MEDC Rejects Land Acquisition, Banners & Art from DIDA's CDBG Plan

IRONWOOD, MI - Wednesday, February 17, 2010 - The Downtown Ironwood Development Authority (DIDA) held a special meeting on Wednesday, February 17, 2010. The meeting had only one item on its agenda -- an audience with Cathi Cole, representative of the Michigan Economic Development Corporation (MEDC). Ms. Cole met with the Authority to explain the MEDC's position on the City's pre-application to the Community Development Block Grant (CDBG) program for Downtown Renovations.

The meeting was called to order at 9:00 AM by DIDA Chairman George Goerig. Roll was taken by DIDA Secretary Jane Bowman. DIDA members attending the meeting included: Eva Smith-Furgason; Mayor Bob Burchell; Corey Gresham; Gail Johnston; Joe Karius (Vice-Chairman); George Goerig (Chairman) and Bill Penrose. Rick Tippett was excused for the meeting and there is one vacancy on the DIDA. City Manager Scott Erickson and DIDA Secretary Jane Bowman also attended. Cathi Cole, MEDC's representative for Ironwood, was at the meeting to address the DIDA. Media represented at the meeting included: Margaret Levra from the Daily Globe and Keri Singleton and yours truly from the Superior Chronicle. Audience members included Arvo Toolanen; Lou Bonagura; City Commissioner Rick Semo; Lily Palmer; and Ironwood Chamber of Commerce representative Kim Kolesar.

Following the recording of the roll, Chairman Goerig asked audience members if anyone wished to address the Authority on agenda items. No one expressed an interest in addressing the Authority.

Goering then introduced Cathi Cole to the Authority and explained that she would be discussing the pre-application to the MEDC for a Community Development Block Grant.

Ms. Cole explained to the DIDA that she met earlier in the morning with City Manager Scott Erickson to discuss the City's pre-application for the grant.

"There are a couple of things we cannot pay for in the original plan." Cole told the Authority, "We cannot purchase land." She explained that the $60,000 earmarked for the acquisition of the Canadian National office near the Ironwood Depot would have to be eliminated from the application. She suggested that the City purchase the land as part of their matching funds for the grant. She said she didn't find out until she met with Erickson that the building was occupied. Since the building is currently used to house a business, the purchase of the property would not qualify for grant funding.

"We cannot also pay for public art or banners!" Cole explained. Twenty-one thousand dollars was originally earmarked to commission public art in the form of a sculpture for the Depot Park and $26,000 was requested for year-round wrought iron banners to line the downtown streets.

Cole told the Authority that the MEDC is ready to advance the City's pre-application as soon as it receives a map that indicates where in the downtown each of the requested items is located. After removing the land acquisition ($60,000), the Depot Park sculpture ($21,500), and the street banners ($26,000) over 83% of the originally submitted estimates were deemed to be grant eligible -- $542,500 of the $650,000 requested.

Scott Erickson told the DIDA that a map will be prepared and supplied to the MEDC next week. Cole indicated that a response to the pre-application would be given within a week or ten days after receiving the map. She said that an invitation would then be given to the City to complete the full application for the program. Erickson said that the City will quickly complete the application once it is received. Cole asked Erickson if the application would be completed "in-house" or if the Western Upper Peninsula Planning and Development Region (WUPPDR) would assist in the process. Erickson said it depends on timing. He said he would ask WUPPDR for assistance if necessary. He went on to say if a new Community Development Director is hired before the formal invitation is received he or she would take part in completing the application.

Chairman Goerig then asked the members of the Authority if they had any questions of Ms. Cole regarding the pre-application and application process.

Joe Karius asked Cole to list off those items that are grant eligible and which ones were not.

"It's easier for me to tell you what we will not pay for" Cole replied, "there are only three items on here!" Cole repeated the items that were not grant eligible -- the acquisition of the property belonging to the Canadian National Railroad; the commissioning of a sculpture in the Depot Park; and the purchase of banners along the downtown streets.

Karius told Cole that there were "cross-outs" on the list he received and he didn't know what they meant. "These items that were blacked out, is that a..." Karius questioned.

Jane Bowman explained that the copy wasn't the clearest and that highlighted areas were difficult to read. She pointed out that the rejected items were indicated by a star on the list of original requests made during the pre-application and she repeated the ineligible items as Cole described. Karius continued by reading items off the pre-application. "For example, under 'Depot Park Acquisition' it says, 'Restoration Top Soil, Mulch $10,000'... What is that? Is that in or is that out?"

