HomeMy WebLinkAbout09(B) - Consider Approval of a Response to the Department of the Interior, Bureau of Indian Affairs Regarding the Proposed Fee to Trust Applications Known as Zaniya Report
ITEM: 9B
CITY COUNCIL AGENDA REPORT
MEETING DATE: April 14, 2026
PREPARED BY: Jason Wedel, City Manager
PRESENTED BY: Jason Wedel
AGENDA ITEM: Consider Approval of a Response to the Department of the Interior, Bureau
of Indian Affairs Regarding the Proposed Fee to Trust Application Known as
Zaniya
RECOMMENDED ACTION:
Approval of the letter of response to the Department of the Interior, Bureau of Indian Affairs
regarding two parcels that are included in the proposed fee to trust application known as Zaniya.
BACKGROUND:
The Shakopee Mdewakanton Sioux Community (SMSC) has acquired fee title to 7.44 acres in
Prior Lake. PID’s 254520025 and 254520060. A copy of the SMSC Application to the Bureau of
Indian Affairs to place this property in trust was previously shared with members of the city council
and is also attached herewith.
Since the SMSC is seeking to place these parcels in Trust with the Federal Government, the
Bureau of Indian Affairs (BIA) is requesting impact information from the city. Impact upon local
government is one of seven criteria the BIA examines prior to deciding whether to place land into
trust.
On February 24, 2026, the United States Department of the Interior, Bureau of Indian Affairs (BIA)
sent a "Notice of (Non-Gaming) Land Acquisition Application" to the Governor's Office, MnDOT
Office of Aeronautics, Scott County, City of Prior Lake, and the SMSC. On March 3, 2026, the
City of Prior Lake sent a letter requesting a 30-day extension which the BIA accepted confirming
that the city’s response would be due on or before May 1, 2026. The next City Council meeting is
April 28, 2026, so the City Council would have one more opportunity to provide input after tonight's
meeting if needed.
Current Circumstances
The Zaniya application for Fee to Trust involves 7.44 acres PID 254520025 and 254520060
located in the City of Prior Lake.
The two parcels are generally located in the northeast quadrant of the intersection of CSAH 42
and McKenna Road. One of the parcels is the former YMCA property and the other parcel that is
currently vacant and located immediately south of the former YMCA property.
The specific information sought by the BIA includes:
Property taxes: The property taxes levied by the City of Prior Lake on these parcels for
2026:
City of Prior Lake | 4646 Dakota Street SE | Prior Lake MN 55372
Item 9B
Page | 2
Parcel ID 2025 Taxes
254520025 $28,554.66
254520060 $ 1,509.14
$30,063.80
These parcels are unique in that the city did not receive property taxes from them prior to
2026. The previous owner of the parcels was Shepherd of the Lake Evangelical Lutheran
Church (SOLLC). Both SOLLC and the previous tenant of the building, the YMCA, are
classified as a nonprofit corporations and did not pay property taxes. It was only after the
SMSC purchased the property that the city began receiving property taxes.
Assessments: There are no existing assessments on these properties.
Services: The City provides all police services, fire services, sewer, water and storm water
facilities to these properties.
Zoning: These two parcels are zoned PUD (Planned Unit Development) and were
approved as part of the Shepherds Path Addition PUD plan in 2006.
The purpose of the PUD district is to offer an alternative to development as outlined in the
residential, commercial, and industrial zoning districts of City Code. The PUD district
provides for greater flexibility in the development and redevelopment process as
compared to development under the definitive and precise requirements of the
conventional zoning districts. zoning is to provide flexibility
The draft responses prepared by the staff are responsive to the information requested by the BIA.
The responses also address the following:
The existing drainage and utility easements as well as the trail easements will remain in
place after this property is placed into trust.
These two properties will remain connected to city sanitary sewer and water services and
will be billed for those services by the City.
Access easements on the south side of the existing building will remain in place for fire
access.
The SMSC will provide the necessary easements to facilitate the extension of the
pedestrian trail along the north side of CSAH 42.
FINANCIAL IMPACT:
The action of placing these parcels into trust would have an annual impact of $30,063.80 in City
tax receipts if done for the year 2026. This tax income will be permanently removed from future
receipts. It should also be noted that prior to the SMSC purchasing these two parcels the City did
not collect any property tax receipts due to the property’s “non-profit” designation.
ALTERNATIVES:
1. Motion and second to approve the City’s response regarding the Zaniya application either
as proposed or as modified by the City Council.
2. Take other action as appropriate.
Item 9B
Page | 3
ATTACHMENTS:
1. Notice of Non-Gaming Land Acquisition Application
2. NOA Extension Letter