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News from the week of January 24, 2007



Aquapower financing okayed


An effort to attract Aquapower Inc. to Tracy continues to move forward.

Robert Gervais, Tracy community development director, said Tuesday that a deal to bring the industrial cleaning operation to Tracy should be finalized soon.

The EDA has agreed to spend $154,300 to purchase and remodel an 8,800 square foot building on South St. for Aquapower. The property will be leased to Aquapower, an Eveleth company that specializes in cleaning ethanol plants. The property is being purchased from Kim Daniels and Keith Peterson of Daniels/Peterson Construction.

Gervais said Tuesday that two things still need to be accomplished to bring Aquapower to Tracy.

• The purchase agreement needs to be finalized between the EDA and Daniels and Peterson.

• EDA and Aquapower representatives need to sign the final draft of the lease agreement.

Gervais said he doesn’t see problems with either point, since major terms have already been agreed upon.

The Aquapower deal cleared a major hurdle Monday night, when Tracy City Council members okayed an EDA plan to finance the Daniels/Peterson property purchase. On a 4-2 motion, the council passed a resolution that allows the EDA to reallocate $62,300 in a housing fund toward the property acquisition. The resolution also authorized the EDA to borrow $92,000 from the Eastview Apartment fund to provide the balance of the $154,300 needed for the warehouse acquisition and remodeling. The money borrowed from the Eastview fund is to be re-paid at 5% interest.

Sandi Rettmer and Tony Peterson voted against the resolution. Mayor Steve Ferrazzano, Charlie Snyder, Mike Martin, and Russ Stobb voted in favor. (Bill Chukuske was absent).

Peterson said that he “didn’t feel comfortable” taking money from the Eastview fund. Gervais said that sufficient money remained in the fund to make scheduled bond payments, plus a cushion. But Peterson questioned what would happen if major repairs were unexpectedly needed.

Rettmer said that she is in favor of attracting new businesses and jobs to Tracy. But she criticized the Aquapower lease as overly generous, and repeated an assertion that she had made Friday to fellow EDA members, that the EDA was “giving away the farm” in the Aquapower lease. (See related story). She faulted the lease for not requiring Aquapower to make an investment in the building, and because the lease does not require Aquapower employees to live in Tracy.

Council member Charlie Snyder responded that Tracy would see significant gains from the Aquapower lease because the firm would be buying goods and service locally. Aquapower’s payroll, he said, will generate tens of thousands of additional dollars for the local economy.

Aquapower leaders have indicated that they could eventually employ six to eight full-time employees and 18 to 24 part-time people from its Tracy site. But Rettmer said that future employment “is not a given,” noting that the lease only requires Aquapower to have one-fulltime employee in Tracy.


Proposed purchase

The EDA deal with Daniels and Peterson calls for the purchase of a 55x160-foot building at 436 South St. for $95,000, and an adjacent brick building on Fifth St. for $15,000. As part of the purchase, Daniels-Peterson will demolish the Fifth St. building, and remodel the South St. property. The estimated value of the remodeling is $52,550, with Daniels and Peterson offering to donate $9,900 worth of labor. The remodeling includes insulating the building, installing new 12-foot overhead doors, 200 amp, three-phase electrical service, and building an office area and bathroom.

The EDA will need to spend an additional $4,200 to bring sewer and water service to the building.

The EDA has offered the remodeled building to Aquapower rent-free for its first year of operations, as long as the company employs at least one person at the site. The EDA has also offered a two-bedroom apartment to Aquapower for no rent for a one-year period.

Rent on the Aquapower building would be $2,000 a month the second and third years of the lease, but rent could be reduced by $200 for each full-time equivalent job at the Tracy site. The lease defines a full-time job as 32 hours a week. Aquapower employees would be required to live within a 40-mile radius of Tracy. The incentives would end after three years, with Aquapower having a choice of either renting the building for $2,000, or purchasing the property for about $152,560.

The EDA is to pay insurance and taxes on the building for the first year of the lease, with Aquapower paying taxes and insurance the second and third years.

Daniels and Peterson have told the EDA that they plan to construct a new building for the company in the Tracy Industrial Park, if the sale goes through.


Street costs outlined

Assessments on 100-foot lot could exceed $8,000


By Seth Schmidt

The planned reconstruction of Fourth St. East could cost a typical homeowner with a 100-foot lot more than $8,000.

At a public hearing Monday, City Administrator Audrey Koopman explained how the project could impact individual property owners. Assessments are estimated at $18.56 a front foot for street reconstruction, $45.71 a foot for curb and gutter, and $2,129 per parcel for a groundwater interception hook-up fee. On a 100-foot lot, that would mean an $1,856 assessment for street improvements, a $4,571 assessment for curb and cutter, and a $2,129 groundwater assessment, for a total of $8,556.

