File Photo The Minot City Council has agreed to purchase the former Wells Fargo building in downtown Minot for a new city hall.

Although the newest council members argued against it, the Minot City Council voted Monday to proceed with the $2.6 million purchase of the former Wells Fargo building for a new city hall.

The next step is phase two of an environmental study. Once the city takes possession of the building early next year, the council will seek consultants to design the renovation. That design process is estimated to take eight months. A contractor would come on board potentially at the end of 2021 or early 2022.

Alderman Tom Ross voiced frustration that the council wasn’t looking at expansion of City Hall at the current site. During his orientation to the council, he understood that expanding the existing building remained an option, he said. He questioned the city dipping into its reserves to fully remodel the Wells Fargo building.

“We told taxpayers that in northwest Minot we will not be building a fire station,” Ross said. “But we’re willing to dip into those funds to make some shiny new offices downtown. Finally, I don’t think having a city hall downtown is going to save downtown. Driving down Main Street, there’s business going in. Downtown is thriving. It’s going to continue to thrive.

“So I don’t think having a city hall on Main Street at a cost to the taxpayers is worth it,” he added.

He also questioned paying about $100,000 more than the value indicated by an appraisal.

“We’re already in the negative equity position with this building,” he said.

The NDR funds come with the restriction that they can’t be used for new construction but only for refurbishing an existing downtown building.

Still, council member Carrie Evans questioned why expansion, as a more economically feasible option, was never seriously entertained.

“Yes, we can get into a discussion about what funds can be used and not used for with NDR funds, but it really concerns me that the public is not aware that the route we are pursuing, it doesn’t make financial sense,” Evans said. “We need a serious assessment done so we can make the decision that makes the most financial sense for the city in a time when we have no idea what the economic impact of COVID is going to be on our community.”

John Zakian, NDR program manager for the city, said the resilience agreement with the federal government is based on the need to relocate city offices and Central Dispatch out of the flood zone. The police department would expand into the vacated space. The original agreement with the Department of Housing and Urban Development was for the city to provide $2.5 million to match NDR funds, although the city’s out-of-pocket cost is expected to be higher.

“How are we voting on something we don’t even know the cost that it is going to take out of the reserves?” Evans asked.

She said the city should ask HUD to revisit the city hall project because Minot’s situation has changed since the agreement made in 2015.

Zakian said HUD will not open discussion on expanding City Hall in the flood zone. He added Minot received a rare waiver to be able to use money toward a city hall.

“We are going to be asking HUD to revisit a waiver they almost never approved,” he said. Even if approved by HUD, the waiver process and substantial amendment to the action would take months, he said. Meanwhile, a Sept. 30, 2022, deadline to spend the funds remains in place, and HUD won’t approve changes that will fail to spend all grant dollars ahead of that deadline. An effort by the 40 NDR grantees to extend the deadline by three years won’t be taken up by Congress until 2021, Zakian said.

City Engineer Lance Meyer said it will be a challenge to spend the $7.75 million in NDR funds allocated to a city hall by September 2022.

“We’re going to move heaven and earth to try to find a way to speed up this process, but just looking at it from a traditional standpoint, we have a very tight timeline in front of us to pull this off,” he said.

If Minot pulls back from the city hall project, the money most likely would be reallocated to affordable housing, where there will be a need for $4 million to $5 million if all approved rental projects come to fruition, Zakian said. More money also is needed for property acquisitions for the flood protection project. However, Zakian said, there still is an uncommitted $5 million in projects for low- and moderate-income, single-family housing and $1 million in unused planning funds from the NDR program that could be reallocated to other needs.

Council President Lisa Olson said rehabilitation of a downtown building has been the most beneficial option. The end result is moving city hall from the flood zone and creating more space for the police department, she said.

“Plus the fact that we do have this NDR grant that I think we are incredibly foolish to walk away from. It only makes sense to me that this is the option that we take,” Olson said.

Mayor Shaun Sipma said the city needs to stick with the NDR program.

“I’m not going to let confusion – of either misunderstanding or just disagreeing with it – sway my opinion on this because this, per square foot, is the best option and is the best impact downtown. It was in 2015, and it especially will be after COVID,” Sipma said.

Council member Paul Pitner called it the most economically feasible option on a per square foot basis.

“I’m just trying to use common sense,” he said in citing lower city costs for renovation than for expanding the current building.

The council voted 5-2, with Evans and Ross opposed, to approve purchase of the Wells Fargo building.