According to sources within the Shell Prairie Agricultural Association, the organization that owns the Hubbard County Fairgrounds is concerned about how special assessments for the proposed Fair Avenue street and utility improvements will affect the county fair.
However, no representative from the association spoke up at the hearing the Park Rapids City Council held Oct. 12 to gather public feedback on the project. Another hearing will be held specifically about the assessments, possibly in spring 2022.
The association’s property at 107 Fair Ave. is the largest assessable parcel in the corridor, covering 21.66 acres, all within the “full reconstruction” area of the project.
On Sept. 14, City Engineer Jon Olson with Apex Engineering Group presented his firm’s preliminary estimates of the assessments for some of the largest parcels in the project area. The figures ranged from $50,000 to nearly $300,000 based on typical assessment practices.
At that time, Olson also presented ballpark figures for the assessments using 50% of the city’s award from Minnesota Department of Transportation’s $1.25 million Local Road Improvement Program grant to buy down property owners’ assessments. The new numbers ranged from $30,000 to nearly $210,000.
In another set of rough numbers that Olson presented to the council on Oct. 12, the 50% allocation of LRIP grant funds to the assessments suggested a potential assessment of $200,700 to the fairgrounds.
Olson said the assessments could be paid over the 15- to 20-year lifetime of the city’s bond for the project, at an interest rate 1-2% higher than the city’s bond rate.
Cost vs. benefit
Russ Smith, president of the Shell Prairie Agricultural Association, commented by phone and confirmed that the association is concerned about the high assessment numbers reported in news coverage of the project.
“The association, run by volunteers, really doesn’t see the benefit to improving the road or the cost associated with that,” he said, clarifying that they don’t see how the project specifically benefits the fair. “It makes parking more difficult on the road, and potentially puts us at a stalemate on a lot of improvement projects for, I would think, the next 10 years. For sure, it’s a lot of money.”
Smith said the association is working with other members of the Minnesota Federation of County Fairs to discover “what actions we can take to either not pay the assessment or reduce the dollar amount of the assessment.”
Assuming the potential assessment amount of $300,000 is spread over 10 years, Smith said, “That’s a considerable portion of the fair’s annual income, which goes directly back into the fair in supporting the next year’s activities. So, it potentially would slow down a lot of progress on projects and the things we’ve been trying to improve.”
Asked what he thought about the proposal to spend 50% of the LRIP grant to buy down the assessments to the $210,000 range, Smith said, “For us as a small nonprofit – and our only income is what we can try to produce ourselves with the fair and boat storage – $210,000 is the difference between a potential new building project, because a lot of our buildings are getting really old, or not doing anything for another decade.”
For example, he said, during the past five years the association has been planning to replace the fair’s decaying poultry barn. “If we have to pay this over the next 10 years, that’s really not a possibility,” he said. “To be honest, it’s a make-or-break.”
Advised that Olson said the assessments could likely be paid over a 20-year period, Smith said, “Either way, the money is the money, if you’ve gotta make it hurt for 10 years or make it hurt for 20. We don’t have a lot of income. It’s a small fair, and we’re not supported by the county.”
He clarified that there is no county tax levy to support the fair, although the county does rent office space at the fairgrounds.
Smith said he is unsure of what the association’s next steps will be.
Alerted to Smith’s concerns, Olson confirmed the city council is aware of the potential costs of the Fair Ave. project to the larger adjacent parcels, also including Park Rapids Forest Products, Heritage Living Center and St. Peter the Apostle Catholic Church.
“I think, from the city’s perspective, there’s interest in further evaluating and considering, maybe, some special circumstances for those properties,” he said. “We’re certainly sensitive to the nature of the costs.”
Olson said he anticipates a “larger discussion” about how to proceed with the assessments, possibly on a case-by-case basis.
“The fairground has been our concern almost from Day 1 when we started talking Fair Avenue,” he said. “There are certainly infrastructure needs along that corridor. The fair is a large property owner and it’s been, frankly, a nice community asset, to have the fair that close to town.”
He said the city intends to reach out to the fairboard once the project is a little further along, stressing that it’s still in preliminary stages.
“Hearing the feedback from the property owners last week is critical,” he said. “We needed to hear some of that feedback before we got too far along.”
Olson credited City Administrator Angel Weasner with saying that such hearings are “a huge part of the city’s desire to make sure that we’re all working together.”