A 'pause' on Bemidji's wellness project: Organizations say more discussions needed; construction target now 2019
BEMIDJI—The two organizations working to bring a new sports and wellness complex to Bemidji are taking a brief "pause" in the project to ensure all stakeholders, including the city, are on the same page.
The $27 million facility, estimated at 175,000 square feet, will be located on Sanford Health's Bemidji campus and include three sections: a wellness center with aquatic space, a multi-use sports facility with a bubble roof and a two-sheet ice arena.
Officials had hoped to break ground on the project later this year, but are now looking at a summer 2019 construction start, they said Friday.
The Sanford Family Sports and Wellness Complex is a joint venture of Sanford Health and Greater Bemidji Economic Development. The two entities are working together, and with other community organizations, on the concept of the facility and how it will be run.
Sanford Health has dedicated a $10 million gift to the project. The remaining financing of the $27 million would would come through $10 million in private donations and $7 million in debt financing.
In addition to the physical buildings, the two organizations also are proposing a 2 percent hospitality tax that would generate funding for an Amateur Sports Commission. That commission then would be responsible for promoting sports tourism, as well as leasing and operating the bubble and the ice rinks, and working with other community organizations to promote youth sports.
The Legislature would have to approve a hospitality tax and the 2018 session starts Feb. 20 in St. Paul.
Dave Hengel, executive director of Greater Bemidji, said Friday the decision for the pause wasn't directly tied to the Legislature's session start, but rather to make sure their priorities align with those of the city as it pertains to the project. Hengel and Bryan Nermoe, president of Sanford Health of Northern Minnesota, both said recent meetings with city officials indicate progress is being made on those fronts.
"I'm excited that we can get to the table ... with a sense of urgency ... but also with a willingness to kind of pause a little bit to say can we get to a spot where we are all on the same page here," Hengel said during a meeting with the Pioneer's Editorial Board. "And I think that's critical, with a project likes this, and the size that this is, and the creative way of funding projects like this, you have to be aligned."
Both said more meetings with city officials are scheduled next week. The "pause" will be to let those conversations take place over the next few weeks before taking any more steps on the project.
Bemidji Mayor Rita Albrecht agreed that more talks are needed to see how the project fits in with the priorities of the city, including how the proposed hospitality tax would be structured.
"We want to make sure when there is public funding, the source of that funding is statutorily correct," she said. "We live within the rules of governance and we need to make sure we are doing, and proposing, things that can happen and make the most sense for the community."
Albrecht also said discussions need to take place on the proposed amateur sports commission, how that would be framed, and also just the overall ice needs in the community and the future of current rinks.
"We need to sit down and roll up our sleeves and get some clarifications on some things," she said.
The future of ice rinks is not just a city issue, as well, but would include organizations such as the Parks and Recreation Department, the Youth Hockey Association, the Bemidji School District and Bemidji Community Arena and even the Sanford Center.
Greater Bemidji has presented the concept of the Sanford Family Sports and Wellness Complex before the Bemidji City Council and the Beltrami County Board of Commissioners. There also have been two public meetings—one about the overall project and the other about the amatuer sports commission—and Hengel said he's been pleased with the turnout and the questions raised at the meetings.
The idea of a hospitality tax in Bemidji is not a new concept. In recent years, the city has advocated for a hospitality tax—levied on the hospitality industry such as hotels and restaurants—that could be used to help pay for costs at the city-owned Sanford Center, instead of relying on property taxes. However, both a 1 percent and then a 1.5 percent hospitality tax proposals met with resistance, mainly because they lacked the backing of the local business community.
However, this 2 percent proposal has the support of the Bemidji Innkeepers Association, as well as the Bemidji Area Chamber of Commerce.
At 2 percent, the hospitality tax is estimated to generate about $1.25 million annually. That money would then be divided, with about $750,000 going to the amateur sports commission and $500,000 to the city for Sanford Center costs. The city now budgets $400,000 a year to cover operating losses at the Sanford Center. (Sanford Health has the naming rights for the building but does not own or operate the center).
The Sanford Family Sports and Wellness Complex, along with the amateur sports commission, is expected to have a $9.4 million economic impact to the Bemidji region, with $3.45 million coming in direct spending, according to Greater Bemidji. And the new tournaments could generate about 15,000 hotel room stays.
The proposed wellness center project originated from a community survey conducted by Sanford Health, which examined the major needs of the Bemidji area, officials said. Officials also said the center will help address some core missions for Sanford Health in increasing overall health in the region, as well as for providing opportunities for youth.