City moves closer to acquiring, redeveloping Hotel Solem

One of the first buildings constructed in Cloquet following the historic 1918 fire is on the verge of condemnation, following a hearing in District Court in Carlton this week.

Using eminent domain statutes and referring to the building in its present state as a public hazard, the city of Cloquet moved closer to purchasing the building for $8,000.

The goal for the city, stated last December, is to attract new ownership that would restore and redevelop the building.

The fate of the Hotel Solem property unfolded Tuesday, Aug. 2 with building ownership declining to be present or even represent itself during an online hearing in front of Judge Amy Lukasavitz.

She ordered a panel of three condemnation officials, made up of local real estate agents, to verify the $8,000 appraised value of the property, before any agreement to cede the building back to the city.

"The need for the taking in this case is due to the hazard this property is creating," said attorney William Helwig, representing the city of Cloquet.

Helwig described a lack of maintenance catching up with the 103-year-old building. A leaking roof is creating structural issues, he said, the upper floors and basement are in disrepair, and bricks are bulging from the exterior walls. The building was declared a hazard by the city last winter.

Helwig further described two years of notices and orders made by the city in attempts to get the owners, Felipe Mata and the estate of the late Carlos Villareal, to comply with repairs. It reached a point at which the city acted to fence off the sidewalk to protect pedestrians from falling bricks at the corner of Cloquet Avenue and 10th Street, Helwig said.

The city subsequently offered $8,000, then $50,000, and, finally, $75,000 in April, with Mata declining and holding out for the previous taxable valuation of $172,700, according to Carlton County property records.

"I told him that's not what the appraisal is showing," Helwig said of Mata, who lives in Mendota Heights, Minnesota. "He's rejected every offer, so we've determined good faith negotiations have failed."

Hotel Solem rose luxuriously and as a sign of new beginnings in June 1919. It housed hotel guests and later apartment tenants throughout most of its life until an interior fire in 2001 displaced its low-income residents.

The city purchased the building in 2002 from Wells Fargo Bank for $67,500 and also settled a lien.

In September 2003, the city sold the building in "as is" condition to Mata and Villareal, who opened the Mexico Lindo restaurant to thriving success. At the time, there was no plan to renovate or reuse the upper two floors of the building, although the new owners did make repairs to the roof.

Subsequently, the restaurant changed ownership, becoming Pedro's Grill and Cantina, which last October moved across the street and two blocks down.

The empty building was declared a hazard last December, with the city's Economic Development Authority recommending, and city council approving, the move toward acquiring the property through the court.

At the time, Holly Hansen, the city's community development director, said the city needed "a responsible owner that cares about building in this community and wants to renovate and occupy that."

A legal announcement of the condemnation hearing said sale of the building to the city "will result in a significant public benefit to the city's business base and provide new opportunities for economic growth."

In May, the city issued the owners, including Villareal's estate based in Texas, a notice of intent to take possession of the property while paying "the approved appraised value of the property."

Helwig assured the judge the owners had received the city's correspondences, and that Mata had an attorney reach out to the city during negotiations in spring.

"He's very aware of what's going on,' Helwig said.

The city shared its appraisal and photos of deterioration with Mata's attorney.

"I haven't heard from him since," Helwig said, noting Mata has never filed anything with the court.

During the hearing, Judge Lukasavitz mostly listened, and said she'd issue an order to convene a panel of condemnation officials "in a day or two."

"I'm not going to wait too long," she said, later noting the lack of property ownership present in the hearing.

There was nobody waiting in the online queue, the judge said, and nobody popping up to enter into the hearing.

"So, we'll let the record reflect that," Lukasavitz said, before concluding the hearing.