A proposed $100,000 donation to Artspace gave Minot City Council members pause Tuesday.
Council members serving on Finance and Improvements Committee debated between tabling the request and sending it to the full council without recommendation before going with the latter choice at its meeting next Tuesday.
Artspace didn't have a representative at the committee meeting, but Cindy Hemphill, city finance director, said the organization needs the money in its financial package to avoid losing tax credits that are helping fund the project.
Artspace is to build an $8.4 million building in downtown Minot. The building would have 34 live/work units, preferably for artists. Two of the units will be for visiting artists on stays of three months to a year. The remaining apartments will be affordable to households with incomes below 60 percent of the county's median income.
In considering the $100,000 donation, the committee also received information that the parking lot on which Artspace wants to build belongs to the city. Artspace was working with the parking authority to obtain the property but now it has been determined that the $107,800 payment would go to the city. The committee voted to recommend the council approve the sale.
Artspace already has begun excavation work at the site. Parts of an old hotel that once stood on the site must be removed, and because asbestos was found in the material, it had to be abated and hauled to an appropriate waste site. The city landfill doesn't take asbestos.
Artspace representatives previously indicated the excavation raised costs by about $300,000. Hemphill said Artspace also is finding building costs to be higher than their estimates.
Council member Amy Moen suggested Artspace seek sales tax money through a new community facilities fund rather than request money directly from the council.
Most council members were hesitant to approve a donation, though, because details were sketchy regarding a previous donation in 2008. The city passed an ordinance in April 2007 that set up Artspace as an enterprise, permitting the city to donate under the laws governing use of public money. That ordinance would come into play again if the council decides to approve another donation.
The city donated $50,000 to Artspace in January 2008. It also had provided $62,500 in gap financing to Artspace in 2007, which the organization later repaid.
The 2008 donation came with requirements. Among other things, the requirements bound Artspace to provide the city with financial statements for at least the first five years of operation, a certified statement that it will permit an audit if requested and a narrative of how the funds will be used to benefit Minot.