Tower to rewrite rules to make daycare loan
Monday, March 13, 2017 — Mayor Josh Carlson appeared before the city council at its March 13 meeting seeking to have the city rewrite the rules governing its commercial development program. The change is necessary to allow the city to make an unsecured loan to the Tower-Soudan Community Development Corporation (TSCDC) to develop a daycare business in the Tower-Soudan elementary school building, according to Tower Economic Development Association (TEDA) Chairman Marshall Helmberger. “We need to tailor the wording on the storefront loan program especially for an urgent community need,” Carlson said.
Daycare is an “urgent community need” according to Carlson and Helmberger. Late last year Carlson hosted a community meeting to try and find answers on why parents living around Tower might send their children to schools in other communities rather than the Tower-Soudan school. Many parents agreed that the lack of suitable daycare in the community is one of the reasons for making the decision to enroll their children elsewhere. TEDA then surveyed the community through Facebook and Survey Monkey and discovered that over 70 percent of respondents needed daycare services. Nearly 24 percent of respondents do not live in the Tower area, however.
In recent years daycare services have been provided by people working through St. Paul’s Lutheran Church in Soudan although those attempts opened and closed in relatively short order. There is already a vastly under-utilized before and after-school program currently available at the Tower school building. Apparently this service is not adequate for the communities’ needs. TEDA has found zero interest in anyone developing a home-based daycare solution according to Helmberger.
Traditionally the commercial development loan program has been tied to Main Street and other commercial property providing the city collateral for any development loans. Because the daycare will enjoy rent-free space in the Tower school building there is no way that TSCDC can provide security for a loan according to Helmberger. Commercial development loans are currently capped at $50,000 according to City Clerk-Treasurer Linda Keith. She then suggested that the city consider allowing unsecured $25,000 loans for urgent community needs. There is between $100,000 and $110,000 in the community development loan fund according to Mayor Carlson and thus adequate funds to make the unsecured loan.
Some on the council were concerned about allowing unsecured loans. “Who are the people on the 501c3 non-profit corporation?” Alderman Lance Dougherty asked. “I don’t want to see it all go down the road and get stuck,” Dougherty emphasized. The city council considered ways that it could collateralize the loan but did not come up with any answers. One obvious solution, which was not discussed, would be to have all the principles of TSCDC sign personal guarantees for the loan.
There has been a calculated path to reestablishing TEDA as the economic development arm of the City of Tower. The program had largely been moth-balled throughout Carlson’s administration until late last year when Helmberger formed his TSCDC and approached the city seeking start-up funding for his non-profit corporation. Helmberger and Carlson then brokered a deal where the Mayor would appoint five members of the corporate board to TEDA at the city’s reorganization meeting in January. As a result Marit Kringstad, Steve Peterson, Joan Broten, Victoria Meloche and Helmberger serve on TEDA as well as TSCDA. Aldermen Brad Matich and Brooke Anderson also represent the city on TEDA but are not involved with TSCDC. Further, Marit Kringstad is the wife of harbor developer Orlyn Kringstad who recently received lands and a window of opportunity to build condominiums around the 8-million dollar harbor development in exchange for one dollar and is currently seeking a $125,000 loan from the city to complete architectural drawings and marketing materials for his project.
It is time the City of Tower engage in serious discussions about the conflicts of interest it created by allowing TSCDA to dominate TEDA and having Kringstad serve on this important city board. The desire to have Tower fund the daycare project is the third time Helmberger has sought funds for TSCDA, or the Tower Vision 2025 harbor condominium project, from Tower during the last five months.
Concluding discussion on the daycare loan Mayor Carlson clearly instructed Clerk Keith to re-write the commercial development loan guidelines, “Let me be clear, I want to tailor it so it works for this project,” Carlson said. The council vote to proceed with paving the way to make the daycare loan found unanimous support. The city’s decision was tempered with a clause that required any unsecured loan would need unanimous approval from the full city council. Privately, however, a couple of city councilors privately informed The News that they are skeptical about the need for the city to incubate a daycare business.
Following approval to re-write the commercial development loan guidelines, the city council unanimously supported a resolution declaring, a “lack of suitable daycare in Tower” to be an urgent community need.
No means no
Two requests which had earlier been rejected by the Tower City Council surfaced on the meeting agenda again. The first involved a request to have the city purchase land from the Vermilion Housing Authority adjacent to the Lakeview Apartment complex. The housing authority wanted to give Tower the first opportunity to purchase the land for its economic redevelopment of the city. The city was not interested and is currently limiting its acquisition of new land. Mayor Carlson reported that he met with Tim Tomsich from the housing authority and was bringing Tomsich’s new proposal to the city council. Carlson explained that Tomsich had suggested that the Town of Breitung and the city jointly purchase the land from the housing authority. This would then precipitate a trade between Breitung and Tower for other land and then Breitung could donate that land to the Lakeview Cemetery Association allowing it to develop new burial lots. The township can donate land to the cemetery according to Carlson.
