The Daily Dispatch

At a special meeting Monday, the Wahpeton City Council approved to allocate up to $25,000 to Generation Development LLC, a for-profit organization seeking to establish a coffeehouse on the first floor of 120 4th St. N, the city's former government offices.

As recommended by the Wahpeton Economic Development Commission (EDC), the funds will be drawn from sales tax dollars for the interest buy-down on a Flex PACE loan through the Bank of North Dakota.

Generation Development will purchase the former city hall property from One Alliance, or One24, a not for profit entity. One24 has been fundraising for more than a year, in hopes of renovating the building.

"I think it's important to remember that the original intent of the One24 group was just to give younger people a place to go," said Tiana Bohn, council member. "It's a very important aspect of this location."

Economic Development Director Jane Priebe said Generation Development will lease the space to One24, which will operate the coffeeshop.

"It seems like it would be a logical investment for the sales tax dollars," said Alisa Mitskog, council member and EDC chair. "This may be a nice attraction in drawing people downtown, which has been our goal during that [2010] reconstruction process."

According to Priebe, a Flex PACE interest buy-down is different from loans received through the regular PACE program through the Bank of North Dakota. The PACE interest buy-down is not based on job creation, Priebe said, but instead is geared toward commercial and retail projects that need low interest loans.

And because the funds allotted to Generation Development will directly improve the interior space at 120 4th St. N., they are considered grant dollars.

"One of our policies through the EDC is that when a project is to purchase equipment, there's virtually no gain in sales tax or property tax base, so the buy-down is loaned to the business," Priebe said. "When it deals with a building expansion, which essentially increases the tax base, the buy-down should be in the form of a grant."

Furthering council discussion, alderman Martin Schmidt inquired on additional upgrades for the building.

Mayor Jim Sturdevant indicated there are two other floors, which will also be renovated and may be rented for other business use.

After vocalizing his support for the project as a whole, council member Don Bajumpaa indicated the space is intended to be used by all residents. A "hard working group of people" are committed to the project, Bajumpaa said, asking for the council's patience in seeing the restoration through.

"I think once something gets started in this building... it'll be easier for people to recognize and understand the function and value this building will have in our community," Bajumpaa said.

Priebe is anticipating a Renaissance Zone application from the private investors too, which would give the group additional property tax incentives as determined by the zone's governing board. Generation Development will also be eligible for a five-year state income tax exemption as they're a for profit entity.

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