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By MaryHelen Swanson
That the North Branch Council is
eagerly promoting the city as a "business friendly" place for new
business is apparent when one sits in on a council meeting these days.
Having
hired Tom Willett as EDA director, things are moving swiftly in
attempts to make the city more appealing to new business and industry.
This
week the council approved a significant change in the way the city
charges water connection and trunk fees in order not to scare companies
away.
In his report on the changes, Willett explained that the
city's finance director has studied figures for the cost of
constructing an industrial building, compiled by the National
Association of Industrial and Office Properties, from 79 cities in
Minnesota.
He said, the results for communities for which North
Branch competes for businesses shows NB is second only to Osseo in
terms of total costs.
The fees are high, Willett said.
To
overcome this situation, Willett suggested the following: require a
down payment of 15 percent of the SAC and Trunk Sewer fees (with full
payment of permits fees, plan review and state surcharge) and allow
them to pay the remainder over a five-year period at 5 percent interest.
His
reasoning is that since the vacant land is not generating any fees
currently, the city is not out these fees by spreading them over a
5-year period.
Willett said the proposal was reviewed and
discussed at the December EDA meeting and it was unanimously
recommended for approval.
At the council meeting this week, Councilor Kathy Blomquist made a motion to approve the plan, but no one seconded her motion.
Mayor Gloria Karsky was concerned with the 5 percent interest rate.
There was also a question about a business going belly up. What then?
Willett
noted in his memo that while there is some risk that a firm could go
bankrupt, it hasn't happened with any industrial firms in NB, "so the
risk would appear to be minor," he said.
City Attorney Tom Miller then noted that there would be an assessment agreement for security on the project.
The
mayor attempted to pass a plan using a variable interest rate.
Councilor Blomquist made a second but then withdrew it when the mayor
suggested that the interest rate be adjusted annually.
Willett
reminded the council again of how NB is trying to be "business
friendly" and explained that if the land sits vacant, the city will
have to cover the bonds itself.
In the end, the council approved
a plan with 15 percent down, 5-year pay off on the remainder at 2
percent above the city's average annual return on investments the
previous year and secured by an assessment agreement.
Councilor Blomquist was opposed.
Willett
advised that this will assist industrial prospects who might not other
wise select North Branch because of the high upfront SAC and trunk fees.
The
council continued addressing incentive programs including the City's
Revolving Loan Fund (RLF). This fund, Willett noted, was depleted with
recent loans to Comforts of Home and Norlite. Repayment will replenish
the RLF to over $28,000 by the end of this 2008.
But that still
leaves the city unable to assist anyone this year. So staff has
suggested that the city, the North Branch Water and Light, Chisago
County and East Central Energy each commit $25,000 so funds would be
available if needed.
The RLF is available to assist a business in acquiring such things as equipment.
The
council agreed to make the commitment understanding that the funds
would not be needed until a loan was approved. If needed, the funds
would be taken from the Permanent Improvement Revolving account, as
explained by financial director David Stutelberg.
Willett noted that Water and Light also made the commitment on Dec. 18.
The city will be asking the county and ECE for the same commitment soon.
Finally,
the council agreed to have staff develop a "brand" for the industrial
park that will appeal to brokers and industrial prospects. The cost for
this will be between $600 and $700.
In other business, the council:
•
Authorized the preparation of plans and specifications for the lift
station construction at North Branch Market Place, the new commercial
development on the freeway. The lift station will be completed by the
city's consultant and funded by the developer. Construction will be
completed by the developer, with city inspection.
The lift station must be constructed early in 2008 to service the Shopko site.
According to City Engineer Julie Dresel, the lift station will be turned over to the city by the developer when completed.
• Agreed to request a speed study by Mn/DOT on 410th St., as requested by residents during a December work session.
•
Certified that the city added 1.4 miles of new public streets to the
local street systems in 2007, including .3 miles of Harder Ave. that
led to the former Green Acres and the rest in the ESSBY development.
•
Re-appointed Mark Ramaley and Donald P. Swanson to the planning
commission for three years; re-appointed Cindie Glem and Michelle
Johnson to the park commission; and Darrel Fisk to the Water and Lights
commission. They also re-appointed Randy S. Larson to the EDA
commission. New resident Galen Strovers had also applied for the EDA
position. The council agreed to offer him a position should one open on
another committee as he indicated he wanted to become involved.
•
Took no action on the request of Glenn Gruber, JJ's Bowl & Lounge,
for a 2 a.m. closing time. Gruber has asked for it before and was
turned down. The city would have had to amend its ordinance to allow
it. Police Chief Steve Forner, in a letter to the council, noted that
he was opposed to the change in 2003 and continues to be opposed. He
listed a number of reasons.
• Approved annual services, retaining all except the official newspaper, which went to the Cambridge Star, the low bidder.
•
Awarded the bond sale for $1,815,000 GO bonds to RBC Capital Markets at
a true interest rate of 4.0343 percent. The proceeds are to be used for
the Flink Ave. realignment project. The Market Place developers will be
assessed for the bond payments.
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