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Palin's hometown legacy left trail of legal bills

  • Story Highlights
  • Records indicated Palin's Wasilla sport complex left city with legal bills
  • Palin campaigned for a sales tax increase to finance the $14.7 million project
  • The complex is getting a lot of use, but it is not breaking even
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From Randi Kaye
AC 360° Correspondent
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WASILLA, Alaska (CNN) -- The sports complex that Alaska Gov. Sarah Palin's supporters call her most visible legacy as mayor of her hometown left the town paying inflated prices for the land and huge legal bills, according to court records.

Sarah Palin, Wasilla, Alaska's former mayor, is under fire for a sports complex she fought hard for.

Sarah Palin, Wasilla, Alaska's former mayor, is under fire for a sports complex she fought hard for.

The complex features a soccer field, a running track and an indoor hockey rink with heated seats. Palin campaigned for a sales tax increase to finance the $14.7 million project, winning approval for the half-cent levy by a margin of 20 votes.

Palin is now the Republican nominee for vice president. Her supporters call the arena the crowning achievement of her 1996-2002 tenure as mayor.

"She really was very, very passionate about this right from the start," Wasilla Recreation Manager Bruce Urban said.

But the city never obtained clear property to the title until this year, after a lengthy court battle with developer Gary Lundgren, who owned part of the land on which the complex sits. Video Watch more on the controversy »

"When they started building, the title to the land was in my name," said Lundgren, who now lives in Panama.

Diane Woodruff, a City Council member and longtime Palin critic, said that has left Palin's major campaign pitch -- to be a fiscally conservative reformer -- in question.

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"She inherited the city with no debt, and suddenly we have a lot of debt," she said. "I don't think that labels her as a true fiscal conservative."

In 1999, the Nature Conservancy was negotiating to sell the land to the city and Lundgren, but he says that although he signed a purchase agreement with the group, the city did not.

Lundgren purchased 325 acres from the Nature Conservancy, but the city filed a lawsuit claiming ownership of land it believed it owned. In 2002, a federal court sided with Lundgren, finding that the city had never signed the proper papers.

But by then, the 80-acre complex was under construction; Palin gave the go-ahead to begin while the issue was still in court. After Palin left office, the city sought to obtain the tract it needed for the sports complex through eminent domain, leading to another court battle.

"I'm curious as to why somebody in the previous administration didn't make sure that we had clear title before we started building, because certainly once we started building, we were over a barrel," Woodruff said.

Wasilla eventually agreed to pay Lundgren more than $800,000 for the land, along with Lundgren's legal fees and interest: another $700,000.

Lundgren said he offered to give the city a 20-acre parcel to avoid further lawsuits, but city officials turned him down.

"They said they needed more than 20 acres," he said. "They had additional plans to build a softball field."

Attorney Kenneth Jacobus, who represented the city, said he had no recollection of an acceptable offer from Lundgren.

The city originally paid $145,000 for part of the land. The rest of it was valued at about $21,000.

It ended up paying more than $1.5 million, not counting its own legal fees.

Palin's successor as mayor, Diane Keller, said the project has brought in more than $3 million in revenue for local businesses.

"I think this was a community dream. It may have been a part of Sarah Palin's dream, but it wasn't only her dream," Keller said.

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The complex is getting a lot of use, but it is not breaking even. Its operating costs are about $900,000 a year, Urban said, and city records show that the city has to pay about $100,000 of that.

And Lundgren is still appealing the eminent domain case before Alaska's supreme court, arguing that Wasilla didn't meet the legal requirements for taking the land.

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