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Minutes/Committee of the Whole
Monday, December 27, 2004 - 7:00 p.m.

The city council met as the Committee of the Whole on Monday, December 27, 2003 at 7:00 p.m. in the council chambers in City Hall with Mayor Brown presiding. Present at roll call were: Council members Brooks, Hamerlik, Glassheim, Gershman, Christensen, Kerian, Kreun - 7: absent: none.

Mayor Brown announced that when addressing the committee to please come forward to use the microphone for the record, and advised that the meeting is being televised live and taped for later broadcast.

Mayor Brown commented on various events held during the past week and upcoming events:

He welcomed all the people from World Juniors to Grand Forks and thanked people from public safety who worked hard on December 24 and 25 to make sure we were safe and giving up time with their families so we could enjoy time with our families.

He encouraged everyone to attend the 11th Annual First Night celebration this Friday and encouraged everyone to attend the World Juniors and enjoy that and make everyone who is visiting in our community to feel at home, and thanked staff and volunteers.

He thanked city council and city employees for hard work and success we saw this year, saw expanded economic development, another year of record housing starts, strong start on long range planning and great success and efforts in housing - American Dream program and Promenade - that this was year of teamwork and great progress, and looks forward to working hard for another banner year in 2005. Happy New Year and keep it safe.

2.1 Pledged Collateral Report.
No comments.

2.2 Issuance of Capital Ice liquor license to related company, Suite 49, LLC.
Council Member Kerian asked if more information available on any of the liquor licenses. Howard Swanson, city attorney, stated information available in the finance and administration office. He noted the license was approved by council in November to Capital Ice, the license was not issued in that name but was now set up to be issued under Suite 49, LLC

2.3 Bid specifications for portable training simulator for flammable liquids and gas (FLAG Trainer).______________________________________________________
No comments.

2.4 Budget amendment for fire department.
No comments.

2.5 Transfer of City-owned property to the Grand Forks Growth Fund, a Jobs Develop-
ment Authority.__________________________________________________________
Council Member Kerian stated that City owns these properties now and asked what that
means to a resident for the Growth Fund to own these properties. Mr. Swanson stated the primary
distinction between ownership by the City and ownership by Jobs Development Authority is that
JDA has greater flexibility in the leasing of property, sale or trade of property, that JDA is
considered an enterprise for jobs development and economic development and doesn't have
stringent requirements on real estate as the City does. He noted that the property is publicly
owned as the JDA is a public entity, a corporate body distinct from the City of Grand Forks and
controlled by the City of Grand Forks, and the board of directors is actually the city council
members. He stated that if the City were attempting to sell the property or negotiate for the sale
of the property, it has to be publicly bid; however, the JDA can use real estate as a leveraging
package for attracting new businesses or new development or expanded development.

Council Member Hamerlik stated the JDA which consists of the council members and the mayor
and there would have to be a vote by members but under different authorization - JDA rather than
city council. He stated that the committee of the whole is to discuss specifically things before
voting on them the following week, but have been trying to sell the auditorium a year or more ago
and other four properties listed, but that this is the first time he has seen anything or heard any
discussion re. these specific buildings - perhaps discussed at Growth Committee, rationale is
more flexible but just seemed to come out of nowhere - are there prospects and why now.

Council Member Brooks stated we are transferring properties from the City to the Jobs
Development Authority and those responsible for the City are going to be those same eight
people who were elected by and responsible to the citizens.

Council Member Glassheim stated that once the property is in the JDA hands you do not have to
have public bid and can negotiate a deal with a company but reason for public bidding is to make
sure that the City gets the best price by having competitive bid, and once putting in JDA hands
what doing is allowing them to negotiate the bid and that is why it requires five votes of the City
to transfer it rather than a majority vote. He stated that before voting and putting in a non-
bidding situation, he would like to have additional information on appraisals, assessments and
values in negotiations for these buildings. He asked what is status of the sale of the FTZ building,
that once it is transferred the JDA will have to pay $440,000 according to staff report before the
deed is transferred and believes that would be covered by the sale of the building but not sure if
there is a deal for the building, etc. and would like that information. Mayor Brown asked Mr.
Hoover to have that information available for council.

