RTC could possibly receive $1M

Published 07:02 a.m., December 24, 2009

The Fergus Falls City Council intends to allot $1 million of its Regional Treatment Center (RTC) grant funds for infrastructure improvements on parcels A and B, but not until councilors are confident they’ll have enough money to cover possible abatement and demolition of the Kirkbride building.

RTC developers Campus Development Group (CDG) are asking $1 million be spent on basic infrastructure improvements — work to city-owned property like streetlights and utilities, according to Kent Mattson, the city’s attorney for RTC redevelopment. Developers would like the money spent on parcel A, the nursing cottages, and parcel B, the buildings south of the Veterans Home.

The concern among city staff and council members is that there are enough grant funds available to cover asbestos abatement and demolition at the Kirkbride if developers are unable to use the building. The cost of abatement and demolition of the Kirkbride is projected to be $6.6 million to $6.7 million, according to June estimates cited by Mattson. The city has about $7 million in remaining grant funds following expenditures to extend an RTC water main and demolish the incinerator building. That money must be spent before April 2013.

In speaking to the city council Monday, Mattson recommended the council wait to designate $1 million of its grant funds specifically to parcels A and B until there is a better assurance that the remaining money will cover work to the Kirkbride. It’s a recommendation that could be upsetting to CDG, Mattson said, possibly enough to prompt developers to pull out of the project.

“It’s not likely,” Mattson told the council. “I just need to throw that out there that it is a possibility. I think we can keep them at the table.”

The city has had a good working relationship with CDG, Mattson said, adding he did not believe delaying the infrastructure funding would be a deal-breaker.

Randy Synstelien, 4th Ward, said his main concern is that the city “remains whole” throughout the process and holds taxpayers harmless. He and the rest of the council accepted Mattson’s recommendation Monday.

The council also accepted a proposal for the removal of part of a tunnel on parcel B, work that CDG would like complete before taking ownership of the property. The $20,000 cost will need to be covered by the city, which could choose to draw from a $1 million holding fund created by the state. That holding fund covers expenses associated with maintaining the campus in the period between state ownership and the acquisition by developers. Another option is to fund the $20,000 expense through a city account, according to Finance Director Bill Sonmor.

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