The Exchange Letter
Community Center Background Information
The McGregor City Leaders have been discussing the need for a Community Center since the 1930s. At the end of 2018, the local news outlets began announcing a serious proposal to fund and build a Community Center, Farmers Market, and Concert Stage adjacent to the BNSF Railroad Right-Of-Way [at 3rd Street] in McGregor.
Apparently, a nonprofit entity was formed in 2013 titled “the McGregor Downtown Exchange Inc.” At the time, the intent was to purchase the foreclosed, bank owned, Top Crop property by a privately funded group lead by David Livingston [TJ Cigar Lounge]. The announced proposal was to spend 5+ million dollars to create a Community Center titled “The McGregor Downtown Exchange.”
In the same 2013 time frame, the Chamber of Commerce produced the Vision 2030 documentation. Among other announced goals and objectives, the Vision 2030 document justifies the necessity for the Downtown Exchange Community Center.
City Debt Using Taxpayer-Funded Certificates of Obligation – without voter approval
Somehow over the past few years, the Downtown Exchange Project has transitioned from a privately funded effort to a totally Taxpayer-funded project controlled by the City Council and the McGregor Economic Development Corporation [MEDC] using Taxpayer-Funded – Certificates of Obligation [CO Bonds] for financing.
We asked the City Manager and the Director of the MEDC for the site selection study that picked the Top Crop Property above all the other location possibilities. Apparently, that process and the documentation does not exist.
We attended the MEDC August 2019 meeting and asked a few questions – for example, what are the real and projected costs up to and including the day the Exchange doors open, and what are the ongoing cost to keep the lights on and the doors open. What are the land costs, as-built construction costs, projected monthly operating costs, projected maintenance costs, other sub-contractor costs, debt service, employee salary wages and benefits, and more? Most important – what is the projected annual revenue? When will the Downtown Exchange be “self-sustaining” and perhaps capable of repaying the Bond Debt Service?
The McGregor City Manager has provided us the [Phase 1] “as-built” documentation for the Downtown Exchange [construction costs]. The City has borrowed $2,090,00.00 to construct the Downtown Exchange. The combined principal and interest is $2,942,245.31 with a maturity date of 8-5-2038 – [a 30-year local taxpayer guaranteed bond].
Apparently, the Chamber of Commerce membership, the City Council, core City businesses, along with other individuals, all insist the Downtown Exchange Community Center is essential to the future of McGregor.
At the August 2019 meeting, we requested the MEDC and the McGregor City Council to stop funding the Downtown Exchange using Certificates of Obligation. We met with the MEDC Director, the McGregor City Manager, and the Mayor to explain the implications of that proposal. [The request is still under consideration as of October 2019].
How will the Downtown Exchange be funded without Certificates of Obligation?
We assume the Downtown Exchange Project [Phase 2] will require even more money to complete the construction and fund the ongoing operational costs? The questions become how will the MEDC calculate the future dollars required and where will that funding come from?
We now suggest the City Council instruct the City Manager to create a financial mechanism whereby the supporting businesses and individuals can visit City Hall and co-sign the 2+ million dollar debt obligation and remove the taxpayers from any responsibility. Any future funding will be handled using the same co-signing debt mechanism.
By co-signing the Bond Note, Exchange supporters are providing “proof positive confidence” the Downtown Exchange is a viable idea among the McGregor Leadership and simultaneously remove the local taxpayers and the MEDC from the millions in debt liability. The MEDC will then have more financial opportunities that would actually benefit the majority of the community as intended.
We expect the Mayor, City Council, City Manager, Chamber of Commerce members, and current individual Exchange supporters be the first in line to co-sign the necessary paperwork to remove the taxpayers from any current or future liability or responsibility for the Downtown Exchange.
By co-signing the mortgage the supporting individuals and businesses with “skin in the game” will be bearing the burden of full financial liability as the McGregor Downtown Exchange Project was originally proposed.