$23M municipal campus plan takes off

The Northland Mall, now mostly empty, is the centerpiece of a mammoth project being eyed by the City of Forest Lake. (Illustration submitted)

Fast-tracked proposal to build city facility at Northland Mall clears initial hurdles, faces year-end deadline

 

Clint Riese
News Editor

Just when all the forums, endorsements and door-knocking were wrapping up, a local issue last week stole the spotlight from this Tuesday’s elections. It is an issue that has been simmering for years, may be boiling on the front-burner for several weeks and could remain on the plate of taxpayers for the next two decades.

A fast-tracked plan to build an estimated $23.5 million municipal campus at Northland Mall on Lake Street (Highway 61) has cleared its first two hurdles. Under review is a concept to build a 55,500-square-foot facility that would house Forest Lake’s police and fire departments as well as city hall.

The proposal would be financed with revenue bonds funded by a 23-percent increase in the city’s portion of the existing property tax levy. The additional taxes would be assessed for 20 years.

The current development agreement between the city and Pace Development, Inc. is contingent on a closing date prior to the end of 2012.

Negotiations between the two parties took place for most of this year. A development agreement full of contingencies last Thursday earned the vote of the city’s Economic Development Authority. This Monday, the City Council approved a minor provision of that agreement which needed advance attention, sending the full proposal back to the council for a thorough analysis on Nov. 13.

Undisputed Need

City officials, board members and residents who spoke at the two meetings were nearly unanimous in the need for new facilities.

The fire station, built in 1970 on Fourth Street SW, is plagued by electrical problems and a crumbling parking lot. The real issue, though, is space. The building has no room dedicated to storage, offices or equipment repair, and the meeting room is too small to seat the entire department. Also, fire apparatus continues to grow in size. The department stores some non-critical equipment at the Columbus fire station.

A fire station committee spent several months in 2004 formulating a needs assessment that was presented in 2005.

“This project for the fire department started in 2002-03 with us bringing it forward to say this facility is totally inadequate for our current use and for today’s modern equipment,” Chief Gary Sigfrinius told the council on Monday.

From a police perspective, space is also the prevailing concern. The station, which is connected to city hall at 220 N. Lake St., was built in the early 1960s to accommodate four full-time officers. An addition in 1988 brought the capacity up to 14, but the department has grown significantly since the city-township merger and now has 25 full-time officers and three office workers.

Several officers recently converted a closet into an office. The garage holds only two cars, meaning many more sit outside with expensive equipment exposed.

The garage is also used as the entrance for those in custody, and the route inside the main building includes a staircase. Police Chief Rick Peterson says he has been involved in several incidents where a suspect under the influence of alcohol or drugs has fallen with him down the staircase. The setup is grandfathered into state code, though a recent biannual review by the Washington County Sheriff’s Office and the state Department of Corrections reported “serious concerns” about liability and safety, Peterson said.

The station’s basement is susceptible to water entry and, besides the department’s detectives, is home to the evidence room and other critical information. Additionally, the station has only two holding cells, both smaller than now required, and the DWI processing room only fits two people, which can put an officer in a tough position.

“At every turn, there’s things that if you just quick look at you wouldn’t think of, but are not considered to be sufficient or up to code for those uses,” said City Administrator Aaron Parrish in an interview with the Times last week.

Structural problems are the main concern with the city hall building, originally constructed in the 1930s with upgrades in the ’70s and ’80s. The roof is nearing the end of its lifespan and there are issues with the foundation and air quality. The mechanical systems date from different eras and tend to fight each other.

The city’s public works, community development and building departments operate in a “south” building on Forest Boulevard while the administration and finance departments are held at city hall. The two-site approach leads to commutes for city employees and confusion for visitors.

Plan Unveiled

The new building would pull together each area except public works, Parrish and Mayor Chris Johnson explained in last week’s interview with the Times.

The city would purchase 13 acres on the 14-acre Northland Mall site for $1,950,000. It obtained an appraisal in February which estimated the property’s worth, including a residual building to be retained by Pace, at $3.1 million.

