IRONWOOD, MI - Thursday, December 4, 2008 - The Downtown Ironwood Development Authority (DIDA) held a specially scheduled meeting this morning. Because of Thanksgiving and Christmas, it was decided to have an early December meeting that would make-up the missed meetings that conflicted with the holidays.

The following Authority members attended this morning's meeting: (1) Chairman George Goerig; (2) Vice-Chairman Joe Karius; (3) Eva-Smith Furgason; (4) Jackie Powers; (5) Steve Frank; and (6) Louise Demasi. Absent for the meeting were Cory Gresham; Wayne Ozark; and Mayor Bruce Noren. City staff in attendance included Community Development Director Dan Petersen and DIDA Secretary Jane Bowman. Three members of the general public were present and Eric Hjerstedt Sharp was there reporting for the Ironwood Daily Globe.

Chairman Goerig called the meeting to order at 8:00 AM. Jane Bowman recorded the roll. The first order of business for the Authority was to approve the minutes from the October 23, 2008 regular meeting. The Authority unanimously approved the minutes.

Before the docket could be approved, Jackie Powers asked to discuss a letter she received from Roy Ahonen regarding the DIDA's position on the proposed Hovey PILOT ordinance. She also wanted to add a discussion of Eva Smith-Furgason's "Ironwood Christmas Bucks" promotion to the agenda. With the amendments to the agenda, the docket passed unanimously.

During the "Citizens Wishing to Address the Authority on Agenda Items" section of the docket, the owner of Bale Clock and Watch told the Authority that he fully supported the shoveling of the Pocket Park.

2009 Holiday Decorations Donation Update

According to George Goerig $425 was collected from area businesses to help pay for this year's holiday decorations.

Louise Demasi told the Authority that she will continue to solicit donations in the near future. She also suggested that the DIDA lobby the City Commission to have City money (as she stated $5,000 or so) budgeted for permanent street decorations when the new budget meetings begin in the spring.

Jackie Powers told the Authority that the decorations looked great.  She explained that she was in Rhinelander on the day they were first hung up and she said was pleasantly surprised by them when she returned to town. She said the decorations were "magical looking." She said she wanted to thank everybody that put the time and effort into decorating the downtown. Jackie told Louise Demasi that she was recognized at the tree lighting ceremony as one of the people that were instrumental in getting the job done. Louise jokingly suggested, "Ask Mr. Albert how I was at that Pocket Park. He won't repeat it!"

Powers went on to say that roughly 40 people attended the ceremony this year, when normally only 10 show up. She suggested a possible change in the date of the ceremony next year -- perhaps to the night of the Jack Frost Parade.

Demasi commented that she had heard nothing but praise for the wreaths and decorations. She made it known that the City contributed half of the money needed for the new LED lights and decorations in the Pocket Park, and they paid for the lights for the wreaths.

Authorize $240 Cost Share Shoveling Pocket Park Sidewalks

Jane Bowman explained that Jim Gregory has annually provided the service. His total contract amount for the coming season is $480. According to Bowman, half of the total cost will be paid by the City, but the remaining $240 is the DIDA's responsibility. She explained that she needs an authorization because the snow is now here.

Steve Frank asked Bowman for a clarification as to what area is shoveled. "Is that in the Pocket Park or on the sidewalks that surround it?" Ms. Bowman explained that contract is only for the City sidewalks around the Park. She told Frank that the only time the interior of the park is shoveled is during the tree lighting ceremony.

Frank questioned how effective the City was on sidewalk snow removal enforcement elsewhere in the downtown. Dan Petersen explained that the blight officer generally assumes the duty of enforcement of snow removal issues during the winter months. He explained that a new blight enforcement officer would be hired shortly. He told the Authority that interviews for the position will be conducted next Friday. The City's former Blight Officer, Travis Smee, didn't opt to renew his contract with the City.

Frank explained that the City should set the example for the rest of the Downtown. If the City opts to keep the Pocket Park sidewalks well-shoveled, it sets an example for the rest of the business community.

Eva Smith-Furgason asked who used to clear the streets with a "little tractor." Chairman Goerig explained that John Deere tests snow clearing equipment in the area. Smith-Furgason commented that she thought it was the City that was doing the clearing and she felt that was a very nice service. Goerig explained that John Deere often clears paths throughout Longyear Park as well.

Eva explained that one of the problems downtown is that business owners run out of room to put the snow. Demasi replied with, "Welcome to the real world!"

When Smith-Furgason said, "The City expects us to do it, but, in the meantime, where are we going to put it?" Demasi responded with, "You can only bank it!"

Jane Bowman reminded the Authority that the State cut back on funding to remove the snow in the downtown, so matters are only going to get worse.

The Authority voted unanimously to approve the expenditure to clear the snow on the streets in front of the Pocket Park.

Discuss Authorizing $350 for Holiday Lights from Permanent Holiday Fund

Demasi explained why this item was on the agenda for a second time. She explained that the issue was previously discussed and approved. However, initially it was believed that the lights the City had stored were good enough to use once again this year. Once the lights were tested, it was apparent that new lights would need to be purchased.

Since the lights were needed this year, it is necessary to revisit the issue and have the Authority give its approval for this year's purchase of LED lights.

Demasi explained that the new lights were going to be stored in the Memorial Building to better protect the investment.

Petersen interjected that the holiday lights are now programmed to run from 4:00 PM to midnight. He explained with a grin that the all of the lights shut off about a half hour after the tree lighting ceremony. He said he figured out how the system works now.

Goerig explained that there is $425 available in the fund to pay for the lights. The Authority unanimously voted to approve the expenditure.

Blighted Properties

Chairman Goerig explained to the Authority that a copy of the "Powers of the Board" based on Michigan law governing Downtown Development Authorities was included in their packets.

He tried to explain that the DIDA didn't have the authority to enforce blight violations. According to his interpretation of the law, the Authority was basically helpless when it comes to blight control. Steve Frank disagreed with Goerig's assessment of the "Powers of the Board," however. Frank said that, in his opinion, the DIDA has the authority to take action when needed.

According to the law:

DOWNTOWN DEVELOPMENT AUTHORITY (EXCERPT)
Act 197 of 1975

125.1657 Powers of board; creation, operation, or funding of retail business incubator.

Sec. 7.

(1) The board may:

(a) Prepare an analysis of economic changes taking place in the downtown district.

(b) Study and analyze the impact of metropolitan growth upon the downtown district.

(c) Plan and propose the construction, renovation, repair, remodeling, rehabilitation, restoration, preservation, or reconstruction of a public facility, an existing building, or a multiple-family dwelling unit which may be necessary or appropriate to the execution of a plan which, in the opinion of the board, aids in the economic growth of the downtown district.

(d) Plan, propose, and implement an improvement to a public facility within the development area to comply with the barrier free design requirements of the state construction code promulgated under the Stille-DeRossett-Hale single state construction code act, 1972 PA 230, MCL 125.1501 to 125.1531.

(e) Develop long-range plans, in cooperation with the agency which is chiefly responsible for planning in the municipality, designed to halt the deterioration of property values in the downtown district and to promote the economic growth of the downtown district, and take such steps as may be necessary to persuade property owners to implement the plans to the fullest extent possible.

(f) Implement any plan of development in the downtown district necessary to achieve the purposes of this act, in accordance with the powers of the authority as granted by this act.

(g) Make and enter into contracts necessary or incidental to the exercise of its powers and the performance of its duties.

(h) Acquire by purchase or otherwise, on terms and conditions and in a manner the authority considers proper or own, convey, or otherwise dispose of, or lease as lessor or lessee, land and other property, real or personal, or rights or interests in property, which the authority determines is reasonably necessary to achieve the purposes of this act, and to grant or acquire licenses, easements, and options with respect to that property.

(i) Improve land and construct, reconstruct, rehabilitate, restore and preserve, equip, improve, maintain, repair, and operate any building, including multiple-family dwellings, and any necessary or desirable appurtenances to that property, within the downtown district for the use, in whole or in part, of any public or private person or corporation, or a combination of them.

(j) Fix, charge, and collect fees, rents, and charges for the use of any building or property under its control or any part thereof, or facility therein, and pledge the fees, rents, and charges for the payment of revenue bonds issued by the authority.

(k) Lease any building or property under its control, or any part of a building or property.

(l) Accept grants and donations of property, labor, or other things of value from a public or private source.

(m) Acquire and construct public facilities.

(n) Create, operate, and fund marketing initiatives that benefit only retail and general marketing of the downtown district.

(o) Contract for broadband service and wireless technology service in the downtown district.

(p) Operate and perform all duties and exercise all responsibilities described in this section in a qualified township if the qualified township has entered into an agreement with the municipality under section 3(7).

(q) Create, operate, and fund a loan program to fund improvements for existing buildings located in a downtown district to make them marketable for sale or lease. The board may make loans with interest at a market rate or may make loans with interest at a below market rate, as determined by the board.

(r) Create, operate, and fund retail business incubators in the downtown district.

