Council Approves Building Purchase 3-2 Following Emotional Hearing

The Sidney City Council held its second public hearing on the proposed purchase of a three-story building at 13th Avenue and Illinois Street.

The council previously addressed the proposal with four members of the council present. Mayor Roger Gallaway was absent on a previous engagement. The proposal died with a 2-2 vote.

On Friday, April 12, a special meeting of the council was held to consider a second public hearing on the proposal. In the meeting, with all five members of the council present, Mayor Gallaway said he felt there were questions left unanswered in the previous public hearing. In the special meeting, Economic Development Director Melissa Norgard said the UST Global president planned to attend the next hearing.

Tuesday, the council met before an overflow room of concerned citizens and company representatives, casting a vote exactly as cast to have a second public hearing.

Nearly two hours were spend hearing testimony from Sidney residents and business owners, and UST Global President Kevin Adams. Mayor Gallaway instructed the crowd that testimonies would be limited to 3 minutes and are to stay on subject; no direct attack on individuals. Gallaway also said the public hearing is not an opportunity to cross-examine city staff, council members or other speakers.

UST Global and Xpanxion are leasing the building from Bass Pro Cabela’s. If the City purchases the building, the lease will transfer to the City. Adams said about a year ago, he entered a conversation with a customer in Nebraska. UST Global is a provider of end-to-end IT services and solutions, according to ust-global.com. The company was established in 1998 and headquartered in Aliso Viejo, Calif. Xpanxion, LLC. Prior to UST Global purchasing Xpanxion, Xpanxion had rural technology centers in Kearney, Loup City, one in Iowa and one in Kansas.

In his introduction, Adams said the company sees Sidney as more than a business move, but also investing in the community. The Sidney plan started with leasing one floor of the three-story building, and has expanded to all three floors. The process of hiring and training is a complicated procedure, Adams said. It is a process that has taken three to four months longer than expected, partly because the company is still signing contracts with customers. The company works with health insurance companies. He cited examples such as Obamacare and medicare as services UST Global and Xpanxion service.

“It is a very complicated business to do,” Adams said.

He said even with the delay, they expect to have another 40 people hired by July, and 70 to 100 by September. He said training employees from retail or other unrelated occupations to the IT skills needed by UST Global and Xpanxion is a complicated process.

Few people questioned the value of UST Global and Xpanxion opening offices in Sidney. The concern of most speakers focused on if the City should be investing in real estate, and is this the best use of $1 million from the City’s Electric Fund.

Sidney resident Loren Holcomb called the proposal “smoke and mirrors,” calling the purchase speculating in real estate by the City. He also questioned if the citizens, the electricity customers, approved the purchase.

“I think your citizens would like to know where the million came from,” he said.

Investment Broker Greg Scripps questioned the procedure and the legality of the City leasing to a private business.

Others also questioned the City spending $1 million months after announcing cuts to the City’s budget, also questioning if the purchase is competing with private business.

Sidney resident and Sidney Sun-Telegraph editor/publisher Don Ogle encouraged everyone to consider Sidney’s unique place in time. He said in normal times, the City has no business in real estate.

“These are not normal times,” Ogle said.

He referred to past booms and busts in the city’s history including the closing of the Sioux Munitions Depot that put more than 2,000 people on the unemployment line.

“We went from boom to bust, and everyone wondered what they were going to do,” he said.

He said over time the City has been involved in many projects.

“Whether they were successful or not, it wasn’t for lack of trying,” he said.

The question also brought up is where does the Sidney community want to be in the next 10 or 20 years.

After a little more than an hour of testimony, the public hearing closed. Sadler said the Electric Fund with $1 million for proposed purchase of the building, can’t be used for anything else. He said the funds cannot be used for a one-time reduction in rates or to help other departments in the city. He added the value of the building is in future sale, not the current lease agreement. The property is valued at $1.8 million. Sadler also said TIF (Tax Increment Financing) can only be used for changes in the infrastructure.

Councilman Bob Olsen asked Adams about the future plans of the company and of the Kearney facility. Adams said the Sidney facility is the only location in this area of the country.

Adams added that he considers only adding 200 jobs “a failure” for the company.

The company is currently under a three-year lease with a two-year option, a “three plus two.”

“I didn’t come to the city for the cheap lease rate,” Adams said. “I came to support the community.”

Norgard said her concern is someone purchases the building from Bass Pro Cabela’s and changes the lease. The building is still listed for sale through Bass Pro Cabela’s.

“I am deathly concerned someone is going to get wind of this and someone is going to get it and line their pockets. That’s not good for any of us,” she said.

Gallaway said he sees the purchase as an investment and what it can do for the community.

“I can assure you,” he said to the residents in attendance, “council has been very thorough going through this.”

He agreed that Sidney is not in normal times, and he doesn’t want someone coming to him in a few years asking “why didn’t you do something?”

Vice-mayor Joe Arterburn agreed the question is about investing in the future.

“If we don’t invest in ourselves, then why should anyone else? It is a tough decision, but its in the best interest of the city,” he said.

The council approved the proposal with Arterburn, Gallaway, and councilman Brad Sherman voting in favor of the purchase, and councilmen Burke Radcliffe and Bob Olsen voting against it.