Kor Ethanol site may revert to state

By Craig A. Johnson | October 06, 2009
Report posted Oct. 22, 2009, at 3:42 p.m. CST

The Minnesota Department of Revenue and the City of Dundas are at odds over the disposition of a 2.7 acre parcel where Kor Ethanol's plant was to be built. At issue is the city's use of the land in accordance with state law, which mandates the property be used for a municipal center or other authorized public use.

The Kor property was forfeited to the state for nonpayment of taxes. According to state law, the city has three years to make use of the forfeited property for a public purpose. In April 2008, that window would close and the city would be compelled to either purchase the property or convey it back to the state.

The city, through an agreement with the county, sent a letter asking that the state's reversionary interest be removed from the property, which would open up the site to other uses. At the time, Dundas had several buyers interested in the property, but none of the proposed uses met the state's prescriptive use.

At least, that's what the Dundas City Council thought. According to John McCarthy, city administrator, the reversionary order opinion they received from a state's attorney was not correct.

"The site is located in our industrial park," McCarthy said. "We would like to use that site for development. It has been cleaned up, we've gone through a phase one and phase two environmental study and we have two parties interested in acquiring the land."

The Kor plant was a small ethanol plant and, according to McCarthy, the city would be able to assess any of the fees they incurred on the next owner.

The Dundas City Council voted 4-1 to file an appeal in district court should the state attempt to reclaim the site. The vote gave the city permission to file an appeal immediately without scheduling an emergency session of the city council.