Minot City Council approves intermodal agreement with Minot Area Chamber EDC

MACEDC seeks to purchase assets

Jill Schramm/MDN A portion of Minot’s intermodal facility is shown Monday. Minot Area Chamber EDC seeks to consolidate assets to improve the future success of the facility.

The City of Minot has agreed to loan $1.56 million to a subsidiary of the Minot Area Chamber EDC to purchase city-owned land used for an intermodal facility. The loan would be forgivable if employment projections and other stipulations in the five-year business incentive agreement are met.

The agreement approved by the Minot City Council Tuesday is one piece in MACEDC’s effort to acquire all intermodal assets to provide a clear title and clean slate for a new intermodal operator. The agreement with the city hinges on MACEDC’s negotiations with First Western Bank & Trust to acquire the property lease that includes an option to purchase.

The intermodal history leading up to Tuesday’s action began with the signing of a 30-year property lease between the City of Minot and intermodal operator ND Port Services. NDPS defaulted on its bank loan, and First Western initiated a foreclosure action on the lease and site improvements. In 2018, the interest in the lease and the improvements were sold at a sheriff’s sale to Westbrand Real Estate, a subsidiary of First Western.

Under terms of the 2009 lease that MACEDC is negotiating to obtain from Westbrand, the lessee has an option to buy two of the city’s three parcels for just over $2 million. Through its subsidiary LPND1, MACEDC wants to take over the lease and exercise the option to purchase.

However, MACEDC has only $500,000 available for the purchase, so by agreement with the Minot City Council, the city will provide the additional purchase funds through a forgivable loan.

MACEDC also is proposing to purchase assets held by financial institutions for about $7 million and is investing in new infrastructure being required by BNSF Railway. The State of North Dakota is providing $2 million toward that rail expansion.

The council supported MACEDC’s efforts to maintain the intermodal operation because of the facility’s significant economic impact. The difference of opinion with MACEDC was over whether to assign the agreement for 10 years, as recommended by the city manager, or five years, which is the minimum allowed in state law for public-private business agreements.

City Manager Harold Stewart said a longer term increases the economic value.

“The longer we can lock that down, the better it is for our community, and I just thought that five years is a little light for that,” he said. “In my professional opinion, with a longer period of time, you can guarantee more return on investment for the public and the taxpayers of the community by approving a 10-year agreement as opposed to a five-year agreement.”

John MacMartin, president of MACEDC, said a five-year agreement is more in line with the size of the investment, particularly in comparison with business incentive agreements signed in other North Dakota cities. If Minot sets 10 years as the standard on these types of investments, it could make Minot less competitive, he said.

“We’re going to have a hard time recruiting some businesses,” he said. “Everything that we think puts a hindrance in the way becomes problematic.”

Council members had mixed feelings on the length of the agreement.

“I want to be a partner with MACEDC. I understand their position. I’m thankful for all the work that they put in to this point,” council member Paul Pitner said. “But at the end of the day, we sit down as members of the city council. We look out for residents and their taxpayer dollars.”

He advocated for a higher standard than five years, but his motion for a 10-year agreement failed 3-4 after getting support from only Stephan Podrygula and Carrie Evans.

“Had this decision come before us in 2019 when we hadn’t just gone through a pandemic,” council member Lisa Olson said. “I think I would have been more comfortable with 10 years. But we’ve seen, in a short amount of time, how much things can change, and 10 years seems like a long time.”

“I believe, in my opinion, that if we approve a five-year plan, the wages don’t stop at five years and one day,” council member Tom Ross said. “They’re going to keep going. It’s going to be there. It’s not going to stop, and I think the bottom line is we’ve got an opportunity here to send a strong message to business that we’re here to work for them. We want to bring business in.”

He referenced letters of support for the five-year agreement in letters from state Agriculture Commissioner Doug Goehring and James Leiman, commissioner of the N.D. Department of Commerce.

The council voted 7-0 on a second motion for a five-year agreement with an amendment to the lease to allow the proposed sale.

In its semi-annual report presented to the council Tuesday, MACEDC noted 35 intermodal trains carrying 8,400 containers shipped in 2021.


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