(2) If it is the express determination of the board to create, operate, or fund a retail business incubator in the downtown district, the board shall give preference to tenants who will provide goods or services that are not available or that are under-served in the downtown area. If the board creates, operates, or funds retail business incubators in the downtown district, the board and each tenant who leases space in a retail business incubator shall enter into a written contract that includes, but is not limited to, all of the following:

(a) The lease or rental rate that may be below the fair market rate as determined by the board.

(b) The requirement that a tenant may lease space in the retail business incubator for a period not to exceed 18 months.

(c) The terms of a joint operating plan with 1 or more other businesses located in the downtown district.

(d) A copy of the business plan of the tenant that contains measurable goals and objectives.

(e) The requirement that the tenant participate in basic management classes, business seminars, or other business education programs offered by the authority, the local chamber of commerce, local community colleges, or institutions of higher education, as determined by the board.

History: 1975, Act 197, Imd. Eff. Aug. 13, 1975 ;-- Am. 1985, Act 221, Imd. Eff. Jan. 10, 1986 ;-- Am. 2004, Act 196, Imd. Eff. July 8, 2004 ;-- Am. 2005, Act 115, Imd. Eff. Sept. 22, 2005 ;-- Am. 2008, Act 226, Imd. Eff. July 17, 2008
Popular Name: DDA
Popular Name: Downtown Development Authority Act

According to Goerig the complaint that was received about a local downtown business, Ironwood Antiques "is more of a "safety" issue and the DIDA was basically powerless to do anything about it. Goerig told the Authority that the property was inspected by Dennis Hewitt and Bob Erspamer and it was determined that the business was a fire hazard. Goerig went on to say that the apartments above are also in bad shape and create a hazard.

Demasi explained that she discussed the problem with a neighbor of the business and there definitely was a concern about the fire potential. She explained that the DIDA members serve without pay trying to make the Downtown a better place. A fire in virtually any building downtown could wipe out a large segment of the City, and all of the DIDA's efforts would be for nothing, Demasi said.

Steve Frank interjected that his interpretation of the law as presented is very different that Goerig's assessment. He said, it is not only the right of the DIDA to intervene in such cases, it was their duty. According to Frank's assessment of the law, he believes the DIDA has sweeping authority to see that the area is brought up to code and that the area is made safe. He read sections "C," "F" and "G" to support his interpretation of the law. Frank went on to say he believed the Blueprint Plan that the City has recently invested in would certainly insist that action be taken on City blight.

Jackie Powers pointed out that Ironwood Antiques is one of many examples in the downtown. She pointed out the junk behind Woodtech Builders and the former City News building as examples.

Goerig told the Authority that the DIDA had no plan to follow to develop the City, and that the Blueprint Plan would give the Authority a direction to follow. Eva Smith-Furgason strongly disagreed with Goerig, pointing out that the DIDA definitely has a plan, however nothing is ever done to follow the existing plan.

Powers pointed out that the Authority members were to compile lists of blighted properties throughout the downtown. She explained that she did what she was asked to do. She created a two-page report that she submitted to the DIDA. She asked whatever happened to the idea and why it hasn't been mentioned since it was first brought up. Goerig told Powers that her list was the only one submitted. Powers explained that she has better things to do with her time than to go through such exercises that are never used.

Vice-Chairman Joe Karius fortified Goerig's position that the Authority was essentially powerless to take any kind of action on blight issues. He said that certain people within the City were responsible for enforcing the blight ordinances, and the DIDA should not be involved with the process. Karius went on to say that he believed the reason the DIDA opted to go ahead with the Blueprint Plan was because no action was taken on existing plans.

Frank compared the City of Ironwood to the "worst kind of parent." He said the City has a tendency to make rules that are never enforced. He said when a child isn't disciplined for improper behavior he loses respect for the parent. He continued by saying the City is forever coming up with new rules and regulations, and none of them are followed. He said with all the rules, eventually everything a kid does seems to be wrong, and it doesn't matter if what is done is right or wrong because there are no consequences for doing things that are against the rules.

After considerable debate on the topic, Goerig suggested the Authority move on to other issues.

Staff Updates - Mural Project

According to Dan Petersen the mural project was not going well. To date, only two donations were received to help fund the project.

Demasi pointed out that the bad economy may be a big reason for such a lukewarm response.

Previously Steve Frank suggested that it could be in very poor taste to plaster a "loved-ones" face on a miner's body if the "loved-one" was never a miner. Dan Petersen expressed Frank's concerns to the artists that produce the murals, and they explained that they would be sensitive to that issue.

