East Grand Forks is set to consider the first of many steps toward a series of arena renovations and the sales tax that would help pay for them.
City Council members are scheduled to vote next week on an agreement between the city and JLG Architects for “pre-design” on the arena upgrades and “pre-referendum” services for a presumptive vote on a sales tax. The contract would cost the city $60,000 if the referendum succeeds and $0 if it fails, according to a draft of it supplied to City Council members for a Tuesday evening meeting at which they made no binding decision.
The city commissioned the firm to consider ways in which the city could fix up the aging VFW Memorial Arena and East Grand Forks Civic Center, and its consultants ultimately recommended a $24 million plan to add a second sheet of ice at the center, turn the VFW into an all-season fieldhouse, and fix a series of “deficiencies” they noted, such as subpar parking lots. The upgrades could mean lower day-to-day costs and sidestep the financial problems presented by a soon-to-be-discontinued refrigerant, R-22, that wouldn’t be used in the upgraded Civic Center.
If city leaders ink the agreement, JLG staff would put together an “initial program document” that includes site diagrams and a preliminary budget for the project, according to the contract as presented to council members at a Tuesday work session. The company would also compare sales tax rates in comparable cities, organize “stakeholder” meetings and community forums, and conduct a community survey.
The city is gauging residents’ appetite for the arena idea, or any others on a $32 million slate of other potential parks and rec-minded improvements across East Grand Forks. Proceeds from a sales tax could help pay for any of them. Ultimately, the Minnesota Legislature and East Grand Forks voters would both need to approve a new sales tax.
Parks and Recreation Superintendent Reid Huttunen told council members that the general sentiment he picked up thus far from residents’ responses was that they are uninterested in higher property taxes, but are OK with putting a new sales tax up for a vote. Some wondered if the architects’ proposal for the center and arena was bold enough -- “a fourth (sheet of ice) has been mentioned, a fifth has been mentioned,” Huttunen said -- and others, he said, hoped the revamped buildings would feel more like community centers than ice rinks.
The $24 million price tag for the renovations is a placeholder, JLG staff said last month, and city leaders could opt for only a portion of the recommendations that push the cost that high. Huttunen said replacing the R-22-based systems and parking lots at the center and the arena would cost an estimated $7 million, and doing that plus fixing the two facilities’ manifold problems -- outdated electrics and a lack of Americans with Disabilities Act accommodations among them -- would cost $12 million to $14 million.
City leaders have also tossed around ways beyond a new sales tax to fund their tentative plans for the center and arena, such as selling the naming rights to one of their facilities or soliciting private donations. City staff said East Grand Forks could also seek money from a future bonding bill.
The arenas aren’t the only projects East Grand Forks staff and officials are eyeing: a $2.5 million plan would add trails and a new boat access at LaFave Park; another $2.5 million would fix up some of the city’s baseball and softball fields; and $2 million would take care of long-term maintenance issues on the city’s Greenway trails.
“We haven’t made substantial improvements to our ballparks in, for sure, the last 30 years. Our boat ramp is over 30 years old with minimal to no improvements. Our Greenway trails we know are going to need money over the course of the next few years,” Huttunen said. “Is the sales tax an option to fund some of these projects and, if so, at what scope? At what magnitude do we want to try to further the community and its facilities that we have?”
Council member Dale Helms worried that an expensive new arena could end up being a financial millstone around the city’s neck.
“We can spend lots of money to build things, but we still have got to take care of it down the road,” he said Tuesday. “Look at Thief River (Falls): They were tickled pink to get their Ralph (Engelstad) Arena up there. After they got it, now they’re upset, now they don’t know what to do with it because they can’t maintain it, they can’t keep it up. They can’t do it. They’re losing money on it all the time. I understand arenas aren’t maybe made to make money, but we can’t keep taxing our people to death in East Grand Forks.”
Council member Clarence Vetter argued that the city needs amenities, such as ice rinks, for families.
“To bring them up to speed, you’re going to have to spend 7 to 14 million dollars, and why not spend another 10 million and get a new rink and have better amenities for our citizens?” Vetter said to Helms. “The sales tax is just one option for funding this whole thing.”
Marc DeMers, another Council member, said the city, if it’s going to ask voters to approve a project, should make a statement that draws people to town.
“Make it something that we can be proud of. Make it something that people come here and say, ‘yep, East Grand Forks is doing it right,’” he said.
DeMers said he expects an upcoming study by Grand Forks and East Grand Forks’ combined Chamber of Commerce to indicate that events that draw people there are an “economic driver” for the city, as opposed to, say, retail sales.
“This could be a cornerstone,” he said of the arena plan.
The city’s current sales tax rate is 8.125% of every dollar spent on most purchases. Eastside voters approved a 1% sales tax in 2016 that’s set to expire this summer. City leaders have been considering a 1% or a 2% sales tax to fund the arena or other upgrades and, at whichever rate they chose, it would replace the 2016 one, putting the city’s rate at either 8.125% again or 9.125%.
If council members decide to push for a sales tax referendum, city staff would need to submit sales tax paperwork to the state in January.
The council’s next meeting is scheduled for 5 p.m. Tuesday, Dec. 17, at East Grand Forks City Hall.