BAXTER — A compromise agreement and settlement between the city of Baxter and Mills Property Investments was reached regarding the special assessment related to the 2025 Design Road/Highway 371 project.
The city levied a special assessment of $233,921.54 plus $2,750.98 interest for the Mills’ property along Design and Dellwood roads. Design Road was the subject of an improvement project for the road and stormwater. The assessment was payable over 12 years starting in 2026. Mills Property Investments filed an appeal to the special assessment in District Court.
This month, the city reported it reached a resolution and reassessed the property for $140,000. The compromise agreement was approved by Mills Property Investments, the city reported on June 16.
The $3.589 million project moved and enlarged a storm pipe to 60 inches to go under Design Road, which will be reduced to a 36-foot width and constructed to a stronger 10-ton design standard. The project is expected to relieve flooding issues on the west side of Highway 371 with water ultimately reaching the Whiskey Creek system, which aims to help clean the contaminated water collected from Baxter’s commercial district before it flows into the Mississippi River. Federal and state funds are paying the lion’s share of the project, about $3 million.
Before the project began, drainage from a vast swath of the commercial area was funneled through a 42-inch storm pipe toward Fleet Farm and Mills Auto. The water flows under Golf Course Drive to Whiskey Creek and on to the Mississippi River. The project relocated and widened the sanitary sewer pipe.
The project is also expected to alleviate flooding issues by Taco Bell and direct water from the west boulevard side of Highway 371 and move much of what engineers describe as an overloaded sanitary sewer, flowing under Fleet Farm, to flow under Design Road. Flooding issues appeared to be exacerbated after the Minnesota Department of Transportation added impervious surface in 2011.
At the Sept. 29, 2025, assessment hearing, Kelly Dahl, attorney representing Mills’ properties, was on the record objecting to the assessment. In the court documents, Mills Property Investments stated the assessment unlawfully exceeded the increase in value for the property resulting from the city’s project and they also sought attorneys’ fees and costs along with whatever other relief the court may deem just and equitable.
With the compromise agreement and settlement stipulation to resolve the appeal, the assessment for Mills Property Investments was reduced to $140,000 plus any accrued interest due and payable as of May 19. The assessment may be paid in equal annual installments over 11 years with the first paid on or before the first Monday in January of 2027 at an interest rate of 5.05%.
The city noted the property owner may, at any time, pay the entire amount of the assessment remaining unpaid to the city with interest accrued to Dec. 31. The city reported such a payment must be made before Nov. 15 or interest will be charged through Dec. 31 of the next succeeding year.
In the agreement with dismissal of the assessment appeal, the city stated, “the City and the Property Owner will cooperate and use their best efforts to ensure the most expeditious implementation of the various terms of this agreement.”
The agreement provides for the dismissal of the appeal without costs or attorneys’ fees to either party.
“The appellant and respondent agree that the above-entitled action shall be dismissed with prejudice and without any award of any litigation costs, expenses and/or attorneys’ fees to any party,” the court document on the stipulation reported.
