The city of Mandan is hoping it can reach an amicable resolution in its attempt to annex Gray Oil rather than having to force the issue through legal channels.

At Tuesday's city commission meeting, Gray Oil owners Ken Zander and James Walth both came forward to oppose annexation, which counted as a 100 percent protest, enough to block the city's annexation action. The property, located just off Memorial Highway, is now surrounded by city limits because 28 years ago the commission forced Gray Oil Company out of city limits, not wanting petroleum storage within city limits.

City attorney Sharon Gallagher is in contact with the attorney general's office with the intent of forming a mediation board on whether the parcel should be annexed despite the protest.

Zander expressed his concerns that should the property be annexed it would be out of compliance with city ordinances and forced to either make expensive changes or move elsewhere. City engineer Tom Little said that the property already falls within the city's extraterritorial zoning jurisdiction and was found to be compliant with ordinances. But fire chief Jim Nardello did find that a propane tank did not meet fire ordinances, being to close to the property line. Regulations stipulate the tank be 50 feet from the property line and it is 12 feet away, although Nardello said he would have to enforce the setback ordinance whether the propane tank were in the city or not.

Zander estimated that it will cost up to $25,000 to move the tank and even then he had no place to put it except in the middle of the yard, which was not suitable for the operation.

"If I had to move, I'd lose half my business. And as far as relocating, where would I go, how far?" Zander said. "It's not feasible for me to go someplace else. I'd have to try and stay here."

Zander is also concerned about special assessments for proposed sewer, water and street improvements. "If they cost me more than what the property is worth, where am I at? You're chasing another business away."

Commissioner Tim Helbling said he felt the problems should have been worked out before the city allowed development of nearby property and he had hoped the adjacent property owners could work out the details.

Commission president Dan Ulmer sympathized with Zander, but said "we don't like to create islands in the middle of the city. Granted, when you moved there, you were by farm land. But life changes and you have to move on. Now it's a question of conforming. It's not like this happened over night. The development has been steady over the past ten years.'"

Helbling asked whether a variance could be worked out so the adjacent property owner couldn't build within 50 feet of the tank. Attorney Malcolm Brown said that might reduce the price of the property and might be considered "a taking" since the property couldn't be developed, though in essence it would be moving the property line within regulations for the tank.

After finding sufficient protest, the commission directed city administrator Jim Neubauer and Brown to meet with Gray Oil and the adjacent property owner in an effort to work out the situation. At the same time, Gallagher was asked to delay the mediation process until the meeting was held.

(Staff writer Gordon Weixel can be reached at 701-250-8255 or at gordon.weixel@;bismarcktribune.com.)