As deadline approaches, groups briefed on second cold box

Paul Nevanen, director of the Koochiching Economic Development Authority, briefed the KDA Board Tuesday and the International Falls City Council Monday on a push to get a contract signed with an undisclosed client that would allow for construction of the cold box this season and other improvements at the facility.

Nevanen told the group that the client, who has not yet been named publicly, has agreed to a 10-year contract. The deal would involve expending about $644,000 by the local governments, which would be repaid by the client in five years with a 2-percent interest rate.

At issue, however, is that the contract must be signed by all parties by June 1 to allow the cold box to be constructed this season and allow the client to begin testing, as they desire, Nov. 15, said Nevanen.

The compressor for the cold box takes eight weeks to construct, he said. And under the public bidding process, as well as delays in developing the contract by the potential client, the drop-dead time is approaching.

KDA Board members urged Nevanen to meet with city officials to find out if the city has money in economic development accounts it could use to pay the costs, with the county guaranteeing the loan. The city would retain the 2-percent interest on the loan. In addition, they urged Nevanen to consider other sources of funding, such as from he Northspan Group and the KEDA’s reserves.

County officials would have to reopen the 2012 county budget to make adjustments in order to come up with its share of the money. And that, they said, would take time.

Nevanen told the KDA Board that he had not discussed using city money to front the project costs, but Commissioner Rob Ecklund said he would discuss the idea as the agreement continues to be developed. City councilors said Monday that they wanted to be kept abreast of the project.

Asked by KDA Board members how much impact a second cold box would have on the community, Nevanen said it would be significant.

He said he estimates that more than $500,000 would be spent by the testing groups annually at area motels, restaurants and the local airport as groups were brought in to the area to use the cold box.

KDA Board member Brian McBride said 2-percent interest in the payback is better than placing the money in a bank, “but is more of a gamble.”

Nevanen said a signed contract with the client would alleviate much of the risk.

County board

In other business Tuesday, meeting as the county board, commissioners agreed that a tower committee should again meet to further consider the tower needs of the Minnesota Department of Transportation and AT&T.

Dale Olson, county Environmental Services director, told the board that since the committee met on the issues April 30, more information was provided by AT&T and MnDOT.

Olson explained that MnDOT was in negotiations with Boise Inc. to purchase its tower and land between County Highway 332 and Highway 11 east. The negotiations fell apart, so MnDOT began looking at another site near Bowman Construction, off Highway 11 east and west of Rainy Lake One Stop, where it owns property.

Representatives of Bowman Construction voiced concerns about the impact the tower could have on its blasting operations, which is also a concern of MnDOT. MnDOT has said it is willing to reopen talks with Boise.

AT&T consultants have called a site for a tower at Rainy Lake Houseboats ideal, but said it also needs another tower on the east side of Ranier to improve coverage. Olson reported that it is unknown if AT&T would pursue another tower or just forgo coverage in that area.

MnDOT, he reported, does not like to lease land for towers because that would require ongoing funding. And, collocating the towers is proving difficult, said Olson.

“Trying to find a location that both AT&T and MnDOT can be happy with will be difficult,” he stated.