By Dan Emerson
Dolan Media Newswires
Minneapolis — The former James E. Kelley farm, a 60-acre site just southeast of the Mall of America, may be the most picturesque spot in Bloomington. Vintage rail-fencing surrounds pastures where sheep and llamas still graze, with a spectacular view of the Minnesota River Valley.
And as the largest parcel of undeveloped land left in Bloomington, it’s also highly prized by developers.
United Properties signed a purchase agreement for the site last year. But it’s unlikely that development will take place anytime soon because of a pending lawsuit and other issues, including the slow commercial real estate market.
The descendents of St. Paul attorney James E. Kelley, who bought the property in 1932, have filed suit against the city of Bloomington, contending that zoning changes required by expansion of nearby Minneapolis-St. Paul International Airport have substantially reduced the land’s value.
To allow the addition of the north-south runway, which opened in 2005, the city revised the farm’s zoning to comply with runway safety-zoning requirements mandated by the federal and state governments and the Joint Airport Zoning Board.
The new zoning prohibits residential development on the site and limits the height of any office towers to about 14 stories, depending on exact location within the site.
The Kelley family’s suit demands that the city and/or the Metropolitan Airports Commission acquire the land by eminent domain. The city and MAC contend the suit is without grounds.
The farm once covered more than 1,000 acres, but land was gradually sold off as the city grew. In 1986, when the farm’s owners opposed efforts to buy land for the Mall of America, the city condemned 32 acres and paid the family $10.4 million.
It doesn’t appear the current dispute will be resolved soon, said Christopher Penwell, the attorney representing the farm’s owners. He said it’s likely the Kelley Farm case will be stayed until a similar suit involving land near the Rochester airport is resolved by the state Supreme Court. That probably won’t happen until mid-2011, Penwell said.
MAC spokesman Patrick Hogan said the Kelley family’s lawsuit came as a surprise, “because they sat through the public hearing process several years ago when we were in the process of developing the new runway, and didn’t raise any objections.”
Monte Mills, an attorney representing Bloomington, said that in 2004 the city invited the landowners to submit a new proposal for development within the parameters of the ordinance, “but for nearly six years the city heard nearly nothing from them regarding development issues, until it was served with the lawsuit.”
Meanwhile, United Properties signed a purchase agreement for the site in 2009 but has been unable to secure prospective tenants for an office development, said spokeswoman Jessie Folkens.
Along with the lawsuit, two other issues could affect development.
The land was once used as a burial ground by native Americans. In the 1880s, two dozen small burial mounds were discovered there. But over the years, farming and construction seem to have removed evidence of the mounds, according to State Archeologist Scott Anfinson. In recent years, archeologists and soil scientists hired by the state and the owners have been unable to find any remaining traces.
“I have asked the current owners and prospective buyers to proceed with caution as burials could still exist somewhere on the property,” Anfinson said. If burials are discovered, they would be protected under state law.
Another issue that could influence development of the site: An active trout stream runs through the low-lying southwest corner, according to Brian Nerbonne, trout stream habitat specialist for the Minnesota Department of Natural Resources. Certain pollution-prevention measures might be required under state law.