Can the city move forward with its plan to build a 14,400 square foot new city hall/liquor store next summer?
Probably not, said City Administrator Mike Roth.
Roth discussed the plans with the city council at the July 29 meeting and said one the hardest things to accomplish with all that is going on would be to find new office space for the staff to work out of while construction was underway. Also, the city’s architect on the project, LHB, said the transition from concept to design has taken much longer than expected due in no small part to the COVID-19 pandemic. In an email to the council, the LHB project manger said, “I have concerns about our ability to complete the design work to accommodate construction in 2021.” He also said he expected the COVID-19 emergency to last well into the winter, and “it seems a real possibility that it will still be an issue for the 2021 construction season.”
Before the COVID- 19 pandemic hit, the city council was well into discussing the various plans and drawings for new city spaces, dropping the scale from 16,000 square feet to 14,400 square feet. Still, over the recent months, the discussion slowed as the city switched gears to accommodate the new rules for the pandemic.
Councilor Kelly Swearengen wasn’t sure how much the building would cost. There were two numbers on the drawings, one for $5.5 million and one for $5.68 million. And, noted Swearengen, those costs didn’t include rent for office space while the new building was being completed, nor the cost of equipment, furniture, or fixtures for the new structure.
“I feel like this has to happen,” she said but added that maybe the city should take a step back at this time because of the uncertainty around COVID-19 and the sticker-shock price tag.
Swearengen offered that the liquor store was designed for the future. Still, maybe the city could use this time to look at cost-saving options like putting offices near the new public works building on the hill and opening the current office space to commercial or other uses, she suggested.
Councilor Tim Kennedy agreed with Swearengen, noting no one could have anticipated COVID-19 when the plans were first made for the new city spaces.
“You’re right; it’s a lot of money. We know we are in a bind, not knowing how much money the Liquor Store or Recreation Park will bring this year.”
“Our revenues are very much unknown,” added Anton Moody, the acting mayor at the meeting because Mayor Jay Arrowsmith Decoux was unable to attend.
“A huge monkey wrench was handed to us,” Swearengen said, saying it was time to take a pause, take a breather and “see where we go when we get more financial information.”
Councilor Schulte agreed, and the council decided to hold back on making any more plans for the city hall expansion until there is a return to normalcy or everyone adjusts to the new normal.
EDA assisted living development
Cook County/Grand Marais EDA Director Mary Somnis and EDA Board President Howard Hedstrom came before the board via ZOOM to discuss the potential to develop a senior living facility in Grand Marais.
“Community Asset Foundation is seeking to build an 18-20 room assisted living facility in the business park,” said Somnis.
Somnis outlined the proposal by Community Asset. The company would pay for architectural plans, develop the building, pay all city building and development fees, and reserve 20 percent of the units for seniors with low incomes of 60 percent less than the area median income.
Plus, they would obtain the site and building plan approval from the city and execute a management agreement with North Shore Health or another nonprofit experienced in assisted living operations for the facility’s ongoing operation.
Construction of the facility would start before June 1, 2021, and end within nine months.
Under terms of the agreement, Community Asset Foundation CAF) has asked the EDA to sell it one lot in the business park for one dollar. CAF also proposes the city try to create a housing tax increment financing (TIF) district encompassing the property and explore with CAF a “pay as you go” tax increment agreement whereby the city rebates the foundation 90 percent of the annual tax increment generated by the project over 25 years and assists the foundation (CAF) in preparing a grant application to the IRRRB.
TIF is a tool where the increase in taxes due to a development are captured and used to finance a portion of the development costs.
Council agreed the proposal sounded promising. The city will work with Ehlers to see about setting up a tax increment-financing district with either the city or the EDA administering the district. The city and the EDA will be responsible for any Ehlers expenses before the EDA and CAF sign a development agreement, should it be determined that the project is feasible.
2021 Budget Calendar
Grand Marias Library Director Amanda St. John came before the council with a budget approved by the Library Board of Trustees. St. John said the revenue projection was based on 2020 revenue to date and reflected the 2019 elimination of overdue fines. Travel expenses have been reduced for 2021 because the pandemic has led many organizations to offer virtual meetings and symposiums. She said the 2021 book budget was decreased as well. The salary increase was set at three percent, which was what the city recommended.
The Council passed the library budget; it now has to go before the Cook County Board of Commissioners. The commissioners are currently working on the upcoming 2021 county budget.
The Council discussed setting meeting times with department heads to address each department’s needs and priorities concerning the 2021 budget.
A preliminary levy will be set at the council’s September 9, 2020, meeting. That levy can be reduced but not increased as the budget is further discussed and modified until December 30, when the council will have adopted the final budget and levy and submitted it to the state.
Department heads were to turn in their draft budgets to Finance Director Kim Dunsmoor by August 5.
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