Agenda - Council Work Session - 03/25/2025

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Tax Credit for solar panels (30%) could come into play if, say, solar panels or geothermal systems are added to the project. Additionally, Property Assessed Clean Energy (PACE) financing is available in many Minnesota counties (including through the St. Paul Port Authority's program). PACE isn't a grant, but it allows the City or a private owner to finance energy improvements and repay via property tax assessments. Using PACE for new HVAC, insulation, or windows in the Town Hall could reduce long-term operating costs and make the project more sustainable. Staff had a virtual meeting with John Beaty, Minnesota Historical Society, on March 20th to discuss the possibility of Small ($10,000) and Large (Over 1 OK to 300K) grants for the project. Generally speaking, John thought that this project was grant -worthy and provided staff additional resources to learn how to apply. Not all costs would be grant -worthy (painting is not eligible for example) but most of the other project costs, flooring, tile, ADA accessibility items are eligible. These grants are competitive and are based the number of applicants, historical significance and local commitment to the project. The fact that the City has spent $33,497 on items to preserve the building building and a renovation was previously started should help the City's chances of obtaining grant money from MNHS. Although there are many, potential sources above, Staff would suggest a more focused approach (using one or two sources, grant applications) if the Council decides to move forward with the renovation. Proforma /Break-even point Recently (2018-2024) the City has spent $33,497 for general maintenance and preservation of the Old Town Hall. Staff estimates that an additional 123K to 130K will be needed to complete the project. The Old Town Hall has an estimated 778 SF of lease space. It includes a bathroom, main hall and cloak room. Staff consulted with a local real estate agent in 2025 and market rate rent for this building would be in the $16-18 / SF range with the tenant responsible for the utilities /snowplowing and the City responsible for the property taxes. For the purposes of the break-even analysis, staff used a - $17/SF rate or $11100 a month. Staff has put together a number of scenarios with varying grant award amounts to show the timing of a break-even point with a market rate renter. It should be noted that the break-even point includes recouping the $33,497 previously spent. Simple analysis for an OK, 30K, 50K, 100K and 125K grants are attached to this case. This analysis shows a 4 to 14 year break-even point if there is a tenant. Staff has not run analysis for a public use as no significant (regular) revenue would be collected or can be determined at this time. Potential Uses / Parking As mentioned previously, the site is challenged for parking with only 5 spaces currently dedicated to the site. The City is allowed to use spaces at the bank when the bank is closed under a current agreement. If the City does that, there likely will be cost with maintenance, which is currently not being paid. Further discussions with the bank have shown a willingness to potentially expand the use of parking on the bank site during bank operation as long as it does not impact bank customers. Suggested uses in the RCP report include a museum, School of the Arts, a Music School, or a business incubator. Other non-public uses could include a boutique, mortgage/title company, accounting business or other businesses that don't have alot of customers at the same time. More public uses, such as park programming or renting the space out for small functions could be a possibility. Staff has recently reached out to Small Town Girl Boutique (previous wanted to lease building in 2021) and they have some interest. Notification: None required Time Frame/Observations/Alternatives: