Court reverses Art Center ruling

Published 9:39am Wednesday, September 26, 2012

The Minnesota Court of Appeals on Monday reversed an almost $460,000 judgment against the owner of the Albert Lea Art Center building, in what was a five-year court battle between the landlord and the Art Center’s board.

Though the order confirmed that building owner Susanne Crane breached the lease with the nonprofit organization, it reversed the Freeborn County District Court decision to rescind the lease, along with awarding damages.

“I’m greatly relieved by the findings of the higher court,” Crane said. “I guess there is some justice to be had if you’re patient enough.”

The case has been in the hands of the appeals judges after Freeborn County District Court Judge Steve Schwab in November 2011 ruled in favor of the Art Center.

At that time, Schwab granted the Art Center’s request to terminate its 99-year lease with Crane, stating she breached the lease, disturbed the Art Center’s “quiet enjoyment” of the building and barred use of certain common areas such as restrooms, basement and the thermostat.

The Monday order, which came by presiding Appeals Court Judge Wilhelmina Wright, along with judges Francis Connolly and Larry Collins, stated neither the record nor the district court’s findings adequately supported the district court’s rescission of the lease.

“I’m just super grateful I’ve been able to come out the other side,” said Crane, an artist who was on the Art Center board before the dispute sprang forth in 2007.

She said now that the case has ended, she hopes to move forward with creating new art programming for the community and restoring the building, 224 S. Broadway, which is known as the historic Bessessen Building.

“I will be tapping into whatever funding I can find,” Crane said. “I have gotten a lot of support from good people in the community, and I couldn’t have gotten through this without them.”

Don Savelkoul, the Art Center’s lawyer, said though the ruling seems negative toward the Art Center at first, there are also several parts still in favor of the art organization.

He said because the order confirmed that Crane breached the lease, Crane will now have to decide whether to honor the lease and provide access to areas included in the lease.

“If she conforms to the lease’s requirements, there’s a good chance the Art Center will stay where it is,” Savelkoul said. “For now, they’re going to explore all of their options. They’re actually really optimistic about the future.”

The Albert Lea Art Center has been in the Bessessen Building for 26 years. He said the ruling provides clarity in the case and allows the Art Center to “control its own destiny.”

The appeals court also ruled in favor of the Art Center, ordering Crane to reimburse the Art Center for utility payments of about $7,200.

 

History of the case

The Albert Lea Art Center was established in 1959. When it was first established, the organization moved from place to place. From 1975 to 1986 it operated out of the small church at 501 W. Main St., now known as Something Special In the Nest.

In 1986 it purchased the building at 224 S. Broadway Ave. in downtown Albert Lea — known to many longtime Albert Leans as the Rivoli Theater.

Though the building was well-suited for the Art Center’s purposes, the operating expenses were higher than what the board preferred. Because of this, the board was interested in selling the building to a third party in exchange for a long-term lease for minimal rent, according to court documents.

In November 2005, Crane — a board member at the time — purchased the building from the Art Center for $40,000 with a down payment of $4,000. The balance of $36,000 would be paid back over 15 years with 6 percent interest. In return, Crane would lease the building back to the Art Center for 99 years at $1 per year.

She also agreed to renovate the building, live there and lease it.

However, shortly after the transaction, the relationship between the two parties began to deteriorate, documents state. The relationship was even described by board members as “toxic.”

Allegations of misconduct from both sides began coming forward.

Crane called the Art Center a “hostile tenant” because of some of the alleged actions of its board members, and she sought to evict the Art Center in 2007, the start of the lawsuits. Her efforts were dismissed in April 2008.

The case heard before the Court of Appeals was filed in 2009.