FAIRMONT– The Fairmont City Council on Monday considered several options regarding the progression of the proposed community center and ultimately chose to put $2 million of the $14 million, raised in local option sales tax, toward a new compressor at the Martin County Arena with the rest of the funds going in reserves toward a variety of potential projects.

On Nov. 9 a joint work session with the Fairmont City Council, Fairmont Area School District, Fairmont Hockey Association, Fairmont Area Community Center Foundation, YMCA and members of the various design teams was held. At that meeting, concept designs and conceptual cost models were shared. The YMCA talked about its operations and the hockey association shared needs concerning ice.

Coming out of that meeting, several items were put on Monday night’s agenda for the council to consider as next steps.

City Administrator Cathy Reynolds said she provided several options based off of what she was hearing at the joint work session, as well as other meetings concerning a community center.

One of the options was to authorize moving forward with the design and purchase of a new ice compressor and mechanicals estimated at $1.5 million with the understanding that the system could be installed into the Martin County Arena and also transfer to a new facility.

Another option was to move forward with a state bonding request and new market tax credit application, and local option sales tax request, to seek additional funding for the community center.

The council also had the option to table the matter until January when two new people will join the council as voting members.

Reynolds noted that there were other options or directions for the council to go but said she felt it was a good starting point.

Dick Strassburg of Tegra, the city’s owner’s representative on the project, was present to share some potential schedules for both a YMCA-only facility, and YMCA and ice facility, which were two of the concepts that have been on the table, the first coming in at about $24.4 million and the second at roughly $43.6 million.

Strassburg said for the YMCA-only facility, if the council were to move forward on it in a few weeks, they should get a letter of intent with the YMCA and Foundation and then go for the new market tax credit. He suggested they do that before going forth with the design.

He said with that route, best-case scenario, construction would likely start in April of 2024.

If adding ice, Strassburg recommended they only go through with the schematic design, then go out for state bonding and it’s that’s granted, he suggested the design be completed. He said that route would see some delays.

“State bonding is a good vehicle for funding projects like this, but it has a lot of uncertainties,” Strassburg said.

Council Member Randy Lubenow asked Strassburg how he felt the project ranked in terms of progression.

Strassburg said usually at this point when a decision regarding a conceptual design is being considering, a lot of fundraising is needed. He noted that right now the city had

$14 million it could put toward the project, along with $6 million raised privately.

“There’s roughly a $4 million gap for the YMCA and it seems like there’s a path there, potentially either fundraising or with additional money from the new market tax credits. So I would say this one’s teed up pretty good,” Strassburg said.

Council Member Bruce Peters asked Strassburg to explain new market tax credit for those who are unsure of what it is.

Strassburg said that it’s set up for communities in a lower income area in a city. He said the property for the proposed community center fits the criteria and that the tax credit goes by the average income within the defined area.

“Technically it’s a loan and it could be defaulted if certain things happen… it’s a good program, it’s complex, we would say that,” Strassburg said.

He added that certain groups usually assemble and coordinate a new market tax credit and that they take a cut up front and also get a portion if it’s granted.

“One of the advantages you’ve got here is that the YMCA has a very good reputation because the target market they’re going after is the one’s that are less fortunate,” Strassburg said.

He also said the fact that Fairmont is rural is an advantage because a lot of urban cities go out for dollars and not many rural communities do.

Council Member Michele Miller made a motion to authorize moving forward with the design and purchase of a new ice compressor and mechanicals up to $2 million with the remainder of the sales tax proceeds to be placed in reserves for lakes, parks, trails, other recreational amenities and upon a contract with a community center operator, upgrades to the Southern Minnesota Educational Campus (SMEC) building for the purpose of a community center. Peters seconded the motion.

He then asked whether the motion would preclude them from later pursuing the second option, which is to pursue state bonding and new market tax credit.

Reynolds said that the compressor can go both into the existing arena and a new facility. She said the motion won’t prohibit the council from seeking additional funds but she pointed out that as soon as they start spending the $14 million on other projects, the amount available for a new facility will go down.

Lubenow pointed out that the decision will affect the community for years to come.

“If we’re not willing to invest in ourselves, bringing a community center to Fairmont, which several of the large employers have asked for, citizens have asked for…,” Lubenow said.

He then brought up the wording of the question on the ballot in 2016, which earmarked funds for local recreational amenities such as parks and trails and a possible community center.

“It’s disappointing as we vote on saying no to this project that has so much support by so many big businesses in Fairmont,” Lubenow said.

He then read a letter from Council Member Britney Kawecki, who was absent from Monday night’s meeting. In the letter, Kawecki said her absence was planned and unavoidable. She said she had asked for the council and mayor to remove the agenda item and place it on the agenda for a later council meeting but the request was denied.

Lubenow read that Kawecki expressed a desire for the council to table the issue until 2023.

Peters commented that the YMCA is a great organization and said it had previously said it didn’t need a new facility in order to offer programming here.

Mayor Deb Foster, who is a council member-elect, representing Ward 3, said that she wanted to be on the council in order to have the responsibility of voting. She pointed out that in January there will be a new mayor and two new council members.

“By having this discussion and not doing anything tonight and moving it into 2023, that’s the council that will be dealing with the future… I’d like to have that opportunity for myself and for Jay Maynard (Ward 1) to have a vote, along with the the rest of the council, for how we’re going to proceed with this because it is a vote for our future,” Foster said.

She added that she’s not in favor of raising the tax levy but that she would be interested in pursing additional funding. She also added she wouldn’t be in favor of a community center unless ice was included.

Foster then asked the council to wait to vote until the new council members come on in 2023.

Council Member Wayne Hasek said he’d like to see the people vote on it, to which Foster said she understands but that the argument has been made that they already have voted on it. Hasek added that no matter what, taxes will have to go up.

Peters said that he believes the people have voted on the matter because at one point there were three strong community center supporters on the council and that they have all been voted off since then.

“I think we have voted and we voted that they don’t want it, unless it could be tax free. But as you said, if we build another building, we’re going to pay taxes,” Peters said.

Miller shared some information on Marshall, New Ulm and St. Peter, which all have community centers and colleges and which Miller said haven’t grown in population.

She said she’s talked with many people in multiple age groups who would like to see the money used for something else besides a new community center facility.

“We have a building over here(SMEC) that’s basically being used as a community center at this time. The YMCA is more than welcome to come in there,” Miller said.

She said the council should be fiscally responsible and keep up the city’s parks, trails and lakes, which it already has.

“We’re moving forward with something. Fairmont’s not going to die because we don’t build a community center,” Miller said.

The motion passed 3-1 with Miller, Peters and Hasek voting yes and Lubenow voting no.