Century 21 Red River Realty gets the nod over LeBlanc, Greenberg

    Crookston City Council members Monday evening found themselves debating what actually defines a “local” business, or, specifically, what might make one business more “local” than another.

    Three “local” realtors responded to the City’s request for proposals to assist the City with pricing, marketing and selling 11 lots ready for home construction, three of them on a portion of Hoven Lane Park property and eight on Pirate Drive on the northeast fringes of town.

    But when City Administrator Shannon Stassen at a Ways & Means Committee Monday recommended that the council approve the proposal submitted by Century 21 Red River Realty because, he said, it was the only submission that didn’t include a minimum fee if a sale didn’t meet a commission threshold, some council members were hesitant, at least initially, because they said the firm isn’t a true Crookston realtor.

    After a fair amount of debate, however, the committee approved a motion to award the job to Century 21 Red River Realty.

Differing degrees of ‘local’?

    Century 21 Red River Realty has two agents, Dave Hennings and Kalie Normandin, Stassen said, who each live in Crookston and list their homes as their “offices.” A second bidder, Greenberg Realty’s Shirley Iverson, also lists her Crookston home as her “office.” The third bidder, LeBlanc Realty, has an actual Crookston office located on the University Avenue curve and several agents that live in Crookston.

    When initially presented with Stassen’s recommendation to go with Century 21 because the City could potentially save “several hundred dollars,” Ward 2 Council Member Steve Erickson was the first to raise a red flag. “They’re not based in Crookston; they have a person here but no office,” he said. “For a couple hundred bucks I’d hate to see us reach out to Grand Forks.”

    “I would say we go with LeBlanc,” At Large Council Member Bobby Baird added. “They’re local, they have agents here, and I’d like to see it left in town.”

    Stassen was eventually able to convince everyone around the table that all three bidders would consider themselves “local” because they have local realtors and local offices, even if they are home offices.

    Mayor Wayne Melbye agreed.

    “If we’re going to do this, we’d better do it earnestly,” he said. “If we wanted only the realtor with an actual office in town, we maybe should have said that at the beginning.”
Price debate

    While City leaders realize the City is going to have to be at least somewhat involved in the “housing business” because they own many residential lots, the idea of working with a realtor on selling the 11 construction-ready lots is meant to take some of the burden off City staff like Finance Director Angel Weasner when it comes to pricing, marketing and selling the lots.

    But, as they have been in previous instances, council members are conflicted when it comes to the price that will be asked for the lots. Some around the table would like to see the lots deeply discounted – such as the $500 “free” lots in the Barrette Estates Subdivision – but at the same time they realize offering City lots so cheaply puts them in direct competition, some would say unfair direct competition, with private local developers who might be struggling to sell their lots are market price. Then there are others around the table who think City lots need to be priced at or very near the market rate so as not to undercut any developers who are trying to make a buck, but at the same time the council members who favor a higher price are afraid that the City lots won’t sell in a timely fashion as a result.

    But it looks like the 11 lots will be priced in the market price range, at least for a year, which is the length of the realtor contract with the City. For one thing, Stassen and CHEDA Executive Director Craig Hoiseth each noted, the realtors who bid for the work did it with the understanding that their expertise is being sought at least in part to help establish the market price for the lots. If the council changed its approach now and wanted the lots deeply discounted, Hoiseth said it could be seen as a bit unethical, not to mention the fact that a 6 percent commission on a lot that sells for, say, $1,000, would be only $60.

    “We’ll definitely need to talk to them about that,” Stassen added. “It doesn’t seem fair to take their advice and then set (the price) way lower.”

    Ward 1 Council Member Jake Fee perhaps expressed the deepest reservations about asking market-rate prices for the 11 lots and then having the market for them be stagnant. Once assured by Stassen and Melbye that the council has the freedom to revisit its current incentive package for new home construction and potentially enhance it, Fee said he’d vote in favor of Monday’s motion to work with a realtor. The incentives could be an agenda topic within a couple weeks, Stassen said.

    “I don’t care whose lot the home is being built on, one of ours or a developer’s,” Fee said. “I just don’t want to sit here forever with no new homes being built, and I think part of our problem is our incentives aren’t good enough.”

    (Erickson abstained from Monday’s vote, saying he has a relative on the LeBlanc Realty staff.)