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News from the week of January 11, 2006


Shetek Bend nears opening

Enterprise now has 42 investors

By Seth Schmidt

Shetek Bend Banquet, Bar & Grill is on track for a Saturday, Feb. 4 opening.

“We’re getting closer,” said Neil Daniels, Shetek Bend president. “We’re pretty happy with how things are looking.”

An extensive remodeling project began in the Hwy. 14 building in September. Initially, it had been hoped that the bar and grill area would be opened in December, with remodeling of the banquet hall to follow. But Daniels said it was decided later to complete remodeling on both the banquet room and bar area before opening.

“We didn’t want to be pounding in nails after we were open,” said Daniels.

The remodeling “still has a ways to go,” Daniels said. Work needs to be finished laying carpet, re-finishing the banquet room’s dance floor, and installing kitchen equipment.

The new sports bar will have seating for about 80, while the banquet hall will be able to accommodate up to 450 people. To date, Shetek Bend has booked “upwards of 40” large group events for the ballroom, Daniels said.

The first two large group events that have been booked for the banquet room are a Valentine dinner for the Tracy Lion’s Club, and a Tracy education banquet in February.

Shetek Bend has hired its first two employees. Lezlee Wells (Prouty) of Tracy will be the bar manager. The food service manager will be Anna Kretsch of Revere.

The bar and grill will have a menu that will include steaks and burgers, Daniels indicated. Food for banquets will be catered in.


Many local partners

To date, Daniels said, 42 people who have invested money in the enterprise. Almost all of the partners are local people, or individuals with local ties.

“This really is a unique enterprise,” Daniels said. “The number of people that have been willing to get involved and invest money in this and make this go is a statement of what people think of this community and what they are willing to do to make this thing go.”

A number of the partners, Daniels added, have invested sweat equity in the remodeling. Daniels said he has been very pleased with the craftsmanship and know-how of many of the people working on the project.


Former Servicemen’s Center

The Tracy American Legion built the Shetek Bend building in the late 1970s. The Legion operated the Tracy Servicemen’s Center until the 1990s, hosting many banquets, dances and large group events. The Legion sold the property to Todd and Harold Radke, who relocated Tracy Minntronix operations to the site. Dean and Jeff Salmon purchased the facility after Minntronix closed its Tracy operations in 2004. The Salmons, in turn, sold the property to the Shetek Bend group this summer.


DM&E plan moves closer to construction

The long-discussed Dakota, Minneota & Eastern Railroad improvement plan has gained momentum with a recent ruling from a federal agency.

The Surface Transportation Agency affirmed earlier decisions that the project could go forward. The three-member panel ruled, in effect, that environmental-related issues raised by opponents of the project are not significant enough to stop the proposed $2.5 billion upgrade. Opponents of the board decision have 30 days to appeal.

The DM&E project, which was proposed eight years ago, would be the largest railroad construction project in the U.S. in about 100 years. Plans call for rebuilding 600 miles of existing track in South Dakota and Minnesota, upgrading 250 miles on the affiliated Iowa Chicago & Eastern Railroad, upgrade 150 miles of track between Wall, SD., and Colony, WY., and building 262 miles of new track from coal fields in the Powder River Basin of Wyoming.

Advocates say that an upgraded DM&E will be benefit agricultural shippers, improve grain markets, and spark economic development opportunities along the line. Utility plants in the Midwest would burn the low-sulfur coal excavated from Powder River Basin to generate electricity.

Most communities along the DM&E, including Tracy, Walnut Grove and Balaton, have signed agreements with the railroad supporting the project.

Rochester and Mankato have opposed the railroad expansion, unless bypasses are built around the cities. Representatives of the Mayo Clinic in Rochester have opposed the DM&E expansion on existing trackage because of the noise, vibration, and congestion that increased train traffic would bring.

A bill passed by Congress last year makes the DM&E eligible to apply for $2.5 billion in federal loans to finance the construction.

The DM&E construction would be accomplished over a three-year period. DM&E President Kevin Schieffer said last week that if final federal approval is granted soon, it would still be possible for some construction to occur in 2006.


Wind farm plan has big response

By Valerie Scherbart Quist

A group seeking to build up to 60 wind turbines near Tracy has raised nearly half a million dollars in stockholder equity.

