BEMIDJI -- The Bemidji City Council is partnering with Sanford Health and the community's economic development organization to study a dormant lot of land.
During a special meeting Monday, the council voted to enter into an agreement and a memorandum of understanding to initiate a site analysis of the Rail Corridor. The section of land is located south of the city's downtown district, extending from the Mississippi River to Park Avenue Northwest.
Bordered by existing railroad lines, the area was once an industrial site. Before the city purchased the property in 2003 for utility work, the corridor had been the home to a coal gasification plant and gas stations.
Over the last decade, developers have expressed interest in building up the area, with ideas ranging from homes to businesses. With the interest from developers, the council contracted with the Saint Paul Port Authority in fall 2017 to study the feasibility of building in the area.
After initial analysis of the area, in 2019 the council opted to create a tax increment financing, or TIF, district for the area. TIF districts are used by Minnesota cities to create a district where additional property taxes are generated by new real estate. Those dollars are then used to pay off the expenses of developing the land.
The council also sought grants from the state Department of Employment and Economic Development and Pollution Control Agency to assist in cleanup, as the Saint Paul Port Authority found the ground to be contaminated.
The city was unsuccessful in getting grant funding in 2020, though. Because of this, and the coronavirus pandemic, the city opted to delay work on the corridor for the year.
However, in late 2020 and early 2021, the council was approached by Sanford Health of Northern Minnesota and Greater Bemidji Economic Development about a new proposal for the corridor.
Both entities expressed interest in having a multi-functional wellness facility. Ideas in the proposal included space for basketball and volleyball courts, a pool, two ice rinks, and a workout center.
Because the wellness center project would be different than what's previously been proposed, more site work is needed by the Saint Paul Port Authority. The new effort by the organization would do the following:
- Define the roles of the city and its partners.
- Conduct a physical assessment of the site.
- Determine the economic impact of a wellness center.
- Find the feasibility of such a project in the location.
- Calculate the environmental cleanup costs.
- Conduct additional geotechnical and environmental analysis.
- Compile a clean-up plan for the MPCA.
- Draft an engineering analysis for DEED.
In total, the work is estimated at $303,310. As part of the agreement and memorandum, the cost will be split, with half covered by the city and the other half by Sanford and Greater Bemidji.
On Monday, the council approved the agreement and memorandum in a 4-2 vote. In favor of the measure was Mayor Jorge Prince, as well as Councilmembers Ron Johnson, Josh Peterson and Audrey Thayer.
Voting against the measure were Councilmembers Daniel Jourdain and Emelie Rivera.
"It's going to cost the taxpayers $150,000 just to understand what is going down in the area," Jourdain said. "I want the public to weigh in on this first. Instead, I'm put in this position where we have to spend $150,000 first, and then figure out what's going to be happening. Unknown costs will still come. For something of this magnitude, I'd like the public to be involved."
In his comments, Johnson called the proposal a "game-changer."
"I've been on this council since we bought it and there have been proposed developments," Johnson said. "But, I think this is a once in a lifetime chance to do it. The Union Square area downtown used to be a junkyard, too. So blighted areas can be turned around and help the city."
"We can clean up a contaminated site and turn it into something good for the community," Prince said. "There's a lot of things to figure out with this, but I think for me as an elected official, with this much return on investment, it's hard to have a no on this."
As part of the wellness center proposal, Sanford is willing to invest $10 million in the project. It's the second proposal of its kind to come from the health provider.
In 2017, Sanford and Greater Bemidji proposed a $27 million, 175,000 square-foot facility on the health provider's campus in the northern area of the city. The proposal was the initial project Sanford wanted to use its $10 million community investment on.
However, the project was later shelved in 2018, as the city of Bemidji expressed hesitancy on the proponents' idea to use a hospitality tax to fund a sports commission, which would have been tasked with bringing in events to generate revenue.
Should the new proposal come to fruition, the expectation is for a private entity to be the owner, while Sanford would be the lesser and operator.
The full council meeting can be viewed on the city's website.