FAIRMONT– The Fairmont City Council on Monday considered a consultant service contract with a company to conduct a feasibility study of a municipally owned and operated cannabis retail store.

The city’s acting administrator, Paul Hoye, provided some background. He said that back on March 24, 2025, the council had conversations on whether it wanted to build and operate a cannabis retail store and authorized staff at that time to put out a request for proposal (RFP) for a feasibility study so it could gather information and see if it was interested in further pursuing the idea.

On July 14, 2025, the council appointed Council Member James Kotewa to serve on a selection committee.

“Through the RFP process, we collected 19 RFPs. We have a very large response and a lot of good applicants provide proposals. We’re happy with the response we have,” Hoye said.

He further said that the committee spent a lot of time reviewing the proposals, comparing them and narrowing down the list to a final three.

“We did end up having interviews with those three vendors and unanimously decided that Vicente was the company that we’d like to recommend to the council to move forward with the contract to conduct that feasibility study,” Hoye said.

The contract would be for $7,560 which would provide the full financial pro forma work for the feasibility study.

Council Member Randy Lubenow asked what knowledge the vendor brings to the table.

Jason Tarasek, a cannabis attorney with Vicente, who manages the firm’s Minnesota office, was present to answer the question. He said that they are the only nation-wide cannabis law firm in the country and that they have over 70 employees scattered nation-wide, but that they are headquartered in Denver.

“We got our start about 15 years ago after Brian Vicente and other folks at the firm were instrumental in getting the Colorado legalization measure passed and over the years we’ve helped clients in every legal market as they’ve come online,” Tarasek said. “We have vast experience in helping people stand up cannabis businesses.”

He said that the Minnesota legalization law, which he helped work on, is unique in several ways, one way being that it allows for municipalities to launch dispensaries and municipal cannabis stores.

“That is unusual in the country, but it’s not unusual to have a licensed dispensary,” he said.

Tarasek said that among their 70-plus employees, they have an economist on staff who he expects will do the bulk of the work if the council accepts the proposal.

“I think the biggest value he adds is that he can look at publicly available data in terms of traffic data and customer data. I think you have a tremendous opportunity economically, given your proximity to Iowa where adult use cannabis is not legal… and your proximity to the freeway system,” Tarasek said.

Kotewa said that going through the proposals was a long and lengthy process and that he had worked with Vicente to come up with a contract that’s going to work toward the city’s benefit.

“We’ll have very intelligent minds and an economist that is very intelligent that can tell us if it’s feasible to have one or not,” Kotewa said.

He acknowledged that there’s a narrative on marijuana and its negative effects but that the council needs to determine what’s best for the city and whether there’s a possibility for money to be used on roads or something else.

“This is to find out if it’s worth it for us to do it. I’ve been impressed with Vicente,” Kotewa said.

Council Member Jay Maynard said that while he appreciated the amount of expertise that Vicente seems to bring, he was personally opposed to the idea of a municipally owned cannabis store.

“With that said, I think it would behove us to have all of the facts before we make that decision,” Maynard said.

Council Member Wayne Hasek agreed with Maynard and said he didn’t think that the city had any business having a cannabis retail store, but that it should be left up to private individuals.

In a roll call vote, the motion passed 3-1 with Hasek opposed. Council Member Britney Kawecki was absent.

Moving to other matters, the council again considered the proposals for the Southern Minnesota Educational Campus (SMEC) development project.

At the last regular city council meeting on Jan. 12, the council had heard that two proposals were considered, each for housing developments, and that a committee had recommended one of the proposals be accepted. At that same meeting, by majority vote, the council asked for a side by side analysis of the two proposals.

However, on Monday, Economic Development Coordinator, Ned Koppen, said, “After that was created and added to the agenda packet, La Salle, one of the developers that submitted a proposal, reached out and withdrew their proposal.”

He said the proposal from Brennan Companies, which the committee had previously recommended, was still in play.

“It’s still a good proposal and remains the same as it was at the last council meeting,” Koppen said. “At this point, it’s up to council on whether you want to accept the Brennan proposal or not.”

Lubenow asked some follow up questions from information in the proposal, including questions about historic tax credits and increment tax financing (TIF).

“Are those all things that the city is willing to commit to? If we’re not wiling to commit to those stipulations, I don’t think the project can move forward as I’m reading the document,” Lubenow said.

“All of this is kind of nuanced in that they’re willing to pay the $200,000 to purchase the SMEC building to build housing, but there’s that 24-month due diligence period where they’re going to apply for, hoping to get the historic tax credits. They are going to ask for TIF- that’s just a fact,” Koppen said.

He said it kind of hinges on if they can get the tax credits or any other funding, but that that’s part of the 24-month due diligence period. Koppen added that the company believes it has a very decent chance of getting the tax credits.

“Are we going to get any financial benefit of giving them the 24 months to go through the due diligence period?” Lubenow asked. “Could we, at the end of 24 months, be still sitting there with the SMEC building as it is today?”

Koppen confirmed that that was a possibility, but pointed out that the city needed housing. He did acknowledge that there was some risk to the deal.

He said that the city would be working with its attorney to work on an agreement and lay out terms so that there’s full understanding on both sides.

Hoye added that there would be additional steps and agreements that will need to come to the council for agreement and approval during the process.

“There’s going to be multiples steps and multiple decisions that the council will have to keep the project moving forward,” Hoye said.

The council unanimously accepted the review of proposals received for the SMEC development RFP and authorized staff to work with Brennan Companies and the city attorney to prepare a contract for future council consideration.

In other business:

— The council approved task order #4 with Bolton & Menk for survey, design and bidding services for the raw water retaining water replacement at the intake facility located at StevePierce Park (1022 Albion Avenue) at an estimated cost of $38,700. The cost of the project is included in the 2026 Capital Improvement Plan (CIP).

— The council approved the first consideration of an ordinance amending Fairmont City Code Chapter 14– licenses, permits and miscellaneous business regulations, by repealing and replacing article IV- lodging tax.

— The council approved of the second application to the recently established Local Housing Trust Fund (LHTF) for a loan of $25,000. The application was previously recommended for approval by the Fairmont Economic Development Authority (FEDA).