Finance Committee Approves Additional Funding For Mall
Left, Director of Community Development Michael Ostrowski explains the need for almost $2 million in additional mall borrowing. (City-Times photo)
By Brandi Makuski
Members of the Stevens Point Finance Committee Monday night approved borrowing an additional $1.7 million for completion of the downtown mall property.
The new amount is in addition to the $5.96 million voters approved with a February 2011 referendum. City leaders say is needed to complete projects slated for the site, including a green space and parking plan already presented to downtown business owners.
In a memo sent to council members in late January, Director of Community Development Michael Ostrowski outlined the need for the additional funding, which is only partially related to unexpected legal costs.
“The (initial) borrowing included construction, demolition costs and so forth, but it didn’t include the legal fees, maintenance or utility costs while we were going through the legal process,” Ostrowski said. He added just over $470k remained from the amount voters approved in 2011. AECOM was contracted by the city after the referendum to conduct environmental studies, he said, which is when clean up needs for ground contamination- caused by two former dry cleaning businesses on the site- were indentified.
The city is bound to clean the site before Mid-State Technical College will relocate to the space. Initial cost estimates from AECOM put the cost of clean up between $1 million and $3 million, but Ostrowski said the city worked with the company to “refine the costs” to the now- needed $725k.
“We’ve applied for grants, and have already received one in the amount of $34,500,” Ostrowski said. “If we get all the grants we’ve applied for it could potentially cover 1/3 of the environmental costs for costs not already incurred. It’s pennies on the dollar, but at least it’s something to cover some of those costs.”
The city should know in about five weeks whether or not it will be awarded the grants, he added.
Once clean up has been completed, green space and an additional 140 parking spaces would cost about $800k, Ostrwoski said.
While the city has seen some income with a late penalty from Marshfield Clinic, which did not complete construction in the four years promised, it also never gained the expected $400k from the sale of the former Dunham’s building, which fell through earlier this month. Mayor Halverson said he expected approval to borrow the full $1.7 million because the city could not have finished the site even with the original borrowing amount approved in the referendum.
“We know we have enough range, at the $1.7 (million), to cover the worst- case scenario based on those AECOM studies,” Halverson said. He added the development would help attract new developers for the Dunham’s site.
“The hard part for us is with well over a two- year delay in the process- with those legal fees- and we always knew, of course, those additional monies would be needed for the second phase of this, for a large private developer one way or the other.”
City Comptroller-Treasurer John Schlice says he expects the impact on taxpayers to be minimal, estimating a maximum cost of 50 cents per $1,000 of home value for the 2014 and 2015 tax levies.
Schlice said he looked at a number of options for paying the loan back, and said a 10 year note with about 1.5% interest made the most sense.
“And when the city does finally sell Dunham’s, any fund balance could be allocated to restructure that loan and bring down the interest, help us pay that off a little faster,” he said.
The measure now moves on for final approval to the Common Council, which meets Monday evening.