Detroit Lakes seeks half-cent sales tax to raise up to $17.3 million for new Pavilion
The Detroit Lakes City Council acted in part to meet a Jan. 31 deadline and keep its options open, and local voters must approve the new tax.
DETROIT LAKES — The Detroit Lakes City Council on Thursday approved the first step towards a plan that would collect up to $17.3 million in sales taxes over 12 years to demolish the historic Pavilion and replace it with a larger building more suitable for year-round use.
Most people at an August open house held by the city at the Pavilion seemed to support a new building, said Vice Mayor Ron Zeman. “We’ve been in that old (Pavilion) building since 1915,” he added. “We have people moving in, this is a growing city – there are a lot of good reasons we should be doing this project.”
With Alderman Aaron Dallmann casting the only ‘no’ vote, the council approved a resolution asking for legislative authority to levy a half-cent sales tax to pay for the project.
The tax would replace a similar tax expected to expire this year that was used to pay for the new police station on Summit Avenue.
“We’re paying the police department off much quicker than expected,” said City Administrator Kelcey Klemm.
If the Legislature gives its approval, Detroit Lakes residents will then vote on the new sales tax in a referendum that could possibly be held this November, but will more likely be held in November of 2024, Klemm said.
The council acted Thursday in order to meet a Jan. 31 deadline for the local option sales tax to be included in the state tax bill this legislative session, he said.
“There may not be a tax bill next year,” Klemm added, which would put the city out of luck if it waited. If there is a tax bill next year, the city may add an arena improvement project to its tax request. That would also require local voter approval before going into effect.
So the council acted in part to keep its options open.
“It's going to look like, by passing this resolution, you’re going to be making some kind of affirmative movement on the Pavilion project,” Klemm said. “This is (just) a step along the way.”
Before the vote, Alderman Jaimie Deraney clarified that the proposal can be reworked if necessary, and that the council is not required to bring the full $17 million request to taxpayers.
“Even if they give you authority, you don’t have to do it,” said City Attorney Charlie Ramstad.
“In no way is this saying ‘build the building,’” said Alderman Shaun Carlson. “It’s saying ‘approve the sales tax, so we can have the conversation with our citizens.’”
Prior to the vote, the resolution came in for some criticism from Dallmann and from the sole visitor, Clayton Schott of Detroit Lakes.
“I don’t see a benefit for the average resident in Detroit Lakes for this project,” Dallmann said.
He believes the city would do better to put the money into creating more daycare – that would help businesses looking for employees, and would help working families that can’t find daycare, he said. “We should be taking care of our own people, that’s what I say.”
“I grew up here,” he added. “This (potential two-story glass-walled pavilion) does not look like a Pavilion. It’s another convention center. It will be competing with the Holiday Inn. I’m in sales my whole life, and I don’t know how you can sell this project to the people of Detroit Lakes.”
Zeman responded that Gov. Tim Walz is making daycare and housing for workers two of his top priorities, and the city should be able to tap into new state funding to help solve those problems.
“I’m opposed to adding another sales tax in Detroit Lakes,” Schott told the council. “I’ve talked to a lot of people in town – they're not impressed with $7.1 million in city hall remodeling. Common people are struggling with inflation. They are seeing their utility rates go up, and that it is being used for that remodeling project … I think you better take a look at your spending habits. Most people are not excited about a new pavilion, not at those kind of dollars.”
In the resolution, the city partly spells out its reasons for the pavilion-replacement project:
The current Detroit Lakes Pavilion was built in 1915 to replace the original pavilion built in 1897.
It lies on the shoreline of Little Detroit Lake and is connected to the city's mile- long public beach and City Park. It's a landmark in the downtown lakefront area of Detroit Lakes and has been the host of many public and private gatherings, concerts, dances, and events over the years.
The building itself is in deteriorating condition and is in desperate need of help. The most recent remodel was done in 2006, but those improvements have now outlived their useful life.
The local option sales tax would fund construction of a new year-round facility that would continue the legacy of public and private events while expanding the availability of the facility and its amenities.
Along with the new pavilion building there would be new parking, green space/ice rink, shelter/bath house, playground, and splash pad added to this area.
Out of the pavilion rentals during 2022, half were rentals by people who were not Detroit Lakes residents, and certainly many of the guests that visit the various events are non-residents as well.
The new local option sales tax request will now go to the Legislature for consideration.