Committee approves GRE grant

The City Council’s Finance and Legal Committee approved a $300,000 jobs incentive grant for Great River Energy Tuesday, but not without debate.

The Jamestown/Stutsman Development Corp. Board recommended approval of the grant to be funded 80 percent by the city sales tax and 20 percent by the county’s economic development fund. Mayor Clarice Liechty argued that since the GRE power plant is in the county and will receive the property taxes, the 80 percent should come from county funds.

Councilman Charlie Kourajian said the county probably doesn’t have enough money to pay 80 percent. Councilwoman Kelani Parisien added that Jamestown is the center for shopping so regardless of where the plant is being built, people are paying the 1 percent sales tax by purchasing goods and services here.

The mayor also pushed to get Barnes County economic development to chip in as a benefactor in the GRE power plant. She said the portion of the property tax, which goes to schools, is going to Barnes County. Some employees, construction and power plant, will also live in Valley City as do some Cargill employees.

JSDC Chief Executive Officer Connie Ova told the mayor the economic development dollars in Stutsman County come from a property tax mill levy. Those funds can’t be spent outside the county.

“I assume Barnes County is governed by the same rule,” Ova said.

“And I would think people here would greatly complain if JSDC funds were spent in another county,” added Councilman Ken Schulz.

Councilman Pat Nygaard, who chairs the Finance and Legal Committee, questioned paying out grant dollars rather than a low- or no-interest loan. He also had a problem, he said, with the 18 indirect jobs created. Ova said the grant funding covered 24 permanent high-paying jobs. Whereas the average jobs funded by JSDC are in the $10 to $12 an hour range, Ova said, these jobs average $25 to $35 an hour.

Added to that, it was GRE’s ability to provide steam energy to Cargill that kept the company here, Ova said.

“Cargill needed less expensive energy or it would move or close,” she said. “Then another 100-plus employees would have been impacted.”

GRE is looking for a second steam host, since the ethanol plant is not going to happen. Whatever business is found will mean even more jobs.

“My issue is about direct grant funding,” Nygaard said. “We’re overly generous on grants.”

Schulz said as long as he’s been on the council, JSDC funding has been in loans the majority of the time.

“In my experience, grant funds are the exception rather than the rule,” he said.

In a 3-2 vote, Nygaard and the mayor voted against it.

The vote was unanimous to approve JSDC purchasing the 551.8 acres of land owned by Harold Newman. The property was the intended site of an ethanol plant. JSDC will purchase the land for $1.975 million and sell all but 100 acres to GRE for $1.7 million. The investment includes an advertising credit of $75,000, by Newman Outdoor Advertising, to be used to attract business from outside North Dakota.

At the same time, with no fuss, $4.5 million plus interest is being returned to JSDC in equity and incentive funding advanced for the ethanol plant project. In all, the investment will have cost the JSDC $169,000 for 100 acres of land.

“We’re pretty pleased with the situation,” said Jim Boyd, JSDC Board president.

“If you look at the $4.5 million in equity and incentive money along with the interest we’re getting back, it’s really only $40,000 for the land,” Parisien said.

The committee also unanimously approved $42,000 in JSDC funding for engineering fees on the $950,000 mill and overlay project on Third Street Southeast. The project is funded with stimulus money, which does not cover engineering fees. Although the JSDC lawyer did not feel the project qualifies as economic development, both the JSDC Board and the Finance and Legal Committee approved it.

Sun reporter Toni Pirkl can be reached at (701) 952-8453 or by e-mail at tonip@jamestownsun.com

Tags: great river energy, news, gre, jamestown, stutsman, development