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‘Bago wonders ‘what to do?’

By Staff | Aug 14, 2016

What to do?

For the second consecutive month, the Winnebago City Council had that question on its mind, pondering the next steps in an impending separation from local business Zierke Built Manufacturing (ZBM).

Aiming to expand by relocating to Fairmont, ZBM requested a release letter from the city, which would enable the company to receive state-funded assistance as part of its move.

But Winnebago has been cautious not to move forward hastily, and that remained the case during Monday’s City Council meeting.

Conferring with Tim Clawson, executive director of Faribault County Development Corporation, the council members suggested pursuing an appraisal of Zierke’s main property.

Getting an appraisal is something that would allow the city to further negotiate repurchasing options for the ZBM building and drew support from Winnebago’s Economic Development Authority.

“We can’t tell a business where to locate or how to function,” Clawson said, “but we can make an attempt to hold them accountable.”

Holding Zierke accountable, Clawson added, does not mean prohibiting the business from leaving Winnebago, as is their plan. Rather, it means ensuring that taxpayers who may have fueled ZBM’s benefits, including state funds or property tax enhancements, are not left unfairly compensated if the city signs off on Zierke’s request to leave and pursue more assistance.

“We’d find out in a hurry how much he (ZBM’s Kyle Zierke) wants state assistance,”?Clawson said. “The city would like to find a buyer but with stipulations.”

The council agreed.

“That’s the next step,”?said council member Dean Johnson, of seeking an appraisal. “That just makes the most sense at this time.”

It may not be the most financially feasible option, however.

“For a commercial property,” city attorney David Frundt chimed in,?”you’re probably looking at getting someone from Mankato or Rochester to do it, and that’s $2,500 minimum probably closer to $4,000.”

Bidding out appraisal services would be another, potentially more cost-effective route, Frundt said, but doing so might also slow the negotiation process with Zierke.

In the end, though, having patience might be the best thing for Winnebago, according to council member Rick Johnson.

“I don’t think we should go spend five grand if everybody’s not going to play nice anyway,”?he said. “We should run it by Zierke and negotiate first.”

Dean Johnson countered, proposing that even a $5,000 appraisal could also be a small expense compared to the hardship of having a Zierke building sit unused for lengths of time.

But as Clawson went on to point out, the city could theoretically still move forward and set stipulations for a future acquisition of the ZBM building, such as keeping property tax benefits on the property, without first having an appraisal done.

And that is what Winnebago may very well do. First, however, city administrator Chris Ziegler said the plan is to speak with Zierke about a possible appraisal and go from there.

“I think we owe it to the taxpayers to look at our options,”?he said.

For council member Scott Robertson, who supported another tabling of the decision on Zierke’s letter request, the entire ordeal is merely a symbol of more widespread concerns in the town.

“I’m a little bit alarmed about Winnebago as a whole,”?he said. “I’m sure you’ve read the papers you lose one thing, and things start crumbling. Main Street is desolate, and we’re sitting here talking about spending money on the northwest side of town.”

Robertson, whose decision to close two of his own Main Street businesses was revealed by Mayor Jeremiah Schutt less than a week earlier, said the city has “got to think things through.”

At Monday’s meeting, the council also:

Passed a motion to order abatement of seven different public nuisances.

Ziegler said he sent letters to eight property owners in violation of city ordinances, specifying Monday’s meeting as a hearing for appeals. Only one responded and was fully compliant, Ziegler said, and no one appeared for the hearing.

Approved the resignation of part-time police officer Brittney Gehrking from the Winnebago Public Safety Department, effective immediately.

Agreed to release two liens against a foreclosed property on First Avenue NW.

Judd Schultz, of the Minnesota Valley Action Council, presented the request, which he said will also be brought to the County Board.

“The homeowner just can’t afford it anymore,”?he said, “and essentially the mortgage company is willing to split (money)?after getting the liens released.”

Since releasing them would not only save the city from potential legal fees and add to Winnebago’s Revolving Loan Fund, council member Rick Johnson campaigned to embrace the request.

“I?think if we can get something out of it and wash it away, I’m for it,”?he said, eliciting a unanimous vote to approve the request.

Heard from Frundt about how Winnebago could opt out of a new law, Temporary Family Health Care Dwellings of 2016.

The law states that it “sets forth a short-term care alternative for a ‘mentally or physically impaired person,’ by allowing them to stay in a ‘temporary dwelling’ on a relative’s or caregiver’s property,”?but cities are permitted to opt out of it for zoning purposes.