By Patrick Tepoorten

The city of North Branchís ESSBY project, a combination industrial, commercial, and residential development planned along I-35 northwest of the downtown area, came before both the Chisago County Housing Redevelopment Authority-Economic Development Authority (HRA-EDA) and the North Branch school board last week.

City Finance Director Dave Stutelberg discussed the project with the HRA-EDA on Tuesday in an effort to explore a financial partnership with the HRA-EDA for the purchase of 93 additional acres- the Sederberg property. Stutelberg called the 93 acres ìthe final pieceî of the ESSBY project and indicated that, after years of negotiation with the Sederberg family, the city and the family have arrived at a mutually agreeable price, $23,000 an acre.

The city would like to purchase the property, as it would ìcomplete the vision for the next 20 years of industrial development, ì said Stutelberg. However, North Branch already has $7 million invested in the project and is a mere $3 million from its debt capacity. The Sederberg property would tap the city for $2.1 million of that, were it to purchase the property on its own. Stutelberg offered another scenario.

ìWe are looking for alternative ways to finance the project,î he explained, and suggested the city and the HRA-EDA become financial partners on the project, sharing the purchase cost evenly.

County Administrator John Moosey asked Stutelberg about the future of the stalled residential portion of the existing ESSBY project.
ìI think the council will come around,î said Stutelberg, who further added that, if the rezoning required to proceed is not approved, the city would be forced to levy roughly a half a million dollars in 2007, 2008, and 2009 in order to cover the outstanding bond.

Stutelberg also informed the HRA-EDA that if the rezoning is not approved he would recommend that the city not attempt to purchase the remaining 93 acres, either on its own or with a financial partner.

HRA-EDA committee chairman Jim Ertz was lukewarm to the request, pointing out that the city already has 300 as yet undeveloped acres and that the mission of the HRA-EDA was to assist communities that did not have those advantages.

ìTo buy more land in an area where there is adequate land already might be a problem for us,î he noted.

Still, the HRA-EDA has not ruled out the venture entirely.

Chris Eng, executive director of the HRA-EDA, said Monday that the HRA-EDAís mission is to assist governmental bodies improve local commercial and industrial development through financial partnerships. And, although that assistance is designed primarily for those areas that have the least amount of applicable development, Eng did not necessarily see the possibility of a partnership with North Branch as contrary to that mission. ìWe would certainly explore it,î he said.

AT THE SCHOOL BOARD

While the HRA-EDAís concerns centered on the cityís ability to finance the purchase of 93 additional acres and the hazy future of existing residential development plans, the North Branch school boardís concerns centered on the population growth expected from residential development and how it might affect district infrastructure.

Estimates for the total number of units in ESSBY range from 570 on the high side to 300 on the low side. With a local average of 2.89 people per household, even low estimates for housing could lead to growth of over 900 people.

ìThat wonít occur in a single year, of course,î City Administrator Joe Lynch explained to the school board on Thursday. ìIt would be an eight- to 10-year phase.î

What may be of concern to the school district is not so much the expected growth over the next decade, but rather how the city will finance that growth.

According to Lynch, the city is looking at establishing a Tax Increment Financing (TIF) district to accommodate the residential portion of ESSBY.

District clerk Jeanne Walz expressed concern about growth and how the school might manage it. ìThe school district benefits from growth with kids, but when there is significant growth, infrastructure needs to come into play. That can be difficult for people. Theyíve just moved and are already stretched to the hilt,î she said, adding, ìThat puts us in a bind, thatís the stress.î

School board vice chair Donna Setter reminded city representatives that the school, unlike the city, can only build with the publicís approval in the form of a levy ballot question.

Walz responded by wondering aloud if there would be any way for a fee to be added to the cost of new home purchases that could be earmarked specifically for the school district.

North Branch Mayor Gloria Karsky said the city was considering that idea. ìWe are not opposed to that. We would like to see the school keep up with growth.î

Dist. 138 Superintendent Rodney Reisnouer ended the discussion by noting that the school district depends on growth for its continued survival.

ìWe donít want to be declining in growth. Slow growth is what keeps our heads above water.î He added that a two percent annual growth rate would be something the district could handle.

Top of Page

©ECM Post Review

6448 Main Street
North Branch, MN 55056
Telephone: 651-674-7025
Fax: 651-674-7026
E-mail: editor.postreview@ecm-inc.com