Mr. Hoover stated it is important that when any deals might come to fruition they will come back
to council members for vote, information of value that has been negotiated will be there. He
stated the problem with public bidding is that as they are negotiating a deal with a business, they
come to preliminary agreement and then come back to council to go through the process and
anyone could come in and bid on the project and business deal would go down the tubes.

Council Member Glassheim stated that the constraints on sale of city property is to make sure
there isn't any favoritism involved and companies treated equally and that is why have rules about
competitive bidding., and should step carefully if going outside the competitive bidding. Mr.
Hoover stated they can be assured that staff and those doing the negotiations are mindful of that.

Council Member Gershman stated there is more to the process when negotiating with a company
because there are number of jobs created, the value of those jobs and could see potentially where
could have a business that is either looking to expand or to relocate to Grand Forks where could
have speculators come in in that instance and start to bid that building on speculation and counter
to what we would try to do; that council will see numbers re. assessed value, appraisal and that
the JDA, EDC and Urban Development would work towards that.

Council Member Christensen stated the buildings are in the Industrial Park except for the civic
center, and there has been some interest in the last 6 to 12 months by various businesses through
EDC for leasing or buying the civic auditorium, and when this matter was raised by Mr. Hoover
and Mr. Duquette, they thought it was better that these properties by transferred to the JDA
(which is the city council) because of flexibility; and having been part in some of the negotiations
or briefed and that those involved had fair market value from our city assessor; and thinks it
would be best to get these properties in the name of the JDA, and not concerned that any
negotiations would take place or would be a favoritism to any developer because the transaction
is transparent and a matter of public record - that this doesn't have to go back to committee but
could send back on Monday.

Council Member Glassheim asked what the next process is, that if either the information about
the deals that are going to be done shouldn't go to the Growth Fund before they come to council
and whether we should vote on this which is setting up deals to go to the Growth Fund - that it
would be good idea for this to go to Growth Fund rather than finance committee.

Council Member Christensen suggested that they approve the transfer of the property to get title,
and as moving through the policies and procedures of the Growth Fund and now getting briefings from the EDC in the Urban Development Office and could have as an added agenda item a
continued briefing if necessary by staff as to the status of any negotiations that are on-going on properties owned by JDA, if negations are required and input from the Growth Fund Authority as recommended body to this group, then go into executive session and discuss those issues and come back with recommendation. He stated this is just to transfer title, the process of the sale or disposition or lease is going to be reviewed, and could have it at the Growth Fund where have members of the EDC and report back here.

Council Member Kreun stated the corporate center is owned by the City, LM Glasfiber won't be
transferred because of bonding structure, won't get businesses to move into those particular
businesses because won't be able to sell as what made for, and transferring these into the JDA
gives us that ability.

Council Member Gershman stated that every negotiation on these buildings with a business
would go through normal process and be heard by the Growth Fund and recommendation
would come to the JDA, nothing changes as far as oversight, and what does change is the
speculation on a potential business coming to town and have speculators come in and try to bid
that property up, which could destroy the negations but people elected will continue to see it - and
facilitating some growth potentials for us and protection for the citizens.

Council Member Glassheim stated he is very uncomfortable making a blanket transfer out of
competitive situations until he knows that all parties are being treated fairly.

3. INFORMATION ITEMS


4. CITIZEN REQUEST

4.1 Mayor Brown stated they have one citizen who wants to address the council. Mr.
Hamerlik stated he had several things there but would pass.

5. ADMINISTRATIVE COORDINATOR COMMENTS


6. MAYOR AND COUNCIL MEMBER COMMENTS

1) Council Member Kerian stated she appreciates that bikepaths behind Alerus have been plowed
but noticed that there is open water northwest of the hospital, and questioned why - whether leak
somewhere, temperature, etc. and asked that they watch their kids and adults as well.

2) Council Member Kreun wished everyone Happy New Year.

3) Council Member Gershman thanked mayor, council members, city employees and citizens of
Grand Forks for courtesies shown his family this year; that this past year he has noticed level of
cooperation between City, Chamber of Commerce, Economic Development Corporation, State
government officials and federal delegation; and expecting good things in 2005. He wished
everyone healthy and happy new year; and to make a resolution to stop at stop signs and not run
red lights as it is getting to be a big deal in this town.

ADJOURN

It was moved by Council Member Gershman and seconded by Council Member Kerian that
we adjourn. Carried 7 votes affirmative.
Respectfully submitted,



Emily Fossen
Finance Department