City's revolving loan fund helps 2 Alexandria businesses
The building at 609 Broadway is being converted into real estate offices, with a conference room and accessory space.
The building at 609 Broadway, which last housed Ravnik Interior Designs, will soon have a new look inside and out.
The building, now owned by Carl Kvale Real Estate, is being converted into real estate offices, with a conference room and accessory space.
At its Monday night meeting, the Alexandria City Council approved Kvale’s request for a $48,000 loan through the city’s revolving loan fund. The loan will be paid back over 15 years at an interest rate of 3.99%, which matches the interest rate of the principal lender, American National Bank.
The total cost of the project is estimated at $96,802. The project is expected to create two new full-time jobs by the end of June.
The fund has a balance of about $340,000, according to City Planner Mike Weber.
Also, the council approved Kvale’s request for a $3,036 loan through the city’s Downtown Redevelopment Loan Fund to re-cover two existing awnings. The loan will be paid back over four years at an interest rate of 1%.
The council approved both requests on a 4-0 vote. Council member Scott Allen abstained from voting because he's the president of American National Bank.
The council approved another loan request at the meeting: Smokin’ Brews and ‘Ques, which is planning to expand, requested and received approval to subordinate its current revolving loan fund with the city to a new lender, First Western Bank and Trust (formerly known as BlackRidge Bank).
Owners Jason and Suzanne Schmidt received a $40,000 loan from the city in October 2019. They recently received approval for additional private financing through First Western, which asked the city to subordinate the loan.
The city has routinely granted similar requests in the past.
There is no direct financial impact on the city. The Schmidts agreed to make payments, which were suspended by the city because of COVID-19, and make a lump payment of $3,768 that will reduce their loan balance to $37,589.
Underground storage tank found
Some city residents living near Eighth Avenue will soon receive a letter from the city regarding the unexpected discovery of an underground petroleum storage tank in their neighborhood.
The tank was found this past fall in the street right-of-way during street reconstruction work, according to City Administrator Marty Schultz. He said there wasn’t a record of the tank on any utility maps.
“It appears to have been something left over from light industrial activity in the area decades ago,” Schultz said in a memo to the council.
The city removed the tank and remediated the soils in accordance with Minnesota Pollution Control Agency’s policy and on March 2, it received a letter from MPCA stating that the city managed the soil cleanup in accordance with the guidelines, Schultz said.
A contingency built into the project covered the unforeseen remediation costs. In addition, the city expects to be reimbursed up to 90% for the tank removal and soil disposition costs from the Petrofund administered by the state.
As part of the state rules associated with such tanks, the city will be sending out a letter and a postcard to all residents within 500 feet of the tank. Schultz estimated that a couple dozen or so property owners will receive the mailings.
Recipients will be asked if they have a well, if they have a basement, and if they’ve had any petroleum vapor issues in their basement or crawlspace.
Fire-damaged lots and armory action
Under old and other business at the end of the meeting, the council authorized city staff to contact the owners of the four lots on Broadway and Fifth Avenue that housed buildings that were destroyed by a fire in February 2020 to discuss their future plans.
The businesses included Raapers Eatery and Ale, RM Tattoo, Charlie’s Bazaar, Little Darlings Children’s Boutique, Achieve Wellness and Hidden Treasures Collectibles and Comics. The owners of the lots are Raapers owners Andy and Cammie Rassat, TVW LLC and Wilhouse Properties LLC.
Also under old and other businesses, the council agreed to send a letter to the National Guard expressing the city's willingness to cooperate with the Guard about a new readiness center, known as the armory, and its field maintenance shop.
Improvements to Bellanca Building on hold
The council was poised to accept a bid of $11,796 from Masters Plumbing, Heating and Cooling to install new fixtures in all five bathrooms at the Bellanca building at the Alexandria airport, including new toilets, urinals, sinks and piping, but decided to hold off.
Council member Bill Franzen asked if the improvements would be touchless like the fixtures in other city buildings that were upgraded using federal COVID-19 aid. Airport Manager Kreg Anderson said they would not be.
Bill Thoennes, the city park director, said he had some leftover touchless fixtures that weren't used. The council directed Anderson to work with Thoennes to find out if those fixtures could be used and to rebid the project.
Other plumbing work includes removing old water fountains, insulating water pipes and capping any unused pipes.
The plumbing upgrades are part of a $362,000 renovation the city and the Minnesota Department of Transportation are doing at the Bellanca Building, which was once used to manufacture Bellanca aircraft . The city and state are sharing the costs equally.
The overall project also includes roof repair, demolishing the office area and removing hazardous materials.
The goal of the renovation is to fix the building up in the next few years so it can be rented out to tenants.
The council also approved new lease rates for aviation tenants that will take effect once the renovation project is completed.
The new annual rates, based on square footage, are:
15,000 or more square feet – $2 per square foot.
7,000 to 14,999 square feet – $2.50 per square foot.
3,000 to 6,999 square feet – $3 per square foot.
Less than 3,000 square feet – $5 per square foot.
“With the scope of our potential tenants limited to the aviation industry, the intention of the proposed lease rates is to attract new aviation businesses and/or aviation businesses from outside of Alexandria to lease space,” Anderson said in a memo to the council. “Bringing in additional tenants to our airport will not only help the other businesses at the airport, but the city will also benefit from increased fuel flowage fees, taxes, etc.”
Currently, tenants have been paying $2 per square foot since 2016 and the building expenses break even each year, according to Anderson.
Tenants will have a one-year initial term followed by month-to-month agreements. Flexibility on the duration of the lease will be encouraged, Anderson said. If a tenant wants a longer initial term, the airport will try to fulfill the request, he said.
Tenants must give a 90-day notice if they are ending the lease.
Leases are subject to inflation increases based on the Consumer Price Index.
Aviation companies must be licensed by MnDOT Aeronautics to qualify for lease rates.
Meeting set to talk about deer hunt in city limits
The council set a date to talk about the possibility of allowing a special deer hunt in the city limits.
The public input session will be the first item on the agenda during the council’s regular meeting on Monday, April 26, and is expected to start at 7:15 p.m.
Mayor Bobbie Osterberg and City Council members have been studying the possibility since Dec. 14 and have gathered information from other cities that have had deer hunts and from the Minnesota Department of Natural Resources.
Council members have been receiving comments from residents that the deer population within the city appears to be rising, raising the risk of car crashes. A hunt would reduce the number of deer.
The meeting is the next step in the process.