Case made for armory, industrial park
NEW ULM – The Reinvest New Ulm (RENU) Committee heard presentations on expansion of an industrial park and a land purchase for a new armory on Tuesday.
The projects are two of the 13 proposals that are seeking financing through the renewal of the city’s half-cent sales tax, which expires in 2020.
The Airport Industrial Park proposal was presented by Community Development Director David Schnobrich and Brian Tohal from the New Ulm Economic Development Corporation (NUEDC).
The proposal called for the purchase of 22 acres of property on the west edge of the Airport Industrial Park behind Wal-Mart. The project would include the installation of roads, underground utilities and a storm water retention pond. The cost is estimated at $2.7 million.
“When you look at New Ulm, our development opportunities are limited,” said Schnobrich.
Describing New Ulm as a triangle, with the Minnesota and Cottonwood rivers bordering two sides, Schnobrich said that expansion was only realistic on the airport side and space would be needed in the near future.
Brain Tohal said that New Ulm recently lost a potential industrial prospect that would have brought an estimated 140 jobs. New Ulm did not make the first cut for consideration due to the limited space in the city’s industrial park.
Tohal added that future industrial prospects were likely to turn down New Ulm as an option for similar reasons. New Ulm cannot currently compete with other cities in South Central Minnesota, Tohal said.
Historically, NUEDC has been the developer of industrial parks, but with the land prices estimated at $50,500 per acre, Tohal said the NUEDC could not cover these costs. Without the local option sales tax, the city would need to depend on the taxpayers to cover cost of a new industrial park.
The benefits of using the sales tax to fund this project is the potential for the creation of jobs in New Ulm. New jobs would circulate more money in the community as well as the collection of real estate taxes and additional property taxes.
Purchase of 30
City Manager Brian Gramentz gave a presentation on the proposal to use the sales tax to purchase 30 acres for the Minnesota Army National Guard project.
Gramentz provided a history of the armory and Field Maintenance Shop.
The Battalion Headquarters Armory is currently located on North Broadway but is listed as deficient. The facility was constructed in 1914 and is unable to operate as the National Guard requires.
The Field Maintenance Shop located on South Washington also no longer meets requirements. These conditions led the Minnesota National Guard to consider replacing both facilities.
The city has identified a 30-acre parcel of land that fits the Guard’s needs. The site is located next to the airport near the Menards roundabout.
The city has negotiated an agreement to purchase land at $36,000 per acre or $1.1 million. The Minnesota National Guard is planning to build a $28 million facility on the site and will likely remain in New Ulm for the foreseeable future.
Without financing this purchase with the sales tax, the City will need to fund it through the General Fund and taxpayers. Using monies from the General Fund could put the City at risk for a lower bond rating, Gramentz said. A lower bond rating would likely raise New Ulm’s interest rate payments.
At this time the Armory has 14 full-time personnel and 102 part-time personnel. After a new Armory is constructed, there would be 154 part-time personnel at the New Ulm location.
The Field Maintenance Shop currently has seven full-time staff. Creation of a new shop would increase staff to 12 full- time workers.
The part-timers – National Guard members – coming to New Ulm for drills have a positive impact on the city’s economy in terms of gas, food and entertainment.
The construction of the new Armory and Field Maintenance Shop could also net local companies additional contracting bids. “We spend a million to buy this land, the State of Minnesota is going to spend $28 million,” said Gramentz. “That’s the return.”
The RENU Committee will continue hearing presentation of sales tax proposed projects at 6:30 p.m., Tuesday, April 19. The Park and Rec Department will presents its plans for Civic Center expansion, Johnson Park grandstand renovations and Hermann Heights Park improvements.