Cole indicated that the top soil and mulch were eligible. She repeated that only the three items that have stars marked next to them were ineligible. Erickson indicated that the "blacked-out" areas were simply the style of the spreadsheet, and they have nothing to do with what is acceptable or not acceptable for grant approval.

"And the public art and the banners... what's the thinking on that?" Karius asked, "What's the rationale behind that?" Cole explained that it was the MEDC's policy not to pay for those things. She said that Lansing made those decisions. She went on to explain that the poles and banner hangers were still grant eligible, but the banners were not.

Eva Smith-Furgason asked Cole what the CDBG rules for purchasing occupied buildings were. Cole explained that there is a clause in the Community Development Block Grant called "URL Relocation." Erickson clarified what property was in question... the Canadian National office on the northeastern corner of the Depot Park area... on the intersection of Frederick Street and Suffolk Street.

Mayor Bob Burchell asked why the acquisition of the storage building adjacent to the Memorial Building was grant eligible while the Canadian National Building was not. Cole explained that the building was unoccupied and being used for storage. Erickson said that the acquisition of the Canadian National building could come out of the City's 10% match for the CDBG program.

Erickson then asked the Authority if, since nearly $108,000 has been removed from the original $650,000 request, they wanted to add some more items to the pre-application for consideration.

Chairman Goerig expressed an interest to move ahead with the pre-application so that action can be taken. Cathi Cole explained that the City can reapply for additional funding at a later time.

Smith-Furgason pointed out that the wall adjacent to the Pocket Park was in disrepair. She said that the park was beautiful, but unattractive wall was not the best backdrop for enhancing the park. She asked if that could be included in the grant application. Scott Erickson pointed out that Dan Petersen had included the wall in the pre-application. Smith-Furgason apologized stating that it was not legible on her copy.

Karius asked Cole to briefly outline the process and give an approximate time-line for that process.

Cole answered Karius by explaining that the first requirement is that the City needs to submit a map showing where all of the improvements would take place. She said once she receives the map, because she's already discussed the project with the MEDC in Lansing, that it would be presented at their next weekly meeting. She said she would have an answer following that meeting. Then a CDBG specialist would be assigned to the project who would report to the Board of Directors of the MEDC. She said the process would take six to eight weeks maximum

Karius then asked how the money would be dispersed. Cole explained that bids would need to be taken. Once contractors are selected and the work is complete, invoices need to be forwarded to the MEDC. The MEDC or the grant administrator then sends the City a check for 90% of the total costs.

Karius asked Erickson of the City would be doing any of the work or if it would all be put up for bids. Erickson indicated that bids would be sought and the project would be contracted out.

Karius asked Cole if it would be wise to add items now. She said if the DIDA and the City feels there are important things missing, they should be added. She went on to say that changes need to be sent to her by next week Wednesday.

Chairman Goerig asked Cole about reestablishing the City's TIF District. Ironwood's TIF District is currently dormant. Cole said a resolution allowed the District to go dormant, and she believed that a resolution could bring it back. She suggested that the City pass a resolution regarding the District and that the City could use the current year as its base. She told the Authority that she will check with her legal staff to verify what she said, but she would have a definite answer for the City by next week.

She said that expanding the District is also possible, but the City would need to contact all of the parties that the new expanded district would involve; public hearings would need to take place; and the City Commission would have to vote for the change.

Smith-Furgason asked if the purchase of an empty lot was possible with the grant. She explained how the City tore down the former Sharon's Place building in the City's "focus block" and that the Blueprint Program urged the City to have Farmer's Markets, etc.  She pointed out that there were two empty lots in Downtown Ironwood and that the Sharon's lot was sold to an out-of-town speculator. Cole explained that usually the purchase of land was problematic, however, an application would be considered if there are plans in place to utilize the land to the benefit of the community. She suggested that a separate grant requeste be made at a later date.

Cole told the Authority that several grant applications will be considered provided that the City shows it is properly utilizing the funds. She said the City's track record on this grant will increase the chances for future grants.

Goerig thanked Cole for attending the meeting and asked for an adjournment.

Karius suggested that action be taken if the Authority was in agreement with the pre-application as amended. Smith-Furgason made a motion to accept the pre-application as amended. Gail Johnston seconded Smith-Furgason's motion, and the DIDA voted unanimously to move forward with the CDBG grant application process.

Following the vote on the application, the DIDA unanimously voted to adjourn.