At a retreat on Wednesday, Feb. 24, the board agreed to decide how much the park district should seek in bonds to help pay for the public-private partnership on the recreational facility that would feature six basketball or volleyball courts, an indoor ice rink, a turf for soccer and football, a walking track and new district administrative offices.
The district's new finance director, Broc Lietz, said bonding experts didn't know of a better time to go into debt to finance projects with current interest rates in the range of 1.3% for a 20-year payback.
He said the park commissioners have to decide the amount of bonding that would be paid back by taxpayers through a mill increase on property taxes. Lietz said the increase could be in the range of about $30 a year for a $200,000 house.
"The district has the capacity to finance the project," he said, "but it takes courage and commitment" to undertake what would be the largest project in the history of the park district.
So far, from the private sector, the district has raised donations of about $21.5 million for the project.
If the split is 50/50, which the board seems to favor, that means another $17 million would be needed for the private share of financing. The board has also talked about 60% private, 40% district share.
The district set aside about $10.5 million for the project, leaving about $27 million that would need to be raised through bonds with the 50/50 split.
With the park district also considering one other major project in the coming years — the demolition and reconstruction of the Island Park pool for a projected $13 million — Commissioner Vicki Dawson suggested they add that project to the financing or bonding plan for the sports complex.
Commissioner Jerry Rostad said it made sense as the pool and sports complex would offer "something for everybody."
With other commissioners seeming to agree, Lietz said he would add that as an option to be presented to the board at a special meeting on March 23.
Board Chairwoman Stacy Griggs suggested gather public feedback and talk further about the financing and projects at their regular meeting on March 9.
The Island Park pool plan is up in the air, although a community survey with 2,500 responses found strong support for rebuilding the pool and adding features such as a water park concept with a large deck for parties or a pool similar to what's there now.
Lietz said the board has four options when considering the sports complex: deciding on the financing plan and bonding limit, waiting until more money is saved and raised, downsizing the scope of the project or walking away from it.
Commissioner Joe Deutsch and staff agreed that delaying the project would only raise the cost. If financing can get settled, work could start in September with a completion date of fall 2022.
When Park District Foundation Director Brian Arett was asked if they could raise another $17 million privately for the project, he said he didn't know. But a commitment by the district to how much they were willing to finance would help create a target figure to help in fundraising.
Rostad said he hoped for more public feedback and wanted to make sure people supported the sports complex. He said with the Fargo-Moorhead Convention & Visitors Bureau committed to giving $1 million to the project it showed there was support from an influential group.
When Commissioner Dawn Morgan asked if the sports complex would interfere with other park district projects and finances, Lietz said in looking over the 10-year capital improvement project list that he believed most other needed projects could be handled within the park board's budgeting process.
He said the sports complex and Island Park pool renovation were the only two major projects planned.
Lietz added that two other debt payments owed by the district for projects would be off the books in a few years, freeing up more funds. If administrative offices moved to the sports complex, he said, money could be raised by selling the depot, too.
Commissioners wanted to know what the estimates would be for operational expenses of the new sports complex, and officials said they were working to determine an answer.
Lietz said he didn't see "any red flags" in a preliminary look. It was noted that Sanford Health is planning to pay to use part of the facility for one of its athletic training programs, and other recreation groups would be paying rental fees for use of courts or fields at certain times.
Sanford is one of the major donors to the entire project and was involved in major recreational building projects in Sioux Falls.
Park District Executive Director Dave Leker said other cities in North Dakota have been undertaking similar indoor fitness projects in the past 15 years, with Williston doing the most similar project for $74 million. A majority of the projects, he said in a later interview, were paid for with public funds through sales or property tax increases, including Watford City, Williston, Dickinson, Mandan, Jamestown and West Fargo.
Leker said only Grand Forks and Valley City have approached or exceeded the 50% cost share ratio between public and private financing. Bismarck is also looking at a similar project to Fargo's, he said.
About 250 acres in southwest Fargo near 64th Avenue South and Interstate 29, south of the Walmart store and 52nd Avenue South, were annexed into the city at last Monday night's meeting. The complex would be built in that new part of the city.
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