all of the desires of the community."

The suit also alleges that North Oaks Mayor Kara Ries, elected last November, made thwarting development a centerpiece of her campaign.

"Mayor Ries' 2020 mayoral election campaign was ... audaciously premised upon her commitment to reversing City Council's prior decisions" around development, according to the suit.

Ries did not return a request for comment, but the council debated and questioned staff and Houge for nearly four hours before voting down the project. The council majority, including Ries, Council Members Jim Hara and Tom Watson, listed eight reasons for their denial, including issues around parking, lot size and how the proposed Gate Hill neighborhood fits into a larger development agreement between the company and the city.

"Planning commissions and city councils have the right to deny final plan approvals if they don't comply with regulations," Ries said at one point during the meeting.

City Administrator Kevin Kress also did not return requests for comment.

At the center of the dispute is a 1999 planned development agreement between the North Oaks Co. and the city that laid out the completion of the city over three decades. The original agreement called for a maximum of 645 additional residential units and 21 additional acres of commercial development on 780 acres.

The North Oaks Co. also agreed to set aside more than 660 acres in a conservation trust and left an additional 220 acres as agricultural as part of the 1999 agreement. It's the largest conservation easement held by the Minnesota Land Trust in the metro area.

This 1999 agreement has been amended eight times over the years, including allowing for the construction of a senior living and care facility in the commercial district around 2006. Houge said the amendments now allow the company to build a total of 673 housing units — most of which have been built — and about 15 acres of commercial development that has already been completed.

Ries and two other council members questioned some of those amendments and related calculations.

Council Member Sara Shah, who along with Council Member Rich Dujmovic voted against denial, warned this decision put the city at risk of a legal challenge.

Ries had previously served on the City Council and often raised questions about development.

In August 2020, Ries' colleagues on the City Council at the time took a vote of no confidence against her after she was accused of improperly visiting a private development site with a hydrologist without the North Oaks Co.'s permission or the knowledge of other city officials. Ries vigorously denied wrongdoing.

The history of North Oaks can be traced back to Hill, the railroad magnate, who in the 1880s purchased 5,500 acres and turned it into a farm. His grandson Louis Hill Jr. eventually inherited the farm and began to develop homes in the 1950s for what was described as a model community that respected the environment.

After Louis Hill died in 1995, his daughter Mari Harpur and her husband, Doug, started the North Oaks Co. with a focus on environmental sustainability. They hired a landscape planner who created large conservation areas for the private community's use and grouped homes and other development around its edges. That resulted in the 1999 agreement.

Even without the new construction, North Oaks will still have about 1,900 homes on 5,500 acres, keeping it one of the metro area's most spacious communities. With median household income around $179,000, according to U.S. census data, it's also one of the state's wealthiest.

Shannon Prather • 651-925-5037