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Sprucewood Townhomes project sparks TIF talk

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news Brainerd, 56401
Brainerd Dispatch
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Brainerd MN 506 James St. / PO Box 974 56401

A Sprucewood Townhomes tax-increment financing (TIF) district project received the typical waiver of the 30-day review.

The Crow Wing County Board provided its boilerplate language of no comment other than a concern for the impact on individual taxpayers coming from support of tax-increment financing.

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The Sprucewood project is in Baxter and has the support of the city council. The project is aimed at providing affordable housing with four units devoted to the homeless.

Sprucewood is a 34-unit townhome project designed to provide affordable housing.

Central Minnesota Housing Partnership (CMHP) requested support for the tax-increment financing for Sprucewood Townhomes, a three-building project on undeveloped land off Grand Oaks Drive.

The CMHP previously reported the project will create construction jobs and increase housing choices for low- and moderate-income residents in the area.

The rental rates are designed to be affordable for the work force — and be open to all households making 60 percent or less of the county’s median income. Household income breaks down to $25,920 for one person, $29,640 for two people, $33,680 for three people and $37,020 for four people. The plan is to construct the three buildings of eight, 12, and 14 units on foreclosed property.

Monthly rental rates for the units range from $635 per month for a two-bedroom unit, $730 for a three-bedroom unit and $790 for a four-bedroom unit.

With TIF, the property taxes generated from the bare land will continue to be paid and the additional property taxes generated by the building development are returned to the developer for a period of time to help finance development costs. This TIF district is planned for 25 years.

Total costs expected to be financed with TIF funds are $980,530. The market value at the completion of the project is estimated to be $3.5 million.

A public hearing is planned at 7 p.m., July 16, at Baxter City Hall to discuss establishment of the TIF district.

Commissioner Paul Koering questioned if there wasn’t a surplus of housing in Brainerd and Baxter. He was told there may not be a surplus of affordable housing for low-income families. Koering asked why all the businesses in Baxter don’t seek TIF approval. Commissioner Rosemary Franzen said projects have to meet specific requirements and the county’s role was really related to the request to waive the 30 days. In this case the county had already received a 30-day notice. Commissioner Paul Thiede said he shared Koering’s frustration and wasn’t a TIF fan as a lot of ways can be dreamed up to spend tax dollars.

The motion passed with Koering opposed.

In other business, the board:

Approved an off-sale liquor license for the Old Waterfall, which is on Highway 371 North in Unorganized Territory. Three commissioners voted in favor and two abstained. Commissioners Paul Koering and Doug Houge, who both own liquor stores, abstained from the vote.

Doreen Bragg, Old Waterfall owner, said she didn’t plan to furnish an entire liquor store but did offer catering and wanted to develop gift baskets with different liquors among other items.

Tabled action on the Central Minnesota Emergency Medical Services Region Joint Powers Agreement. The agreement involves Benton, Cass, Crow Wing, Kanabec, Mille Lacs, Morrison, Pine, Sherburne, Stearns, Todd, Wadena and Wright counties. Thiede objected to the agreement’s removal of term limits for representatives appointed to the joint powers board. Nystrom said she’d get more answers to commissioners’ questions and bring the joint powers agreement back.

Approved changes in information technology (IT) to move two existing employees to new positions as a service desk lead and as an analyst and hire a desktop specialist. The move eliminates the senior geographic information systems specialist position vacant since December for a savings of about $82,589.

Jay Sikkink, IT, stated in his report the IT personnel budget for 2014 was $747,931. Changes to the department’s structure by reclassifying two positions and using intern hours could save $16,185 in 2014 as the proposed IT budget will be $731,746. The intern hours could add up to $10,663. Savings for the 2013 budget were expected to be about $8,000.

Thiede said it makes abundant sense but he wasn’t going to let it go by without telling Sikkink he shouldn’t presume the budget will be $747,931 for 2014 to get to the $16,000 savings.

Reviewed management policies for fund balances and reserves and investments from the auditor-treasurer’s office.

Auditor-Treasurer Laureen Borden said one of the questions from state auditors was whether the policies were in place and in writing. Thiede said he understood the need to formulate policies but if the board chooses to step aside from the policies it should be able to do so. Borden said she’d be cautious about saying the county would adopt the policies but they didn’t have to follow them. The board adopted the policies.

RENEE RICHARDSON, senior reporter, may be reached at 855-5852 or renee.richardson@brainerddispatch.com. Follow on Twitter at www.twitter.com/Dispatchbizbuzz.

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Renee Richardson
Richardson is a Pacelli High School graduate from Austin, Minn., who earned an applied science degree from the University of Minnesota, Waseca, with an emphasis in horse management. She worked extensively in the resort industry. She received an associate’s degree from Central Lakes College, where she was editor of the Westbank Journal student newspaper, as well as a summer intern at the Dispatch. She graduated from St. Cloud State University summa cum laude with a bachelor’s degree in mass communications and interned at the St. Cloud Times covering business while attending SCSU. She's been with the Brainerd Dispatch since 1996.
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