Pace would retain 30,000 square feet on the southern end of the current mall, consisting of Anytime Fitness, The Dance Factory and one empty, connected unit. The city would demolish the structure’s remaining 80,000 square feet and build a facility in the northwest corner of the property. Three outlots would be created along the eastern edge and marketed by Pace, which would retain 30 percent of the net proceeds from their sale or lease over the next six years. City officials expect the outlots, once filled, to generate more revenue for the city than the amount that would be taken off the tax rolls through the city’s purchase.

Of the estimated $14 million construction cost, roughly $11 million would go toward the police and fire aspects.

“We’re talking about a public safety facility first and foremost,” Johnson said. “The misconception is it’s more for government offices, and realistically the bulk of the project costs get down to those public safety functions.”

Nearly $4 million is estimated for site development and demolition. Design fees, construction inspection, legal costs and furniture and fixtures make up the rest of the costs. The construction and site development estimates include a 10 percent contingency.

The entire parking lot, which would accommodate over 800 vehicles, would be rebuilt, and the accesses off Highway 61 would be reconfigured. A controlled access for fire department use would be sought over the Hardwood Creek Trail to assist with prompt response times.

Owners of the adjacent movie theater and retail building to the immediate south of the parking lot have indicated interest in refacing their buildings with a design cohesive to the look of the new city facility.

The project would also include a stormwater management development benefitting Clear Lake. Installation of a pond on the north end of the property would treat water that is currently untreated and labeled as the dirtiest to drain into the lake. The Rice Creek Watershed District may partner in the effort and seek grant funding for a related improvement plan involving a nearby wetland and subdivision.

Johnson and Parrish pointed to the city’s good bond rating, a 30-year low in bond interest and a favorable window for construction costs as reasons to move forward quickly.

The most pressing factor, though, falls in Pace’s court. The Bemidji-based developer stands to benefit in the form of tax relief by gifting to the city the current mall building. To qualify, it needs closing to take place on or before Dec. 31.

“All of our terms are predicated on a year-end closing,” Parrish said. “If we don’t have a year-end closing, we’re sort of back to square one.”

Twenty-year lease revenue bonds would be issued by the EDA, which would own the property and building. The City Council would make lease payments to the EDA to cover the debt.

As alternate funding sources for essential municipal services are few and far between, the city would use a steep property tax hike to bring in the funds. The 23 percent increase equates to a first-year total of $180.70 for a residential property valued at $175,000, or $669.66 on a commercial/industrial property valued at $500,000.

Parrish said that amount should dip as the city grows, noting population projections from the Metropolitan Council.

Mayor Johnson said it is not good practice to put a project involving essential services to a referendum.

“The complexity of this issue would be hard to explain in a yard sign,” he said. “Ultimately, it’s not the right way to make a decision this big and complex, in my opinion. It’s regarding critical operations of the city.”

If the plan goes forth, the current fire hall could be used in conjunction with the city’s south building to ease space concerns of the public works department. City officials would like to see the current city hall property sold and transformed into a residential housing project that could help downtown businesses.

Gaining Approvals

The plan still faces several hurdles, but they will come in a quick manner if cleared, as the first two are.

The EDA voted 5-1 last Thursday to accept the development agreement. Jackie McNamara cast the dissenting vote, while Mark Finnemann abstained because his architecture firm is involved with the project.

The EDA in August instructed staff to put together a contract with Pace for review. At last week’s meeting, Mayor Johnson said he was surprised it took nine weeks to produce.

Despite the rushed timeframe that delay has brought about, EDA members were open to approving the agreement since it contained several contingencies.

“It’s been a deferred situation for many, many years,” said Mike Muske. “The fact is, it probably should’ve been handled a long time ago at a lower cost and it wasn’t, and if we defer it again it’s going to get larger.

“My thought is we have to do something, so let’s keep everything on the table.”

Blake Roberts voted in the majority but also expressed concern.

“That $23 million scares me,” he said. “That’s a tough number…Is it a $23 million Cadillac, or is it a Ford? Can that number be lowered a couple of million dollars?”

McNamara wanted to wait for the results of a comprehensive facility needs assessment currently in the works.

“We’re not being honest, we’re not being transparent, and I think we’re putting the cart before the horse,” she said.

