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Rushford moving forward with multiple projects

By Kirsten Zoellner

Fri, Oct 18th, 2013
Posted in Rushford Government

The end of a long process in getting a motel in downtown Rushford is almost over. Following a public hearing and a recommendation from the Economic Development Authority (EDA), the city council has approved a $500,000 EDA revolving loan fund subsidy for the project. Up to $80,000 of the loan is allowed as forgivable to assist with remediation of soil conditions for the site, provided the motel remain in business more than five years.

The site, a vacant lot immediately west of the fire hall, was subject to a two phase environmental study and analysis over soil conditions and their suitability for building. In addition, motel developers John and Eileen Loken had two small bore holes excavated for their own study. The $80,000 amount comes from professional estimates of the work. Should Lokens not need the full amount for amending the soil, remaining funds could get rolled into the loan subsidy pacakage.

The balance of the $420,000 repayable loan will assist with funding the 20-unit building. Loan terms include a two percent interest rate over a 20 year term. Payments will be over a 10 year period, plus a final balloon payment at the end of that time. At that point, the Lokens can either pay the balloon or refinance. Payments will be deferred for two years, following motel completion, in an effort to assist the developers an opportunity to establish a client base.

City Administrator Steve Sarvi notes that the city had to get creative to make the financing work. The lot will be sold to Loken for $1, despite an appraisal on the property which estimated it worth $86,000. “The true value is less, because it cannot support a motel or any other significant structure without extensive remediation,” notes the city resolution.

“The city is blessed to have folks like the Lokens,” stressed Sarvi.

EDA President Tom Driscoll echoed the sentiments, “These are excellent candidates. Local folks, they bring an owner/operator experience. We’re bringing to you a very complete package.”

The motel joins existing Bed & Breakfasts, “Bestemor Inn,” and “Meadows Inn,” as well as motel, “Windswept Inn.” It is expected to open on or about April 1, 2014. The project still needs to go through the Planning Commission process and a building permit must be approved. Further action on the project is expected at the Monday, October 28 meeting.

The 2014 Municipal Improvement Project/Mill Street Reconstruction Project also continues to build momentum, although the city is far less enthused about the massive project. “This is not something we want to do,” noted Sarvi. “If we weren’t having utility problems, we wouldn’t do it.”

In a brief presentation during a public hearing in the topic, Otomo Engineering representative John DeFrang put forth some history on the city’s infrastructure and the estimated price tag for upgrading it. The project affects the area from the Root River Bridge north to the south end of the Rush Creek Bridge along Highway 43.

The 1895 watermain, constructed of 6 inch cast iron pipe, with lead joints, is dated, undersized, and experiencing the lion’s share of issues, including inflow and infiltration to the system. It is scheduled to be completely replaced with 8 inch ductal iron pipe. Engineer’s estimates put the water portion of the project around $564,324.

Some sections of the sanitary sewer system also date to 1895, but other portions were redone in 1930. It is comprised of 6 inch clay sewer pipe and has displaced joints as well as infestation from roots and other sources. Per design, it will be replaced with 8 inch PVC piping laid up to the right-of-way. Depending solely on the condition of the piping, some piping will be replaced past the right-of-way to the connection at the home or business. Estimates anticipate a $308,386 price tag for the sanitary portion.

The storm system is notably newer, but still in need of work and will be upgraded to 10-year storm regulations set by MnDOT. Additional work, such as catch basin upgrades, will also be done. It is estimated at $366,006.

Lastly, but certainly not least, upgrades to the street condition and continuity are scheduled to ring in at $2,294,284. The road dimensions will shift slightly in areas with the overall width varying from 49.36 to 53.34 feet. It will be completely dug out, following utility repair, and replaced with an 18 inch sand layer, 8 inches of aggregate, and 6 inches of bituminous surface. Sidewalks will be upgraded to ADA compliance, including pedestrian ramps and crossing areas, such as at the school, which will be altered to meet up better with the building entrance.

Approximately $337,142 of the total street reconstruction cost will be funded by property assessments. While the exact amount for each assessed parcel will vary, the figures are based on a $3,200 water service charge, a $2,500 sewer service charge, and $20-22 per linear foot of property.

The city cost of the $3,533,000 project is approximately $1,695,858. MnDOT has pledged $1.5 million to the project and $343,000 in FEMA funding is pending. Final plans are expected in November. Project letting will begin in February and construction will begin in May. It is expected to be a six-month duration with the project wrapping up in October 2014.

The length of the project schedule concerns many, but Administrator Sarvi has attempted to reassure the public and business owners that the city will do all it can to move the project along. “It’s going to be a coordination exercise. We plan to get word out as soon as we can.” According to Sarvi, there will be a preliminary schedule of work, although it may be subject to some shift. Two crews will be working on the project and whichever contractor is chosen will be subject to both penalties if work isn’t done on time and incentives to quicken the pace. “We fully intend to be in their grill and make sure this gets done,” he added.

The city has hired consultant Sally Ryman to assist the city with communication and marketing for the business community. Ryman’s work for the city will start immediately, although a formal budget for the project has yet to be determined. The city is currently working under the assumption of a $20,000 budget. Ryman will work with the city to determine goals and objectives, as well as meet with business owners as soon as possible. A budget, goals, and objectives will be in place by October 28.

Another continuing headache for the city in regards to the project is the proposed detour. Currently, the plan is for a path east on Pine Meadows Drive, south on Eiken Drive, Nannestad Lane, North Prairie Street, and then west on East Park Street. Trucks will be completely rerouted to from I-90 to Highway 76, and the on Highway 16 into the south side of Rushford.

Rich Bjorlo, Interim General Manager for Farmers Co-op Elevator, expressed concern over the impact a trucking reroute would have on their business. “It’s a huge concern. We’ve made a major investment in the city. We’re planning to adjust our operations to accommodate what it going to be a disaster. If we have a disaster, we’re going to lose businesses.”

Farmers Co-op Feed Department Manager Rod Torgeson estimates that 1,800 feed trucks come in and out of the elevator during the May to October time range, while Grain Manager Greg Bolt estimates 4,479 trucks for his division. “It could be just devastating to our business,” Bolt noted.

Looking to minimize business impact and losses, the city intends to continue the discussion of how best to assist the business community. Unfortunately, it’s not as easy as simply allowing traffic in from the north via alternate city streets. The only two other routes would include a steep hill on Elm Street and too tight of a corner on Winona Street. What’s more, only Highway 43, 16, 30, County Road 27/Park Street are rated for the weight. The proposed detour was recently sealcoated as a preventative to handle the weight. Should the city use alternate city streets, the roads would be “pulverized” requiring the city to go back after the project, mill and overlay the roads, and then assess those property owners. Even if the city could find an alternate detour, they run the risk of disrupting utilities under the road, which were not intended or designed to be subjected to the weight.

“The survival of this whole town is based on doing this project well,” added Bjorlo.

The next regularly scheduled council meeting is Monday, October 28, at 6:30 p.m., at city hall. The public is encouraged to attend.

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