The projections are based on an estimated project cost of $569,560 and the city’s past practice of assessing benefiting, adjacent property owners for 100% of curb and gutter improvements, 25% of street reconstruction costs and 100% of groundwater interceptor improvements. Costs would be less or more depending on what the actual construction bids are. Property owners would have the option of paying off assessments over a period of years.

The city’s 2007 street project would rebuild about four blocks of Fourth St. East, from the intersection of State and Fourth, to a point midway between Summit and Circle Drive. One block of State Street between Fourth and Fifth streets East would also be rebuilt. The one block segment of Fifth St. East between the hospital and Prairie View would be seal coated.

Plans are to replace all of the curb and gutter on Fourth St. East. The groundwater interceptor improvements are designed to eliminate places where clear drainage water now enters the sanitary sewer system.

The project also includes an estimated $58,029 of water and sewer improvements. Those costs will not be assessed to individual property owners.

• • •

City council members postponed a decision on “ordering in” the project until Feb. 12. Council members decided to get information on what the extra cost of building Fourth St. East to a nine-ton status before making a decision. Council members wondered if a heavier road should be built because of the truck traffic that uses the street to reach the hospital.

Koopman said that if the East Fourth is built to the nine-ton capacity, city taxpayers at large would have to absorb the extra expense. The added costs, she said, could not be assessed to adjoining property owners. She said that the most northerly block and half segment of Fourth St. East, which is not included in the 2007 project, was not built to nine-ton status when redone several years ago.

• • •

Several property owners spoke at the public hearing.

Shirley Strand, who lives on the corner of Fourth St. East and Hollett, asked why so many trucks travel by her house on both streets.

“When did Fourth Street East become a truck route?” she asked. Strand said that trucks going to the hospital should take a route using Center and State streets.

City staff said that neither Fourth St. East nor State were designated as truck routes. But, they pointed out vehicles need to use some street to reach the hospital, and that delivery, service, and emergency vehicles are exempt from any weight restrictions that would be posted.

Police Chief Bryan Hillger said that unless every city street is posted, the city would not be able to enforce weight restrictions on city streets.

East Fourth St. resident Jim Vandendriessche wondered why all of the curb and gutter is targeted for replacement, when some curbing still appears to be in good condition.

Steve Robinson, a consulting engineer for SEH Engineers, said that while some curbing is “borderline” as to whether it needs to be replaced. But Robinson said that it would not be practical or cost-effect for contractors to do spot curb and gutter replacement. Some curbing— even though the concrete is still sound—has settled and is contributing to drainage problems, Robinson said.

A letter from Dale Krog, another Fourth St. East resident, asked the council to give special consideration to adjacent property owners in setting assessments. The street should have been rebuilt three years ago, he wrote, but the project was delayed because of the city’s aquatic center problems. The extra costs caused by the delay should be shouldered by all city taxpayers, Krog wrote, not just the people on Fourth St. East, because the aquatic center repairs had been a citywide problem. Krog also questioned the necessity of replacing all of the curb and gutter along Fourth St. East.

• • •

If the council orders in the street improvements and calls for engineering plans and specifications at its Feb. 12 meeting, construction bids could be opened in May, with construction beginning this summer. A final assessment hearing would be held following construction, possibly in November.

The preliminary assessment hearing that convened Monday was continued until Feb. 12.


Tracy physicians plan to return to Pakistan


Dr. Haseeb Khawaja and Dr. Nida Latif have announced plans to end their medical practices at Sioux Valley Tracy Medical Center and return to their native country of Pakistan.

A statement by Rick Nordahl, SVTMC chief executive officer, said that the couple had decided to resign “to be closer to family and to insure that their children receive education that is more appropriate and consistent with their religious beliefs.”

The doctors, who live in Tracy, have practiced medicine in Tracy for just over two years. Nordahl thanked the physicians.

“On behalf of myself and our staff members, I would like to acknowledge and thank Drs. Khawaja and Latif for their commitment to the healthcare of our patients. They have been great assets to this medical facility and to the community as a whole.”

But Nordahl said that recruitment efforts are already underway. “As we move forward, the Sioux Valley Tracy Medical Center is working diligently in the recruitment of physicians to fill the health care needs of this community and surrounding area. To date we have interviewed two interested and highly qualified individuals but will not receive notification of their decision until late in February. In addition, we have other interviews set for late January and early February and have two additional resumes under review.”

