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City contemplating local sales tax, food/bev tax

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City contemplating local sales tax, food/bev tax
Detroit Lakes Minnesota 511 Washington Avenue 56501

The City of Detroit Lakes is moving ahead on establishing a food/beverage/entertainment tax, and preparing to ask for a local option sales tax when the state lifts the moratorium at the end of 2010.

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City aldermen, staff and the mayor met Tuesday afternoon to discuss some of the 2010 and 2011 projects in the city and to discuss potential revenue sources. With the threat of losing $334,000 in local government aid this year, the city is looking to find other revenue sources than raising property taxes.

Although there was no official action taken Tuesday, all those present agreed to move forward.

"We're not going to get any more money from St. Paul," Alderman GL Tucker said. "We've got to take care of ourselves."

Mayor Matt Brenk said he'd like to see the taxes in place because there are lots of people coming into the city to use its resources, and this would be a way to collect from all, rather than just the residents.

"It's not fair to put all this burden on the local taxpayers," he said.

A half cent food/beverage/entertainment tax would generate about $110,000 annually, City Finance Officer Lou Guzek said. The city would purchase bonds in whatever amount and the annual funds would go to pay off the bonds.

With a sales tax or food and beverage tax, there needs to be something specific the money is planned for. Although that's not decided at this point, one major thing brought up was to control the flowering rush on the lakes.

Long Bridge Grill and Bar owner Brian Johnson said he wasn't in favor of the food and beverage tax because it's a "value added tax," meaning the bars would eat the tax because they wouldn't charge a customer $4.33 instead of an even $4 for a beer. Also, establishments were just hit at the first of the year with a doubled liquor license fee, he added.

Kris Street crossing

Work at the Kris Street crossing is completed for the Whistle Free Zone, and the city sent out its required notice Tuesday.

Community Development Director Larry Remmen said 21 days from now -- March 17 at 12:01 a.m. -- the train whistles should no longer sound in Detroit Lakes on the Burlington Northern Santa Fe rail corridor from the County Road 54 crossing to just before Airport Road crossing.

Crescent district

"Do we want to aggressively move forward on this," Brenk asked of the crescent redevelopment area. "I personally think it's a good time to move forward and move forward aggressively."

When the city asked for proposals on the development, they received two --one that was discounted because it didn't meet the standards the city requested. The second being from DLM, associated with Goldmark Schlossman, which started West Acres.

Alderman Ron Zeman said maybe the city should hold off on the development until the economy is better and be more concerned with the downtown, which has several empty buildings or office space instead of retail.

In DLM's proposal, the company says Miguels would be the only relocated property and the rest would be new to the area.

The property is proposed to be developed in two phases, the first being north of Frazee Street. The estimated cost for infrastructure and streets is $1.3 million, which is small for the large portion of land.

"There really isn't that much sanitary sewer costs in that phase, taking a big crunch off that," City Engineer Jon Pratt said.

Zeman stressed again that he would like to see the city take it's time on the project.

"The last thing we need is another building empty in a few years," he said.

"Trying to time the bottom" of the economy is impossible, Alderman Jim Anderson said.

"Step on the gas a little and get going," Alderman Walt Tollefson said.

North Washington Avenue

Tying into the county's project on North Washington Avenue, the city is paying extra to have the infrastructure replaced -- which will be assessed to property owners along the street -- and streetscape designs -- which will be a citywide levy.

The county is paying about $600,000 for the street reconstruction, the city is paying $342,000 for construction (the assessable portion) and $338,000 for the enhancements (the citywide levy).

While the city hasn't made any final decisions on what color to make the concrete, at the March meeting it plans to approve the proposal so the county can get the project out for bids.

The colors and design will eventually be carried through to downtown as well.

Park Drive

When RDG consultants came up with a plan for the city, it included the West Lake Drive area. It also included a street one block north of West Lake Drive from Washington Avenue to Rossman Avenue that would be used as a thoroughfare and take some pressure off West Lake Drive. It would also tie into the existing Peoples Street.

There would be several houses the city would have to acquire along the way, but the project would create more parking and a better buffer between the residential and business district.

"Someday, but due to economic problems, I don't see how financially it could be done," Heltemes said, and the others in attendance agreed.

"It is a good idea to do eventually," Zeman said.

Parking at Peoples Park

With the ongoing requests from Zorbaz to build on, and the ongoing denials from the city due to a parking shortage, the city is helping with the quest for more spaces.

Pratt offered two options for the parking issue. One would provide 54 spaces - or 45 if a fence and greenery was installed to help with screening from the neighborhood - and cost about $150,000. It would be located between Minnesota Avenue and Summit Avenue behind the condos at the old water treatment site. This lot, they agreed, would serve the beach better.

The second option would be expanding Phinney Street, which runs by Peoples Park. It would provide 75 parking spaces for about the same cost as the first option. This one would serve those using Peoples Park and Zorbaz better.

While all agreed the Phinney Avenue option was more feasible, they also agreed they'd like to see both lots built in the future.

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