Dickinson Hills developer wants $1.9M for project
Negotiations between the city and a private developer for a new shopping center continue.
Five Diamonds Development of Draper, Utah, wants to build a shopping center on the Interstate-94 business loop and bring in four major national retailers: TJ Maxx, Hobby Lobby, Shoe Dept. and Dollar Tree.
However, this can only be done if the city pays to expand Fairway Street.
In June, Five Diamonds requested a complete expansion costing $9 million. In July, the city offered a scaled back version that would accommodate Phase 1 of the development. The 1500 foot segment would only be asphalt, and include sidewalk on one side of the street and lights, for a cost of roughly $1 million, paid with special assessments.
Developer Ron Raddon, in a letter to the city dated Aug. 3, wrote the $1 million would not be enough and requested $1.93 million that also includes infrastructure development.
An itemized cost estimate includes expenses for utilities, earthwork, additions to 1-94, and water and sewer improvements.
Mayor Scott Decker, at Tuesday's meeting of the city commissioners, voiced concerns about the additional costs.
"There are things on here that he's wanting us to pay for that I don't think we would pay for even if we would consider this," he said. "Hydro-seeding their property. Landscaping with irrigation. Why is that even in this?"
City Engineer Craig Kubas said Tuesday that even if it was paid for, at a cost of $90,000, the city does not have the authority to add a deceleration lane to 1-94, as it is controlled by the North Dakota Department of Transportation.
He also spoke against the city paying utility costs.
"I can't think of a time where we've said we'll pay for power, telecommunications and gas. We don't have standards for those utilities. Often they're put in utility easements," he said. "I would feel uncomfortable making any contribution to private utilities."
Raddon also wrote that the retailers are against special assessments.
According to his letter, "none of these leases allow for levy of sales tax or the transfer of the requirement of a Special Improvement District to the anchors."
The retailers, Raddon claims, have a co-tenancy requirement, meaning if one retailer is out, then all are out and the project will be shut down.
Raddon has previously argued income tax from the first four tenants alone will pay for the new road within seven years.
City commissioners Tuesday agreed they would be willing to offer $500,000 upfront, similar to assistance it provided to the Dickinson's Roers addition, with any other expenses covered by special assessments.
"If we special assess this amount to Raddon Development, and they're allowed to pay it back over a 15-year period, I think we're putting a lot of skin in the game," Decker said. "But it seems to me they're not open to any specials."
The city is not against the project, Commissioner Jason Fridrich emphasized.
"Once we set a precedent and give a certain amount of money, we're going to have other requests," he said. "What makes this project any different from the next project, or the next one after that? It's something to tread lightly on."
Commissioner Sarah Trustem said she was supportive of growing business in Dickinson and that it would be wonderful having those retailers in the city. The project is not guaranteed, though.
"I am very cautious in providing city funding for a private developer because of the precedent it creates," she said. "I don't feel very reassured by a promise that (those retailers) are going to be here. I haven't seen anything, except an email and word of mouth."
She added, "At least with a special assessment, we have some protection."
Five Diamonds also has unpaid city fines from stormwater violations that have caused erosion to the site, which Decker said must be resolved.