Ironwood Christmas Bucks

Eva Smith-Furgason told the Authority that she started a promotion called "Ironwood Christmas Bucks." She explained that twenty-seven businesses are participating in the program this year. She briefly described how the program worked and she said if it takes off the way she anticipates it will, she intends on doing "Ironwood Festival Bucks" during the Festival Ironwood.  She said the best way to support area businesses is to shop at area businesses. She told the Authority that her eventual goal was to resurrect a Downtown Merchant's Association in the future.

Jackie Powers told the Authority that she has been hearing a lot of good responses to the program. She said she thought it was a great idea and something very positive for area downtown merchants.

Opposition to Hovey PILOT

Jackie Powers brought up the emails that Roy Ahonen sent to the Authority members. She told the Authority what she told Mr. Ahonen regarding the situation. She said the only way she could recommend that the DIDA send a letter of opposition is if there was some evidence that the PILOT (Payment in Lieu of Taxes) would negatively impact the downtown businesses.

Lousie Demasi explained that she felt it wasn't appropriate for the DIDA to take a position. She said she didn't oppose the Hovey Towering Pines project, she opposed the PILOT. She said that free enterprise works, but everything needs to be equal for all businesses. She said she didn't feel it was fair for Hovey to pay 2% taxes when other local landlords are paying a much higher percentage.

Eva Smith-Furgason said she believed it was very appropriate for the DIDA to take a position on the matter. She said the PILOT was reason enough to oppose the idea. Eva explained that she has kept up with issue and that it is unfair taxation.

Demasi cautioned that basing opposition to the project based on one man's data was a dangerous thing. She questioned what would happen if Mr. Ahonen's figures are incorrect. She warned that the DIDA would be "hanging themselves out to dry" if they based their opposition to the project on incorrect figures.

Jackie Powers explained that the PILOT is very clearly stated. She said all downtown businesses pay a much higher percentage in property taxes than the 2% Hovey will be required to pay. She explained that the PILOT would remain active until the mortgage with MSHDA is fully satisfied -- thirty years or more. She also pointed out that downtown businesses also pay a TIF tax to support the DIDA's efforts. She explained that Hovey would only pay 2% of the rents collected less utilities. She said the taxation on the PILOT is reason enough to oppose the issue.

Steve Frank pointed out that MSHDA just recently financed the Taplin Building apartments downtown. He said he sees many "potential" negatives that could hurt downtown businesses, but the tax disparity is a just reason for the DIDA to express opposition to the PILOT.

Eva Smith-Furgason started to suggest that the letter read... "based on the negative economic impact of the proposed Hovey project..." when George Goerig interrupted her.

He stated that the issue is very controversial and that there is a lot of information out and available from both sides. He said he personally doesn't have enough information or enough "factual" information to make a decision. He said a motion can be made to try to support the issue, "but myself, I will not support it as a board!" He went on to say, as a citizen he will go before the Commission and voice his concerns.

Smith-Furgason told the Authority that she felt the DIDA had a "burden" to oppose something that could have such a negative impact on the downtown businesses. She said she personally doesn't have time to attend so many meetings. She said she serves on the DIDA to represent the businesses and landlords downtown.

"This is another one like blight, we could discuss this all day long! If you would like to make a motion to see if it passes, you can do that!" Goerig explained.

"So the different methods of taxing aren't enough for you , George, to say that's unfair to the downtown?" Powers questioned. 

Before Goerig could answer, Demasi interrupted saying the people need to voice their opinons directly to the City Commission at the meeting. If enough people voice opposition to the idea, the Commission would be "obliged" to go with the wishes of the people, she reasoned.

Goerig called for a motion. This reporter, who happens to be a downtown businessman and landlord had my hand raised to voice in on the issue. Goerig acknowledged me and said he would give me the opportunity to speak shortly.

Smith-Furgason made a motion "to oppose the PILOT of the Towering Pines based on the negative economic impact on the downtown businesses and rentals."

Frank suggested the word "potential" should be added. Powers suggested sticking to the PILOT issue that the Commission was going to consider.

Demasi said, "You cannot say the businesses downtown. What about the highway?"

Smith-Furgason said that the DIDA's concern is strictly the downtown businesses.

Demasi said if the motion passed, she wanted it stated that she voted NO. She said she knows the Commission and she will speak for herself.

Dan Petersen tried to explain the PILOT and MSHDA's reasons for requiring the tax break. This reporter pointed out that most communities insist on a 10 percent PILOT -- not 2%.

Jackie Powers seconded Eva's motion as previously worded and Goerig asked for discussion on the matter. Joe Karius spoke up.

