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Council approves subsidies for business projects

August 14, 2013
By Deb Gau , Marshall Independent

MARSHALL - Two businesses in Marshall are planning to expand their distribution facilities, and on Tuesday night, members of the Marshall City Council voted to help make both projects happen. The council approved development and business subsidy agreements with Beverage Wholesalers Inc. and Runnings Supply Inc. to build larger warehouses in Marshall.

Council members said the agreements were an opportunity to encourage local economic growth, but Marshall Council member Glenn Bayerkohler said he had concerns about the subsidies.

Marshall Economic Development Authority Director Cal Brink presented council members with proposed agreements with the two companies during the council's regular meeting. Beverage Wholesalers is a company that distributes alcoholic beverages to licensed retailers in Minnesota. Randy Christianson, president of Beverage Wholesalers, said the company has outgrown the warehouse space it currently leases in Marshall and would like to build a bigger facility.

Brink presented the council with a proposed agreement between the city, the Marshall Housing and Redevelopment Authority and Beverage Wholesalers. Under the agreement, the HRA would sell a property to R&R Investments, the LLC for Beverage Wholesalers, for $175,000. Brink said that price was a write-down of $106,000. In addition, about $1.2 million in special assessments on the property, and a water charge of about $19,000, would both be waived. In return, Beverage Wholesalers would build a 45,000 square-foot warehouse and administrative building.

Brink also presented the council with proposed agreements with Runnings Supply. Runnings is a business that has been part of Marshall since 1947 and has expanded to locations around Minnesota and the Dakotas, with warehouse locations in Marshall and Pierre, S.D. Runnings Supply is also seeking to expand its warehouse space.

Under proposed agreements with the city and the Marshall HRA, a vacant property would be transferred to Runnings Supply at no cost. Brink said that transfer would be a write-down of about $354,000. In addition, about $1 million in special assessments on the property and a water charge of about $18,000 would be waived. The EDA will also give Runnings Supply a $250,000 Community Reinvestment Fund loan. In return, the company would build a 70,000 square-foot warehouse and office in addition to its current Marshall warehouse.

Brink said the properties being offered to Beverage Wholesalers and Runnings Supply are both located along Lake Street, in a recently- developed addition to the Marshall industrial park.

Council members had positive responses to both proposals. Council member Ellayne Conyers said Runnings' expanding its Marshall facilities was a "win-win situation" for the community, and Mayor Bob Byrnes told Christianson, "We're very pleased that (Beverage Wholesalers) will be growing in this community."

However, Bayerkohler said that, while he appreciated the businesses wanting to stay in Marshall, he had concerns about offering them subsidies.

Where local businesses are concerned, he said, "is it really the role of government to pick winners and losers?" Subsidizing some businesses and not others might not be fair dealing, Bayerkohler said.

Brink said subsidies are only offered to manufacturing, industrial and distribution projects and not for retail.

"We're very careful about that," Brink said. He added that the Marshall community benefits from the jobs retained by keeping businesses in town.

Council member John DeCramer added that the subsidies were being given to businesses that approached the city and wanted to work with it.

"I see this as picking companies that have worked with us and want to continue to work with us," he said.

The council approved subsidy agreements with both companies, voting 5-1 each time. In both votes, Bayerkohler cast the dissenting vote.

 
 

 

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