Dr Khawaja told the Headlight-Herald Wednesday morning that he and his wife anticipated leaving Tracy the first week in March, and that they would see their last patients the last week of February.


Vintage lights eyed for city downtown

New lighting fixtures proposed for Downtown Tracy would have an early 20th century look to them.

A lighting design discussed by the Tracy Planning Commission, city council, and the Tracy Chamber of Commerce board would use an “acorn globe” design. The fixtures would be similar to lights installed in Tracy’s Central Park several years ago.

“We are supportive of this plan,” Chamber past -president Dr. Mark Evers told council members Monday.

Between 40 and 43 new light fixtures are envisioned for an eight-block area of downtown. The high-pressure sodium, single-globe lights would replace 1950s-era fixtures that are in poor condition. Lights would be installed along Third and Fourth streets, between Rowland and South; and along Morgan and South streets, between Fourth and Second.

Estimated cost for the 14 to 18-foot fixtures, is $159,000.

City Administrator Audrey Koopman said that 25% of the cost would be assessed to benefiting property owners, although the method for determining the assessments has not been determined. The Chamber has discussed raising some money for the lights by offering people the chance to “buy” a light pole in memory or honor of a loved one.

The replacement of downtown sidewalk and curbing that is in poor condition would also be a part of the project. Sidewalk that is in good condition can be saved, Koopman said, by the use of side borings for wiring the new fixtures.

Lary Parker, Chamber president, said that the new lights and restored sidewalks would do much to “spruce up” downtown, while also improving safety.

• • •

The planning commission has discussed also replacing old lights along Craig Ave. The Hwy. 14 lights would needed to be taller at about 30 feet. The estimated cost for aluminum light poles is about $174,000, and $151,000 for fiberglass poles. An additional 20% would need to be added for lights.

Evers said the Chamber would be supportive of a second phase for r Hwy. 14 lights at a later date.

• • •

Council members have discussed including a downtown light replacement project in a large city bond that will be issued later this year. A preliminary assessment hearing for the lighting project is scheduled Feb. 12.


More parking proposed near hospital

A plan to create more off-street parking near Sioux Valley Tracy Medical Center is being studied.

Hospital and city leaders hope to turn two vacant Union Street lots into a parking lot. The 220x128-foot area is south of the Tracy hospital.

“We have an increased need for parking,” Rick Nordahl, SVTMC chief executive officer, told the Tracy Economic Development Authority Friday. The hospital’s other parking areas, Nordahl indicated, are often full, forcing the staff and the public to park along city streets. A parking lot along Union St., he said, would greatly ease congestion on Union St. The SVTMC’s advisory board supports the Union St. parking lot.

The EDA agreed to facilitate the request, passing a supportive motion on a 4-1 vote.

• • •

The two lots have been for sale since the EDA developed the Eastview Addition in the mid-1990s. The consensus of most EDA members is that the lots are not really saleable for new family housing, because of their proximity to the hospital’s helicopter pad. But Sandi Rettmer, EDA and city council member, wondered whether that assumption was necessarily true, because the air ambulance flights didn’t occur that often.

“There was one last night,” responded Charlie Snyder, another council member who sits on the EDA. A helicopter ambulance would swoop in 50 feet over any houses built on the two Union Street houses with a deafening roar, he said.

Rettmer questioned whether the property should be simply given away for hospital use. The Eastview Addition lots, she said, were originally supposed to be sold for $14,500 each, in order to recoup development costs. She questioned whether Eastview lots along Union Street had been adequately marketed for single-family housing.

Robert Gervais, community development director, said that EDA’s five lots along Union St. have been for sale, but generated little interest. SVTMC has had an option on the five lots which gives the hospital the right to match any offers made on the Union St. lots.

Rettmer also questioned whether the parking area would violate the Eastview Addition’s special covenants. Gervais said he didn’t think the covenants would be a problem. Gervais said that he had asked one of the adjacent property owners, and that individual had said they didn’t have an objection to the parking area.

The EDA’s motion Friday (Snyder, Dennis Fultz, Chad Buysse, and Claire Hannasch cast “yes” ballots, and Rettmer “no”) recommends that the property is no longer needed for housing purposes. A public hearing would have to be held before the property could be transferred to the hospital.


'Giving away farm?'

Views clash on Aquapower offer

By Seth Schmidt

Has the Tracy Economic Development Authority been too generous in offering incentives to attract Aquapower, Inc. to Tracy?

Definitely yes, says one EDA and city council member.

Absolutely not, contend the majority of EDA and city council members.

“We’re giving away the farm,” Sandi Rettmer told fellow EDA members Friday morning.