Karius spoke about the lack of development in Ironwood. He said the only things that have come to Ironwood recently have been Wal-Mart and Walgreens. He said that the Towering Pines project was an opportunity to finally say, "Okay, let's move with something!" He conjectured that the project could improve the downtown business climate by attracting young professionals. He incorrectly stated that this was the first project of its kind ever proposed -- PILOT or no PILOT -- that has attempted to locate in the Ironwood area. According to Planning Commission minutes, back in 1989, an extremely similar project was proposed by a local investor for a 48-unit low-income development. 

Karius said many communities would welcome such a development. Ironwood, he pointed out, is saying... "No! We don't want it! It's not fair!" He went on to say, "A lot of things are not fair because things change over the years! Things change over the years!"

"My building pays a lot of taxes and everything else happens that you can't help what is gone on when you find your current circumstances and what looks to be the future circumstances are going to be very difficult everywhere.  And especially in a community like ours. So when we do have a chance for some development we should take a little broader view..." Karius rambled. The Chronicle could not find evidence that Karius owns a commercial building in Ironwood. In fact, Karius doesn't even live in Ironwood.

Smith-Furgason pointed out how the City of Ironwood is struggling to fix their roads, plow their streets, and maintain the current infrastructure. She said giving such a ridiculous tax break to Hovey was unfair to all of the City's taxpayers.

Karius repeated the commonly cited rhetoric that without the PILOT there would be no Hovey. The project will not move forward without the PILOT ordinance. He went on to say that the people who move into the area to live in the rental units will also pay taxes. This too is a misstatement. They may pay sales taxes, but they won't be paying property taxes if they are renting from Hovey.

Frank agreed that the PILOT payment would be a positive for the community, however, he said he hasn't seen any evidence that the few dollars in PILOT payments they will make is enough to overcome the potential negatives to the community.

Louise Demasi attempted to leave the meeting. George Goerig asked that she wait until a role call vote was taken on the motion presented by Smith-Furgason.

A roll call vote was taken. Karius, Goerig and Frank voted NO. Smith-Furgason and Powers voted YES. Demasi abstained. The motion, as stated was defeated. While the vote was being taken, Demasi was explaining her position to this reporter. The Globe's reporter, Eric Hjerstedt Sharp, asked that the vote please be repeated so that he could hear what was said. Dan Petersen told him he would give him the information following the meeting.

Before Demasi left, and after the vote was taken, Goerig allowed this reporter to speak. I pointed out that the percentage of taxes I pay on my building is substantially higher than what Hovey will be paying. I pointed out that the higher my utilities are, the less profit I make. And whether I have tenants or not, my taxes remain the same. Hovey, on the other hand, gets a reduction on their PILOT when their utilites increase or when they are unable to rent any of their units. This, in my opinion, is unfair taxation that gives Hovey an unfair business advantage over every existing landlord in the area.

This reporter also corrected something that Ms. Demasi stated earlier. Demasi said that attending the meetings and voicing your opinion has an impact on the vote of the various Commissions and boards. I pointed out that the public in attendance at the public input meeting to allow snowmobiles on City streets was very much opposed to the proposition. At the Planning Commission, those against the proposal outnumbered those that supported it. Even though the general public made it VERY CLEAR that they opposed the proposal, the Planning Commission agreed to recommend the passage of the proposition to the City Commission.

Demasi was surprised. She said she read about the meeting in the Globe, but couldn't understand what went on. She said goodbye and left.

Steve Frank explained his vote to the Authority. He told the members that he voted NO to the motion because the DIDA didn't have data to support a negative economic impact to the downtown.

Powers recommended that a new motion be put before the Authority. Frank said he would like to make such a motion. Karius objected stating that Louise had left the meeting. Frank returned that a quorum still existed, and that a vote was well within the rules of the Authority. Frank reworded a motion that stated the DIDA officially opposed the PILOT due to the fact that it was unfair taxation. Another roll call vote took place. This time the motion passed. Voting YES were Smith-Furgason, Frank and Powers. Voting NO were Karius and Goerig.

Before the meeting adjourned, Steve Frank mentioned that the Superior Chronicle has created a Community Calendar as a result of requests made at the All Board Meeting. He explained that anybody that wanted to post the calendar on their website was welcome to do so.

Immediately following the meeting, George Goerig walked up to Steve Frank and accused him of  using crafty politics to change the vote. Frank attempted to explain to Goerig that he was simply voting his conscience and was trying to vote for what is right. Goerig, smiling from ear to ear, continued to insist that Frank was playing politics as he left the meeting.