Giant million dollar project
It looks like a proposed new building for the Blue Earth Chamber of Commerce is going to come to fruition, with a lot of help from the city of Blue Earth.
In fact, the Blue Earth City Council voted last Monday night to basically take over the project and came up with a plan to make it happen.
When the bids for the combination Blue Earth Chamber of Commerce office, tourist information welcome center and Giant Museum came in, they were higher than expected. A lot higher.
The low bid came from United Builders, Inc., of Blue Earth, at $938,900. But when an additional cost for a metal roof, instead of asphalt shingles, was tacked on, the total was just under $1 million at $997,900.
Blue Earth mayor Rick Scholtes presented a plan that he said would be a way the new Chamber building could become a reality, with help from the city.
“My thought is the city needs to help pay for some of it, then bond for the remaining amount,” Scholtes said. “The city would then lease the building to the Chamber for 20 years and at the end of that time, sell it to them for one dollar.”
Scholtes’ numbers worked out this way.
First, the Chamber would add in their $300,000 state grant money. Then the city would add in a $200,000 one time contribution, which would come from the city’s liquor store funds.
The city would then do a $500,000 bond to finance the rest, which would be paid back over 20 years.
“The bond payment would be around $33,000,” Scholtes said. “But if we could do a TIF District for the building, it could lower the payment by $12,000.”
Scholtes said the Chamber of Commerce could manage an $18,000 to $20,000 payment per year. And Chamber of Commerce director Cindy Lyon, who was present at Monday’s meeting, agreed.
The mayor had one more idea to help out the building project and it involved the Blue Earth Economic Development Authority (EDA).
“I want to suggest the EDA buy back the land the new building will be built on,” Scholtes said. “At a cost of $50,000, which would go to the Chamber.”
The EDA had previously granted a loan to the Chamber of $50,000 for the purchase of the land and the old building that was on it. Last month the Chamber had paid the $50,000 back to the city’s EDA.
After discussion both at the council’s work session before the regular meeting, and at the regular meeting itself, the council passed several motions dealing with the new building.
First, they voted to proceed with the new building and accepted the low bid from United Builders of $997,900, which includes special track lighting and the metal roof.
Secondly, they voted to authorize the one-time $200,000 contribution to the building fund, which would come out of the liquor store reserve fund.
City administrator Tim Ibisch said the exact details of the amount of the bond and the sale of the bond could come later.
“The bids are only valid for 30 days so we do need to let the contractor know right away,” Ibisch said. “Plus I am sure he needs to order materials for the construction of the building.”
Mayor Scholtes said the fact the city is going to take over the construction of the building is a good thing.
“This building is going to be what welcomes people to the city of Blue Earth,” he said. “So we want to make sure it is going to be done and do what we can to make it happen.”
City councilman Russ Erichsrud agreed.
“We are all in your corner, Cindy,” he said to the chamber director. “This is a big deal, and we want to help make it work.”
While he agreed with the others about financing the new building, councilman Glenn Gaylord also had a caution.
“I am concerned we are starting to own too many buildings,” he said. “Like the Ag Center, the Three Sisters and now this new museum building. Maybe we need to think about selling the Ag Center.”
Other councilmen said that could happen down the road, but they are committed to the Ag Center for now.
Mayor Scholtes pointed out the goal is to not own the new chamber building, but to eventually transfer ownership to the chamber itself.
He also pointed out the investment in the new building will not cost the taxpayers any money.
The council also spent some time discussing another building project, one that they will own and operate.
Bids came in for the proposed new Public Works building, which will be built in a city-owned area behind Kwik Trip. The former municipal liquor store building will be torn down and a new large building replacing.
The low bid was for $809,995 and came from Ankeny Builders, Inc., of Blue Earth.
There were eight bids received. The bids included paving the parking area around the city buildings, but did not include the cost of demolition of the old liquor store building.
Administrator Ibisch said the cost, which city engineer Wes Brown estimated to be about $50,000, could come from the Public Works Department 2018 budget.
The council decided to delay a vote and decision on the Public Works building until their March 5 meeting.