City records obtained by The Forum show the city settled earlier this month with Ronald Bergan for $130,500, including attorney fees. It settled in November with Richard Quam for $200,000, records show.
City Engineer April Walker said there are several more properties Fargo must soon acquire to keep pace with dike construction. She said staff is assembling a list for the City Commission, which will decide which ones to push harder to purchase.
Some property owners have received offers from the city and several have rejected those offers, with some rejections potentially leading to court action, she said.
Other owners will soon receive their offers, she said.
The city has bought out more than 170 properties since 2009 at a cost of $57 million. Another 80 properties were paid for easements, meaning dikes can be built on them, but owners retain control of their properties because their building doesn’t have to be torn down or moved.
More than 16 miles of dikes have been built on these properties.
Another 120 or so properties remain to be purchased at an estimated cost of $36 million. More than 13 miles of dikes not yet built are planned.
Walker said the areas where buyouts are most urgent are the Harwood Drive area across the river from River Oaks Park, along Drain No. 27 in Copperfield Court and an area near the city of Prairie Rose, which is surrounded by the city of Fargo on all sides.
City Attorney Erik Johnson said when the city requires a buyout it will typically get an appraisal done for the property and use that as the basis for an offer. Owners may get their own appraisals and come up with counteroffers, which sets the stage for negotiations.
Johnson said sometimes it’s not about money but when owners must move out of their home.
An eminent domain lawsuit is usually filed when negotiations reach a dead end, though as with the Bergan and Quam case, settlements may occur before the case goes to court because both sides wish to avoid costly and lengthy legal proceedings.
Things are a bit different when it’s a voluntary buyout, typically to get homes out of the flood plain. The offer there starts at 110 percent of the assessed value, which often lags behind market values because of the timing of tax assessments.
Coming out ahead
With the Bergan case, the city wanted to buy vacant lots at 1102, 1104 and 1110 4th St. S. that couldn’t be built upon anyway, according to Walker.
The owner didn’t want to sell, but ultimately agreed to grant the city an easement, meaning he owns the land but the city has the right to build on it. The city determined it was worth about $6,000, but Bergan said he paid more for it. He also wanted to retain control to do as he wished on parts of the property that the dike wouldn’t touch.
Ultimately, the city agreed to the higher value and an easement, which leaves Bergan with ownership but allows the city to build dikes.
With the Quam case, the city wanted to buy his home at 1118 4th St. S. It was appraised at $140,000, but the city offered $150,000 plus help with finding a new home, moving expenses and tax credits worth a total of $192,500.
The settlement was $7,000 higher and allowed Quam to rent the home afterwards until this month.