12/27/2018 3:13:00 PM Lindstrom Council keeps TIF alive on split vote
The Lindstrom City Council mustered a split vote Thursday December 20, approving a modification to the Tax Increment Financing District boundaries in which redevelopment income generated through the future use of actual TIF can be expended. The designated area in which the city can reinvest TIF monies, is basically the entire city-- modified last week to include annexed areas not previously drawn within the district border.
Council member Ann Marie Brink jumped in after a grueling public hearing and motioned to deny the modification.
She wanted to “continue” the hearing to next month and opposed closing the public comment portion. She made a motion to deny the modification, which failed 2-3, David Waldoch supporting it.
The district was modified and staff was also directed to create a TIF based development agreement, on a motion by mayor-elect Kevin Stenson. This passed 2-3 again. The TIF contract itself is waiting for a second public hearing when finalized property tax projections and financing gap details can be reviewed in the developer agreement. The property tax to be generated depends on a number of factors affecting market value and pinning down the gap between what the project will cost and what the development can sustain.
TIF is a tool that Lindstrom has taken advantage of several times in the past, examples given were Arby’s (used to be a Hardees), and the Scottsdale Mall area where a trailer park once stood. These are closed out once eligible project costs are returned to the developer and state audits show they have fulfiled their role. City Administrator John Olinger noted the new streetlighting in downtown was paid for through a TIF account.
The city can take administrative fees and use revenues to help fund city improvements in the designated spending district. TIF properties do pay their share to support school district referendum levies, according to Kirstin Barsness, a consultant on this application. And, existing tax base will continue to go into property tax coffers, as it is just a portion of the “increment” or the higher value property tax generated, that can be redirected or in this case, rebated.
The actions last week are setting the stage for unknown financial aid for the developer of a 92 unit apartment and restaurant/marina complex where the Dinnerbel is. Northland, the applicant for the TIF benefit, made no comments at the public hearing last week, but a number of citizens did.
Some comments weren’t specific to the district.
Citizens felt betrayed by city council members who have been part of this lengthy process, which those who spoke believe has been a charade.
Owner of a motel across the highway from this redevelopment site, Richard Berget, said the traffic controls in the site plan, eliminate his left turn out and left-in access. He said the highway rebuild already took a second driveway he had, so big trucks no longer can enter the parking lot. He said the motel should just be acquired and he can move-on.
This issue not related to the TIF question, however, and Berget was reminded council has already given the okay to the future layout that’s been presented.
Nearby residential property owner Pat Wahlgren stated, the actions so far are “distressing.” The developer isn’t demonstrating anything new as far as costs in requesting this assistance, she stated.
TIF requires extraordinary expenses, not normally encountered in developing a site. Northland has identified South Lindstrom Lake shoreland restoration, massive excavation for underground parking and demolition costs to raze existing structures.
These have been known all along, Wahlgren argued. “You have already made up your mind,” she declared to council.
Neighbor Julie Wilcox recalled that at many earlier meetings on zoning and variances, Northland was asked point blank if the project needed special considerations to be feasible financially and devlopers wouldn’t commit.
She continued, “That’s a bunch of baloney, I think they knew, I think you knew” adding this process has been “dishonest and deceitful.”
MaryKay Campbell said the project ought to be providing the city with “full tax income from day one,” and she opposed redirecting any of property tax payments back to the developer to help defray extraordinary costs.
There was no specific date for the developer agreement to be completed and submitted to the city for action.