The only citizen who turned out for the Monday, December 14, 2009 public hearing of the Cook County – Grand Marais Economic Development Authority (EDA) was Grand Marais mayor Sue Hakes— who had to leave because there was a quorum of city council members in attendance. Hakes’ fellow council members were there to discuss the potential sale of a lot in the Cedar Grove Business Park to G&G Septic. City councilor Jan Sivertson serves on the EDA board and councilor Tim Kennedy has been hired to serve as the realtor for the business park.
After Hakes left to comply with open meeting laws, there was lengthy discussion about the lot sale—the intended use of the lot, the sale price, and how the water and sewer infrastructure assessment would be repaid.
One of the first questions was which lot is G&G Septic interested in purchasing. EDA Director Matt Geretschlaeger said it is Cedar Grove Business Park lot 3, block 7, across the street from Nordic Electric.
Geretschlaeger said G&G Septic’s plan is to construct a building similar to the Nordic Electric building, approximately 4,500 square feet in size. The building would be used by G&G Septic as a temporary holding area, allowing G&G to discharge septic waste into tanks and dose it into the Grand Marais Municipal Waste Treatment Plant in an appropriate manner. All of the operations would be conducted inside of the building.
G&G Septic is working with the Grand Marais Public Utilities Commission (PUC) on the details. EDA realtor Tim Kennedy said G&G Septic wants to construct this building to eliminate the need to discharge septic waste on fields in the county or to truck it to WLSSD in Duluth. Kennedy, also a PUC board member, said the city municipal plant has the capacity to do this.
“Our wastewater equipment supervisor Tom Nelson has been talking with G&G. It’s just a matter of working out the details,” said Kennedy.
EDA board member Jim Hall asked if the soil on the lot would allow the installation of underground tanks. Geretschlaeger said soil testing has been done and the site will allow placement of tanks.
The EDA board continued the discussion it has had at the last two board meetings, regarding lot prices. Lot prices were set in November at the market value recommended by Kennedy—however, the newly established prices do not bring any income to the EDA. In fact, they barely cover the assessments due to the city of Grand Marais for water and sewer assessments.
“With these prices, we’re just addressing the money owed to the city,” said EDA Chair Mike Littfin, at the December 10 EDA meeting. “We’re trying to make the city ‘whole,’ but with each lot sale we’re losing money.”
EDA Board Member Jan Sivertson agreed. “We are losing out on realty expenses, publication expenses—we need to come up with a sustainable plan.”
EDA Director Geretschlaeger said it is still hoped that the EDA will be able to use $140,000 from Iron Range Resources that was granted for a sewer system lift station for the Sawtooth Cottage residential development. Since that development was put on hold because it was determined to not be feasible financially, the EDA has asked IRR if it can use the money to help pay off the business park infrastructure.
“That would really take the pressure off,” said EDA Board Member Bruce Martinson.
In the interim, the board debated how to make the sale to G&G Septic a “net sale,” meaning a sale with no loss to the EDA. The lot sale price is $45,000, but the EDA owes the city $60,000 at the time of sale for the water and sewer assessment.
Littfin said G&G Septic is aware of the assessment and he said they hope to be able to pay the additional $15,000 over time. Littfin asked if the EDA should make its approval of the sale contingent on the city agreeing to accept such a financial arrangement.
Littfin made a motion to that effect and Martinson seconded. Both board members noted that the sale was contingent on the approval of the Cedar Grove Business Park Design Review Board—and contingent on the city agreeing to accept a payment of $45,000 and a $15,000 assessment over time in lieu of the $60,000 due from the EDA on sale of the lot.
Sivertson asked how the transaction would result in a net sale, since there are closing costs. Geretschlaeger said closing costs will most likely be less than in previous sales, since a purchase agreement has already been developed and should require minimal changes. However, it was agreed closing costs would be approximately $5,000. The board amended its motion, adding $5,000 to the cost of the lot.
Realtor Kennedy asked what the next step would be. Geretschlaeger replied, “With this approval, the applicant can move ahead with negotiations with the city. He can feel more comfortable incurring costs, getting drawings of the building and so forth.”
Littfin said this motion is basically the EDA saying it supports this project.
In other business at the
December 10 meeting:
The board agreed to consider a purchase offer from Cornerstone Community Church for the lot next to the church, lot 3, block 5. The board agreed to offer the lot to the church for $40,000 with a $20,000 assessment, contingent on agreement of the city of Grand Marais.
The board discussed the Superior National at Lutsen golf course debt. EDA Treasurer Jim Hall said the golf course is paying its bills, but only because “we’re running on the county’s $100,000.” Theboard noted it desperately needs to receive the $100,000 grant from IRR on the cart path project, however that is not enough to pay back loans from both the city and the county and to cover golf course operations through the winter. The board asked the golf course committee to put together a complete financial statement of its revenue and expenses.
“Thenthe next step is to come up with a plan on how we can pay back the city and county,” said Sivertson.
Director Geretschlaeger gave the board some good news. The EDA’s application to the University of MN, Crookston, to have a cost feasibility study done of the Cook County – Grand Marais EDA has been approved. Geretschlaeger said it would be enlightening to see the results of an impartial evaluation. The study is a $20,000 value and includes assistance with developing a marketing plan for the business park.
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