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Wells EDA plans to market lots

By Staff | Aug 21, 2016

With two business/industrial parks full of lots that need to be filled, the Wells Economic Development Authority (EDA) decided to list the properties with a local broker.

However, since that local real estate broker is also the chairman of the EDA, they had to do it after acknowledging it could be perceived as a conflict of interest.

EDA chairman and real estate broker Brad Heggen temporarily relinquished the chairmanship at last Tuesday’s meeting and let the vice chair take over.

Tim Clawson of Faribault County Development Corporation, which acts as the city’s EDA director, then explained that all of the EDA members should sign the same conflict of interest document as Heggen.

“While we don’t believe making this contract with Brad Heggen Realty is a true conflict of interest, it can be perceived as a conflict of interest,” Clawson said. “Therefore, it needs to be acknowledged by the EDA Board. This is a little different than a normal conflict of interest because the contract is for an amount under $100,000, and the fact that the EDA board is made up of non-elected members.”

After a little discussion, the remaining members of the EDA other than Heggen voted unanimously to move ahead with the contract agreement with BradHeggen Realty, and acknowledge the possible conflict of interest.

In the listing agreement contract with Heggen, the two business parks will be placed on the Multiple Listing Service (MLS). And, Brad Heggen Realty will be paid a six percent commission on the sale of any lots.

If another outside broker is involved in a sale of one of the lots, the commission will be eight percent, with both brokers receiving half, or four percent.

There was another part of the contract dealing with the amount of the commission.

“Because the city and EDA might sell the lots at a reduced price in order to get businesses, especially if they are bringing in new employees, to locate there, we feel the commission should be paid on the market value of the lot,” Clawson explained. “So we set the market value of the lots at $15,000.”

One sale of a lot was excluded from the listing contract.

The EDA learned that Verizon cell phone company is buying lot 4 in the South Industrial Park and will be building a new cell tower there in 2018 or 2019.

City administrator Robin Leslie said the deal is about to be made, with Verizon putting $2,000 earnest money down on the purchase.

In other business at the EDA meeting, the board:

Granted a $1,000 grant to Bill and Patricia Schuster who are fixing up a building on Main Street, next door to the City Hall.

The grant will go towards fixing the front of the building, with steps and front door repair, new awning, paint and more.

Total cost of the work is $5,000.

Learned that Schroeder Electric is interested in continuing the lease of the EDA-owned incubator building. City administrator Robin Leslie will work with him on another one-year lease.

Discussed why some work on the South Industrial Park is not being done, despite an agreement with a business to do it, and instructed Leslie to contact the vender and if there is no agreement, to go on to other options.