This Monday’s City Council meeting was much more contentious, both among the board and the audience.

The council voted 3-2 to approve a portion of the development agreement, but not before 15 residents took the podium to oppose the plan. This Tuesday’s election will play a key role in the project’s fate, as City Council candidates Ed Eigner and Ben Winnick were among that group.

Eigner said it became clear during his campaigning that residents do not favor building a city facility at Northland Mall.

“I’ve talked to over 100 households and I’ve brought the situation of this city hall complex up, and I’m waiting for the first person to tell me they want it. Not one. Zero,” he said.

Winnick, who owns a business adjacent to the mall, found the project’s timing odd.

“Doing it all the day before the election, when this is the biggest issue in the election, it’s just wrong,” he said.

A third council candidate, Jeff Klein, said the solution falls between spending no money and spending $23 million.

“I’ve said it 100 times, I’ll say it again: Logic would indicate the answer is somewhere in the middle, but this town has a history of never looking for that answer,” he said. “We take an issue and polarize it and make it personal and we continue not to do anything.”

Park board member Karen Morehead praised the council for taking up the issue, but her support was echoed only by members of the police and fire departments. Otherwise, the council heard a barrage of criticism.

Forest Lake business owner Wes Ruddy said the local economy is not conducive to such a project.

“Right now I don’t think anybody catches on,” he said. “Things are rough right now. Everybody’s trying to hold their breath and see what’s going on and you guys are trying to spend $25 million. I think you’re losing it.”

Kevin Shoeberg, an attorney retained by several local residents and business owners to study the agreement, said it is irresponsible for the city to go along with Pace’s hurried schedule.

“What I would suggest to you is this: that Northland property is not going to be worth any more money on Jan. 1 than it is today,” he said.

Stev Stegner, former mayor of Forest Lake, does not agree with city officials who expect the project to spur redevelopment along the Highway 61 corridor.

“That was the same rhetoric we heard when we practically gave away the land in Headwaters for the government center,” he said.

Many of the speakers also called for a referendum and pledged to make their statements even clearer with their votes in the next day’s general election.

McNamara and Johnson mirrored their votes from EDA, leaving council members Jim Dufour, Mike Freer and Susan Young to come up with a majority one way or the other.

Freer voted against the agreement, citing the plan’s aggressive schedule as a main concern.

“It is moving way, way, way too quick,” he said. “I wish we would just slow down. If this deal falls off the table because of that, I’m sorry, [Pace] didn’t really want to sell it to us.”

Young regarded the matter as necessary in order to fully analyze the project’s merit.

“I’m not willing to make a decision yes or no on this property without knowing what’s there and getting some more information, and the only way I can get the information I need is by a purchase agreement with outs,” she said. “And if we’re out by Dec. 1, it doesn’t cost us anything.”

Dufour kept his comments brief.

“I’ve been supporting this for quite awhile,” he said. “It’s another option, we do have the outs. Let’s look at all our options.”

The proposal now moves to a City Council and EDA workshop set for 6:30 p.m. next Tuesday, Nov. 13. The results of the aforementioned facility needs review will be presented and incorporated both into the plan at Northland Mall and into alternative projects. The bodies will vote on whether to initiate project financing. As with the previous votes, the action is non-binding until final approval.

A public forum would follow on Monday, Nov. 26 and include tours of city facilities. If still under consideration at that point, the project’s ultimate fate would be decided at special meetings of the EDA and City Council on Monday, Dec. 3.

  • maurie berchem

    I’m in Arizona for the winter, I live in south east FL. I don’t see how you people can do this without a special vote for the tax payer. I was on the DR C commitee for Broadway and as we the committee found out the the higher people in power do not care what the taxpayer has to say. The Broadway project was a done deal before it was presented to the public. It’s not what you people do it’s how you do it.If you people jam 180.00 down my throat in taxes for twenty years I will put my house up forsale when I get back. As far as I’m concerned everyone on the city council has a agenda of their own. I’ve seen it over the years and being on the DRC just proved what I’m saying is true. I feel that the government of Forest Lake has closed their eyes to the needs of the taxpayers in FL. You people wonder why you don’t have more industry here, well it’s your own doing. I could go on forever but what’s the use, bottom line is that you could care less. Thanks for the time Maurie Berchem