There is a growing interest in development in Tower according to Carlson, however he said that he believed the city should stay away from new land acquisition and allow developers to fill their needs from the private sector. “I don’t see how the city would benefit from buying this land,” Alderman Brooke Anderson said, agreeing with Carlson. Carlson moved to reject the offer. The motion was supported by Alderman Matich and unanimously supported by the city council.
Providing a doorbell security system for the Vermilion Country School, a charter school, was also revisited by the city council. Alderman Kevin Fitton, who also serves as Vermilion Country School administrator, again focused the council’s attention on security at the school. “Parents and others want it reconsidered,” Fitton said, “any other school would have the ability to lock the door.” The school’s problem is that there is not a visual sightline from its offices to the door, according to Fitton. The doorbell becomes necessary to alert school staff that there is someone waiting to enter if the door is locked for security. Fitton proposed that the city authorize spending about $770 to place a doorbell at the entrance.
Others on the city council disagreed. “I still stand on the fact that we rent the building to the school,” Alderman Dougherty said. “I don’t believe that it is the citizens’ responsibility to provide a doorbell,” Dougherty concluded. Mayor Carlson was of the same mind. “I think any other landlord would tell you to go pound sand,” Carlson said.
The city receives a lot of rent from its lease, according to Fitton, and then pays a significant portion each month from those proceeds to Community Resource Development (CRD) for consultation on the harbor development, suggesting that the city could well afford a doorbell for the charter school building.
“That is not going to happen going forward,” Carlson strongly emphasized. The agreement expires after June of this year and the decision to retain CRD was made by a previous council Carlson explained. “It’s not a permanent situation,” Carlson said. Former IRRRB Commissioner Gary Lamppa and Richard Grabko are principles in CRD. (The News has obtained copies of the CRD agreement and the school lease and is researching the details of those agreements and will report on its findings in a future issue).
Mayor Carlson moved to deny the charter school request. Alderman Anderson supported the mayor’s motion which passed with all voting in favor except Fitton who abstained due to his conflict serving on the council and as Vermilion Country School administrator.
Dave Rose land sale request
Dave Rose has requested that the city sell him one of the city’s old dump sites to incorporate it as part of his proposed West Two River campground. Rose currently owns land surrounding the old dump on three sides. “We are not expanding our campground plans at all,” Rose said. He explained that he wanted the land as its addition to his existing parcel would allow campsites to be set back and allow him to maintain a buffer from the Mill Point Plat residents who have been outspoken against his project. Several Mill Point Plat residents packed the city council chambers although they made no comment on the offer to purchase or any of the other details Rose provided to the city council.
“We did pass the Department of Natural Resources requirements for protecting bats at the Soudan Mine,” Rose said. He also explained that he was anticipating an archaeological survey to assure that there were no Indian burial grounds on the site as soon as the snow melt opened the ground for examination. He has also made progress on the wetland delineations and environmental impact statements, he said. “You can’t build on the land because it is an old dump ground,” Rose added. “I would like to have the land for nothing but understand it would have to be appraised,” he concluded.
“Our policy is not to accept offers, but appraise property and list it for sale at fair market value,” Mayor Carlson explained to Rose. There are also some problems with the Minnesota Pollution Control Association (MPCA) paperwork on the property according to Clerk Keith. The city cleaned up three dump sites, according to Keith, however, the paperwork for the riverside site in question is in error. It has an incorrect legal description, a description which matches the legal description for another former dump location, according to Keith. She has been working with MPCA to correct the errors, however it appears that the original files have yet to be found. The city council determined that it would table any action on Rose’s offer to purchase the land until the discrepancies with the legal descriptions can be corrected and the city is assured that the MPCA has certified the clean-up work already accomplished on the river-side site.
IRRRB Application Ordinance
The city council amended the meeting agenda removing its consideration of an IRRRB application ordinance. Mayor Carlson had promised, at the council’s February meeting, that he would return in March with his proposal on the IRRRB ordinance. No explanation on why this was removed from the agenda was given.
In other action, the Tower City Council:
• Accepted a $40,000 Iron Range Resources and Rehabilitation Board grant favoring Main Street improvement
• Issued a Sexual Assault Awareness proclamation
• Approved the request for an airport hangar lease transfer from Brian Maki to John Burgess
• Approved contracting with Vermilion Painting LLC to prepare and re-stain the airport arrival and departure building at an estimated cost of $3,100
• Approved contracting with Arrowhead Construction to replace the roof on the airport arrival and departure building at an estimated cost of $4,350
• Accepted the 2017 Department of Natural Resources fire department cooperative agreement
• Agreed to write-off $7,419.77 in unpaid water utility charges from clients defaulted on their property taxes and let the property go tax-forfeit to St. Louis County
• Chose to spread out Public Employee Retirement Account debt across the city budget, rather than account the debt as a single line item in the budget
• Approved renewing the I Am Responding contract which the fire department and ambulance service utilizes to coordinate its communications
• Accepted all of the regular and routine monthly reports from officers, engineers, commissions and committees.
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