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Summary of Background Information Provided to City Council: Crystal Bay Road City Lots The City of Orono owns four lakeshore parcels across from residential properties at 3407, 3415, 3435 and 3445 Crystal Bay Road. These parcels were quit-claim deeded to the City in the mid- 1930s. They are subject to deeded "bathing and boating" rights dating back to 1911 for as many as 150 residential lots in the Navarre area (including the four opposite lots), only a few of which have exercised that right. Staff regularly receives questions from realtors, sellers or potential buyers asking what this means and whether their off-lake properties have the right to have a dock. The City's position is that they do not, for a variety of reasons - primarily that a dock is an accessory structure not allowed without a principal structure. It is unknown how many of these 150 can actually claim"bathing and boating rights"pursuant to the Marketable Title Act. The City Council in 2006 had the Lots surveyed and authorized the City Attorney to commence a Torrens action, with an expectation that Hennepin County would do the extensive title work needed to determine what properties had formalized and retained their legal interest in the parcels. In 2008 it was learned that the County would not do that title work and that it would cost the City $25-30,000 to have it completed. Council chose not to proceed. An additional factor is that the four privately owned residence lots directly across Crystal Bay Road have in the past had docks extending from the City parcels. The City has never formally advised the owners of three of the four to remove their docks from the City property; the fourth, 3445 Crystal Bay Road, was the subject of a principal structure tear-down/rebuild variance a few years ago. That variance approval resolution states that the residence property does not include the lakeshore and does not enjoy riparian rights. The other three continue to have docks. In October 2008 (and again in March 2010 and again in August 2010) Karen Elshazly of 3415 Crystal Bay Road asked for a resolution to this issue because she is having difficulty selling her property without established dock rights. In March 2009, Jon Eiss of 3445 Crystal Bay Road requested that he be allowed to have a dock and was turned down by the Council but the Council did offer to look further into the matter of these lots. See Council minutes of 3-9-09 and 4-14- 09. At its April 14, 2009 work session Council was presented with a variety of options to consider for dealing with these lots, including doing nothing; requiring removal of the docks; selling to the opposite landowners; leasing the lots individually or as a group to the four opposite owners; develop the site for rental City dock space; or acquire the nearby properties for park or stormwater management purposes. The Council indicated their preference would be to have staff discuss with the City Attorney the pros and cons of selling the parcels. There was no movement on this issue during the remainder of 2009. In a letter dated March 31, 2010 Karen Elshazly indicated to staff she would be satisfied with an easement granting permanent dock rights rather than full ownership of the lakeshore parcel across from her home. Her follow-up letter of August 23, 2010 suggested that sale of the properties to each opposite homeowner would be the least desirable option unless they can be sold at a nominal price. In reviewing the various hypothetical options prior to the September 2011 Work Session, the City Attorney indicated that granting an easement over City property was not a viable option, Page 1 of 2