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A public hearing on the potential sale of Lakeview Homes is scheduled, but City Council members are speaking in opposition to the sale agreement being proposed.

For the past three months, City officials have been negotiating with potential buyers Mick Montag and Dennis Hood. The two Mankato developers have been interested in purchasing Lakeview Homes (the nursing home, Oak Terrace and Heritage House) for the past year.

City Attorney Doug Nesvig told council members last week that a public hearing on the proposed sale has been established for December 19th. Montag and Hood’s plan, financial information, and projected figures as to the tax impact will be revealed at the hearing, Nesvig explained.

For the past year, the entire City Council has expressed interest in selling Lakeview Homes which have been struggling financially. Council members believe the City is better off not being involved in the health care business.

Council member Roger Bruellman believes the City still needs to sell Lakeview Homes. But, Bruellman said Wednesday that, based on the current proposal, he cannot continue to support a sale to Montag and Hood.

Bruellman is against offering Montag and Hood 14 years of tax increment financing (TIF). According to City Administrator Lonny Johnson, this means the developer would pay taxes to the City, County and School District, but would be reimbursed for those taxes for a period of 14 years. The tax capacity of the proposed project is unknown at this time, Johnson explained.

Bruellman is also opposed to the City providing Montag and Hood with a $1 million loan. Another concern for Bruellman has been the opinions expressed by the Lakeview Home board and members of the community. “I need to represent these people,” Bruellman said.

Also opposed to the current proposal is council member Dale Breuer. He said a project of this size may justify five years of TIF, but not 14 years. Breuer is also opposed to a $1 million dollar loan saying the City could better use that money elsewhere.

Members of the Lakeview Home board believe the City should have continued negotiations with Augustana, a non-profit organization based in Minneapolis. Mayor Doug Quast said there would still be changes if the facility was sold to Augustana. He also said there would be no tax benefit to the City as Augustana is a non-profit organization.

Quast attended a recent Lakeview Home board meeting. He recommended a joint meeting between the City Council and Lakeview board members.

The City continues to look for more “expertise” to help in negotiating the sale of Lakeview Homes. According to Johnson, this “expertise” would ensure that the City is dealing with a fair purchase agreement. Nesvig asked the City’s bond attorneys if they could provide this expertise but has not yet received an answer.

Johnson and Nesvig will continue to work on finalizing a proposal prior to the public hearing in December. According to Nesvig, the City Council cannot approve a proposal before the public hearing.