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Brainerd City Council: Council approves BPU land sale

Monday night, the Brainerd City Council approved Brainerd Public Utilities' purchase of land adjacent to its property on Highland Scenic Road. The $60,000 sale of the old health club facility at 13021 Eagle Drive was approved on a 5-2 vote, with ...

The old health club building at 13021 Eagle Drive, recently purchased by Brainerd Public Utilities for $60,000. (Brainerd Dispatch/Steve Kohls)
The old health club building at 13021 Eagle Drive, recently purchased by Brainerd Public Utilities for $60,000. (Brainerd Dispatch/Steve Kohls)

Monday night, the Brainerd City Council approved Brainerd Public Utilities' purchase of land adjacent to its property on Highland Scenic Road.

The $60,000 sale of the old health club facility at 13021 Eagle Drive was approved on a 5-2 vote, with council members Mary Koep and Sue Hilgart voting against the sale.

As part of the sale, BPU agrees to cover up to $2,500 of the seller's closing costs. The 2015 assessment from Crow Wing County for the 1.79 acres provides an estimated land value of $87,000 and an estimated building value of $91,300, for a total value of $178,300.

The BPU will use the existing building for cold storage, council member Dave Pritschet said. A general estimate to build a comparable storage building is $150,000, he said, and the property will also serve as a buffer zone for neighboring properties.

"Sometimes you have to spend a little bit of money to make a little bit of money," Pritschet said.

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Council member Chip Borkenhagen said buying and cleaning up the property improves an entrance to the city of Brainerd. Council President Gary Scheeler, who serves as council liaison on the BPU Commission, said the BPU did its homework on the sale.

Koep said the $60,000 sale price didn't include the additional closing costs and title insurance, which could add up to "at least $4,000." She criticized the fact the building was a need, but not in BPU's budget for this year.

"They indicated they would have put it in next year's budget, but I don't know if they would have," Koep said.

Koep said she wondered if BPU found out the building was for sale first, and then tried to justify the purchase by saying there was a need for it. She also said the old building will require landscaping and upkeep, which add additional costs.

"It all boils down to my deep belief that real people are paying this price, real people who are often struggling to pay their electric bills and their utility bills," Koep said. "I think we can genuinely foresee another increase in your rate."

In a Personnel and Finance Committee meeting prior to the city council meeting, BPU Commission President Lucy Nesheim called the sale a "win-win" for both parties. At an Oct. 6 BPU Commission meeting, the commission unanimously approved the sale, pending council approval.

"At this time, we have funds in our budgets that would cover the purchase," Nesheim said. "It's important that we take advantage of it."

Scott Magnuson, BPU Superintendent, said conduit and conductor material which currently sits outside would be moved into the building for storage.

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"It sits out in the sun, and over time, not good for it," Magnuson said.

Koep brought up the issue of costs like attorney's fees, title insurance and closing costs not being included in the $60,000 sale price. Nesheim responded the additional expenses are "typical for any property purchase, and it's well within the standard situation."

Because of the added costs, Koep said the sale is not a "win-win."

"You don't have anyplace to get money any more than we do except the people," Koep said. "I'm very concerned about what we're doing to ordinary people in this community with rates."

Even with the additional costs on top of the $60,000 sale price, Pritschet said, the BPU is still coming out ahead.

"I think this is one of those things where you spend a little money and save more in the long run," Pritschet said. "We're not playing a short-term game, we're playing a long-term game."

SPENSER BICKETT may be reached at 218-855-5859 or spenser.bickett@brainerddispatch.com . Follow on Twitter at www.twitter.com/spenserbickett .

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