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City to seek site appraisal in potential property swap

Cemstone makes counter-offer for propose land deal involving current Sherwood Street site

Worthington City Hall
Worthington City Hall. (Brian Korthals/Daily Globe)

WORTHINGTON — Members of the Worthington Economic Development Authority have advised city staff to obtain an appraisal on property that could be involved in a potential land swap arrangement.

Last month, EDA members considered a request from Cemstone — a regional ready-mix concrete company — to purchase EDA-owned property north of Interstate 90 and west of U.S. 59. Worthington Assistant City Administrator/Director of Economic Development Jason Brisson reminded EDA members that Cemstone initially requested to purchase approximately 10.7 acres to develop a new ready-mix plant and a small specialty retail store.

The EDA expressed its willingness to sell the requested property to Cemstone and established a price of $33,388 per acre for the property. The EDA also indicated its willingness to consider reducing the price of the property based on job creation as defined by the city’s Business Subsidy Policy.

“Cemstone has counter-offered with a proposed land swap for their current ready-mix property located at 1000 Sherwood Street,” Brisson reported to EDA members Tuesday. “To prepare the property for future development, Cemstone has agreed to demolish the existing buildings on the site. Based on the EDA’s asking price, Cemstone has also removed the retail component from their project, reduced their purchase request to 8.5 acres ... and submitted a new rough site plan.”

Cemstone still intends to create six to seven new full-time positions, Brisson added, all paying a wage that would qualify for the $25,000 in business assistance per FTE based on the subsidy policy.

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“Based on the established value of the EDA’s property, the county’s valuation of Cemstone’s land located at 1000 Sherwood St., and the anticipated job creation for the project, EDA staff anticipates that the EDA could provide $76,998 in benefits — just over half of what is permitted by the city’s policy, based on the proposed job creation — and assist Cemstone in achieving their goal of no cash outlay for the development property,” Brisson said.

In exchange, the EDA would receive the property at 1000 Sherwood St. for future development, Brisson continued. That property is currently zoned B-3 (general commercial, “but staff has considered this property for multifamily residential development or a childcare center, both acute community needs,” he said.

“If the EDA is in favor of exploring this arrangement further, staff finds that a site assessment will be required to determine an approximate cost to prepare the site for future development,” Brisson told the EDA. “Staff recommends that a professional environmental assessment should be done on the site before the EDA agrees to accept the property from the current owner.”

It’s anticipated that a tax increment financing (TIF) district will be required to assist with the site preparation costs to facilitate future development on the Sherwood Street site, Brisson said. EDA member Chad Cummings was in favor of pursuing an appraisal, though he didn’t want the process to take so long that it jeopardized Cemstone’s plans.

Also noted during discussion on the matter was a development proposal from Duininck Inc. to construct a bituminous facility in the same area as the potential new Cemstone site. Mayor Mike Kuhle supported looking into an appraisal while expressing hope the result could help boost the chances of both projects moving forward.

“There’s a lot of benefit to both Cemstone and Duininck going out there,” Kuhle said of the west-of-U.S. 59 location.

In another matter, the EDA heard a presentation from Deputy Nobles County Administrator/Emergency Manager Bruce Heitkamp on current COVID-19 response programs.

Heitkamp noted that $433,708.15 in CARES Act funds recently received from the state of Minnesota will specifically target restaurants, bars, gyms and bowling centers within the county that have suffered financial hardship due to the ongoing COVID-19 pandemic. Businesses will have until Feb. 12 to return applications for funding to Nobles County; the county must distribute all of the funds by March 15.

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The county has hired Jorge Lopez of APX Construction Group to coordinate the application process, Heitkamp said.

“There was $4 million we collectively worked with with all local units of government in Nobles County,” Heiktamp told EDA members. “I think you all very much should be applauded for those efforts. This money is 1/10 of that … and we want to make as much of an impact as possible.”

Heitkamp added that for-profit and nonprofit entities alike are eligible to apply.

“If someone has a story to tell … we’re interested in hearing people’s stories and then reviewing them,” he said. “I don’t want to give anyone an impression that they shouldn’t fill out an application.”

In the final agenda item of the meeting, the EDA approved an application in the amount of $9,052.58 for the EDA’s Façade Improvement Matching Grant program from Rudy Gorra on behalf of RG Music, located at 919 Fourth Ave. The rehabilitation work includes removing old siding and installing new siding, soffits, corners, fascia, windows and lights, as well as repairs to the existing sign.

It’s the first such grant to be approved by the EDA, and Brisson noted that there “are a couple more in the pipeline.”

Related Topics: GOVERNMENT AND POLITICS
Ryan McGaughey arrived in Worthington in April 2001 as sports editor of The Daily Globe, and first joined Forum Communications Co. upon his hiring as a sports reporter at The Dickinson (North Dakota) Press in November 1998. McGaughey became news editor in Worthington in November 2002 and editor in August 2006.
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