Orono gave 'sweetheart' land deals to city officials, ex-mayors charge

The city of Orono has made sweetheart deals transferring valuable Lake Minnetonka property rights to city officials, according to three former Orono mayors.

The ex-mayors have sent letters to Minnesota Attorney General Keith Ellison and Auditor Julie Blaha, asking them to investigate transfers they claim are illegal.

"It is more than a sweetheart deal," said former Mayor Gabriel Jabbour. "In my opinion, it is a theft from the public and giving it to their buddies."

Dennis Walsh, the city's current mayor, said the property deals were needed to clarify issues stemming from century-old land records that are no longer accurate.

"We're cleaning up things that affect people's title and affect the way they use their property," Walsh said. "We are here to solve issues that were put in place 100 years ago for things that don't even exist anymore."

Earlier this year, the City Council voted to vacate a public lakeshore right-of-way to benefit Bob Erickson, a member of the city Planning Commission. This month, the council took similar action on behalf of one of its own elected members, Matt Johnson, vacating two city rights-of-way and an alley on lakefront property that Johnson owns.

Critics say vacating the rights-of-way allowed Erickson and Johnson to consolidate multiple properties into larger parcels, potentially making their land more valuable while also reducing public access to the lakeshore.

"That deal smells," former Mayor Jim White said of the Johnson transaction. "I've never seen such brazen disregard for things that are really important to the people who live here."

Johnson did not respond to multiple emails requesting comment.

State law requires cities to consult the Minnesota Department of Natural Resources when vacating any road, alley or right-of-way on or adjacent to public waters. In both Orono cases, the DNR opposed the transfers, saying they served no public benefit. But the city isn't required to follow the DNR's recommendation.

In the Erickson deal, the Orono city engineer also opposed the transaction.

In their letter to Ellison, Jabbour and White — along with former Mayor Barbara Peterson — called the property transfers "illegal under state law, the misuse of city resources and an example of unethical conflict-of-interest that cannot go unaddressed."

Cleaning up past mistakes

Walsh said that outdated land records have been a hindrance to orderly development. In the early part of the 20th century, the city laid out a series of future roads that extended out into what is now open water as the lake level fluctuated.

The same former mayors who are now objecting refused for decades to fix the problem, Walsh said.

"We have roads and alleys and plats of land in the middle of the lake from over 100 years ago. We have helped people fix these problems," he said. "We have looked at these on a case-by-case basis."

Just four years ago, the city's Planning Commission was concerned about keeping public access to the lake from Johnson's land when its previous owner proposed building a subdivision there.

"It would be nice in my mind to keep [access] to the lake in that area," John Thiesse, then-commission chair, said at a 2018 meeting. "We've basically not yielded on that," another commissioner said..

"What's important to the Planning Commission at this point is access to the lake," then-city development official Jeremy Barnhart said in summing up the discussion for commissioners.

Bigger plans in store?

Critics of the deal are also concerned that Johnson may have development plans for the property, which totals about 5 acres on Forest Lake, an inlet that connects to West Arm and Jennings bays. Over the years, the city has entertained several proposals for subdivisions of up to 14 homes on Johnson's land and an adjoining 10-acre parcel.

At a Dec. 12 council meeting, Johnson said he planned to use the property for himself and perhaps his parents.

"This is not for a development purpose," he said. A neighbor on Wildhurst Trail was skeptical.

"This is step one to getting a bigger development built," Brian Turbeville told the council during public comments on the proposal.

Johnson, the City Council member, paid nothing for the vacation of the rights-of-way on his property. Erickson, the Planning Commission member, made a $100,000 donation to the city's park fund when his right-of-way was vacated.

Walsh said the transactions involving city officials aren't illegal because state law merely prohibits selling city-owned land to officials. No sale, no foul, he said. The former mayors believe the transfer of property rights to city officials falls under the same umbrella and are hoping Ellison sees it that way.

"We have followed a commonsense rule," Walsh said. "And it has nothing to do with whether it's Matt Johnson or anybody else. He's a citizen, and he has rights."

Jabbour said the current council's actions go against a longstanding policy that the city should never give up its lakeshore property and public access to Lake Minnetonka.

"What we're trying to do is say, 'Look, there's a skunk in the house,' " he said.