“We’re not giving away anything,” countered Claire Hannasch, former Tracy mayor and EDA member. “We will still own the building.”

Rettmer questioned the wisdom of investing more than $150,000 in a building, offering it rent-free to Aquapower for a year, and not requiring anything from the company besides the creation of one full-time job in Tracy.

“We’re not asking the company to invest any of its own money,” Rettmer said.

Hannasch said Tracy will benefit by attracting a growing company with the potential for eight to ten full-time jobs, and as many as two-dozen part-time jobs. Tracy businesses will also benefit from having Aquapower in town by providing services and supplies to the company, he said.

Tracy leaders, Hannasch continued, need to be aggressive in their economic development efforts.

“We are going to have to take risks if we are going to grow,” Hannasch said. The alternative, he said, is for Tracy people to “sit on our duffs” and allow the town to stagnate.

Rettmer replied, “Doesn’t it bother any of you that we are not requiring them (Aquapower) to invest one cent of their own money?”

Hannasch and EDA board chairman Dennis Fultz said it was not true that Aquapower won’t have an investment in its Tracy operation. The men said that Aquapower will need to buy tens of thousands of dollars of equipment to establish a Tracy operation.

Aquapower’s lease calls for $2,000 monthly rent payments in the second and third years of the agreement. The company can qualify for a credit of $200 off its rent for each full-time equivalent job based in Tracy. The lease specifies that Aquapower employees must live within a 40-mile radius of Tracy, and defines a full-time job as 32 hours a week.

Rettmer questioned why the lease doesn’t require that Aquapower employees live in Tracy.

“I thought the purpose of this was to get people to move to Tracy,” she said.

Robert Gervais, Tracy community development director, said that the 40-mile radius was agreed upon so that Aquapower would have an adequate area in which to seek employees. (Aquapower had requested a 60-mile radius). The 40-mile provision also provides protection for Tracy, Gervais said, because Aquapower can’t claim employees from its Eveleth location for the $200 rent credit.

Rettmer also wondered why the EDA was agreeing to provide a two-bedroom apartment to Aquapower, rent-free for up to one year. The EDA originally offered a six-month rent-free apartment, but Aquapower countered by requesting that the no-rent period be for one year..

“We didn’t think this was a deal-breaker,” EDA and council member Charlie Snyder said of the one-year, rent-free, request. “They asked for a year, and it wasn’t a big deal for us.” EDA member Chad Buysse said that the one year, rent-free apartment really wouldn’t cost the EDA and city anything, since the Fifth St. four-plexes where the free apartment will be offered, have often had at least one vacant unit.

Hannasch said that Aquapower hadn’t initially asked for anything. An EDA committee, he said, had developed the major incentives offered to Aquapower, after Tracy leaders became aware of the company’s expansion plans.

“It’s no wonder we went to the top of their list,” Rettmer said. “We gave them everything they wanted.”

Hannasch said Tracy was able to attract Aquapower because it was quickly able to offer a concrete plan for a suitable building, while other communities were only able to offer possibilities.

Rettmer said she has heard much negative opinion in the community about the Aquapower incentives; Hannasch said he had only heard people speaking positively about the EDA’s efforts.

Gervais said the only negative comment he had received was from a man who questioned whether Tracy would be able to recoup is $150,000 investment, if Aquapower does not buy the property. Gervais said he preferred to look at the positive scenarios. “What if Aquapower is so successful that it outgrows that building and they need build a new building in Tracy?”

Fultz and Hannasch said they have been impressed by the character and integrity of Melvin Rolfe, director of operations for Aquapower. Their confidence in Rolfe, they indicated, is a major reason they are convinced that Aquapower will be a good business for Tracy.

At the end of the three-year lease, Aquapower will have the right to purchase the building for $154,150, which is the amount that the EDA has invested in acquisition and remodeling costs. Aquapower had requested that the purchase figure should be capped at $150,000. But EDA members felt that they needed to be able to recoup their acquisition and remodeling costs. Aquapower would be able to purchase the property with $25,000 down, with the balance financed over 15 years at 6% interest.

The Tracy EDA okayed terms of the Aquapower lease and the $154,150 purchase on a 4-1 vote, Rettmer cast the dissenting vote, with Snyder, Hannasch, Buysse and Fultz casting affirmative votes. (EDA members Dick Boerboom, and Deb Schenkoske were absent). The motion asking the Tracy City Council, to okay the transfer of $154,000 from the Eastview Apartments fund and a down-payment assistance housing funding also passed on a 4-1 vote, with Rettmer against casting the lone dissenting vote.