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Testimony peaks in Kolb vs. city lawsuit

Thursday, October 20, 2005

It was 1968 when Henry Kolb made an agreement with the City of Storm Lake to place a flower garden memorial on city property in memory of his grandson Robert, Norman Kolb's nephew. Henry Kolb later paid for a fountain at the garden. Two farms were placed in a trust to pay for the maintenance of the site.

A controversy arose when Norman Kolb objected to plans by the City of Storm Lake to relocate the gardens and fountain to make way for the $10-million lodge and water park centerpiece of Project AWAYSIS, a $29-million lakefront development project.

In July, Kolb filed a petition to keep the city from removing the gardens and fountain. Failing that, Kolb asked that the assets of the trust be returned to the grantors, or his heirs.

In a countersuit, the City of Storm Lake asked, among other stipulations, that Kolb be removed as trustee.

District Judge Don E. Courtney last week denied motions for summary judgment by both Kolb and the City. Before that, Judge Courtney denied Kolb's petition for a temporary injunction to stop removal of the Kolb gardens and fountain.

Construction crews removed the flower gardens and fountain last week. On Tuesday, District Judge Richard J. Vipond presided over the last phase of the controversy over whether the City of Storm Lake should be able to relocate the gardens and fountain.

Ivan Webber, attorney for the City, questioned Norman Kolb's spending of the assets of the trust. Webber noted that Kolb and his brother, Robert, who died in 2002, had taken $324,955.50 in management fees and other costs from the trust since 1976 when their father Henry was no longer able to handle operation of the trust.

Norman Kolb said he and his brother made a number of improvements to the property and handled grain marketing for the two farms.

Webber said Kolb had agreed to resign as trustee if the City would allow one of the two farms to revert to the Kolb family heirs. "The better farm is the one you want to keep," Webber said.

The flower beds took up 2,400 square feet in Sunrise Park. The city claimed there would be 12,000 to 14,000 square feet available for the gardens in the AWAYSIS development, but Kolb argued that the actual space previously dedicated for the gardens was 28,000 square feet.

"They (city officials) haven't asked me to come in and see the actual original plans," Kolb said.

The city's attorney said Kolb was invited, but did not accept.

When Webber asked Kolb whether he was opposed to Project AWAYSIS, Kolb said, "I'm not opposed to the project. I'm opposed to the removal of the Kolb Memorial garden."

Webber asked Kolb about a letter from Storm Lake Mayor Jon Kruse inviting him to participate in planning for Project AWAYSIS.

Kolb said he had indicated at the time that he "wouldn't be able to participate".

"So you had the opportunity to participate and chose not to?" Webber asked Kolb.

"Right," Kolb said.

In cross-examination by his attorney Mark McCormick, Kolb stood firm that his father Henry had intended that only the site that he had originally chosen for the flower garden and fountain would be acceptable to his father. "He put a lot of thought and work into that fountain," Kolb said. "That site only. I'm sure of that."

The proceeds from two farms were committed as assets to the trust. According to an Oct. 31, 1968 document, "This agreement shall continue for the period of the trust" and the assets of the farm were conveyed the next year. A similar agreement for the water fountain was made Nov. 17, 1969, with the farm conveyed to the trust Aug. 13, 1973.

McCormick asked Kolb whether he believed it was his father Henry's intent that the agreement that the farms would be assets for the trust as long as the trust continued.

"I trust that Henry would mean that it would last forever," Kolb said.

"Has the city kept its promise?" McCormick asked Kolb.

"No, it has not," Kolb said.

As to the issue of whether he was willing to agree to the relocation of the gardens if the city would release the better of the two farms to Kolb's heirs, Kolb told Webber that the city could not provide an acceptable location for relocation of the gardens.

Under questioning from McCormick, one of Kolb's attorneys, James Gailey of Newell, recalled a meeting late May 2004 when he and Kolb discussed Project AWAYSIS with Storm Lake officials for the first time.

Gailey said then City Administrator John Call had said that the city's plans for Project AWAYSIS were final. Gailey said Kolb had suggested that if the garden and fountain could be moved "that it wouldn't take two farms to do that."

Gailey said he didn't recall whether it was Kolb or himself that suggested at that time that one of the farms be returned to the Kolb family. Gailey said Call asked Kolb and Gailey bring a proposal to City Attorney Paul Havens. Gailey said he told Call that such an agreement would require court approval.

Gailey said he then prepared a proposal for a petition to modify the trust agreement. Negotiations continued when Kolb returned to the area mid-May. Gailey said that Havens indicated that Kolb and Gailey could deal with either Wilson or himself but not Call.

Gailey said Wilson was adamant that the Project AWAYSIS design was final and that the city could not agree letting go of one of the farms. Instead, Gailey said Wilson suggested that one farm could be given to Kolb and sold and $200,000 could be gifted back to Project AWAYSIS.

As to Wilson's proposal, said Gailey, "Quite frankly, it was never given a great deal of thought."

Gailey said there was another meeting later in May between himself, Havens, Wilson, Gailey's associate Josh Walsh, and Kolb. Gailey said Wilson said at that time "There's no way those plans could change."

Gailey also said that Havens said the city did not need Kolb's permission to move the gardens or fountain.

Gailey said he asked "who's making money on this $29-million project" and that Wilson responded that issue was not part of the meeting.

"Norm asked why didn't they ever contact him," Gailey said, to which, according to Gailey, Havens responded, "Mr. Kolb is a greedy bastard."

"I said to them if the city tries to take out that flower garden I would seek injunctive relief," Gailey said. Gailey said that Havens responded that if Kolb and Gailey tried to tie up Project AWAYSIS that "We're going to seek the removal of Mr. Kolb as trustee."

Webber cross-examined Gailey regarding the proposed distribution of the trust assets if the trust failed. Gailey said the distribution was based on Henry Kolb's belief that if the trust failed, assets would go to his heirs.

While Webber said that the area the city was willing to dedicate to the relocated gardens was larger than the area the gardens previously occupied, Gailey said the area dedicated to the gardens would actually would have been smaller. He also said he told city representatives that any agreement to relocate the gardens would need court approval.

"They (city) never contacted Norm from day one which we thought might be an obligation on their part," Gailey said.

When Webber called Wilson to the stand, Wilson said, "The central components of the plan have stayed the same. Some of the details have changed" from the original conceptual design done December 2003.

Wilson said it was necessary to locate the indoor water park next to the hotel and that the area of the Kolb Memorial Gardens was the only place that would work for the design.

Webber asked whether the components of Project AWAYSIS could be placed somewhere else.

"Quite frankly, it's the only place that works," Wilson said. He said the city "from day one" intended to make provisions for the relocated Kolb Memorial Gardens.

Wilson said Kolb was among 150 people that were sent letters June 4, 2004 asking whether they would be interested in participating in Project AWAYSIS and that Kolb "indicated to me he had no interest".

As to Kolb's position that one of the farms would be sufficient to support maintenance of the flower garden, Wilson said, "My conclusion was that it would not be."

Under cross-examination by McCormick, Wilson said of the placement of the Kolb Memorial Gardens in Project AWAYSIS, "The plan has been from the beginning to relocate them and make them bigger and make them better."

McCormick asked Wilson whether "by December 2003 was it clear that the fountain and flower garden would be removed."

Wilson said the fountain and flower garden could not have remained in their former location and still accommodate both the lodge and water park.

Judge Vipond was to review briefs from both sides before rendering his decision.



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