Does the city of Loretto want to take a risk by getting started now on downtown redevelopment or would the city rather wait until the real estate market has had a solid recovery?
Financial Advisor Rebecca Kurtz, of Ehlers and Associates, asked the Loretto City Council these questions at its regular monthly meeting, Tuesday, March 12. Then she gave City Councilors a financial strategy for getting started now. She also provided information on how redeveloping five target parcels on County Road 19 would affect Loretto’s tax base and how the city could finance redevelopment costs.
At the meeting, the City Council also took up other business. Here are some meeting highlights.
Financial Advisor Kurtz has been working with Loretto’s Redevelopment Advisory Committee (RAC) on preparing a proposal for redeveloping a strip of land along County Road 19 that starts on the north side of West Railway Street and heads north to St. Peter Street. She and RAC member Clark Lohr talked about what could come next, now that a market study, property appraisals and concept have been accomplished.
Kurtz said that RAC is recommending a redevelopment project with commercial space at street level and 12 units of rental housing situated above the commercial units.
The City Council will make the final decision about a redevelopment plan for the five parcels. Councilors left the meeting knowing they have lots of information to sift through.
Meanwhile, Lohr recommended that Loretto take an important step for getting started now — setting up an interfund loan. Kurtz said this tactic would help Loretto pay for redevelopment costs that come in prior to setting up a funding stream, such as a tax increment financing (TIF) district.
Prior to Kurtz’s presentation, Auditor Mark Ebensteiner, of Abdo Eick & Meyers, provided a clue as to a potential starting point for an interfund loan. He said Loretto’s TIF District No. 1 (the West Railway Street area) is doing well financially. Loretto could pay off all or part of the debt for the TIF district in 2013. Paying off all the debt might make possible a transfer from the TIF debt fund.
Kurtz said an interfund loan from TIF district No. 1 would have to wait until the state legislature passes legislation making this possible. A bill is in the works.
RAC member Lohr said the interfund loan is his first priority for redevelopment. His second priority is Loretto’s purchase of the parcel on the northwest corner of West Railway and County Road 19 (150 N. Medina St.) He called this lot the most attractive parcel in the targeted area and the key to successful redevelopment.
However, Lohr first wanted to know what risk Loretto would be taking if it purchased the property. For this reason, he recommended that Loretto do phase one and phase two environmental site assessments (ESAs) first.
Following Lohr’s recommendation, the City Council approved $2,100 for a phase one ESA. This study is a first requirement for Loretto applying for redevelopment grants. The study will be “noninvasive” and take three to four weeks. Investigators will look at previous land uses for the five properties to identify whether any of the uses might have resulted in soil contamination. Then investigators in a phase two ESA would use soil borings to search for possible contaminants. Any required environmental cleanup would depend upon the proposed future land use for the property.
Lohr said he did not want Loretto to buy 150 N. Medina St. and then discover that a large cleanup bill was on the horizon. Soil cleanup would be funded differently than redevelopment. A phase two ESA would cost $16,000 to $25,000. Lohr expected to start work on grant applications for the phase two assessment within two weeks.
City Clerk Travis Rosin said Loretto has $8,000 coming from last’s year’s redevelopment grant that could pay for the phase one ESA.
The City Council told Herb Koch Jr. and his fiancé Jessie Converse that they would like to work with them on a contract for using the Loretto ball fields for their wedding reception in September. However, Loretto first needs to develop a policy for the city renting the ball fields to the public for this type of event. The policy would include provisions for liability insurance, security and repair of any damages to the ball fields.
Converse said she and Koch wanted to celebrate their wedding on the ball fields, because this is where they first met. The couple needed to know whether or not the city would rent the ball fields for their reception, so they could make plans either in Loretto or elsewhere.
The City Council committed to approving a ball field rental policy at its April 9 meeting.
NEW STREET SIGNS
Public Works Director Jeff Leuer said that city street signs are falling into disrepair — especially on the south side of Loretto. A federal law mandates that street signs have six inch tall letters on nine inch plates. He recommended that Loretto replace street signs over three years at a total cost of $3,423, starting this year with the area south of the railroad tracks.
The City Council approved his plan and the funds to go with it.
The City Council also:
APPROVED Mary Schneider as treasurer for the city of Loretto.
ACCEPTED the audit report for Loretto’s 2012 city finances. Auditors Abdo Eick & Meyers gave Loretto an unqualified clean opinion.
DISCUSSED using unspent funds from Loretto Fun Fest for hanging baskets and/or planters for beautifying the city. City staff will look into a plan emphasizing the County Road 19 area.
AUTHORIZED $2,799 to pay for cleaning Loretto’s city water reservoir.