Stacy council convenes special meeting Aug. 28

By Anne Thom

The Stacy city council convened for a special meeting on Aug. 28 with nearly a full agenda and a full supporting cast.

City Attorney Peter Grundhoefer, who generally avoids being summoned in order to save the city the cost, gave a draft resolution to the council.

The resolution is directed at Chisago County and the MN Dept. of Transportation (MnDOT). The city expressed opinions and concerns regarding a traffic study that has been requested for 2013.

Grundhoefer prepared the resolution due to the manner in which past traffic studies were handled. The city previously noted that the county and MnDOT failed to monitor traffic during rush hour periods or monitor specific driving behaviors during the study.

A motion to send the resolution to the county passed unanimously.

As a follow-up to one of the issues, Mayor Mark Utecht said, “Oh, and if anyone didn’t notice the county put flashing lights on our stop sign out there. It’s better than nothing.”

He credited County Commissioner and Stacy resident Ben Montzka with producing this result which the council deemed a good first step to traffic control issues at Stacy Trail and Forest Blvd.

City and NBAHA struggle to over languishing Stacy Sports Complex

There was unfinished business to address with the North Branch Area Hockey Association (NBAHA) over the Stacy Sports Complex. City and NBAHA representatives met today.

The NBAHA is in need of funds to move forward with the project, however, they are unable to secure the funding from their bank as the NBAHA doesn’t own the land the sports complex sits upon.

“I would just like to deal with the hockey arena part first,” the mayor said.

The city asked city financial advisor Doug Green of Springsted for an analysis of the value of the land the Sports Complex sits upon.

Green also provided information on the payoff schedule of the bond that is funding the sports complex project.

The full debt service on the bond is $1,235,000 with $328,000 in outstanding interest owed.

Green calculated per square foot this is $1.09, thus providing a picture of how much land the city would have to sell in order to pay off the bonds.

Mayor Utecht asked about pre-payment which Green said the city has to make three more principal payments before the city could pre-pay.

Councilor Michael Carlson said this project began at a park meeting in 2002. Carlson said he has been dealing with the project for the last 10 years and he called it “Pie in the sky.”

“It’s going to make it more and more difficult for kids to play sports,” Carlson said.

He brought up the city of Vadnais Heights where a high profile default of a sports complex and change of management just occurred.

Utecht said he thinks everyone involved lacked the foresight to figure out a bank won’t loan money to a project on which they would not be able to foreclose. The bank doesn’t want to own a building unless they also own the property.

Utecht said it appears no one thought of this in 2002. Ness said the terms of the project changed in that the NBAHA wasn’t going to borrow, they were going to bond with the city as the bonding agent.

Utecht said the situation is similar Stacy’s problem with water/sewer rates. The city set rates based on a projection of 25 new housing starts per year.

“And that’s why those funds have issues. We all didn’t predict how it was actually going to happen. We thought we were making the right decision, and it wasn’t. Sounds like government to me,” Utecht said.

Green calculated the value of the three lot parcel or block in question at $229,338 or $47,375 per acre.

“It’s a minimum, otherwise we are giving that land away,” Utecht said.

Grundhoefer reminded the council the plan is for the city to buy back the sports complex for $1.

Utecht said he didn’t want to be faced with having to buy back land that the city had given away.

“I’m not willing to put anymore into it, we’ve dumped enough into this little charade,” Councilor Jim Ness said.

Utecht asked everyone to study the numbers as the council will have to make a decision on what to tell the NBAHA they must pay for the property.

He said he tried to figure out a way where they could accomplish the end result of the NBAHA not having to pay and the city being the end recipient of the property.

The NBAHA representatives will return to their bank with the proposal.

Utecht also proposed an escrow account that would be surrendered to the city should the hockey arena go into foreclosure.  “Right now this thing is sitting in limbo and it’s really stupid, we’ve got to get going with something to get it moving,” Councilor Chuck Lucia said.

The council is unhappy that construction on the project has come to a standstill.

Ness made a motion to sell the property to the NBAHA for $1.20 per sq foot and the motion failed for lack of a second. Ness brought up at least three cities that have built hockey arenas and are now seeking to turn them over to a respective city because the hockey association behind the project cannot afford the cost.

“Are you proposing we don’t sell the land to them? If we don’t offer to sell it to them, that’s inappropriate,” Utecht said.

Utecht said the point of this transaction is that if the city ends up with the property, the city will not be out the money.

He cautioned against inflating the price and favored sticking to the $1.09 per square foot, “Then it’s paid for, period,” Utecht said.

He made a motion to offer the lot for sale at the agreed upon square footage price of $1.09 per square foot.

“What I don’t want to do is give it away’” Utecht said. He advised the NBAHA needs to be given an opportunity to respond. “I don’t want to put anything in the way of them getting this done,” Utecht said. He sincerely hopes the association is able to follow through.

Ness asked if escrow could be added into the agreement and Utecht yes, but that would be for the professional fees.

Ness made a motion to add a $5,000 escrow account as a condition of the sale. “We have to think of them now as a developer and we have to treat them as any other developer,” Ness said.

Lucia disagreed and said, “We don’t want to back them into a corner.” Ness argued the $42,000 the city has already spent is too much. “It’s their project, they’re going to have to figure out how to pay for it,” Ness said. The motion for the amended $5,000 escrow failed.

“I don’t want the city putting any more money into this project with the exception of Sharon’s (City Clerk Sharon Payne) time as required. All other professional costs need to be born by the association,” Utecht said. With that the motion passed.


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