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The to-do list to bring a massive Louisiana Pacific manufacturing facility into the North Branch Interstate Business Park is growing shorter with last week’s council action unanimously establishing a Tax Increment Financing District modification and Plan.  

The 200,000 square foot plant is proposed in the industrial park area on an extension of Fletcher Avenue, west of County Highway 30.

It will generate 100 jobs at wages of $30 per hour, and property tax sufficient to support the redirection of some $4.8 million over the life of the district.  The TIF analysis has the district running from 2028 to 2036.  

The redirected tax revenues (the new value increment) go back to the TIF applicant, in this case Louisiana Pacific, for covering qualifying project expenses.  

Council and the North Branch Housing and Redevelopment/Economic Development Authority have been chipping away at needed infrastructure preparations to accommodate the project;  with  the company aiming towards a late April land acquisition of some $2.5 million.  The HRA/EDA is the actual owner of the five parcels involved. 

In project memos,  the city council has been advised sale proceeds will retire debt from a 2017 bond the city used for economic development.

Nobody spoke in opposition to the TIF action in the public hearing last week.  

North Branch Area High School principal Clint Link, who also is on the North Branch Chamber of Commerce, declared this project will provide living wage jobs and be positive for the community.  Students can grow up in, and remain in, North Branch.

The term Tax Increment Financing refers to the increased revenues created by the development or the “increment’ are “captured” (not deposited by the government body) for a specified time period.  Funds are to be used to assist in the project overall budget.  The base amount of property tax a TIF site generated,  before the value was increased,  is still received.

North Branch council members heard the school district will get about $20,000 annually, even with tax increment being redirected and the state still gets $135,000 approximately.  The city itself receives a 10 percent administrative share, which over the life of the TIF district is some $439,000.

Council member Jeff Goulet remarked that this is precisely what TIF, as a special development tool, is to be used for.

In another matter—Ehlers public financing consultant Rebecca Kurtz advised council that there were seven bids for the city’s equipment financing offer of $3 million.  Council supported borrowing to get caught up on big ticket items the city needs.

The accepted low interest rate of 3.659 was submitted by Baker Group from Oklahoma City.

North Branch’s bond rating is affirmed at double-A  by S & P, according to Kurtz.

City share of gaming

Council then clarified the  action supported at the prior council session, concerning a new distribution of charitable gambling proceeds.    The mayor was absent from that discussion and Mayor Kevin Schieber wanted to include a clearer description of the eligible parks and recreation expenditures that the charitable gaming 10 percent city share can be used for.

In Minnesota cities that allow charitable gaming their ordinances may stipulate collecting 10 percent of gaming proceeds as the municipal share, and North Branch recently opted to pursue this.  The new ordinance got a 4-0 vote and wording is being crafted.

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