Another developer is disputing charges the city of Excelsior billed him after a failed attempt at building in the city.
Developer Todd Frostad had proposed to build a medical clinic at 712 and 734 Galpin Road, off Highway 7 in Excelsior.
After the council didn't approve Frostad's plans last year, the city sent him a bill for nearly $19,000. The first bill went out in November of last year, and another one was sent in February.
A June letter sent by City Manager Kristi Luger stated that if payment wasn't received by July 31, the fees would be assessed to his property.
"I told them this is ridiculous," said Frostad, who waited to give the city formal objection until a similar situation with developer Jon Monson was resolved.
In March, the council concluded that Monson did not owe the city $24,000 the city initially billed him after he suggested building a pavilion on the shores of Lake Minnetonka.
The two situations are different in that Monson did not own the land he hoped to build on and he didn't make formal application.
Frostad owns the land, near Ridgeview Medical Clinic, and made a formal application.
When submitting the application, Frostad signed an agreement to pay for all fees and expenses incurred by the city for processing it.
"He signed off on it," said Luger.
But Frostad points to another step in the city's process that states that before an application will be discussed by the City Council, all fees must be paid.
At the time the council discussed the application, the city shows that Frostad's escrow account was already depleted.
In 2005, when Frostad first discussed developing the property, he put $3,000 into an escrow account. By March of last year, the city shows those funds had been used.
Luger said that because of potential litigation she didn't want to comment on why the council discussed Frostad's application when the city showed he had an outstanding balance.
She did say that it was just "one phrase in the policy."
From Frostad's perspective, he feels he was owed notification during the review process that he was accumulating the charges.
"I would have withdrawn the application if I knew those were the fees," said Frostad.
He also questions the amount of the bill, which at $18,600 is "significantly outside the norm," according to Frostad, "$18,000 is offensive."
Most of the charges billed to Frostad were from Northwest Associated Consultants and WSB & Associates, which are the city's planning and engineering consultants.
"I think the city is grasping at straws because of the economic situation," said Frostad.
While Frostad hasn't been successful at building in Excelsior, he did receive approval within recent years from the Shorewood City Council for an office building on County Road 19. He said Shorewood charged him less than $1,000 for the process.
Both Monson and Frostad's plans were discussed before the city updated its procedures regarding collecting fees from developers.
"They were caught in an old pattern," said Luger.
The city used to accumulate bills throughout an application process and present one bill to the developer at the end. Since January, the city mails bills out monthly.
Luger said that the dispute with Frostad is the last significant bill to sort out from the old way of billing.
The July 31 deadline the city gave Frostad to pay up has come and gone. Frostad hasn't paid the bills and the city hasn't assessed his property.
Luger said the city is currently in the process of drafting a letter to Frostad that notes the disagreement.
City Attorney Kevin Staunton is researching how Frostad could appeal a decision and its impacts on the city.
While the City Council hasn't had any formal discussions about the issue, council members have been told about it, according to Luger.
Frostad said he hopes the dispute won't end up in court, but said that if the city doesn't make "reasonable adjustments" to his bill, he'll pursue legal action.
