North Oaks build-out to continue after settlement between James J. Hill descendants and the city

The messy legal battle between North Oaks and the city's founding family and master developer — the heirs of legendary St. Paul railroad magnate James J. Hill — is finally over.

The result is that the exclusive Ramsey County suburb of 5,300 will be built out over the next decade according to the Hill family's vision, despite initial resistance from a majority of the City Council.

The North Oaks Co., owned by Hill's great-granddaughter Mari Harpur and her husband, Doug, now has the city's approval to build out the final phases of the private community.

That includes lots for 37 single-family homes, 73 townhomes and 74 condos — adjacent to 900 acres of open space that make up the largest conservation easement held by the Minnesota Land Trust in the metro area, said Mark Houge, president of North Oaks Co.

The only approval still needed is for 17 additional lots for single-family homes, he said.

"The Harpurs are really proud of the work they've done to get us where we are today," said Houge, noting the ongoing emphasis on environmental stewardship. "Each day the value of that conservation easement becomes more evident."

But it's taken months of litigation and hours of contentious City Council meetings to get to this point, he said.

The public dispute roiled the affluent bedroom community, best known for its natural setting and its privacy. Uninvited visitors can be ticketed for trespassing by driving on the city's private roads.

City officials did not return requests for comment. But according to a news release, they are "pleased to have resolved this litigation" and look forward to working with North Oaks Co.

The release added that the litigation will not affect North Oaks' insurance premiums. The city relied on the League of Minnesota Cities Insurance Trust for legal counsel.

The Hill family's history with North Oaks dates to 1883, when Hill bought more than 5,000 acres for farming. His descendants inherited the property, and in the 1950s created a community with spacious lots, ample privacy and an emphasis on preserving its natural beauty.

Mari Harpur bought out her siblings in the 1990s and mapped the build-out of the community with an eye toward environmental stewardship. Newer homes are clustered together to allow for open natural space.

City leaders approved that concept in 1999 as part of a planned development agreement. Since then, that agreement has been amended multiple times and construction has begun in phases.

But a new majority of City Council members elected in 2020 was skeptical of the 1999 agreement and its amendments. The council denied final approval of the townhome development in fall 2021, citing failure to meet applicable regulations, and earlier this year withheld final approval for 16 single-family lots.

North Oaks Co. filed suit challenging both council denials. At a hearing in the case in February, Ramsey County District Judge Patrick Diamond said city leaders' actions appeared to "border on disingenuous."

In April, the City Council reversed itself and approved both the townhome and single-family development.

"It was exactly as was originally presented by the company, in conformance with the terms of the development agreement between the city and the company," Houge said.

Diamond ruled in July that the council's reversal made the North Oaks Co. suit and the company's request for damages largely moot. Earlier this month, the city and company agreed to dismiss one remaining claim related to public records and the Minnesota Data Practices Act, ending the litigation.

Houge said an independent appraiser estimates North Oaks Co. lost $1.5 million due to delays and changing market conditions.

"Interest rates have doubled from 3 to 6 percent, and construction costs have gone up 20 percent," Houge said. "That will ultimately be borne by the homeowners."

The company considered appealing the judge's ruling on damages but decided against it. "We didn't feel it was fair to penalize the entire community for the actions of four council members. The residents would have paid," Houge said.

The Harpurs, who own a residence in North Oaks, sent out a two-page letter to every household in the city earlier this month providing a timeline of the dispute and explaining the outcome.

"For 70 years we have had a good working relationship with the city. Hopefully we are near the completion of our development and we can get back there," the Harpurs wrote. "We are proud of what we have created for the community."