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Land sale for LTL terminal approved by Willmar council

WILLMAR -- There should soon be another large construction project taking place in the Willmar Industrial Park, as the City Council approved the sale of a lot to GM Development at Monday's meeting.

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Tribune file photo

WILLMAR - There should soon be another large construction project taking place in the Willmar Industrial Park, as the City Council approved the sale of a lot to GM Development at Monday's meeting.

The ordinance to sell the land passed 7-0. Councilor Ron Christianson was absent.

GM Development will be purchasing Lot 1, Block 1, a parcel of about seven acres in the park's Fourth Addition. The buyer also has first right of refusal for a second, larger lot of about 12 acres.

The Fourth Addition is located west of Kandiyohi County Road 5.

The developer plans to construct a less than load, or LTL, terminal and maintenance facility on the lot, with construction beginning this spring. Magnum Trucking will be operating the facility.

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"They want to build right away in the spring," said Bruce Peterson, Planning and Development director.

The price of the lot is $405,900. GM Development has requested the use of the city's Industrial Park write-down policy, which reduces the purchase price of the land based on the number of new employees and increased property values due to development. Based on those requirements, the lot price is estimated to be reduced by $160,000.

"They are anticipating 10 positions within the next three years," Peterson said. The remaining write-down would come from the lot's development.

The city should receive $5,000 in earnest money and $240,900 at closing of the land sale.

"Which I anticipate in a couple of weeks," Peterson said.

The write-down policy, approved by the City Council in October 2013, applies to the sale of any and all city-owned industrial properties. The policy states that $10,000 per job will be deducted from the purchase price for every eligible job created or relocated into Willmar by a business who purchases and builds on city industrial land.

Current employees of Magnum Trucking who are based in Willmar will not count toward the new employee count in the write-down policy, Peterson said.

Another $25,000 will be reduced from the purchase price for every $1 million added to the land's estimated market value. This will be determined by the county assessor.

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There is language in the sale documents that if GM Development's project is less than projected, it will have to pay the city back for some of the write-down.

Peterson added there has been discussion about doing a small tax increment finance district in this area, with the goal for the city to recoup the $160,000 reduction in the purchase price.

Tax increment financing enables a city to use the additional property taxes generated by a new development to pay for certain development expenses. With TIF, a city "captures" the additional property taxes generated by the development and uses that revenue for the specified development costs.

If there is money remaining following the city's share, Peterson said it could go toward the ongoing development of the facility.

"To open the door for the second phase of the project," Peterson said.

This second phase includes the construction of a distribution warehouse center. This would bring in additional jobs to the area.

"They're not certain they are going to build that," Peterson said, adding the business is looking to generate more contracts to move product consistently for area businesses.

"They want to accommodate growth and look into the future," Peterson said.

Shelby Lindrud is a reporter with the West Central Tribune of Willmar. Her focus areas are arts and entertainment, agriculture, features writing and the Kandiyohi County Board.

She can be reached via email slindrud@wctrib.com or direct 320-214-4373.


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