A revised proposal is on the table from developers wanting to rent and improve two lots in the local foreign trade zone.
The Koochiching Economic Development Authority Board, and concerned parties, discussed issues surrounding the proposal Wednesday.
“I think we felt we want to develop it ourselves,” KEDA Board and FTZ subcommittee member Mike Fairchild said in summary of the three previously held FTZ subcommittee meetings.
If self-development occurs, the city of International Falls and Koochiching County would likely ask for bids to remove, store and use rock, which needs to be removed for the two rail-adjacent FTZ lots to be deemed “site ready.”
The KEDA Board voted that the subcommittee appointed to review the proposal make presentations and receive comments from members of the Falls City Council and county board.
The county and city jointly own the FTZ, which is under KEDA management. KEDA Board member Wade Pavleck noted that the proposal would at some point have to go to the county and city for that reason.
Pavleck explained that the rock is more valuable than proposed compensation from the developers. The rock could net the entities more than $1 million, he estimated, with questions still unanswered that would affect the cost and benefits of the project, especially depth of blasting.
“The bottom line, there’s a lot of value,” Pavleck said. “At the end of the day, the resource belongs to the taxpayers, the public.”
Attorney Steve Shermoen presented the revised proposal for his client and fielded questions from the board.
The revised proposal requests a 50-year lease for $2,000 per year for FTZ Lots 3 and 4, which are adjacent to railroad tracks servicing the zone. The developers had previously requested to purchase the parcels. The revised plan also softens language related to wetland mitigation and new road construction, which had previously been required.
One of the questions, which garnered discussion from the board and guests, was the depth of the blasting. Kalan Wagner of Wagner Construction, Carl Bowman of Bowman Construction, Dave Serrano of Arro of the North and Koochiching County Engineer Doug Grindall updated the board on ways in which the lots could be leveled, taking into consideration ground level of the railroad tracks, drainage, and space for utility lines to potential buildings on the site.
The depth of rock removed has a direct impact on the cost and amount of crushed gravel retrieved from the blast. The crushed gravel is of great importance to the county, Grindall and Pavleck said, especially for road projects, as there is typically a gravel shortage.
Another topic of concern is use of local contractors. It was mentioned by the board that any requests for proposals through the governments could not be geographically limited to area contractors. However, a private developer through a developer’s agreement could give right of refusal to local interests, as was indicated in the proposal. Further, the developer clarified intentions that it does not wish to do drilling, blasting and crushing, opening those fields to area contractors, according to the revised proposal.
KEDA Board member Allen Rasmussen restated his goal of getting the site ready and securing a tenant as quickly as possible, but did not indicate preference to the proposal or KEDA overseeing the project. He made the motion that brought the issue to the two governments.
During a public comment period following the meeting, Ranier resident Arden Barnes said, “I think the city and county would be insane to lose control of the foreign trade zone.”
Other business
In other action, KEDA Director Paul Nevanen updated the board on several ongoing projects. He said that work continues on a contract with the Minnesota Pollution Control Agency and the Office of Management and Budget to release bonding dollars for the Renewable Energy Clean Air Project plasma gasification facility design phase.
In addition, he said the Minnesota Foreign Trade Zone group was successful in obtaining a $30,000 grant from the federal Economic Development Authority to promote the three FTZs in Minnesota, including the local property.
A letter will be sent to Iron Range Resources requesting funding for fiscal year 2011. KEDA is expected to receive $42,214 for 2011. That’s a drop in funding of 55 percent, which Board Chair Gail Rognerud added was “never a good thing,” although it was expected due to a drop in taconite sales last year. The IRR funds KEDA, and Koochiching County, through a portion of taconite production tax.
The KEDA Board voted to renew its administrative service agreement with Koochco, Inc. Koochco receives general administrative services from KEDA, such as coordinating and administering monthly board meetings, minutes and financial reports; general bookkeeping functions; and clerical and reception duties. Koochco pays KEDA $450 per month for those services.
The board members voted to table discussion on a new alternate board member until the next meeting because member Tim “Chopper” McBride was not in attendance and the group wanted to wait for a full contingent of members to make the decision.
