Tuesday evening, during the regular Detroit Lakes City Council meeting, the Community Development Committee will ask for approval of a letter of intent with DLM Downtown Properties LLC for the redevelopment of the crescent area.
The process has been in motion for about a year, with plenty of bumps along the way. There may be one more Tuesday night. The vote to accept the letter of intent and move forward on the funding of the public improvements is iffy.
Throughout discussions during Detroit Lakes Development Authority and special council meetings, there is a fairly clear division among aldermen. It was no different during the Community Development Committee meeting Thursday afternoon.
"There has been a lot of rationale thrown around about why we should or shouldn't do it now," City Administrator Bob Louiseau said, but it comes down to control of the businesses coming in.
Two of the biggest bumps have been the cost of the land versus the cost the city has invested, and the amount of control the city will have over what tenants rent space in the development.
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The price on the land is at $300,000, and the city has invested about $1 million in infrastructure, including roads, utilities, etc.
The city will also be redesigning the public parking lot behind Norby's and be giving its turbine building a facelift to make the area "more pedestrian and environmentally friendly," Louiseau said.
As for the tenants, DLM has agreed to exercise a best effort to get new tenants and at least regionally recognized tenants, not just relocations from Detroit Lakes or office space. But some aldermen believe that the city should get a say in who can go in the spots.
The only relocated business thus far is Miguels, and owner Mike Danner will be an investor in the project as well. The relocation of Miguels is included in the RDG consulting plan, making room for a bigger "pad" site for another development.
"In my personal opinion, it would serve the community better now rather than waiting," Louiseau said.
Alderman Ron Zeman disagreed, stating the city is "having a fire sale" on the land and thinks the city should have control over who is coming into the development.
Alderman Jim Anderson said the letter of intent stated DLM would make a best effort to get new businesses, specifically two that are nationally or regionally known.
Zeman said that DLM must not be confident enough since they won't give the city the ability to veto any incoming businesses.
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Anderson countered with what developer would give that control away?
"It's almost like we're desperate, and I don't think we are at this point," Zeman said.
"We know the developer is capable of putting together a quality development. We could wait two years and who knows?" Anderson said, adding that the development wouldn't be any cheaper five years down the road.
Louiseau also pointed out that the rent on the development would be significantly higher than most downtown businesses could afford, so relocations wouldn't be an issue.
If the agreement goes through, DLM would be purchasing the property for about $7 per square foot. That is about average for land in the Wal-Mart area, Louiseau said. The Menards sale, though, figured out to about 53 cents per square foot.
"It's all relative, because they bought 25 acres," he said.
The crescent area redevelopment, located from Holmes Street to Washington Avenue, is 42,000 square feet, about 30,000 square feet of that buildable. DLM estimated in its letter of intent for rent to be about $14 per square foot.
"Price is dictated by what any developer can get for rent," said Mayor Matt Brenk, who is in favor of the developer and moving forward with the project. He added that even if the city decided to wait on developing the area, rent wouldn't be any cheaper.
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"There are good arguments on both sides, I'm not going to deny that," Louiseau said.
As chair of the CDC, Alderman Dave Aune said that Tuesday he will make a motion to "move ahead and take advantage of the opportunity in front of us."
