Minnesota state auditor ends review of controversial Orono land deals

The Minnesota State Auditor’s Office has ended its review of controversial Orono land deals that transferred property rights to city officials and became a point of debate in recent elections.

The City Council vacated public rights-of-way on property for Planning Commissioner Bob Erickson and Council Member Matt Johnson in recent years. Critics said the moves potentially made their land more valuable while reducing public access to the lakeshore.

A group of former Orono mayors asked the auditor’s office in 2022 to investigate, saying they believed the deals represented a conflict of interest and went against longstanding policies aimed at preserving public access to Lake Minnetonka. Officials who defended the deals, meanwhile, described them as an effort to clean up century-old land records that hindered development.

In a September memo, shared with the Minnesota Star Tribune this week, the State Auditor’s Office wrote that it was clear the land deals had been controversial.

“However, we do not see a basis for further ... inquiry into them, as such inquiry would have to be based in determinations that either are for courts to decide (e.g., were ... beyond the broad discretion afforded to the City Council for such matters) or left to the will of the voters, who ultimately judge the wisdom of the city’s elected council members in their exercise of the power given to them,” the memo said.

Neither Erickson nor Johnson could immediately be reached for comment.

In an interview Friday, State Auditor Julie Blaha said her review focused on two main points: whether Orono city leaders overstepped their authority and whether there was a conflict of interest.

Blaha said the transfers didn’t “hit that bar of being clearly outside the public interest in a way we could decide that,” though she left open the possibility “a court could decide that.”

As for the conflict of interest question, she said, “just a connection is not a conflict.” According to city records, Erickson stepped down from a Planning Commission vote on his application, and Johnson recused himself from votes on his property.

“I think a really important idea in the conclusion is that, while we didn’t find something that we could look at on either authority or on conflict of interest, that doesn’t mean these decisions were good or bad,” Blaha said. “That is for the residents of Orono to decide.”

Orono is on track to replace four of its five elected leaders next year. Voters chose a new mayor and two new council members in elections earlier this month. Johnson, who had two years left in his term, resigned earlier this week.

Former Mayor Gabriel Jabbour, part of the group that requested the auditor’s review, is happy to see change. He said he was surprised to learn Friday about the auditor’s memo and to see that it didn’t talk more about the issues affecting the waterfront.

Jabbour said he felt state auditors did a thorough review that stuck narrowly within the parameters of their field but, “I respectfully disagree with them.”