  • Herman C.

    b-bye

  • Moving forward

    See ya! Typical FL resident. Push it off, push it off, push it off! That’s always the answer. If you can’t afford the $15 bucks a month/$180 bucks a year then you should sell your house. I think if you live in Arizona in the winter you can handle it. Time to move this city forward and not being stuck in the 1850′s. The reason FL doesn’t have any businesses is cause the town looks like hell. Hugo is a million times nicer. The reason there isn’t a vote on this is cause we have elicited officials to make these decisions. Do you want a special vote every time the city needs to make a decision?? Time to move forward!!

    • Ralph Peterson

      You can have your $180.00 a year in taxes. You want cheap living cross the border to Wyoming.

    • Cameron Piper

      No, I just like to have a vote every time they plan to spend 3 times their annual budget on a special project.

    • Kay

      The reason business are leaving this town is not due to the town hall looking like hades. Business owners probably visit the town hall only a few times a year – no sane business person would build a business in a town because of how the town hall looks but they would make that decision about how business friendly the gov’t/council in it are. I would recommend you check your facts that the most recent business losses were financial loss due to the road construcion, go back and actually read the articles in this paper. Read about the bakery, Mansetti’s and the scrapbooking store they all pointed to the financial loss of road construction. How many jobs were lost – how many places are vacant due to road construction? How much sales tax revenue was lost, how much property tax was lost and how many jobs with taxable income were lost? The answer is more than we can afford. The sad part is even after all this betterment of the city we are maintaining the high vacancies. . . Rainbow did not reference road construction but said it could NOT AFFORD to sustain this business any longer therefore 59 jobs were lost and another vacancy showed up. People need to realize that it may be $200 more per $189,000 home and that is bad in this economy when people are losing homes left and right. It also impacts our business community. The City throws out a lowball number but it reality that could be $2k-$6k+INCREASE on an average business. At a average of 10 cents profit per dollar (which is the top end of profit margin) that would equate to needing an extra $20,000 to $60,000 in sales volume to compensate for just the increase in taxes. If it was an average return per dollar it would be extra $40k-$120k needed by the businesses in our community to sustain themselves. These numbers are the sales needed on a 23% increase on the city side – imagine the sales volume it takes to pay for the orignal 77% of their property taxes. That is what businesses look at when they decide to move into a community not what the town hall looks like.

  • Lil Jimmy

    I couldn’t agree more with moving forward!!!!

  • JJ

    Lil Jimmy is right. Time to move FL forward!! We can no longer push this off!! That’s the typical answer from FL residents. That’s why 50% of the city streets need to be reconstructed because they have been put off!!

  • jg

    We should all be able to vote on this. The city has a bad habit of doing what they WANT. Not what the people of the city want. This should go to a referendum. But I am sure it will not because it would not pass. We could improve all the current city facilities for a lot less.

  • King

    It’s because of the “no more taxes” backward-thinking (which is actually non-thinking) of such people as dick tschida, clyde mccaskey, eugene huerstel, john freed, lee perrault and dennis kessler that F.L. has not made progress. These guys all want to make sure they give their 2 cents-worth. Well, it’s not worth even that anymore. Nobody cares what you think or say!

    Well…..the good old white boy network is dead, boys! Your world doesn’t exist anymore. You can no longer be the slumlords of the community. Time to do something for a change…..as opposed to making sure nothing gets done.

    Let’s move F.L. into the future and away from the Dark Ages!

    • Ralph Peterson

      The people can’t take anymore burdensome taxes and at $180.00 a year that ain’t no small potatoes. We don’t stand for that in Wyoming one bit. We won’t won’t even let them raise it $20.00 a year. Cheap living is across the Chisago County line.

  • go Forest Lake

    Couldn’t agree more with moving forward! Too bad we all don’t have the extra money to winter in Arizona! How selfish I would rather help my city move forward!

