Detroit Lakes could be adding 13 more lots to the North Industrial Park on Cormorant Avenue with a proposed $2.5 million street and utility project that was discussed at the city's development authority meeting on Feb. 1.
The project would add street and utility hook ups to the remaining lots and run from Hawk Street to Terry Street along Cormorant Avenue, possibly including a link to nearby Richwood Road near Heron Street.
"(The Richwood Road connection) is something we would need to discuss," said Larry Remmen, community development director for Detroit Lakes, during the meeting. "It does provide another ingress into the industrial park off of Richwood Road, but it doesn't really service any of the lots that we have, so we could live without it, because there are accesses, there would be three accesses, Terry Street, Hawk Street and Cormorant Avenue."
He added that the Richwood Road connection adds $250,000 to the project cost.
Remmen also said the expansion would complete the North Industrial Park in terms of available lots for purchase.
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City staff are also looking to supplement the cost of the project by applying for a federal EDA grant through the U.S. Economic Development Administration. The city hopes to get an 80% project cost match from the grant and will fund the remainder, up to $500,000, through the development authority's fund.
Remmen said the grant would come from outstanding American Rescue Plan Act funding and said he expects the project applications to be competitive for the federal funds.
The city would be responsible for the whole street and utility project cost up front, but would be able to recoup $2.4 million through special assessments on the property purchasers as the lots are sold.
Development Authority increases industrial park lot prices 20%
Also, the Detroit Lakes Development Authority increased the lots prices for their industrial park lots by 20% during the Feb. 1 meeting.
The lot prices hadn't been adjusted since 2011, said Remmen, and new price increases would keep pace with the rising special assessment costs associated with hooking up water and sewer systems.
"If you look at the North Industrial Park property values and how they compare with the county's estimated market values, with the 20% increase we're pretty close on most of the lots," said Remmen.
The price on a 1.25-acre lot in the North Industrial Park on Cormorant Avenue will increase from $40,162 to $48,014. The price on a 2.25-acre parcel increased from $56,250 to $67,500.
In the Tower Road Industrial Park, the cost of a 2-acre lot increased from $65,732 to $78,878.
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Phil Hansen, chairman of Lakeview Township and member of the city's development authority, was the only member of the development authority to vote against the lot price increase.
"We are a development authority and we're trying to get development in there, we don't want it to be so cost restrictive, but we do want to take care of our infrastructure costs with putting 10-ton roads in there and that all has cost," said Hansen, during the meeting. "I think pretty much everyone who has come in to buy a lot to build something, there has been some negotiation."
Remmen agreed with Hansen that the nature of acquiring the lots is to get the best deal possible and most of the time that requires negotiation.
"I don't think we're under on this stuff," said Ron Zeman, alderman for Ward One. "We're probably getting it right with the costs of what's been happening the last couple years, along with the extra expense of infrastructure going in, I think we're in a good spot on it."
The new lot prices did not need to be approved by the full city council since the council previously delegated authority to the development authority to set their own prices on parcels the group controls.
