Financial strategies planned to not affect taxpayers
The event center project team, which consists of representatives from city staff, Headwaters Regional Development Commission and the design team, has developed funding strategies for the events center that do not rely on taxpayer dollars.
No action has specifically been taken on the plans to date; however, the City Council has reviewed and discussed them.
The full project, including the second sheet, was estimated at $75.5 for construction costs.
The project team had proposed to pay for the construction using $25 million in legislative bonding dollars, $40 million from the half-cent sales tax, $2 million through local investments/grants, $5.5 million through the use of tax increment financing, and $3 million through a partnership with a hotel developer/convention center partner.
The project team also had considered ways to fund any operation and maintenance deficit of the facility, which has been estimated to range from $125,000 to $300,000 per year (these figures have not been adjusted for the exclusion of the second sheet of ice).
In order to not use property taxes to fund the O/M costs, the project team proposed the following:
-- Jointly develop the old fairgrounds site with Beltrami County and split the lease revenue ($100,000 to $150,000 per year).
-- Sell the naming rights of the events center ($75,000 to $150,000 per year).
-- Institute a parking fee for major events ($15,000 to $25,000 per year).
-- Increase efficiencies in city operations ($150,000 to $300,000 per year).
The City Council has decided to purchase 130 acres along the south shore of Lake Bemidji and is selling $14.5 million in bonds to do so (the events center is proposed to be located in the middle of the property).
To recoup those dollars, the project team is planning to sell land to the Minnesota Department of Natural Resources for $4 million, sell land to commercial developers for $9.5 million, and sell land for housing for $1 million.
Infrastructure costs are expected to total about $9.8 million, of which $7.8 million are improvements.
The project team expects to pay for the work as follows: $3 million from special assessment bonds, $800,000 from storm water funds, $300,000 from sanitary sewer, a $426,000 Brownfield grant, $545,000 from the parks and trails sales tax and $4.8 million through tax increment financing.