Shetek Wind, LLC has raised $470,000 from nearly 40 landowner-investors in the wind farm project’s targeted construction area, said Dennis Fultz of Shetek Wind, LLC and Outland Renewable Energy, a group dedicated to aiding landowner groups that want to put together wind projects.

The bulk of the project is expected to be located in Monroe and Custer townships in southern Lyon County and Shetek and Lake Sarah townships in Murray County. The area includes 32 sections of land running from near Balaton to southeast of Garvin.

Fultz said he was pleased in the response from potential landowner-investors. There were 128 landowners/residents in the targeted wind farm area. The landowner-investors who have signed on to the project represent about 40 percent of the land in the target area.

Potential investors were approached privately. The period for investors to sign on was closed in December.

The project was initiated by Outland Renewable Energy, a group of eight people that includes five area farmers. Local members of the group are John Nelson of Garvin, Bernard and Dennis Fultz of Tracy, and Larry and Elton Goeman of Jeffers. Also involved are wind energy developers Patrick Pelstring, Jack Levi, and Jay Allsup.

Outland Renewable Energy was responsible for completing a computerized wind study and environmental permitting study, initiating a transmission study, and contacting potential buyers of the power and financiers.

“After we did those steps, we knew we had a viable project that we could take to the landowners,” Fultz said. About $175,000 has been spent on those initial steps. The transmission study will cost approximately $200,000.


Board is elected

Once the stock offering period for investors was closed, a board of governors was elected. Elected to the board were Rick Anderson, Matt Surprenant, John Nelson, Ron Schwartau, and Jay Allsup.

Fultz said it is possible that an additional stock offering will be opened up later on to raise some additional dollars for the project development. Local investors will own approximately 60 percent of the project, Fultz said, with Outland Renewable Energy owning the balance of the project.

The Shetek Wind, LLC wind farm will likely benefit from the state’s Community-Based Energy Development (C-BED) legislation, said Fultz. The concept behind C-BED is to keep ownership of wind projects local, with the goal that profits from such projects will remain in Minnesota. The Minnesota Public Utilities Commission mandates that utility companies purchase a certain amount of their power from C-BED qualified entities. Shetek Wind, LLC meets the criteria to be a C-BED qualified entity.

A similar wind power project initiated by Outland Renewable Energy near Jeffers has sold 50 megawatts of its power to Xcel Energy through C-BED.

“We envision the same thing happening here,” Fultz said. Construction for the Jeffers project, which will be 24 of the largest wind turbines in Minnesota, is set to begin in the summer of 2006.


Construction in phases

Fultz said preliminary studies have shown the potential to produce 250 megawatts of electrical power in the Shetek Wind target area. The transmission study is examining what changes will have to be made to the transmission system to handle 150 megawatts that the project will produce from 60 or more wind turbines. The power produced would be enough to provide power to about 150,000 homes.

Fultz said the turbines may not all be built at one time. It is likely that they will be built in phases, depending on the blocks of power the utility wants to buy.

Engineers will need to determine the tower location. Factors will include how to maximize the electrical energy output in the targeted area while keeping construction costs within reason. Which turbines are constructed first also depends somewhat on where a substation for the project will be built, and where the system would interconnect to the transmission system. It is likely that construction would start close to the substation.

Fultz said Shetek Wind, LLC is in the process of securing the wind rights from the landowners in the area. The limited liability corporation has already made offers to two utility companies and is awaiting their response. Financing and turbine supply have been tentatively secured.

“We’re ready to build when transmission capacity becomes available,” Fultz said. “As soon as we get transmission and a buyer, we are ready to go. We’re well along in that process, which typically takes two to three years to complete.”


Transmission lines needed

The biggest uncertainty, he said, is transmission. He said a definitive answer on the transmission study isn’t expected until the end of 2006.

The construction of an MET tower, or possibly even two, will likely be completed this summer. The approximately 200-foot-high tower will record wind speed and direction, temperature, and barometric pressure.

“The tower will confirm what the computer wind analysis has indicated,” Fultz said.

He said that when completed, the project costs could be in excess of $200 million.


Long-range opportunity

The Shetek Wind, LLC wind farm isn’t the only project currently being pursued by Outland Renewable Energy. The group is in the process of stock offerings amounting to $1.5 million to continue development of other wind farms in various stages of development in other parts of the country. Fultz said he would like to see other people from Southwest Minnesota become investors in the company.

Outland Renewable Energy is also exploring other renewable energy resources, such as biomass to energy and, in time, hydrogen, Fultz said.


