Howard Lake-Waverly Herald, Feb. 11, 2002

Crowd peppers Howard Lake council over bank development

By Lynda Jensen

Two dozen people peppered city council members with questions about the bank development project during a public hearing at the Howard Lake City Council meeting Tuesday.

Questions arose during the hearing for the closing of a portion of Ninth Avenue.

Planning and zoning Chairman Jean Schmidt was in attendance, and asked the council about the premature vacation of the road.

"The city has already, in essence, vacated that property," she said, pointing out that even though the city was conducting a public hearing that very night for the closure of Ninth Avenue, that it already closed the street in the late fall.

At that time, the city closed the road, which did not require a public hearing. If the city had vacated the road, it would require a public hearing.

The closing caused Joe Drusch of Joe's Sport Shop to express concern about the impact on his business from the lack of access there during the winter months, especially in the middle of his expansion with a hardware addition.

The city decided to re-open the road until spring, however a problem arose when the red brick was laid down for the sidewalk shortly after, which prevented vehicles from driving over the area because the compaction ruins the brick bed. The road has been closed ever since.

City Administrator Doug Borglund indicated that the city only wanted to take advantage of some unusual generosity from the Minnesota Department of Transportation, when it offered to continue expensive curb and gutter work at that time, instead of waiting until the spring for the work to be done.

This saved the city from $8,000 to $10,000, Borglund said.

Schmidt also asked if the council discussed the closing with the fire department, since the fire trucks use that route for access.

Mayor Gerry Smith indicated that three council members were on the fire department and that someone had a casual conversation with one of the fire fighters.

In any event, the fire department can use alternate routes.

If two parking spots are eliminated past the clinic, the main pumper can go to the north, Councilor Shelly Reddemann said.

Resident Kent Confeld questioned the council's protocol regarding planning and zoning, since the commission did not see the bank development project until recently, Schmidt said.

In the council before Smith, it was decided that the city should not be in the real estate business, Gene Schmidt said.

Now, it appears the city is willing to pay top dollar for property, Gene Schmidt said.

Schmidt pointed toward the tax delinquent lot purchased by the city as part of the bank deal.

The vacant lot did not go for tax delinquency because the county did not do its job, Reddemann said. "The timing was off. We were on the list for that property," he said.

As for the amounts paid for each house, Smith underlined that the city wanted to treat everyone fairly, he said.

Resident Darrell Main questioned the judgement used about the development. "Has anybody looked down the road, past their nose?" he asked. "The city has the cart before the horse."

Main asked what would happen to the clinic down the road, if all did not go as planned.

"We could sell it, rent it, tear it down," Smith said. "The city will decide at that time," Reddemann added.

Resident Verdell Stenberg asked how much taxpayer money was going to be given toward the bank, which appeared to be the sentiment of many people there.

"The bank isn't getting a subsidy," Smith said.

Dollars being captured from the tax increment financing district at the bank development is like the city taking a long term mortgage out, and using the extra taxes from the TIF district to pay for the mortgage, said financial consultant Michele Hartman.

The "extra" tax money comes from revenue that would otherwise go to the school district and county, but since the city designated the area as a TIF district, this tax money is put back into the district for the city's use, she said.

The city wouldn't be allowed to keep this money anyway if it wasn't in a TIF arrangement and used for specific revitalization purposes, Hartman said.

The bank will be paying the city back for the land at its market rate, Smith said.

Councilor Don Danford pointed out, with some frustration, that the city has not raised its levy in the past three years, except for four percent forecasted in 2002. "Why would you think we are screwing you?" Danford asked.

Stenberg was told that taxes would not be raised one penny to subsidize the bank development.

In addition, there was discussion about tax increment financing and the city's low-interest Voyager fund, which is a loan program designed for small businesses. The two are completely separate entities.

The bank helps manage and distribute this fund without cost to the city.

Donna's demolition

Residents also took the council to task about the handling of Donna's Salon demolition.

Donna Munson attended the meeting to castigate council members over their unwillingness to allow the new owner of Donna's two weeks of extra time before the business was closed for good.

This will cause two weeks of unemployment for the six employees at Donna's.

The council was not willing to do this because of bad relations with her in the past, Munson said. She was hoping that a new owner would receive different treatment, but was disappointed, she said.

Now the building will stand empty until March, Munson said.

Borglund indicated that the building had to be inspected, walk throughs completed, utilities shut off and the building inspected for asbestos.

The city told Kathy Johnson, the new owner, to come to the meeting, since this makes a difference when it comes to making a decision, Smith said.

The city gave a total of three extensions for Donna's last day.

Nevertheless, the decision was up to the bank, Borglund said.

"The bank did not want to have a tenant," Smith said. Borglund repeated this statement as well.

"You are dead wrong," Trudy Berg told Smith.

Steve Berg indicated that he spoke with John Forstrum of the bank before the last council meeting to finalize the last day of Donna's operation, and Forstrum told him that it was not a problem for Donna's employees to remain.

The new Donna's Salon will be located next to Bergie's, which is owned by the Bergs.

Munson also indicated she spoke with the bank, and it had no problem with Donna's staying open.

Forstrum told him that as long as Donna's provided proper insurance, which it did, and paid its bills, he didn't care, Berg said.

"I'm getting two different stories," Steve Berg said.

The meeting nearly turned into an argument, causing Smith to bang his gavel several times while Berg was speaking. "This is my meeting," Smith said. Later, during the meeting, Smith apologized to Berg for losing his temper.

Munson added that the city told her she would be arrested for trespassing if she set foot in the building after the appointed time, she said.

"I can't stand here and let you say we did nothing," Munson said.

"I'm sorry you feel that way. That's what the bank told us," Smith said.

Berg accused the council of being secretive in its decision-making.

"Why wouldn't you want to open it up to the public?" Berg asked. "At least people would feel that they had a chance to give input."

"I think this council has made more attempts to communicate," Smith said. During the council's tenure, the cable broadcast has gone live, and the council communicates regularly through the newspaper and on videotaped segments on public television, Channel 7.

"We're not perfect," Smith said. "We're just like you. We're working people."

Jodi Eggert said that she could not afford cable or a newspaper subscription and that the council should overcome this obstacle.

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