Landowners say agents 'not negotiating' on land prices for FM Diversion

FARGO — Ray Kvalvog bought land by the Red River near Oxbow that he and a business partner planned to develop into a housing subdivision called South Bend.

They had preliminary plat work done in 2006, but the project has been on hold since the 2009 flood.

The Army Corps of Engineers, however, has other plans for the property — it’s the site of the planned Red River control structure, a key component of the $2.75 billion metro diversion project.

Kvalvog, who says he isn’t against the diversion, hasn’t been able to reach agreement over the value of the land — a grievance he brought Monday, Aug. 3, to the Cass County Commission, which heard from a handful of owners who have not reached agreement to grant rights-of-way to their land.

The crux of the dispute: Kvalvog and his partner paid a premium price for the farmland with plans to develop it, but land agents for the diversion project consider it farmland, worth $6,000 an acre, or $411,000 for the 68.5-acre parcel.

Land agents and the Cass County Water Resource District, the public entity buying land in the county for the diversion, haven’t budged from that original offer, even though another appraisal and other reviews show the land is worth $1.2 million to $1.6 million, Kvalvog told commissioners.

“In my case, we could make a deal,” he said. But in many contacts with diversion representatives, he added, “There was no movement whatsoever."

“To me, that’s not negotiating.”

Also, Kvalvog said, “Every piece of property is unique,” but he complained that the land agents from Burnsville, Minn., used a “cookie cutter process.”

RELATED: With first pour of concrete, $2.75B flood diversion takes shape south of Fargo-Moorhead
| North Dakota approves plan to address upstream impacts from F-M flood diversion project | Pandemic, lawsuits don't slow flood diversion construction

Commissioners urged the land agents and water district to negotiate with Kvalvog, but nonetheless voted unanimously to move ahead with a process to acquire rights-of-way for five properties — the first of 50 to 70 parcels with disputed values in the county to come before the commission.

“This one probably gave me the most headache,” Commissioner Rick Steen said, noting the “difference of opinion” over the “highest and best use” of the land. “Is it commercial?” he asked. “Is it ag?”

Commissioner Chad Peterson instructed land agents to keep negotiating with Kvalvog and his business partner, Mark Nyquist, to reach an agreement on price.

“We do not want to hurt owners in this process at all,” he said.

Monday’s commission action was merely to decide whether diversion representatives had followed state law and not threatened to take the land through eminent domain, a bargaining tactic banned by a 2017 law.

Two other landowners also spoke to commissioners to explain why they haven’t agreed on terms for their property.

Stuart Johnson, a farmer near Harwood who has been offered $1.7 million for almost 277 acres, said he is worried about impacts to his land. Engineers have failed to accurately predict impacts to farm fields, he said.

“My life’s been on hold for eight years,” with uncertainty over what will happen to his land, which lies along the path of the flood-control project’s 30-mile diversion channel. He’s worried about disruptions, noise during construction and other impacts.

“You’re going right through the heart of my land,” he said. He complained that negotiators have been unbending.

“You call what you’re doing negotiating?” he asked. “I call it a joke.”

Mary Adams also owns land needed for the diversion channel. Officials have offered $517,000 for almost 46 acres of land near Horace that she said is desirable for residential development.

Andy Westby, a real estate broker representing Adams, said most of the available land in the area of her parcel, a wooded tract along the river, is held by developers.

Adams said she made a counteroffer of $703,000, and agents have been willing to increase their offer to about $600,000.

Forum file photo

Eric Dodds, a consultant who is working on land acquisitions for the Diversion Authority, said agents will keep talking, with the goal of reaching settlements.

“We’d prefer to settle these,” he said. Officials have reached agreement in the vast majority of cases, Dodd said.

Officials said they will continue negotiating with Kvalvog, Johnson, Adams and other owners as allowed under the legal process, which grants the water district the right to gain access to the land even as those talks continue so the project can move ahead.

Workers are building the Red River inlet structure, which will serve as the gateway for water entering the diversion channel from an impoundment area near Horace. They also started construction on the Wild Rice control structure near St. Benedict, also in Cass County.

Officials are striving to have the project ready by the spring of 2027 even as a dispute over a key permit for the project is pending before an administrative law judge in Minnesota. The permit is being challenged by upstream communities, including North Dakota’s Richland County and Minnesota’s Wilkin County.