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BSU, city sign agreement; Will team up for Bemidji events center

Mayor Richard Lehmann was on one side, BSU President Jon Quistgaard on the other. In the middle was a memorandum of understanding - and they both were signing it.

It was a scene that, as recently as last week, seemed unlikely to happen.

"This was in the best interest of the city and in the best interest of the university," Quistgaard said after Thursday night's work session.

The City Council and Bemidji State University president agreed to a revised memorandum that commits BSU hockey to being the anchor tenant of the events center. The council vote was 5-1 as Councilor Roger Hellquist was opposed (Councilor Jerry Downs was unable to attend the meeting).

In a second action, the City Council voted unanimously for a funding plan to request from the Legislature $25 million in state bonding and a 30-year extension of its half-cent sales tax.

The events center no longer includes plans for a second sheet of ice, nor will it host BSU practices, offices or training facilities. However, members of the planning team told the City Council that they believe the facility could include the events center/hockey arena and convention center.

Neither decision was an easy one for council members. At one point, in fact, councilors were deadlocked and poised to table all events center decisions to Monday's work session, when Downs could be in attendance.

Erickson actually made a statement explaining her reasons for opposing the events center, referring to the $3 million granted to the city for the purpose of considering whether an events center was the right fit for Bemidji.

"The purpose of those dollars was to investigate the potential of this city to build this facility," she said.

"I believe the sacrifice is too great."

Councilor Barb Meuers explained that the process literally made her understand how a hockey puck might feel, going back and forth, back and forth. She said she believed the council had made its decision last week and then found out Thursday that things had again changed.

"I'm really feeling totally confused," Meuers said. "This whole issue has worn me out."

Enter Cliff Tweedale, the executive director of the Headwaters Regional Development Commission. Tweedale urged the City Council to consider the project as a whole.

Rejecting concerns that the events center would be a burden on taxpayers, he explained the following:

Construction of the entire events center complex (including the second sheet of ice) was set at $76 million; minus the $9 million that would be needed to build the second sheet of ice, the council was now looking at a $67 million facility.

So who pays that? Tweedale explained that $25 million would come from bonding, at least that much would come from the half-cent sales tax, and other funds would come from a partnership with a hotel developer.

According to Tweedale, 87 cents of every dollar raised through the sales tax comes from someone other than a city resident. The state bonding dollars come from the taxpayers of Minnesota, of which Beltrami County residents make up one-third of 1 percent.

Summing up, he said anywhere from 92 to 94 cents of every dollar of the $67 million would come from a source other than a city taxpayer.

But, if the city chooses to move forward with a $50 million facility and not partner with BSU, the city would likely lost $25 million in bonding dollars, Tweedale said. Also, it would stand a "less good chance" of receiving authorization to extend the sales tax and a "less good chance" of partnering with a hotel developer.

Under which scenario - the $50 million facility or the $67 million facility - would the city taxpayer pay more, Tweedale asked; he then answered his own question: "Neither."

However, because the larger facility has the potential of drawing in outside visitors who would make an economic impact on the city, it would actually be more beneficial for city residents to have the council build the larger complex.

"I understand the paradox," he said. "You're better off in the long-term if you build the bigger facility."

Tweedale's comments affected Meuers, who immediately thanked him for putting things in perspective for her. They also seemed to reach Erickson, who said she could support the signing of the memorandum of understanding, as long as it did not specify a dollar amount.

Bill Krueger, the city's consultant from Conventions, Sports and Leisure, told the council that it already lost some ability to draw major trade shows and conventions to Bemidji by cutting out the second sheet of ice, which could have doubled as additional convention space.

City Manager John Chattin, who supported the partnership with BSU, told the City Council that the memorandum of understanding, even signed, was worthless unless the council removed the $50 million cap on the facility.

With just $50 million, the council would probably be able to just fund the construction of an events center/hockey arena, he said.

"You will not have convention facilities," Chattin said. "I believe in the long term, if the city adopts the memorandum of understanding, it would be good for all involved, but only if you intend to lift the cap.

"If you're not going to lift the cap, then don't sign the memorandum."

During discussion of what would be presented to the Legislature, some councilors voiced support of a 30-year sales tax to generate $40 million in funding for the construction of the events center. That, combined with the $25 million in bonding dollars, would likely cover the bulk of the cost for the facility.

But, Erickson and Hellquist both voiced concerns with the integrity of the figures being presented for discussion.

The council ultimately voted in favor of a 30-year sales tax and did not specify an amount that would go toward construction costs.

What changed?

Quistgaard told the council that he was ready to sign the memorandum, but was unable to elaborate on what prompted him to change his mind from last week.

Just last Thursday, Quistgaard told the City Council that he was unable to commit to the events center because he did not have assurance that the men's hockey team would have a home conference.

He told the council that something has changed in the hockey world, but apologized for being unable to share the details with the public.

He got the information in confidence and is unable to make any announcements, Quistgaard explained.

"It's huge to me," he said, explaining why he felt more confident about the future of hockey.

"I'm confident now with the information I have on the hockey side ... I have reason to hope," he said.

Quistgaard, who had hoped to gain admittance for the men's hockey team into the Western Collegiate Hockey Association, said he was unable to say whether the development was related to the WCHA or BSU's current conference, the College Hockey America conference.

He still plans to make a presentation Sunday to the WCHA board, during which he will ask again for admittance.

Having the signed memorandum of understanding with the city boosts his confidence about the presentation, Quistgaard said following Thursday's meeting.

"To be able to say we're moving forward together certainly strengthens our position," Quistgaard said.