High School studies to continue

Estimated cost of multi-use facility is $4 to $5 million

By Valerie Scherbart Quist

A new gymnasium or theater complex would no doubt be an asset to Tracy Area Public Schools and the community of Tracy. But would the district taxpayers support such a project?

That’s the question District 417 board of education members asked themselves Monday. The board reviewed rough estimates for two building project possibilities from district Superintendent David Marlette.

The first project would include the construction of a 100x100-foot game gymnasium, 70x100-foot practice gymnasium, boys’ and girls’ locker rooms, a 50x50-foot wrestling room, boys’ and girls’ bathrooms, weight room and coaches’ rooms, equipment storage rooms, and remodeling the existing gymnasium facility into a theater.

Marlette estimated the cost of the building project at about $4,446,000.

A second option would include a 100x100-foot game gymnasium, 8,000-square-foot theater, boys’ and girls’ locker rooms, 50x50-foot wrestling room, boys’ and girls’ bathrooms, weight room and coaches’ rooms, and equipment storage rooms. Under this scenario, the existing gymnasium would be kept as a practice room.

Marlette estimated the cost of this building option at about $4,511,500.

The superintendent emphasized that the figures were a very rough estimate, but felt the cost would be between $4 million to $5 million for either construction project.

“It gives us a starting point to start talking,” he said. “I don’t know if this is something people would like to see, but we won’t know until we start to talk about it.”

Marlette added that whether the building project moved forward would be up to the taxpayers through a referendum.

Board members questioned whether the community could join in to raise part of the money so the whole amount wouldn’t have to come from a referendum. The superintendent felt a community and district project could be blended together very easily.

What’s the next step?

Marlette said there were several options, including conducting a survey, asking for community input, and having a public meeting on the issue.

“I think we just need to start talking,” he said.

He said most school districts the size of Tracy have more than one gymnasium as well as a theater.

“It’s a tough sell just to say, ‘We are going to build a gym,’” he added.

Board member Chris Schons recommended getting together with the different entities involved before any further decisions are made. Board member Eric Fultz agreed that it would be a good idea to get wish lists from the groups that would benefit from the new building, get harder numbers, and then go to the public.

Marlette agreed. “We have to narrow the scope first,” he said.

The board agreed that it would invite various groups, from both the athletic and theater ends of the spectrum, to a meeting next month. The meeting will begin at 6 p.m. on Monday, Feb. 13. The regular school board meeting will follow at 8 p.m.

City settles most pool claims for $1.2 million

Efforts continue to recover additional $556,560

By Seth Schmidt

The City of Tracy will receive $1,206,206 to settle most of the city’s Aquatic Center litigation claims.

Legal counsel Jim Kerr announced the out-of-court settlement at a Tracy City Council meeting Monday. Council members had agreed to the settlement terms at a closed meeting Dec. 12.

Settling claims with the city are:

• Olympic Pools, Inc., which constructed the original aquatic center pool areas and mechanical room in 2001-02.

• Allman & Associates, Inc., the designer of the original aquatic center mechanical equipment.

• Mid-State Surety Company, Olympic Pool’s bonding company.

• USAquatics, the chief designer, engineer and construction manager of the original aquatic center.

The City has not reached a settlement with United Fire and Casualty Co., one of USAquatic’s insurers. The City of Tracy, through its settlement with USAquatics, retained the right to seek an additional $556,560 in damages from United Fire & Casualty. The City of Tracy vs. United Fire & Casualty case—which involves the question of what the insurance company’s policy with USAquatics covered—will likely be heard in Lyon County District Court.

Council members made no comments after Kerr read the settlement statement. After the meeting, Mayor Steve Ferrazzano was asked for his reaction to the settlement.

“It’s a good resolution,” Ferrazzano said.

Asked about the settlement Tuesday, City Administrator Audrey Koopman said that the out-of-court agreement came after mediation sessions involving the parties. She said that the city’s lead attorney in the case, Jeffrey Coleman, recommended the settlement to the council.

The out-of-court settlement, Koopman said, offered the advantage of an immediate monetary award for the city, and an end to the uncertainty of protracted litigation. Had the city pressed forward with its entire aquatic center lawsuit in hopes of obtaining a larger monetary award, Koopman said there was no guarantee that a jury would rule in favor of the city. Even if the city ultimately won a larger settlement in court, she said, an appeal process could have delayed any payment to the city.

