The Detroit Lakes Finance Committee recommends funding of $300,000 over six years for the Detroit Mountain project.
The Detroit Lakes City Council will meet Tuesday for a final vote on if the project should happen or not, but the finance committee — along with a couple extra aldermen — met Thursday to discuss the financial end of the project, and the majority agreed to move forward and financially support it.
“This is not only a recreational opportunity but an economic opportunity,” Mark Fritz said of the project. Fritz is a member of the Detroit Mountain Recreation Area (DMRA) non-profit that is spearheading the effort to reopen the ski hill.
Not only will Detroit Mountain be open for downhill skiing in the winter, the plan calls for camping, hiking and biking in the warmer seasons and cross country skiing and tubing in the winter.
The total cost of the project is estimated at $6.2 million. The city was asked to not only contribute the $300,000 but also to be the landowner. With the city as landowner, there would be no property taxes or debt service, making the project doable.
Though the city would be the landowner, another entity — most likely DMRA, though the city has the final say on who — would manage the property, similar to how the Detroit Country Club works. The city owns the land the golf course sits on, but the country club group runs the facility. The employees are employees of the country club, not the city. The country club has its own board of directors as well, just like the Detroit Mountain would.
The same goes for the Legion Campground. The city owns the land but the Legion operates the campground.
“This will be a first-class place with brand new lodge and snow making (equipment),” Fritz said. “This is not a fly-by-night (project).”
The remainder of the financing would consist of $2.1 million from the DNR’s park and trail grant, $500,000 from the Legacy fund, $989,000 in New Market Tax Credits and $2.3 from donations, which the DMRA has pledged to raise.
The DMRA group presented a feasibility study at an earlier city council meeting with the conclusion that the project would be successful and profitable.
“We took a conservative approach to each of these benchmarks,” Stu Omberg said of the financial projections for the facility.
Without the DNR’s $2.1 million grant though, it would be a no-go. The DNR has expressed interest in having a regional park in the Detroit Lakes area. The grant deadline is Sept. 28, and the applicant will know by the end of the year if the DNR grant is awarded or not.
With their proposal, the DMRA group agreed to a five-year guarantee to cover any shortfalls in revenue so there wouldn’t be any cost to the city. Alderman Ron Zeman said his vote could be swayed though, with a 20-year guarantee.
Zeman said he’s talked with Zorbaz owner Tom Hanson, who said it could be done, but that wasn’t confirmed at the finance meeting Thursday. Fritz said that while the group is very comfortable with the project and the money it will bring in, he couldn’t commit the DMRA group to 20 years without talking to the board. He said he’d find out by the Tuesday meeting.
Since another entity would run the facility, that entity would be responsible for the insurance and benefits for the employees, too, not the city. The operating entity would also be responsible for the liability insurance.
City Administrator Bob Louiseau said that if the council wants to support this project, the $50,000 a year for six years could be found in various funds over the years, but, “I wouldn’t pin it down to any single fund right now.”
He said it would be better to have the flexibility to have the funds come from the general fund, the liquor fund, possibly the utilities commission, etc., depending on the year.
City Finance Officer Pam Slifka agreed.
“I think it’s important to keep that flexibility each year,” she said.
Alderman Bruce Imholte said he supported the project and supported the funding if the city would go after a city sales tax. He said a sales tax would help fund this and so many other projects around the city, not to mention help with assessments, too.
Plus, anyone who buys anything in Detroit Lakes would pay the tax, not just the citizens of Detroit Lakes.
It was proposed last year to replace the half-cent food and beverage tax with the 1 percent sales tax, but the city couldn’t get a state legislator to support the proposal, Mayor Matt Brenk said.
Most of the other aldermen at the meeting also supported the sales tax.
Alderman Marty Waller said that he’s not underplaying the $300,000 proposal because it is a lot of money, but in the grand scheme of the $6.2 million project, it’s a small amount.
Alderman GL Tucker agreed, adding that it’s less than 5 percent of the project cost.
“It’s a unique opportunity,” he said of the mountain.
Zeman, still not sold on supporting the Detroit Mountain project, said the city already has a lot of amenities and can’t really afford another.
“We can’t keep adding on and adding on,” he said.
“We have a lot in this town,” agreed Fritz, “and that’s what makes it special.”
When people move to Detroit Lakes for jobs, he said, they look at the amenities the town has to offer more than just the job they’ll be working.
Alderman Madalyn Sukke said that though she won’t be skiing the mountain, she’s most interested in the draw from the Fargo-Moorhead area and those outside of town.
“I’m more interested in their green,” she said, implying that it will bring people to town to spend their money in Detroit Lakes.
The Detroit Lakes City Council special meeting is Tuesday at 5 p.m., and the council will make the final decision whether to go ahead with the project or not. It is also a public hearing for anyone to make comments regarding the project.
Follow Pippi Mayfield on Twitter at @PippiMayfield.