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Rushford council fails to endorse proposals

Fri, Sep 12th, 2008
Posted in Government

Rushford - The Rushford city council said a quiet "no thanks" to two sizable proposals on their agenda last Monday night by declining to second the motions made to endorse the projects.

City Administrator Windy Block carefully presented a plan to use FEMA repair funds from the city-owned Dreaming Horses building of $393,513 as matching funds for a grant from the state of Minnesota to the Rushford Institute of Nanotechnology (Rintek) for $600,000.

The money could be used for a "business incubator" managed by Rintek, likely in the former Tri-County Electric building, and the EDA endorses the plan, according to Block.

Block acknowledged that with the FEMA funds, the "temptation is to spend it on something else," but he continues to maintain that "it all comes back to jobs."

Block said he'd secured the services of business incubator experts from Owatonna, including former Rushford resident Tim McManimon, to help shepherd the project. Block also admitted it would be rare to see a business incubator in a city as small as Rushford.

Lending moral support to the argument for the business incubator was the presence of developer Mike Sexauer who continues to suggest he'd be interested in developing more housing in Rushford, if only the prospect of new job development looked better.

But what some saw as an opportunity to "liberate" $600,000 from the state and possibly create jobs, others may have seen as a bail-out. (In the four years since receiving the grant, Rintek has not raised the matching funds for their grant.)

"Why does the city have to raise the matching funds?" asked councilwoman Laura Deering. "Why can't Rintek match this grant?"

Deering also asked if it was a recent "revelation" that the city was responsible for matching this grant for Rintek.

Block responded that whatever project the grant was used for had to be city-owned, suggesting the city had an interest in raising the funds.

"The city is sitting with $394,513, (FEMA repair money for Dreamin Horses)" said Block. "We've come up with a formula to use it to go to the state of Minnesota to get $600,000 that's been sitting there for four years."

Deering asked whether it was possible to spend that particular FEMA money on anything else. Block responded that sure, it could be used toward the library, or the community center, or a wastewater treatment plant, and more.

After listening to more discussion, Deering stated her case. "Obviously right now we have lots of infrastructure concerns (following the flood). All our home values and the future depend on that infrastructure."

Deering said spending the money on a Rintek incubator business felt like putting "money on a roulette wheel. It may pay off or it may not. This feels like using it (FEMA funds) for venture capital."

Councilman Larry Johnson expressed his agreement with Deering that there are currently just too many other things that need "fixing" in the city to use the money on this proposal.

But councilwoman Nancy Benson supported the idea because "jobs are so important" and she made a motion to have the city staff continue to develop and research the idea. The motion died for lack of a second.

A number of individuals, including members of Rintek, then left the meeting, expressing audible disappointment.

Motel development

The council already approved developer Tom Serie's plan for a motel in the Himlie business park a month ago. But Serie and others at city hall, including the EDA, would like the development to coincide with a 400-seat community center, partially paid by FEMA funds for the destroyed Tenborg center, and rental housing units.

Serie was present to say that, at the request of some downtown business people, he'd looked into the possibility of putting the community center in the downtown area. He said the only downtown property that could hold a 400-seat center would be the Darr property west of the municipal liquor store. Problems with that property are that it could not accommodate the required parking for the center, and the price tag is higher than in the Himlie park, according to Serie.

The EDA has recommended to the council that they approve Option "D", which puts the motel, a new community center, and a 9-unit rental housing development all at the Himlie Business Park.

Councilwoman Benson, who serves on the EDA, said, "Well, I'm just going to lay it out there. I like scenario D. We need housing for our residents."

The housing study conducted last spring found that Rushford has an immediate need for at least eight affordable rental units.

But what if a private developer was interested in building rental units?

Sexauer was also present at the council meeting two weeks ago when he promised to take a new look at his development project for single-family homes on land adjacent to Himlie Business Park, the proposed 23-acre site of development of a motel and possible community center and rental housing. Sexauer's development has been on hold for a couple of years, in part because of access problems. The construction of a new road to the proposed motel and public housing units would allow access to the Sexauer property; the lack of such access has kept the project on hold for a few years.

Sexauer told the council that after talking it over with his wife, he decided to "pass" on constructing a 9-plex in Pine Meadows, something else he'd promised to consider. He said the numbers didn't make the project feasible, as it is currently cheaper for the city to build housing than it is for a private developer.

Sexauer taking a "pass" on the rental housing project seemed to pave the way for the city's plan with Serie. But the council was not ready to act.

Benson made a motion to approve Option D.

Deering asked, "Does it have to be option D? Could it be another option?"

Mayor Ladewig reminded her that there was a motion on the table that had to be decided first. But when the motion died for lack of a second, Ladewig hurried on without entertaining any other motions on the issue.

A city staffer, when asked, responded that both the business incubator proposal and the motel/community center will come before the council again since "the council hasn't really affirmed, denied or taken any action on either issue."


Brad Lenerz of Winona Health was present to reaffirm Winona Health's commitment to Rushford and to answer any questions.

The council had directed Block to inquire with other health organizations whether they'd be interested in opening a satellite clinic in Rushford.

Block reported that he discovered "collaboration" is much more the name of the game in medicine, rather than competition as other organizations were polite and willing to discuss, but expressed reluctance to move into an area the size of Rushford if Winona Health is already serving the area.

Both councilman Robert Dahl and Larry Johnson expressed their continued disappointment with the lack of a physician more than two half days a week, to which Lenerz responded that the organization is always actively recruiting and trying to provide additional part-time coverage with physicians from Winona.

Lenerz said he believes the new state-of-the-art clinic, to be built in the old Rushford Hardware location, will prove attractive to potential recruits.

Ladewig commented on the number of local residents who deal with Gunderson clinic and wondered whether a collaboration was possible, where Gunderson staff could provide care to local patients in the new Winona Health facility in Rushford.

Lenerz responded that Winona Health was indeed open to "collaborations that make sense."

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