The settlement does not include any admission of negligence by any of the parties, according to Koopman. She also said that how much of the total settlement was being paid by each of the four parties would not be released.

The administrator said that she expects that the City will receive the $1.2 million within the next week.

The settlement agreement will result in the dismissal of all aquatic center related claims involving the City of Tracy, Olympic Pools, USAquatics, Mid-State Surety & Allman & Associates in Lyon County District Court. Two cases in Hennepin County District Court related to insurance coverage issues will also be dismissed.


$1.5 million referendum

City of Tracy voters approved a $1.5 million bond referendum to build the Sebastian Park aquatic center in 2000.

Demolition of an outdoor pool that had served the city since 1951 began in August of 2001, and construction on the new pool facility began that fall. The new aquatic center included four distinct pool areas, three large water slides, a refurbished bathhouse and a new concession building. The new aquatic center opened in July of 2002. Construction costs totaled about $1,855,000, higher than the original estimate of $1.5 million.

The pool operated for one full summer in 2003. But water leakage was noticed at the pool that summer, causing operating costs to be more than expected. A significant amount of cracks were observed in the pool shell.

In the fall of 2003, city council members ordered a series of tests be conducted on the pool structure. Core samples were drilled into the pool’s concrete shell, and the pool’s Diamondbrite finish coat was jackhammered off during the testing.

In the fall of 2003, consulting engineers reported to city officials that they had discovered a significant numbers of flaws in the aquatic center, including foreign objects and voids in the pool’s concrete shell.

The aquatic center remained closed during the summer of 2004. A plan to award repair bids in October of 2004, with the goal of re-opening the pool for the summer of 2005 fell through when a manufacturer backed out of a verbal promise to guarantee its product. Engineers then had to develop alternate repair plans.

In January of 2005, the council accepted an option calling for the installation of a Myrtha, steel-reinforced PVC liner. Hopes were that repairs could be completed in time to open the pool for a portion of the 2005 swim season. But delays pushed back the awarding of construction bids until April of 2005, and construction began in July.

Installation of the liner was completed in late this fall, and water was put into the pools for testing.

Final completion of pool repairs is expected this spring.

Besides the liner, pool repairs have included mechanical repairs, the construction of a new retaining wall, and new gutters. The Myrtha liner is guaranteed for 15 years.

Pool repairs were designed to bring pool standards up to what city leaders thought the city was getting when the original pool was built. The 2005 pool work does include an $11,000 pad underneath the children’s pool area, which is considered an improvement over the original pool design.

Casey's looks at June opening

By Seth Schmidt

Early summer is the targeted opening date for a new Casey’s General Store in Tracy.

“Right now, we are looking at sometime in June,” said Bill Walljasper, chief financial officer for Casey’s General Stores in Ankeny, Iowa.

Footings for the store’s foundation were dug in October, and the building’s outer shell was erected in November.

Walljasper said that the Tracy Casey’s store would have about 2,700 square feet of space. Fueling facilities would consist of a “four-quads,” he said. Each of the station’s 16 fuel dispensers will have “pay at the pump” capability.

Like other Casey’s, Walljasper said that the new Tracy store will have about a 500-square foot food area. Other merchandise, he indicated would include groceries, health & personal care items, household supplies, beverages, snacks, and basic automotive supplies. Walljasper said there is a “strong likelihood” that the store will also offer video rentals.

Store hours will be 6 a.m. to 11 p.m., seven days a week. A manager, assistant manager, and six to eight other employees will staff the store. Typically, Walljasper said, a manager will be hired six weeks to two months before a new Casey’s store opens. The manager, with help from a supervisor, then hires the other employees.

The new Casey’s convenience store is being built on the far west end of Morgan Street, just off Hwy 14, east of the Dairy Queen and south of Salmon Motors.

Likes small towns

Walljasper said that the Casey’s company, which has 87 stores in Minnesota, likes to operate in small towns. More than 50% of its approximately 1,300 stores in nine states are in towns with less than 3,500 population. The Tracy store, like virtually all Casey’s stores, will be corporate owned. Walljasper said that only 19 Casey’s nationwide are not company-owned, and that all new Casey’s stores are company owned.

Walljasper said he did not know what Casey’s total investment will be in Tracy. But he said that a store the size of the one in Tracy usually costs about $1 million, including inventory. Land costs, he said, are the biggest expense variable in starting a new Casey’s.