Serving Gogebic, Iron and Ontonagon Counties
Serving Gogebic, Iron and Ontonagon Counties
By PAMELA JANSSON
Bessemer — The Bessemer City Council approved on Monday evening a tax agreement that will allow the pending Iron Belle Apartments project to continue moving forward.
Chad Bucknell, a principal of that project, was present at the meeting and agreed with the decision, which will allow the city to choose over the period of a 30-year state loan to receive 50% of the project’s net cash flow or of a limited dividend payment, depending upon which is the higher yield in a given year.
At the request of Councilwoman Linda Nelson, the motion also included a contingency that the council revisit the agreement in five years before continuing it throughout the 30-year duration of the loan. The same option to revisit also was included in situations such as a property sale or expansion.
Bucknell told the council that the project, by definition, is “limited dividend housing,” which means that — once the housing is established — he must operate it within the realms of a complicated state mandate that limits his ability to profit.
The council’s decision resulted in part from explorations already made by its executive committee and in part by city manager Mandy Lake’s consultation with city attorney Ray O’Dea and support staff.
Councilman Adam Zak said that members of the community have asked him why the city has agreed to the project.
“I want the community to understand the complexity of this situation,” said Zak, who added that when the city first pursued the related grant, city officials believed they would benefit from receiving 100% of a related tax abatement from a private business.
However, he added, they then learned that the grant was intended to serve only nonprofits or limited dividend operations. This means that the city’s ultimate gain will not be until the 30-year loan is complete and the city then can qualify to receive the 100% abatement.
“As much as it’s going to irritate people now,” said Zak, “30 years from now it’s going to be a good boost to our general fund...Right now, our decision is to continue with this and look at the positives.”
Despite assuring Bucknell that he trusted him, Zak did question whether there is anything the city could do in such situations to protect itself from the possibility that “somebody could bury money into costs and the taxes won’t show that — if that happened, it would show zero profit every year, and the city would get nothing.”
Mayor Peter Tacconelli asked whether, in that event, “Would it be beneficial to have an audit?”
“The state has full access to the record if they choose to look at them,” said Bucknell, adding, “I don’t have to submit them.”
The council also:
— Approved a bid for $22,485 by Tiziani Sand and Gravel LLC of Ironwood for screened winter sand.
Zak voted against the motion on the grounds of Jake’s Excavating and Landscaping LLC of Ironwood having submitted the lowest bid of $22,350. Other council members said that Tiziani’s gravel was better suited for the city’s needs.
— Approved a request by Donna Frello, chairperson of the Pumpkinfest, for various support from the city in the way of use of the City Hall and various supplies and blockage of roads during the event occurring from Sept. 27-29. An exception was to deny use of the land now vacant after the demolition of the Gambles building and adjacent structure, on the grounds that it technically belongs to the Downtown Development Authority and that the land should settle for a year before being considered for such use. An additional request for funds was tabled pending legal advice.
— Approved a city fee schedule, per limited modifications, that Lake said the council already had OK’d previously.
— Appointed David Darrow to the Board of Directors of the Bessemer Public Library. Darrow stated in his application that, during residency in another community, he had been president of the Friends of the Library and also had served as assistant director of the library at Baker College of Cadillac.
— Approved sending a registered letter to persons who exceed the deadline in relation to the terms of purchasing unused city land for $1 with the understanding that construction of a house should begin within a year. The letter will explain that options for a one-year extension do exist.
— Approved a change order increase of $72,562.50 in relation to a Drinking Water State Revolving Fund grant for water system improvements at Washington Elementary School and also approved a zoning ordinance in relation to the school. The ordinance absolves the city in the event of damage to fencing during snow removal.
Unless otherwise indicated, all votes were unanimous with all members present.
The city’s next regular meeting will be on Sept. 9 at 6 p.m. in the council chamber of Bessemer City Hall.
