Just about everyone knows how valuable agricultural land is these days, whether someone's buying it, selling it or renting it, and it's that fact that has Crookston City Council member Keith Mykleseth wondering if maybe the city shouldn't be charging the University of Minnesota/Northwest Research and Outreach Center more for land it rents and farms near the Crookston Municipal Airport.
While the city leases ag land near Crookston Sports Center for $159 an acre, Mykleseth said the per-acre rate paid by the NWROC is $80 for the land near the airport.
The council's Ways & Means Committee this week agreed with the ward 3 council member, sort of. The committee recommended council approval of a two-year lease extension on the land instead of three years, which has been the traditional length of previous extensions of the agreement. As part of that extension, the city will let the university know that when the agreement expires in two years, the city will likely solicit competitive bids for the land, similar to the scenario with the land around the sports center.
"I'd like to see us get a little more off of this, to be blunt," Mykleseth said, suggesting $110 per acre as a potential rate. That spurred council members Wayne Melbye and Bob Quanrud to wonder if a rent increase that would bring a few thousand dollars into the city's coffers was worth the effort, especially if it irks the university, which is a valuable partner with the city on multiple fronts.
"Are we going to beat ourselves up for $30 an acre?" Melbye wondered.
"I'd feel a whole lot better leaving it as it is," Quanrud added.
Council member Tom Jorgens endorsed the two-year extension, and getting the word out that the city would like to get a little more money in the form of rent on the land. "That way, there are no surprises in two years," he said.
"The university is a big partner for us in the community and we want to work together," Mayor Dave Genereux added. "We don't want to just give our stuff away, but they'll know we're looking to be more competitive two years down the road."
The mayor added that there are many restrictions placed on land around the airport, due to aviation rules, and it's important that the city maintain ownership of the land and lease agreements with partners who will abide by the restrictions.
Finance Director Angel Hoeffner, asked by Mykleseth to look into the history of the lease agreement, said the city last increased the per acre rate in 2008, from $70 to $80.
Page 2 of 2 - The lease arrangement dates back to when Crookston High School was built, a portion of which was on NWROC land. NWROC didn't necessarily want to lose the land, but didn't want to hinder the high school's construction, either, Genereux recalled. In order to ease the blow to the NWROC, it was suggested at the time that the city lease some rural city farmland to the university.
The property around the airport came up for bids after the high school was built, with NWROC and Jim Reitmeier both bidding. Reitmeier submitted the winning bid and he farmed all four quarters of land. The "gentleman's agreement" between the city and NWROC then "came to light," Genereux explained, and Reitmeier eventually gave 111 acres to NWROC, with both parties paying the same lease rate. Reitmeier has won the bid several times in the years since, and both he and NWROC have paid the same rate.