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Zorbaz project advances in Alexandria

The new owners of the fire-damaged Wharf building plan to completely renovate the facility with a new roof, siding, flooring, windows, plumbing and electrical. The total cost of the project is estimated at between $1.5 and $1.7 million. They plan to hire local contractors, plumbers and electricians for the work. (Photo by Al Edenloff)

A Zorbaz restaurant is one step closer to opening out of the old Wharf site in north Alexandria.

At its meeting Monday night, the Alexandria City Council voted 4-1 to create a tax increment financing (TIF) district for the Zorbaz development at 2710 North Nokomis Street and to approve the TIF plan for it.

Zorbaz On the Lake, a pizza and Mexican food chain, will use the tax break to completely renovate the 4,400-square-foot building, which was gutted by a fire 12 years ago. The project is expected to cost between $1.5 and $1.7 million. Tom Hanson, Zorbaz founder, told the city's economic development board that the target opening of the year-round restaurant is next January or February. He said he's purchased three additional lots for parking.

Right now, the property is valued at $136,000 and generates $2,200 in taxes. After it's fixed up, its value will increase to $400,000 and it will yield $11,917 in taxes, according to Jason Murray, director of the Alexandria Area Economic Development Commission.

Elroy Frank voted against it. Just prior to the vote, the Alexandria Economic Development Authority (EDA), which is comprised of the five council members and the mayor, approved two separate actions on the TIF request on a 4-2 vote, with Frank and Dave Benson opposing the measures. They didn't say why they opposed the application.

A public hearing was held but drew only one speaker. Tony Tigges of South L'Homme Dieu Drive wanted to know how many full-time jobs the restaurant would create, whether it would bring in new business or take away from existing businesses, and why such a small area would now have two liquor establishments (Bug-A-Boo Bay is just across the street).

Murray said Zorbaz expects to hire 20 full-time workers, and 20 part-timers. He said Tigges' other questions were difficult to answer because they're not measured as part of the TIF process. He said the area is commercially zoned and establishments that serve food and alcohol are allowed under the city's comprehensive plan.

With TIF, the property taxes on a parcel of land are frozen at the current level for a specified number of years as an incentive for developers. In this case, up to 15 years (although the district itself is expected to last for 25 years).

The difference between the existing and new tax rate, the increment, will amount to about $220,500. The city will retain 20 percent of it for administrative expenses and the rest can only be used for specific redevelopment purposes, such as land and building acquisition, site improvements and preparation costs.

Council member Virgil Batesole asked Murray several questions about the legalities and language of the TIF agreement. At one point, Batesole suggested that the developer should provide the city with a written document stating that he would not be able to proceed with the project without TIF. Murray said the developer made a statement to that effect during the economic development board meeting, which would be reflected in the minutes and Batesole said he would go along with that.

Council members Sara Carlson and Owen Miller said that they were concerned about public safety in the area. Carlson asked if the owners would cooperate with the city's highway committee to make that part of North Nokomis safer for pedestrians. Murray said that safety concerns could be addressed as part of the building permit process at a later date.

Later, after the final vote was taken - the third one concerning the application -- Mayor Dan Ness summed up the action by saying, "This seems like a complicated process for a $400 a month benefit."

The council acted on a variety of other issues at Monday's meeting, including zoning requests for a major development by LBR Properties east of Pioneer Road (County Highway 106), across the road from the site of the new high school. It would include apartment complexes, townhomes, senior housing co-ops and commercial buildings, with a total of 642 living units. (See Friday's Echo Press for a follow-up.)

In other action, the council:

--Accepted a $137,000 bid from Rapp Construction of Alexandria to build a new restrooms/shelter facility at Dean Melton Fillmore Park. The money will come out of the city's capital improvement fund. Park Director Bill Thoennes noted that the park is one of the city's four "showcase" parks and serves as a gateway to the city. About 600 people use the park every week in the summer. The existing restrooms, built in the 1960s, are in dire need of replacement, he said. They're not handicapped accessible and the electrical system is substandard, he added. Batesole was the the only council member who voted no. He said he wasn't against having better restrooms but felt the city had more urgent priorities, such as roads and streets. "Let's put it off," he said. "Let's do it when we have the money."

--Accepted a low bid of $370,495 from Arvig of Perham for electrical distribution system improvements requested by Alexandria Light and Power. It includes constructing a large three-phase underground electrical feeder between Woodland Elementary School and Grand Arbor; replacing underground cable north of Viking Plaza; and constructing three phases of underground cable on 6th Avenue between Quincy Street and Rosewood Lane. The bid came in well below the estimate of $420,000 to $460,000. The cost of the entire project, which also includes materials, engineering and labor, is at $840,000 - also under the estimate of $1,023,500, according to ALP General Manager Al Crowser.

--Accepted a "Toward Zero Deaths" state grant, formerly known as the Safe and Sober program, for $34,400. The Alexandria Police Department will act as the fiscal agent for the grant and work with the Douglas County Sheriff's Office on safe driving programs.

--Accepted a quote of $13,485 from Midwest Machinery for a John Deere zero-turn mower as requested by the parks department. The money will come out of the department's equipment fund. Thoennes first requested accepting a John Deere mower quote in May but the council voted it down. Some members questioned whether the specs were fair for all the bidders or skewed toward John Deere. They also instructed Thoennes to meet with the local dealers to test the mowers. The accepted quote was still for a John Deere and came in about $1,000 less than the quote in May. One of the other four quotes was lower, $11,627 for a Ferris from Ollie's Service, but it was a 24-horsepower model that didn't meet the 30-horsepower in the specs.

--Approved a resolution to support the preservation of tax-exempt financing. Former Mayor John Perino, who serves on a utility board and recently met with lawmakers in Washington, D.C., requested the city to adopt the measure. He said a federal bill calls to eliminate the exemption, which he said would hurt cities and utilities, including the Missouri River Energy Services, which ALP buys power from. If the bill goes through, it would drive up electric rates, Perino said. The resolution will be forwarded on to Minnesota congressional representatives, the League of Minnesota Cities and, at council member Owen Miller's suggestion, the Coalition of Greater Minnesota Cities.

--Approved a request from residents on Sumac Drive on Lake Geneva to hold a neighborhood block party at the end of the cul de sac on August 8. The street department will place signs so motorists won't drive through the area. "I think it's great that they're having a neighborhood get-together," said Mayor Ness. "There should be more of that."

Al Edenloff
Al Edenloff is the news and opinion page editor for the Echo Press. He was born in Alexandria and lived most of his childhood in Parkers Prairie. He graduated with honors from Moorhead State University with a degree in mass communications, print journalism. He interned at the Echo Press in the summer of 1983 and was hired a year later as a sports reporter. He also worked as a news reporter/photographer. Al is a four-time winner of the Minnesota Newspaper Association's Herman Roe Award, which honors excellence in editorial writing.  
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