News from the week of February 12, 2003
Farmland values skyrocketing to near '80s levels
By Nancy L. Torner
Center for Rural and Regional Studies, Southwest State University
The upward spiral in farmland values shows no signs of peaking, according to county assessors and lenders in Southwest Minnesota.
Some counties are recording sales approaching or as high as transactions in the eighties before the bottom dropped out. More outside investors are purchasing land today, but the majority of buyers are local, well-established farmers.
No one can predict what the market will bear, but most hope circumstances today are different.
Lenders say interest rates are considerably lower now and that banks generally demand higher down payments. Their customers either are using farmland they already own as collateral or are transferring cash from other investments to make down payments. (See related story).
Some county assessors who were around when land values took a dive in the 1980s say they cannot help but be a little nervous. Others say current conditions might have changed the equation for calculating cash flow, making the rise less serious than before.
"I would hope something is different—I would hope that the lenders are being a little bit more careful," Laurel Walker, Murray County assessor said.
Low interest rates for investments and loans probably contribute to the spiral, Walker said.
"People can invest in that land probably feeling that they'll have a better chance of making some money than putting it in CDs at the present interest rates," Walker said. "They're scared of the stock market right now and the low interest for money to buy land is attractive. But it still has to pencil out or it's not worth it."
Can waste be turned into energy?
By Valerie Scherbart Quist
Is a waste-to-energy facility in Southwest Minnesota feasible? That's the question being asked by 17 area counties.
Lamberton, population 859, is the proposed site for the facility, which would turn solid waste into electric or steam energy. The facility is expected to cost approximately $26 million to build.
Brian Kletscher, a Redwood County Commissioner who is leading the feasibility study, said the facility is being studied for two reasons.
First, the county commissioners were approached in February of 2001 by a group from Lamberton, which included the Lamberton Economic Development Authority and city council, about building a waste-to-energy facility in Lamberton.
“We looked at it and said 'yes,'” Kletscher said. “We thought it would be a pretty decent idea for taking care of our solid waste material.”
A preliminary study was completed a year ago, and a study team was selected to outline where the project needed to go.
Steve Johnson named to Tracy school board
Steve Johnson has been appointed to the Tracy Area Public Schools board of education.
Johnson is a 1973 graduate of Tracy High School. He and his wife, Pam, live on a farm southwest of Tracy.
Steve is the assistant county engineer for Lyon County. He has worked with the county for 21 years, and with the Minnesota Department of Transportation for seven years. Pam is employed at Minnwest Bank South in Tracy.
The Johnsons have two children, Jared and Jennifer. Jared is a 1999 graduate of TAHS and will graduate from South Dakota State University in Brookings this year. Jennifer is a 2002 graduate of TAHS and is attending college at Mankato State University.
Johnson said he wanted to serve on the board because he knows cutbacks are coming. He said Tracy has always had a good educational system, and wants to work to keep that system going.
“I think we need to take a hard look at the money, and how to spend it in the best way we can,” he said.
Tracy seeks meeting with Marshall City Council
Does common ground exist for the City of Tracy and the City of Marshall to cooperate on mutually beneficial projects?
"Yes," say Tracy City Council members. Sometime in the near future, council members want to meet with their Marshall counterparts. Council members instructed City Administrator Audrey Koopman to contact Marshall City Administrator Mike Johnson to see if the two councils can meet sometime. Tracy council members said they'd be willing to drive to Marshall, if their county-seat counterparts were willing to put them on a meeting agenda.
Possible items for discussion suggested by Tracy council members are:
• Housing. Tracy has a larger supply of moderately-priced housing compared to Marshall. Council members indicated Tracy should be willing to work with Marshall businesses whose employees are in need of housing.
• Transportation. Is it feasible to develop some sort of transit system, to bring Tracy workers to the doorsteps of major Marshall employers?
• Technology. Both communities have made major investments in technology. Is this an area where the communities can work together in attracting and developing more jobs?
• Marketing. Would it benefit both communities to share resources on some marketing programs?
• Business development. If a business has needs that can't be fulfilled by one community, a referral could be made to the other community.
• Southwest State University. Cooperative efforts could encourage area students to enroll at SSU, rather than going elsewhere.
New mayor Steve Ferrazzano proposed the joint meeting.
New power lines tied to more wind turbines built in region
A proposed Xcel Energy power line project could give a major boost to windpower energy in Southwest Minnesota.
On Jan. 30, the Minnesota Public Utilities Commission (PUC) approved a certificate of need, which calls for the construction of four transmission lines between Lakefield and Sioux Falls. Estimated cost is $160 million.
When the PUC approved the project, it also added a requirement that 825 megawatts of windpower be built in the same timeline as the power lines. Buffalo Ridge in Murray and Pipestone counties—already home to Minnesota's largest concentration of wind farms—could be one possible area for new wind turbines. However, no specific sites for the new wind turbines have been selected
The power line is projected to be in service in 2006.
Win-win scenario?
Michael Noble, executive director of Minnesotans for an Energy Efficient Economy (ME3), said the PUC decision was a win-win situation for proponents of wind energy as well as Xcel Energy.
ME3 formed a collaborative effort with the Izaak Walton League of America and the American Wind Energy Association to encourage that the project, with conditions, be approved.
Noble said there are two major benefits to the approval of the project with the new conditions. The first is that approximately $350 million worth of windpower is going to be built in Minnesota six years earlier than originally planned. In the late 1990s, Xcel was required to acquire 400 megawatts of windpower energy, and to have it in place by 2012.
That means increased opportunities for private investment and economic activity, Noble said.
“Your part of the state needs economic activity. I think that's the most important outcome,” he said.
Twin Circle dries out
Main building remains closed in wake of broken water main
Fans and dehumidifiers drone on at the Twin Circle Apartments Community Building this week.
One week after a broken water main flooded the apartment complex's main building, clean up efforts continue.
Dawn Benson, Twin Circle manager, hopes that the community building can re-open by Monday, Feb. 24.
"A lot depends on when the new carpeting is put in," she said Monday.
Carpeting in the community building was ruined after a nearby four-inch water main burst. Six inches of water seeping in around the foundation flooded the building. Carpets and baseboard trim were ruined. However, Benson hopes that more extensive damage was averted.
"I think it is going to be minimal," she said. Furniture was saved by putting it up on blocks soon after the broke water main break was noticed. She expressed optimism that efforts to dry out the building will minimize the need to repair wall sheet rock, doors, and wood trim.
"Basically, we have a lot of clean up to do."