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Judge rules in favor of Willmar developer, LLC

WILLMAR -- A district judge has awarded more than $1.6 million to Dale Heffron and Heffron Properties LLC from Burlington Northern Santa Fe Railway Co. for renovation costs and lost profits from a failed project to build sleeping rooms for rail w...

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The exterior of the building on the 500 block of Benson Avenue Southwest in Willmar is shown in March 2008. Tribune file photos

WILLMAR -- A district judge has awarded more than $1.6 million to Dale Heffron and Heffron Properties LLC from Burlington Northern Santa Fe Railway Co. for renovation costs and lost profits from a failed project to build sleeping rooms for rail workers in downtown Willmar.

In an order issued Monday, Judge Jon Stafsholt ordered two judgments against BNSF and in favor of Heffron Properties for a total of $1,528,747.46 and in favor of Dale Heffron for $91,618.60.

According to his attorney, Heffron now lives in Florida but continues as majority shareholder and president of Heffron Properties.

Stafsholt presided over a court trial of the Kandiyohi County civil case in late February and early March. The litigation was filed in 2008 after Heffron, spent nearly $1.4 million purchasing and renovating the property along the 500 block of Benson Avenue Southwest to accommodate 30 hotel rooms for railroad crew members on layover in Willmar. Only after the work was completed did BNSF officials inform Heffron that the company would not enter into a contract with Heffron to house rail workers there, the order states.

Suann Lundsberg, director of media relations for BNSF, told the Tribune in an e-mail Thursday that "we strongly disagree with the courts findings and award and are considering an appeal."

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The attorneys for Heffron Properties, Patrick J. Sauter and Mark R. Bradford, issued a statement at the Tribune's request and stated they were extremely pleased with the decision to hold BNSF accountable for the "promises it made -- but failed to keep -- more than three years ago."

The attorneys also stated that the renovations at 540 Benson Avenue were done at BNSF's request and were a collaborative effort involving individual investors, Home State Bank, the Kandiyohi County and City of Willmar Economic Development Commission and a host of local contractors.

Nonetheless, Sauter and Bradford expect the railroad will appeal the court decision.

Troy A. Stark, attorney for Heffron, noted that while the ruling is a vindication of his client's long-held belief that BNSF backed out of promises it made to him and the LLC, no amount of money can compensate for the economic damage to Heffron, his company and the community.

Stark expressed hope that BNSF would pay the judgment, rather than appeal, so that Heffron and the citizens and businesses in Willmar affected "can finally put the matter to rest."

According to the order, Heffron Properties was formed in March 2007 after Dale Heffron discussed the cost of lodging and van transportation of railroad workers with Herbert Beam, who was at the time the terminal manager for BNSF at Willmar. The men discussed how it cost the railroad time and money to transport crews to and from the Comfort Inn and how that cost could be reduced, specifically by lodging them close to the rail terminal.

The men looked at several properties in Willmar and Beam referred Heffron to the company's corporate travel department in Forth Worth, Texas. Heffron had a series of e-mail communications and met with BNSF officials in Texas.

Heffron received enough assurances from BNSF officials to secure financing, with the EDC assistance, to purchase the building from Dwight Barnes and renovate it into the sleeping rooms in late 2007 and early 2008. He was notified after the renovation work was completed that BNSF wouldn't consider lodging crews there.

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According to the order, Heffron spent another $100,000 on the property and is using it to house students, but for much less income, less than $70,000 per year. Two appraisers testified during the trial that the building is valued, without the BNSF contract, at $580,000.

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