Among funding proposals is citywide 1% sales and use tax

Few things are certain about the future of the IRA Civic Center. It’s a fact that the 52-year-old facility’s roof is failing.

For the past year, since a city vote to renovate the IRA by implementing a 1% sales and use tax failed, a committee has convened to formulate a new plan. On Tuesday, Nov. 12, members of the committee reported their findings and recommendations during a work session of the Grand Rapids City Council. Among their proposals, is the sales and use tax - again.

Lead consultant Kent Koerbitz, with ICS Consulting, introduced the main points.

According to ICS, the original capacity of the IRA’s roof trusses was 20 PSF (pounds per square footage) or about 1.5 feet of snow however current code requires 46 PSF or two and a half times the current roof. Partial failures of the truss system have already occurred. Minnesota Unified Building Code will require compliance when the 24 year old roof membrane, basically the shingles, needs replacement (2-5 years).

A “significant” snow event could cause failure and collapse, explained Koerbitz who acknowledged the city’s efforts to clean the roof off after snowfalls or cancel events at the facility for the safety of participants.

Committee members Kelly Hain and Megan Christianson provided details of their meetings and discussions. The two explained that the committee had representation from several stakeholders such as the hockey association, chamber of commerce and city as well as members at large. They were supported by experts in architecture, structural engineering, construction costs, building codes and public finance.

The main assignment of the committee was to decide what roof structure should be used to replace the west venue roof and how to pay for it. From that, they discussed whether the project should involve other components such as installing a new ice floor, creating a common viewing area between the two sheets of ice, repositioning of the HVAC machinery, and reconfiguring the locker rooms.

As Christianson explained, the floor under the ice is 52 years old and combining a new floor with replacement of the roof “provides measurable savings.” The committee also found that there is value in keeping with the existing arch roof style.

“It is unanimously recommended that the west venue arena roof be replaced with a wood truss system that replicates the existing truss system,” Christianson told the council. “The west venue floor and refrigeration system will also require replacement.”

With the roof, floor and refrigeration work marked as priority, the committee then put together a proposal for funding the project and a schedule.

It was determined that the citizens of Grand Rapids make up approximately 40% of the civic center’s user base, “so we felt, to be fair, that their contribution should make up the same representation,” explained Christianson.

“Increasing user fees to pay for repairs would require 223% increases in fees for 20 years and would eliminate most usage,” said Hain. “A cap on costs to city taxpayers is recommended regardless of funding sources.”

Finally, the committee agreed that a General Sales and Use Tax is best suited to pay for the needed repairs. With the IRA Civic Center recognized as a regional asset, this tax would place a minimum burden on city businesses and city residents (sharing the burden with others who use it). The tax would be a progressive, citywide tax and expire when the project is paid for, clarified Hain.

“Of course everyone is interested in what method should be used to for pay for the renovation and repairs,” commented Hain. “A 1% citywide General Use and Sales Tax is unanimously recommended by the committee. It will provide consistent revenue and we believe will expire in six years or less and that is dependent on (state) bonding support and continued level of sales within the city and years is dependent on bonding support as well.”

This July, the city submitted a bonding request of $5.4 million to the Minnesota Legislature to cover a portion of the project. Should that request be approved next spring, those funds would need to be locally matched so the city needs to determine the best approach to generate those funds, explained Koerbitz.

In summary, Koerbitz said, “Can we choose to do nothing? Yes. Then, at some point the building would be closed and as it would be a hazard with the roof and it would need to be demolished. This would reduce area gross output from the facility by $3.3 million per year according to UMD studies. That feature and that attraction brings in a lot of events.”

As to the question of can’t the city just fix the roof?

“Yes. But the Civic Center is a regional asset that benefits more than just the city taxpayers,” replied Koerbitz, adding that responsibility for repairing the facility should be shared by more than just residents of the city.

“One of the biggest things is risk of failure,” said Hain who stressed that should the roof fail and collapse, the Grand Rapids hockey program would lose out on two hockey seasons without no other arena space available as “Coleraine is already booked with their own programs.”

Christianson commented on the loss that would mean to area tourism.

“The people who come here as visitors like to come here,” said Christianson. “It is a destination hockey place and the whole family comes. My concern, will we get those tournaments back if we lose them?”

When families come, they buy gas, stay in local hotels, eat here and visit other area attractions, explained Christianson, “The concern is, it’s millions of dollars. They would help pay for the facility too.”

According to the committee’s potential timeline, the city would submit a revenue plan to the state legislature in January and that would include details on a sales tax as the state will need to approve that option as well. The city would know by May if the bonding request was honored then the steering committee can proceed on final recommendations to present to the city council which will set project scope and budget next summer. If a potential referendum is passed in November, construction could begin as soon as spring 2021 with construction slated to be complete in October 2021.

After thanking the steering committee for all of their work, Grand Rapids Mayor Dale Adams had one major question regarding another shot at asking residents to approve a sales tax - something that has failed twice in recent years.

“The city has taken two runs at something similar with no success,” said Adams. “Has your group had any discussion on what you would do different?”

Koerbitz said the timeframe on the process is key given the condition of the roof. He also noted that virtually everyone on the committee is a property owner and/or business owner within Grand Rapids and they understand the importance of making the repairs to avoid the devastating consequences of a roof failure.

Grand Rapids City Administrator Tom Pagel explained that there would be about a 10% difference to business owners between a sales and use tax versus property taxes. That could mean the difference of $10,000 with the sales and use tax or $100,000 in property taxes.

“I’ve heard from some people, let’s just demolish the building,” commented Councilor Dale Christy. “But, then I heard it is a priority for the community, from the business perspective it’s the community’s gathering space outside of hockey events.”

Councilor Christy agreed with Mayor Adams regarding the plan to fund the project.

“Like the mayor, I’m a little gun-shy after going after a couple sales taxes but I’ve heard people saying we’re OK with paying for what needs to be done (but nothing more) and I’ve heard that loud and clear from a large cross-section of the community. I feel better, If we go for the sales tax, I prefer we word it as just the way that you did - there is a point certain when its done, that there’s a sunset. Language shows it will go away unless community feels more should be done. I feel better knowing we’re doing just what needs to be done.”

“It’s important to point out that the civic center is a community center that hosts 30+ events a year,” added Pagel.

“We have two significant attractions in Grand Rapids, the Civic Center and the Reif Center; I’m not sure which one brings in more (people),” said Koerbitz, noting the significant trickle down to local businesses.

“There needs to be discussion on what this space means to us,” commented Councilor Tasha Connelly who served on the steering committee and said “there is an appetite within this group to further this but a lot of work has yet to be done in a short amount of time.”

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