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Minutes of the Grand Forks City Council/Finance-Development
Committee - Monday, August 23, 2010 - 5:30 p.m. _______________

The Finance/Development Committee met on Monday, August 23, 2010 at 5:30 p.m. in the council chambers in City Hall with Council Member Christensen presiding. Present at roll call: Christensen, Glassheim, Sande, Gershman.

Also present were. Howard Swanson, Greg Hoover, Don Shields, Brad Gengler, Todd Feland, Chief Packett, Chief O'Neill, Rick Duquette, Roxanne Fiala, Mel Carsen, Bev Collings, Mayor Brown, Daryl Hovland, Mark Walker, Council Members Kreun, Bjerke and Grandstrand.

1. Application for abatement for 2009 taxes by Thomas Murphy, 4827 4th Avenue North._
Mel Carsen, city assessor, reported this is routine abatement, for disabled veteran who has a 50% service connected disability and he filed it late so we have to go back and correct for 2009 - required by State law. Motion by Glassheim and Sande to approve recommendation for council. Motion carried.

2. Application for exemption of remodeling improvements to residential buildings at various locations.
Carsen reported there are two homes that have extensive remodeling and would qualify for a 5-year remodeling exemption, typically giving the full 5 years, meets requirements.
Recommendation by Glassheim and Sande for approval of application. Motion carried.

3. Application for property tax exemption for expanding business by J.R. Simplot Company._________________________
Carsen reported this is request for a 10-year 100% property tax exemption for anaerobic
digester that Simplot is proposing to build north and east of their current plant; State law allows 10-year exemption for industry that produces ag product. Request is to establish a public hearing date if want to go forward, and suggested date of October 4. It was noted if application is approved, would have to be made prior to their putting concrete in the ground, and that wouldn't happen until next spring.. He also noted that Simplot has never asked for nor been granted any property tax exemptions in his time with the city.

David Gothberg, Simplot, presented background information re. Simplot, locally they employ 388 employees with payroll of over $21 million; customers include McDonald's, Texas Roadhouse, etc. They believe that expanding the business in Grand Forks is right thing to do,
they have already invested over $25 million in the last 2 years with more proposed - this is trying to improve their product mix in securing the future for this factory - this is over $33 million project, they create about 2 mg of wastewater every day, this project will be able to displace about 1/3 of their steam capacity, and will be able to use the bio-gas out of the digester to displace about $2 million worth of natural gas. He stated one of the reasons they are looking here is because of the favorable opportunities.

Questions were asked if they expand the plant would they be purchasing more potatoes in the Valley because of plant expansion and its capabilities. Mr. Gothberg stated probably not, the capacity will remain about the same, but different product mix serving different customers, but will insure that potato purchasing will continue in the Valley.

Direct impact of the tax exemption and how much is eligible for abatement from taxes. Carsen stated of the $33 million project about $9.1 million in real estate and about $20+ million in personal property; would be about $183,000 per year at 100% for all 4 taxing entities (City, School District, Park and County and City's share 22 or 23%). He noted that Simplot has already spent approx. $25 million in the plant and most of that is personal property - there have been some enhancements in the building and those are assessed but mainly equipment; following this there will be a lot of equipment in the plant, new lines, etc.

Gershman stated Simplot has been here many years, great corporate citizens and when making these investments, while not employing a lot of people, many contractors will be hired to do this work and thanked them for their interest in our city.

Recommendation by Glassheim and Sande to set public hearing for October 4; motion carried.

4. Appointments to Grand Forks Planning and Zoning Commission.
Recommendation by Glassheim and Sande to move approval (Mike St. Onge from School and Jim Bollman from Park). Carried.

5. Redevelopment of City-owned lot at 1815 N. Third Street.
Greg Hoover, urban development, stated they are asking for approval of review committee's recommendation and to authorize appropriate city officials to execute documents subject to review and approval by the city attorney. Last year had a project for this property that the review committee had recommended denial and council concurred with that and directed staff to do another RFP solicitation; that they received 2 proposals and the review committee (Glassheim, rep. of Historic Preservation Commission and rep. from neighborhood, and himself) reviewed proposals and are recommending proposal by the Burris' (other proposal was by the Aarvig's who had submitted the earlier bid and was denied). Reason for approval of the Burris' proposal was that the committee felt it was better fit architecturally, had alley access for the garage, which was what they were looking for rather than front access, had more sq.ft. and overall value was est. to be $265,000 as opposed to the other proposal at $206,000.

Kristie Aarvig stated they submitted one of the proposals, that applicant was to have their financing pre-approved by their bank - that they received pre-approval from their bank with no contingencies, and were questioning why the other applicant received approval contingent on their financing until June 1 of next year. Hoover stated that was discussed and committee decided that the Burris' have approval for the project and one of the contingencies was to sell their current home, and are going to sell that if get approval for this but not putting it on the market until they are assured that they can go ahead and built this property. The Aarvig's submitted an entirely new proposal and Ms. Aarvig stated they met all requirements.

Christensen stated concern and question is how this is being administered and concerned about deviation from policy and procedures, not going to judge plans but would like to see what was put out for an RFP. Gershman stated that it was an architectural decision, if everything else was equal.

Glassheim stated that they both had equal letters that they were approved by their banks, the Committee wasn't asked to delay the start date but decided that in a slow housing market whoever got it would probably need to sell their home; and allowed it to be later in case it took more time to sell the home, the decision was made based on location of garage, benefit of the neighborhood on their plan, 1 1/2 stories opposed to 1 story, better for the neighborhood and the adjacent properties, total value of $265,000 to $206,000, none of those were decisive but all put together weighed in their favor - that was unanimous decision by the committee.
Christensen stated to delay for 2 weeks but Mr. Burris stated he would not be able to break ground - the committee already has delayed 2 weeks - and that until the committee decides, he would not put up his house for sale. Burris stated they have had discussions re. policies, procedures and there is a reason why we have those, the process was advertised, have come through and has now been presented to you, delaying this further only hurts him, their process is here and looking for that process to be approved.

Sande stated he is prepared to move forward to approve Mr. Burris' application for his proposal but that he doesn't like the process that we utilize for selling these city lots, too much subjectivity in it and if had way to take the subjectivity out of it and have a point system based upon what the house looks like, sq. footage is, color, etc. and was somewhat irritated by the fact that he was denied twice on two city lots when he had all of his process and ducks in a row as well but would recommend that we look at the process that we are using and try to find a better process that takes the subjectivity out of it, and if can't get together and work with the Aarvigs and help them find a lot that would fit their price point and the area of the city they are looking for.

Gershman stated that he has sat on more of those committees than anybody on the council and that we have to be careful of opening it up to the market, talking about historic areas, and neighbors are adamant about the type of home that goes in next to them, that we have an issue.

Sande moved approval of the recommendation, with suggestion being included in the recommendation that we review process and potentially put in a point system; Glassheim seconded the motion.

6. Surplus real property.
Hoover stated this is follow up to meeting in Central Park neighborhood attended by Mr. Gershman and Mr. Glassheim, and the first step in disposing of these lots is to declare them surplus and authorize staff to proceed with RFP process. He suggested based on previous conversation that you declare the property surplus and staff work to put together this new rating and ranking system and bring that back to this committee before soliciting any RFP's. There are 2 lots; with balance of approx. 10 lots.

Christensen stated he would like to get the RFP's out by the first of November so people can go through the process and get ready to build in the spring. Motion by Sande and Glassheim for approval; motion carried.

ADJOURN

The meeting adjourned at 6:15 p.m.

Alice Fontaine
City Clerk