At a Blue Earth City Council meeting held on Jan. 18, city attorney David Frundt shared he has yet to finalize a new draft of a development agreement between Project 3 Sisters and the city of Blue Earth. The agreement concerns ownership of the Main Street buildings pictured above.

The Blue Earth City Council tackled a packed agenda at their regularly scheduled meeting on Tuesday, Jan. 18, at 5 p.m.

An update from city attorney David Frundt brought local organization Project 3 Sisters to the table for discussion once again.

The organization was formed in March of 2019 to take ownership of three empty buildings on Blue Earth’s Main Street for purposes of rehabilitation.

Project 3 Sisters entered into a purchase agreement with Blue Earth and its Economic Development Authority (EDA) board to gain ownership of the properties. The project’s progress became a source of concern for the city, the EDA, and Project 3 Sisters as several stipulated deadlines passed without being met.

After much discussion and disagreement, the city council voted to grant ownership of the buildings fully to Project 3 Sisters on Oct. 18, 2021, with the stipulation that Project 3 Sisters could not request funds from the city of Blue Earth, including its EDA board, for 10 years.

After this vote, it remained for Frundt to negotiate a new development agreement with Project 3 Sisters according to the City Council’s new stipulations.

Frundt revealed he has had one conversation with the organization’s attorney since sending them a revised development agreement.

“They were not satisfied with the language in the proposed development agreement with the new restrictions for funding,” Frundt said. “They did not indicate they would accept.” 

Frundt concluded he has not heard an update from Project 3 Sisters for several months, and has yet to negotiate a development agreement with the organization which is in accordance with the City Council’s most recent wishes.

“As of this point, we don’t have an agreement as the council voted,” Frundt concluded.

Mayor Rick Scholtes suggested Project 3 Sisters’s hesitation may be due to the clause barring them from working with the EDA.

“Maybe we could take that part out about the EDA?” Scholtes suggested. “The EDA doesn’t have to give (Project 3 Sisters) money if they don’t want to.”

Scholtes added removing the clause would add a little more leniency in the event a business located in one of the Three Sisters buildings wished to request EDA funding.

City administrator Mary Kennedy added she feels something needs to be done about the situation, and quickly.

“As a city staff, we’re in unknown territory,”  Kennedy explained. “We have no agreement with them.” 

She added the previous development agreement is void, as Project 3 Sisters failed to meet its terms, but the organization also has not agreed to a new development agreement, leaving the buildings’ status in limbo.

“That’s why my proposal was to just sign off, and say it’s their property,” Scholtes concluded.

After further discussion, council member John Huisman made a motion to notify Project 3 Sisters the council is waiving all requirements in the existing development agreement for the purposes of considering the Main Street buildings the organization’s property.

Huisman’s motion carried with a 5-1 vote. Council member Ann Hanna voted in opposition.

In other business, the Blue Earth City Council: 

• Heard an update from city administrator Mary Kennedy regarding Blue Earth’s membership on the Faribault County Animal Control Joint Powers Board. Kennedy suggested Blue Earth would be better served by securing its own animal impound services rather than continuing its membership on the Joint Powers Board.

Scholtes suggested Kennedy begin drafting a request to hire impound services for the city of Blue Earth.

• Conducted a public hearing for Matthew Bartz’s property located at 507 14th Street. The council determined the property is in violation of several city ordinances, and passed an abatement order calling for the violations to be rectified prior to Feb. 1.

• Was introduced to new Blue Earth Fire Department Chief Steve Brown, and also heard the fire department’s year-end report.

• Heard an update from Blue Earth Library Board president Chuck Hunt, who informed the council the Library Board has officially voted to accept over $19,000 worth of dinosaur fossils and cabinetry from local Paleontology expert Jim Pollard.

Frundt intends to research whether the donations require the council’s acceptance as well as that of the Library Board.

• Passed an ordinance to amend zoning code subsection 1040.29 with added language about shared property lines.

• Passed a motion to purchase the former Kerr McGee lot in the amount of $4,700 from Greenfield Environmental Multistate Trust, LLC.

• Approved a service agreement with Frundt, Lundquist & Gustafson, Ltd. for continued city attorney services in 2022. Frundt noted no changes have been made in the agreement, apart from dates.

• Approved the purchase of six new computer monitors for city staff, at the price of $311 each, from Midwest IT Systems.

• Passed a resolution appointing Lars Bierly and Bruce Hanson to the Blue Earth City Charter Commission and nominating Scholtes to an additional two-year term on the commission.

• Passed a resolution relating to financing of a new substation and system conversion for Blue Earth Light & Water, which establishes compliance with reimbursement bond regulations. The resolution indicates the maximum amount of bonds expected to be issued for the project is $5 million.

• Conducted Kennedy’s annual performance review via closed session, after which the council voted to increase Kennedy’s pay to $85,000, effective immediately, and to draw up a new contract indicating a subsequent $3,000 annual pay increase.