Preston City Council gives approval to EDA to pursue property purchases
Wednesday, December 26, 2012 7:30 AM
The Preston City Council, meeting Tuesday, Dec. 18, gave its approval to the Preston EDA to look into financing options, and pursue purchase of properties in dilapidation along the Root River and the trailhead.
EDA director Cathy Enerson gave a PowerPoint presentation for council members about the land acquisition. Enerson noted the purpose of the cleanup and repurposing at the trailhead is to remove dilapidation on these properties and to "continue creating space for residential building sites." It could also serve as a "plan B" site for the National Trout Center.
Enerson discussed the Preston POP (Preston Oil Station) bulkhead property, which will be available for purchase, due to the death of the property owner. She noted the EDA has budgeted money for this purchase. The bulkhead has a tax appraised value of $7,700. During the presentation she shared that cleanup is not expected to exceed $10,000 for the demolition and environmental work.
"The EDA would like the city to work with the POP personal representative to enter into a purchase agreement or accept the donation of land for the POP bulkhead and two other properties the POP representative will be liquidating," she said.
Enerson added once the city takes ownership, it would have to enter a voluntary environmental cleanup program and then it could remove the tanks on the property.
They also discussed the property on the Harmony Agri site, which Enerson says has a willing seller. The council had entered into an option agreement for this property and it is currently committed to doing a phase 1 environmental study on the site.
Also a property being considered for purchase is that known as NAPA, owned by Mike and Ann Stein. Enerson said this is an area with no further growth potential. Enerson said the EDA has worked with the owners to find an alternate site for the business to relocate to.
Enerson has also "spoken to private and state environmental experts for programs and grants to assist with redevelopment costs, demolition and environmental testing of the sites."
She noted the goal of the project is to showcase the area's assets, using a redevelopment project that benefits Preston.
According to the director, the next step is for the city council to enter into purchase agreements with NAPA, POP and Harmony Agri.
Enerson listed the following as financing options:
$52,500 allocated by the city for the NAPA building, which it could lease to the National Trout Center (NTC).
The EDA has asked for budgeted funds for the purchase of the POP properties and the cost to remove the tanks.
The EDA has a pre-approved USDA community facilities reapplication for 40 years at 4 percent interest.
Enerson noted the Legacy Land Trust is willing to fund the purchase.
EDA President Chuck Aug added, "The EDA has kept an eye on the properties down there and hoped to get the property for development. We are working on finding a permanent site for the NTC. It's the time to decide if the city wants to buy or there is no point in us working on it any more. It's time for the city to make some sort of commitment."
Mayor Kurt Reicks said he thought the city should commit to the purchase of the properties. "They are not the best looking property in town and they have been sitting there awhile," he stated.
City Administrator Joe Hoffman noted this "isn't an action item tonight" but will be in the near future, within the next couple of months when the purchase agreements are finalized. Hoffman said the EDA would put the financing options together for each property along with the property costs and bring it before the council for approval in the future.
Reicks said it was up to the council to decide if it wanted to direct city staff to pursue financing options for the project. Councilmember Charles Sparks said the city "needs to pursue it." Councilor David Collett stated that he wanted to see if the city could afford it first (the costs for the property and the cleanup costs, which include costs for environmental studies).
Councilmember Dave Harrison gave his opinion, noting that he thinks it should move forward. "We should look at financing options and see what the cleanup costs will be."
Hoffman said it was time to take action on the budget for 2013 because the end of the year was approaching fast. The budget was discussed in length at the council's previous meeting. Collett made a motion that the council fund the National Trout Center (NTC) at the same rate it did last year, instead of giving it an additional $8,500 increase - which was 40 percent.
Collett noted, "Everyone else was asked to make cuts or hold the line."
Reicks added, "We need to pursue the NTC - it's on its way to being its own entity."
Banker Dan Christenson, who is involved with the NTC, stated that the $30,000 the organization receives from the city is one-third of its total budget. He said the money, "helps get ties broke (with the city)" and will allow it to be on its own sooner.
Sparks said he thinks of it as an investment in the community. Harrison noted the city is "trying to spend money to make money."
Collett made a motion to take off $8,500 from the NTC's budget. The motion was seconded by Robert Maust. The motion failed with Maust and Collett in favor, and Reicks, Harrison and Sparks not in favor.
It was noted that the council would need to "flush out how long" the NTC will need the city council's support.
The 2013 budget and levy were approved, as originally submitted. The final levy was set at $672,725.
The council approved the 2013 contract with CEDA (Community and Economic Development Association) for EDA director services. It was noted it was the same contract as 2012, but with a 2 percent increase for a total of $25,996.
It approved the hiring of Heath Sershen as the NTC director of programs and operations. George Spangler of the NTC board recommended the hire. It was noted this position would be as a full-time city employee eligible for benefits. Spangler said he has a background in trout fishing and has worked at the National Eagle Center. He has a degree in public relations from Winona State University, Spangler noted. The new director will begin his duties Jan. 2.
The council approved allowing Harrison to attend a League of Minnesota Cities training session. The training will be Feb. 1 and 2 and cost $500
Donations were accepted by the council. There were 88 donations approved for a total of $24,125.41. The largest donation was for $15,000 from the Fire Relief Association. Hoffman said half of the donations were $25 or less, noting that it goes to show that every little bit helps.
The council approved sharing half the cost with the Preston Servicemen's Club for 92 new flags. The city's share is $898.72.
It was decided that city hall would be closed at noon on both Christmas Eve and New Year's Eve. Hoffman said that this would be "very appreciated by city employees."
The next city council meeting will be held Monday, Jan. 7.