Council members support, oppose request; more discussion to come.
Saying they're dealing with some expenses they didn't anticipate, the owners of Drafts Sports Bar & Grill, currently being built next to Crookston Sports Center, are asking the city for a two-year tax abatement.
Brent and Jasmine Melsa are seeking the abatement because, Brent told the city council's Ways & Means Committee this week, they weren't counting on expenses relating to extending utilities across their property in order to make future development possible, and a frontage road that the city hopes to build this summer. "We'll be assessed for both of those things and we really weren't anticipating that," Melsa said.
As council members asked questions and debated the Melsas' request, it appeared that at least half the council was in favor of the abatement, but that some council members were against it. So Ward 1 Council Member Tom Jorgens asked that a decision be put off until the committee meets again either next week or the week after. In the meantime, Jorgens said, everyone can gather more information on Melsas' request.
The first days of any new business are critical, Melsa said, but in the restaurant business, the first two years are especially critical as a clientele is established and a reputation is developed. So every dollar helps, he added.
Ward 3 Council Member Keith Mykleseth and At Large Council Member Wayne Melbye expressed similar concerns about potentially setting a precedent where all kinds of future businesses will want their taxes abated, too, when they first open. The two council members also said they didn't want to appear in the eyes of existing Crookston restaurant owners to be favoring the new kid on the block, Drafts.
"Other resturants in town, they're going to compete against this," Mayor Dave Genereux added. "Are we putting them on an unequal playing field?"
If there is a precedent, it would be the city's 10-year tax abatement granted to Titan Machinery when the new facility was built on Crookston's southern edge. Mykleseth, along with Genereux, said it was difficult to compare the Titan project, which cost several million dollars and involves a business with a large staff, to Drafts. Citing ways the city has assisted the Melsas already, Genereux said Titan didn't need any help from the city, and that the tax abatement was "kind of a token" the city provided.
Melsa said his and his wife's business, which also includes an off-sale, is substantial, too, with a $1.3 million price tag. "It's not like we're building a $200,000 house here," Melsa said.
At Large Council Member Bob Quanrud said the city has long wanted businesses like Drafts to open here, and that a two-year abatement wasn't asking for too much. Ward 6 Council Member Tom Vedbraaten agreed, citing the high level of excitement in the community as Drafts nears an anticipated opening in June. Ward 2 Council Member Dana Johnson added that other relatively recent restaurant additions to Crookston, such as Hong's and El Metate, moved into existing buildings, while the Melsas have taken a much bigger financial leap by building new. She added that people from outside of Crookston have expressed excitement as well and will be coming to Crookston in the summer to check out the new restaurant and sports bar. Ward 4 Council Member Hector Santellanes continued with the excitement theme, saying he personally is excited for Drafts to open.
"We're doing things for you with lighting out there and the frontage road, and we're very happy that you're building," Mykleseth told Melsa.
"But you can't say you're just doing it for me, because there will be a lot of other things built out there," Melsa responded.
"But we're doing these things now because of you," Mykleseth said.
By the time everyone sits down again to discuss the matter, city Finance Director Angel Hoeffner said she'll get together with the Melsas to talk about estimated market values and tax rates in order to provide detailed figures on what the abatement might actually amount to.