  • F.L.Resident

    All of you guys are idiots and obviously not long time residents, moving here with your yuppy money. Times are tough and the last thing the government needs to do is spend more peoples money. The only thing I agree with is the fire dept. needing a new facility. The police have enough space in that building. Since the library has moved, what has been done in that extra space anyways? As far as I’m concerned, if they want a new facility, they can stand outside Wal-Mart and ask for donations to build it – the fire department would!

    • Steve

      “All of you guys are idiots and obviously not long time residents, moving here with your yuppy money.”

      F.L. Resident:

      I’ve lived here for over 60 years, so obviously you wouldn’t know a newcomer or “yuppy” if it bit you in the hind end! You are just another of the sad guys who can’t stand to see the world changing.

      Why don’t you stand outside Wal-Mart and ask for a brain transplant?
      Oh……..and then go visit the F.L. Police in their nice “roomy” digs!

      • F.L.Resident

        I have no problem with change, Steve. I have a problem with the government wasting money especially when the economy is in the shape that it is in also with a threat of a fiscal cliff looming in the future. You may have been a resident here for 60 years Steve, but apparently you have plenty of money to throw away if you are saying I am wrong which would make you a yuppie with plenty of money. How about you sell off your Florida house and donate that towards the government center and take the burden off of those who cannot afford that change!

  • Judy

    I can afford the 180.00, but don’t you think it’s time you think about all the residents of Forest Lake that are just hanging on to their homes by a thread.Some people are living pay check to pay check and it doesn’t matter if you have lived here 60 years or 6 months. In this economy is this a good time to raise taxes?

  • 25 years of Forest Lake

    My family has lived here 25 years and trying to get the house paid off. You think it’s easy to pay bills and a house payment when people are loosing jobs and the price of everything is going up. Have you looked lately…everything is going thru the roof, gas prices, taxes, groceries but not job pay. Are you trying to get people to move out of your city? As far as people thinking Hugo is nice…the only nice area is along 14. Hwy 61 is an eye sore. It’s FL fault the city is in bad shape. I think if it were built it should not cost 23 million…you love to spend money that you don’t have and the people don’t have either. Do you really need everything new? I say no! And if this goes thru you will see alot of homes for sale in Forest Lake.

  • Kay

    After listening to the EDA meeting last night and hearing all the disrepair that the current facilities are in – it is obvious that they were not kept up. A commercial builiding that gets a lot of use needs daily maintentance! The repairs that they listed were one that were let go for a long time. So how are we going to expect them to keep up a facility this large that is built on a swamp?. If anyone has seen the Northland Parking lot and how bad it looks – it is for a reason – it’s a pete bog. It was costing that company more per year to maintain the parking lot than it was built. Do we as taxpayers want to dig into that kind of maintenance? The reason they are on a timeline and in a hurry should scare us all – Pace wants to dump this site. For those two reasons alone this project bother me – but to consider the economics of this with the unknown around the corner should be reason to pause, breathe and consider. What about the pressure on familiies just trying to keep their homes. . . And then there is the local busienss community which has not only gone through the worst economic decline in a generation they had to do it during horrendous road construction thanks to this same city council. We have lost several businesses and just heard about Rainbow leaving. . . if pockets as deep as Rainbow are leaving then we have to be logical and realize that we aren’t done hearing about business closing down in Forest Lake. . .if we lose business, we lose jobs, and we lose tax revenue and FL gets a bad rap to those coming in. It is a bad cycle to which there are answers for. . . it will not be found in the extremes. You can’t afford to build and maintain a Ferrari in a Yugo economy. Just sayin’.

  • FED UP

    how will this $23,000,000 pork-barrel project improve the community of Forest Lake? Will the services from the police and fire department improve? NO !! The northland mall location will actually INCREASE the response time for many of the members of the fire department, which means SLOWER response to an incident. Currently the paid-on-call fire dept responds to approx 400 call per year (average 1.0 hours per call) and has triaining at the station 4 days per month (3.0 hours per session), so between actual calls and training, the station is used approx 550 hours a year. So for 90% of the time that the station is NOT being used, it is a garage to park trucks. $23,000,000 is a pretty expensive garage!! JUST SAY NO

  • Cameron
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