McIntosh could lose federal tenant

McINTOSH, Minn. -- The city of McIntosh could lose a longtime federal tenant in its city-owned Bjella Building this year.

And officials say the planned move of the Farm Service Agency to a building that hasn't been constructed yet about one-half mile away is both a waste of federal tax money and a financial burden on the local community.

The General Services Administration, which negotiates leases for the FSA and other federal agencies, recently accepted a bid from a Rochester, Minn., real estate investment firm for $22.14 per square foot for a building it plans to construct this year.

The city of McIntosh had bid $10 per square foot.

The loss of the FSA, which is supposed to happen by December, could cost the city more than $30,000 annually, Mayor Bruce Haaven said.

"Why they'd spend twice the money, we don't know," he said. "In the past, it's just been a matter of renewing the lease."

Appeal to Peterson

The city has appealed to FSA and to Seventh District Rep. Collin Peterson.

Wally Sparby, an aide to Peterson, said Wednesday he has contacted a liaison in Washington, D.C. He is waiting for an answer, perhaps this week.

"I think this situation is very hard to understand, because it's such a higher rate than the city was talking about," he said. "The congressman is certainly not in favor of spending that kind of money if we can get the thing serviced on the local level."

The building in downtown McIntosh, an eastern Polk County community of 635, once served as city hall. Those offices have been located in the McIntosh Community Center since the early 1990s, said Teresa Syverson, city clerk-treasurer.

Haaven said the building has served area farmers. In addition to FSA, it also houses the East Polk County Soil and Conservation District, Natural Resource Conservation Service and University of Minnesota Agricultural Extension Service.

'Farmers upset'

FSA employs nine people in McIntosh.

"Farmers are upset about this," Haaven said.

"It's just been a nice fit for years," Syverson added.

The mayor said the present office building location is in the heart of downtown McIntosh.

"It's busy all the time. And many of those people also shop, eat or have coffee while they're downtown," he said. "Our businesses will lose a lot of that support if the FSA is on the far end of town."

The mayor said the city and federal government have been trying to negotiate a new lease since 2007, adding that GSA has forced delays by adding amendments to a proposed lease agreement.

He said GSA has demanded that the city renovate the building. In the past three years, the city has replaced the building's roof and siding. It also has remodeled restrooms to comply with the federal Americans with Disabilities Act and agreed to add another restroom on the main floor, where FSA is located. It also has buried all utility lines, paved the parking lot and installed fiber-optic cables.

"Whatever they've asked for, we've done," Haaven said.

Difficult income loss for city

Syverson said the potential loss of $30,000 in annual income is difficult to overcome, especially since the city also is losing $17,000 in Local Government Aid from the state this year.

The city's general fund budget is $378,000.

Two years ago, the city disbanded its local police department to save money after losing LGA funding.

"We still have to pay to heat the whole building," Haaven said. "If this doesn't change, I guess we'll be looking for new renters. And that's not easy in a small, rural community.

Reach Bonham at (701) 780-1110; (800) 477-6572, ext. 110; or send e-mail to kbonham@gfherald.com .