Vacation of an alley to make way for a new Holiday convenience store and two new gas pumps will move forward following action by the International Falls City Council Monday.
The council accepted a petition on a 4-1 vote to vacate the alley, on the former TeePee Motel property, 1501 2nd Ave., as requested by the property's current owner Northern Border Investment LLC.
Councilor Leon Ditsch voted no, voicing concern about existing similar businesses losing customers as a result, and adding to the number of vacant buildings in the community.
Addressing concerns about previous alley vacations that did not spur the intended new developments, the action is contingent on the investment company entering a development agreement with the city which negates the vacation should construction not take place there. In addition, the agreement is contingent on NBI providing easement to the city to a manhole to access the city's sanitary sewer system.
Jace Baldwin, a part of NBI, asked the council to approve vacation of the alley to allow for new development to be constructed on the whole of the site. He said the project will add to the city's tax base and is a good investment.
City Administrator Ken Anderson said NBI has a purchase agreement with Circle K, which owns Holiday.
The new construction will house a Holiday store, which David Edquist said will be a replica - only with the addition of two gas pumps - of the Holiday store at the southeast corner of the Highway 53 and 11th Street intersection. Edquist, is manager of real estate, for Holiday Stationstores.
Edquist said the current Holiday location does not provide enough parking, and has a difficult traffic flow through the site, share by a sporting goods shop and liquor store. He said the new structure would be smaller than the existing Holiday building, and there would be no car wash, liquor store or other amenities at the site.
A member of NBI said the company is not asking for the alley for free and is willing to purchase it.
The group is working to the close deal, get preliminary groundwork and utility work done this fall, and break ground for the foundation as early as possible in the spring, added Edquist. He described the long history, staring in 1952, of Holiday with International Falls, and noted Holiday now leases its current building.
The council also accepted Mayor Harley Droba's appointment of "disinterested freeholders," as called for in the city's charter, to ascertain and award damages and compensation it deemed appropriate, as well as ascertain the benefits of the alley vacation. Representing the East Ward is Cindy Strand, Center Ward Len Peterson, and West Ward Ronna MacKay.
None have a vested interest in the property, Droba noted.
Meanwhile, Edquist said the proposal seeks not tax relief for abatement, and the development would pay full taxes the day the company owns the property.
The council heard from Matt Koerbitz, who presented a petition with signatures of many local business owners opposing the vacation.
The petition said those who signed it believe that NBI should be the developer, and the property should not be sold to a corporation for profit.
It cited costs incurred by the city for razing the former TeePee Motel after it was damaged by fire.
Droba later said the city demolished the building through its demolition program and has done the same for other city property owners. "They did nothing the wrong," he said of the Baldwins involvement in the city's demolition of the buildings. "they went through all the process."
In addition the city received a letter from attorney Steve Nelson, representing Koerbitz and others, which said the city must determine the alley completely useless, "does not serve or is incapable of serving any valuable purpose" before it has the power to vacate.
City Attorney Steve Shermoen said he disagreed with several of Nelson's statements, and said the city's charter discusses vacation of streets. It does imply the council may decided based on whether the vacation is in the best interests of the city to vacate.
Granting or denying the vacation could bring the issue to district court, where Shermoen said he believes the court would consider whether the city's actions were arbitrary or capricious: without reasonable grounds or adequate consideration of the circumstances.
He also discussed a case cited by Nelson, saying it does not apply in the case of a charter city with specific provisions for street vacation.
All councilors voiced concern for the city's small businesses, but Droba, and Councilors Chelsea Nelson and Joe Krause said they favored the vacation for several reasons, including adding a new structure to the city.
Droba supported the proposal, saying it has value for the city, especially with reconstruction of Highway 53. He said the city should never turn away new or existing businesses.
Nelson agreed, adding the congested corner Holiday now sits at makes for difficult entry and exit to the city's largest highway. She said she supported additional amenities to the site, but said without them other stores in the city should not be impacted.
Krause too supported vacation, also adding the city must support business retention, expansion and growth.