HRAEDA advances Farden Township industrial park and housing plan; board discusses funding, rail and timing risks

HRAEDA staff presented a two-phased plan to develop tax-forfeit land near Highway 2 in Farden Township as a light- and heavy-industrial park with adjacent housing, and the board discussed funding options, infrastructure needs and risks of holding land while the private market responds.

Mary, identified in the meeting as the presenting HRAEDA representative, said the site checks key boxes for potential businesses — location, zoning, utilities and logistics — but also lacks municipal water and sewer, which will limit high water- or wastewater-generating industrial uses. "It is going to exclude some businesses," Mary said, adding that the plan intentionally places lighter industrial, contractor and warehouse uses nearer residences and heavier industry south of the railroad.

Staff described two road/parcel layout options for phasing and said a rail spur is desirable but will take time and typically requires land ownership before rail owners will engage. Mary said she is working with Melissa Beach of Minnkota Power to convene utilities (and to explore gas access; staff noted Lakehead’s natural-gas pipeline runs through the utility corridor) and with developers to secure commitments. Eric Schulke was cited as a developer who previously sought a rail spur on nearby property.

Staff reviewed potential infrastructure funding: the U.S. Economic Development Administration public-works program (EAA) (typical match 50% and potentially up to 80% depending on demographic metrics), Minnesota Department of Employment and Economic Development (DEED) Greater Minnesota Public Infrastructure Grant (50% match, maximum $2 million per recipient in two years), and the Transportation Economic Development Infrastructure (TEDI) program (no match but available only when grant rounds open). Mary also identified Minnesota Housing’s Greater Minnesota infrastructure program (for roads) and state business-incentive tools including the Minnesota Investment Fund and the Job Creation Fund (JCF). She said the Minnesota Investment Fund can be structured as a revolving loan fund that local jurisdictions then lend to businesses and can be used to forgive up to $100,000 of loans in qualifying cases.

Staff emphasized that many grant programs require business commitments that show jobs and tax-capacity gains before infrastructure funding is awarded. Mary told the board she has a meeting scheduled within two days with a business that has expressed strong interest in locating in the area.

Cost and timing details discussed in the meeting included: several parcels are tax-forfeit under pre-2016 rules (which staff said allow the county to acquire tax-forfeit land for public use or at a discount by recognizing timber value as a baseline); staff cited $564,000 in undesignated HRA/EDA funds in the approved 2025 budget (fund 91) available for acquisition or preliminary work; a separate parcel east of Potlatch with an existing rail spur has an asking price reported at $10 million and is currently beyond negotiation; and staff estimated that platting and initial road construction to create roughly a dozen lots could cost in the $150,000–$175,000 range and yield roughly 12–16 lots depending on lot size and phasing. Staff also cited lot-size planning around an 80,000-square-foot (about 2-acre) target for some lots intended to support middle-income housing.

Commissioners and attendees raised several concerns: the risk that acquired parcels could remain undeveloped while the county carries holding costs and taxes, whether existing privately listed lots are priced too high or have neighborhood/quality issues that discourage private development, the necessity of meeting township and county road standards, and the timeline for rail-spur negotiations (staff noted railroads typically will not negotiate until a developer owns land and that the process can take years). Several commissioners urged a phased, cautious approach focused on parcels with existing road access and on securing letters of intent from businesses before large infrastructure spending.

Mary and staff said HRAEDA will prepare a business-subsidy plan (which requires a public hearing) and will return with options for phased acquisition, needed covenants or deed restrictions to target middle-income housing, and draft development agreements. Staff also will pursue state and federal infrastructure grants and said they will prepare a recommendation to the HRAEDA board at its next meeting about whether to acquire the specific tax-forfeit parcels (staff noted a statutory window for action on those parcels). Mary will present the conceptual plan to Farden Township and continue developer outreach.

Ending: Board members supported exploration of the concept with caution and prioritized incremental phasing, developer commitments and a business-subsidy plan before significant infrastructure outlays.