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Menards may come: Contract with retailer subject of special meeting Tuesday

The Jamestown City Council will hear comments on a proposed contract between the city of Jamestown and Menards during a special meeting at 5 p.m. Tuesday at City Hall. The contract defines land purchases and financing options related to Menards opening a store in southwest Jamestown.

The meeting culminates planning that began in August to bring an unnamed big box home improvement store to southwest Jamestown. The development, located west of R.M. Stoudt and fronting Interstate 94, is known as Prairie Haven Commerce Park.

Developers Drew Snyder of Woodsonia and Matt Dennis of R.H. Johnson Co. originally developed the plan and have facilitated negotiations between the city and Menards.

The original developer’s agreement, signed in October between the two companies and the city included the city purchasing about 73 acres of land. The Menards store would have received 20 acres while streets and drainage would require about 13 acres leaving the city with about 40 acres of commercial lots between the Menards and the R.M. Stoudt location.

The new plan reduces the size of the development to 33 acres and moves it closer to R.M. Stoudt. This also reduces the cost of the project from about $8 million to about $5.7 million. It also eliminates most of the commercial lots that had been planned around the store. The contract indicates Menards would receive 20.25 acres with about 5 acres used for roads and 7.5 acres in commercial lots around the Menards location.

Jamestown Mayor Katie Andersen said the changes make the project more feasible.

A proposed contract between Menards and the city of Jamestown was distributed to members of the City Council earlier this week. The contract specifies the responsibility of the city and Menards in the project.

“The city’s costs are to acquire the site, cover engineering costs, legal fees and developer fees,” said Jeff Fuchs, city administrator. “The big box is doing all the infrastructure.”

Jamestown’s costs total $3.4 million and include $2.9 million to acquire 33 acres of land, $250,000 for developer fees and $125,000 each for legal fees and engineering costs. The contract also gives the title to 7.5 acres of lots adjacent to the Menards location to Woodsonia and The R.H. Johnson Co. in lieu of $650,000 in developer fees. This would reduce the developers’ fees for the project from an original cost of up to $900,000 to $250,000 and the land.

The city may sell bonds to cover these costs, according to Fuchs.

The city would then form a tax increment financing district that includes the area of the proposed Menards store and the adjacent lots to repay the bonds, Fuchs said.

In a TIF district, the land would be taxed normally. Property taxes on buildings on the property would be used to repay the bonds used to finance the development. In addition, the city would take half of the current 1 percent city sales tax generated in Prairie Haven to help cover bond repayment. Fuchs estimated it would take 15 years to retire the bonds.

Menards will pay for grading the project site and paving 10th Avenue Southwest from 23rd Street to 25th Street Southwest and paving 23rd Street Southwest to the west end of the Menards property. Menards will also extend sanitary sewer to the area. The total cost of the Menards infrastructure improvements is estimated at $2.3 million.

Menards’ infrastructure costs would be repaid by a rebate of half of the 1 percent city sales tax generated in the development until the costs and interest are repaid or for 25 years —whichever comes first.

Fuchs said Jamestown has used TIF districts twice in the past. Developers of the Hugo’s Family Marketplace and Newman Signs both used the program to cover infrastructure costs.

The city has not rebated a portion of the sales tax back to a business in the past, he said.

Andersen said all costs of the project will be paid from revenues generated within the Prairie Haven Commerce Park.

“It’s important to know everything proposed is funded by Menards itself,” she said. “No one else’s tax dollar is contributing.”

Andersen said the Tuesday meeting is intended to make information available to the public.

“This is an opportunity for the City Council to share information as the contract has been negotiated rather than based on rumors,” she said. “We could take action. I think it is expected by Menards that we take action so they can begin taking care of contingencies.”

Voting on the contract on Tuesday is too quick, according to Councilman Dan Buchanan.

“Any vote now is premature,” he said. “We need to let it soak into the public and give them time to provide some comments.”

The purchase and sales agreement contract that is currently under discussion includes several pages of contingencies on both parties. Requirements of the city include changing the zoning and approving easements for utilities. Requirements on Menards include wetlands delineations and other environmental studies.

Both parties must complete a TIF developer’s agreement and the city must hold public hearings and approve the TIF district, before the contract can be finalized.

The purchase agreement specifies the deal must be closed within 180 days. Menards is required to open a fully stocked and staffed store no later than July 1, 2016.

Sun reporter Keith Norman can be reached at 701-952-8452 or by email at