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Old Kmart building runs afoul with city

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News Worthington,Minnesota 56187 http://www.dglobe.com/sites/all/themes/dglobe_theme/images/social_default_image.png
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Old Kmart building runs afoul with city
Worthington Minnesota 300 11th Street / P.O. Box 639 56187

WORTHINGTON -- Time is up for the owner of the Northland Mall.

Stemming from an inspection in mid-June at the former Kmart building, the mall's owner, Northland Mall Realty Management LLC, was sent an official letter from the city of Worthington.

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From that letter, dated June 24, the ownership group had 30 days to reply with a plan to address the issues related to the building.

"Their deadline was toward the end of July, 30 days after the receipt of the letter," said Brad Chapulis, director of community and economic development. "Staff had one phone call conversation with the ownership, and there was no verbal response as to how the ownership was going to address the violations or issues that were outlined in the notice. As such, since the time has expired, we have not received a written plan as was outlined in the letter. Therefore, as staff we are identifying that as no official response. We are now looking to take this to the council to declare it a hazardous building or public nuisance, which will outline a due process to assure the building is either repaired or demo'd."

The letter, which was signed by Chapulis and building official Arman Eshleman, outlined the conditions and violations within the building.

"We were given the access through a warrant the police department had issued by the courts," Chapulis said. "At their request for our attendance, our building official was able to walk through the facility and identify the concerns and issues that we have specified in the letter."

Listed in those violations were: lack of maintenance resulting in roofing failures and leakages; mold growth in many areas; electrical wiring has been exposed to water; electric fixtures have been altered; fire sprinkler/alarm notification system is inoperable; proper lighting and emergency lighting is not provided; the HVAC systems are non-functional; and the building is being used for storage purposes not authorized or approved by the city through the permitting process.

"It's not very nice in there," Eshleman told the Daily Globe in a July 17 article.

The next step is to take the issue before the city council. Chapulis hopes to have it on Monday's agenda.

"That is my game plan at this point in time," Chapulis said. "However, I am meeting on Thursday with legal counsel to outline those next steps. Right now, our intention is to have that in front of council on the 12th."

At that meeting, the council could potentially take action.

"What they will be doing is supporting our determination by declaring it a hazardous building and ordering the repairs within a given period of time," Chapulis said. "If not, that would open up the door for us to go through the legal system to have the work done, either by the owner or by the city with the cost being the responsibility of the ownership."

However, currently the only issue with the property is the former Kmart building.

"We are looking at the condition of the remainder of the building, and there might be action at a later date," Chapulis said. "But at this time, it's specifically the Kmart building itself."

If it does go that far, the recommendation will be to demolish the building.

"The ownership has the ability to do one of two things to abate the issue," Chapulis said. "They can do it either by repair or by demolition. If it gets to the point that we're going through the legal system to take lead on this, staff's recommendation would be demolition."

Those aren't the only issues facing the mall ownership.

According to Kris Ray, chief deputy auditor-treasurer for Nobles County, the management group owes $141,081.61 in taxes, which includes penalties and interest.

There are seven parcels of land. The first half of the 2012 taxes were paid on the smaller pieces of land. The largest parcel -- which includes most of the mall property -- didn't have any taxes paid on it in 2012.

"With 2012 and the current year -- nothing has been paid on the first half of 2013 -- and, of course, the second half isn't due until October, but that's all part of the numbers because it is payable," Ray said.

However, the forfeiture guidelines are a few years from being in place in this case.

"How the forfeiture proceedings work is that is based on the year that's the furthest behind, so for instance, 2012, if that continues to remain the year that's the furthest behind forfeiture, proceedings would start in the spring of 2016," Ray said. "That's what it is for non-homestead property. If they would pay 2012, they would bump it up a year, so then it would be moved to 2017."

Ray said typically the tax-forfeited properties they usually deal with are parcels of land that weren't deeded properly or properties that aren't worth anything.

"When we start proceedings, we start with all lien holders, so the mortgage companies are notified as well," Ray said. "We haven't dealt with anything this big ever being forfeited. Hopefully, it won't come down to that."

According to Ray, the biggest parcel -- for just the year 2012 -- generates $12,424 worth of tax revenue for the city. The state is entitled to $11,500, the county $9,098 and the school $8,033. Since it's been two years since taxes were paid on that parcel, the amount each entity is missing out on is doubled.

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