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Frustrations grow over 40th Street woes: City, businesses try to find a solution as project hangs in limbo

Press Photo by Nadya Faulx A truck drives Tuesday along unpaved 40th Street off of Highway 22. The half-mile stretch of road has been due for extensive improvements for months, but debates over funds have delayed construction and caused frustration among landowners.

Jared Scheeler first heard of business partner Chris Fitterer’s plan to build a convenience store in Dickinson in 2012.

Scheeler had been working in the Twin Cities area in the convenience industry for more than a decade when he made the decision to come back to his hometown and help run The Hub, which broke ground at the southwest corner of Highway 22 and 40th Street West last month.

“It came together pretty quickly,” he said.

But early in the design process, the business owners found out the plot had no sewer and no water hookup — an issue The Hub owner Fitterer brought before the Dickinson City Commission last June.

A bid was opened in September to bring sewer and water utilities to Fitterer’s 7-acre property. The low bid came from Meyer Contracting at $548,177.55; the commission voted to award the bid with the agreement that Fitterer would fund the project.

But in an email sent Oct. 9, the city, citing future maintenance concerns, informed Fitterer that it did not recommend awarding the contract. It preferred to construct the utility extension along the whole of the 40th Street roadway, with an expected completion date in fall of 2014.

City Attorney Matthew Kolling told The Press that lot-by-lot improvements along 40th Street are unfeasible because of of major issues with stormwater — and they’re more costly than a single, expansive project.

“The larger the project, the more comprehensive the project, the cheaper the overall cost is going to be,” he said.

The private bid was dropped and the city moved ahead with its plans to improve the infrastructure along all of 40th Street. Scheeler moved to Dickinson last fall to work with Fitterer to prepare The Hub.

“It went from our timeline to the city’s timeline, and we were OK with that,” Scheeler said, adding he expected the store would still open on schedule.

Several months later, construction on 40th Street has yet to start.

The best solution?

A half-mile stretch of road and home to 10 separate businesses including Wyoming Casing Service, Champion, Halliburton Energy Services and Tooz Construction Inc., 40th Street has been in development limbo since it was annexed into city limits.

An estimated $7,287,500 in above- and below-ground improvements along 40th Street — pavement, a stormwater system and water and sewer utility hookups — are outlined in the first phase of the city’s Capital Infrastructure Improvement Plan, introduced in early last year. It’s just one of 34 planned construction projects around the city, totalling close to $400 million.

Scheeler, Fitterer and other landowners along 40th Street learned in mid-April that the city has approximately $5 million in the budget for the $7 million improvements.

“We’ve seen some costs increase,” Kolling said of the discrepancy. “This is one (project) that probably was estimated to come in more expensive than we originally expected.”

Landowners were told the $2 million funding gap would need to somehow be distributed among them in order for design and bidding to move forward, and landowners had 30 days to agree on a payment plan.

“From the beginning, there was no chance of that happening,” Scheeler said. “Just, when you have 13 different landowners who have their own self-interests, naturally, it’s difficult.”

Landowners could choose to pay $167,000 each, or split the cost by linear or square footage. The Hub makes up just 11 percent of square footage along 40th Street; Halliburton is the largest property with 30 percent of adjacent land.

“The solutions (the city) offered aren’t in the best interests of all parties on this stretch of land,” Scheeler said.

The 40th Street project isn’t the only city-funded capital improvement project requiring some additional funding from businesses and landowners, Kolling said, but it is unique in that most of the other properties eyed for improvements are raw land. All of the properties along the street are already developed properties with existing needs to consider, he added.

“That’s one of the things that makes 40th Street a little bit different,” he said.

Landowners voiced their objection to drafting their own payment plan — and to paying the additional construction costs at all — before the commission on April 21.

After a meeting between landowners, KLJ and City Administrator Shawn Kessel, the city commission approved a resolution to instead establish a special assessment district. The city will pay for all $7 million in construction up front, and landowners will pay the $2 million difference back to the city over time.

It’s a move the city initially tried to avoid: It already anticipates to be approximately $100 million in debt by the time all of the capital improvement projects are finished.

“That is probably the limit of what the city is going to be able to afford,” Kolling said.

Still, he said the special assessment district “is the best proposal we have at the time.”

A letter was sent to landowners on May 12 giving them 30 days to either sign a petition endorsing the special assessment district or protest against it.

“If they do protest the district out, we’ll see what other options we have,” Kolling said. “We’re just waiting to hear from landowners which direction that they want to go.”

‘We just want to open our business’

Valuable construction time is running out, and frustration is growing as the waiting period passes.

Fitterer said “the city held a gun to our heads” in holding off on construction plans until it could figure out how to fund the project.

“That’s not a good way to do business,” he said.

“(The city) is not budging on sharing expenses with property owners, and that’s what we think is wrong,” Scheeler said. “In a perfect world, they would take the $5 million and do other services.”

Meanwhile, construction costs could potentially rise even further, adding to the overall cost of the project, and the unpaved road is already costing the city in maintenance fees, Public Works Director Gary Zuroff said.

“The maintenance part of 40th Street has been difficult to maintain,” he said. “We can’t have someone out there daily fixing that road. We put over $20,000 in the last couple of weeks just to keep the road passable, but there’s way too many trucks.”

The improvement project has already fallen on the capital improvement plan’s list of priorities, from No. 21 on the March 5 status report to No. 25 at the April 21 commission meeting.

The city will know if landowners have approved the special assessment district at the June 16 commission meeting.

Though Scheeler said the situation is “frustrating,” he and the rest of the partners at The Hub are the only business so far to sign the petition in support of the special assessment district; none of the parties have protested.

“We just want to open our business,” Scheeler said.