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Construction in Baxter hits highs not seen in recent years

Baxter city staff and council members look through five year capital improvement plans with trails and street projects as priorities and years of completion are discussed. Renee Richardson/Brainerd Dispatch.1 / 2
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BAXTER - With $3,867,100 in commercial construction value alone this spring, Baxter may be putting the Great Recession in the rear-view mirror.

The spring of 2014 saw a rebirth with construction of an estimated market value of $9.1 million compared to $1.1 million in the spring of 2013.

New residential homestead construction hit $1.9 million this spring compared to $265,500 in the spring of 2013.

This spring, the city had $909,300 in non-homestead residential construction compared to $198,800 a year ago. And this spring saw nearly $2.4 million in new apartment construction compared to zero last year at this time.

All told, the 2014 spring construction is bringing in an estimated tax capacity of $116,409.

In spring 2013, the city had nothing for apartments or commercial construction but did have $641,700 for seasonal recreational residential. The total estimated tax capacity of all the construction in the spring of 2013 was $11,060.

New construction brings in additional tax dollars and in the boom years before the recession, those building dollars helped fuel local government costs. Then the building stopped.

Now a resurgence construction is an indicator of the overall economic health in the city.

Budget goals and priorities were discussed at a Baxter City Council workshop session Tuesday night.

But city council members said it was too early to make a decision on what the tax levy will look like. Budget discussions now, however, are when the city begins to look at what it needs or wants and what money will be there to pay for it.

Jeremy Vacinek, finance director, said health costs were at a zero increase last year but some increase is expected this year, retirement rates are expected to increase and there may be new funding requests.

It's also a time when the city hears from other organizations seeking appropriations.

Mayor Darrel Olson said the Brainerd Lakes Area Economic Development Corp. (BLAEDC) indicated it would be asking the city to consider restoring funding to pre-recession levels.

Administrator Gordon Heitke said BLAEDC is working on two business leads in Baxter but it may be months before there is a direct benefit.

Olson also noted that just looking for businesses locating within the city may be short-sighted as everything done for the betterment of the community will trickle down even if a new business locates outside of the city limits, especially with the retail and commercial opportunities the area offers.

Olson asked if The Center, formerly the senior center, sent in a funding request. Vacinek said it had not but The Center did sent a thank you for the city's contribution. Olson noted while the city is working on the 2015 budget and fall will be here soon enough, it's early in the year so other organizations aren't thinking of funding requests yet.

Council member Todd Holman noted that while the city hasn't completed its capital improvement plan process yet, the council doesn't have numbers for operating costs that all need to be in consideration as well as the debt service.

Crow Wing County previously reported this year that property value assessments increased by 1 percent, reversing a trend of decreasing market value.

During the last six years, from 2008 to 2013, the estimated market value in the county fell by 20 percent.

Baxter saw a similar decrease of 19 percent for the same six-year period.

Mayor Darrel Olson said it was important to note that even with the commercial properties the city added in the last few years, Baxter was just holding its own at time of tremendous pressure.

Heitke said the council could start with a wish list or let staff know where the levy should be and work backwards. Heitke said it's about needs, wants and wishes but it might save time if the council had an idea where they wanted the levy as an end point.

"I'd be resistant to saying that until we see what we can do," Holman said, adding he wouldn't want to say no to a levy increase or put a percentage on it until the council hears staff recommendations on what is needed. Olson agreed it was too early to make a decision on the levy. He noted the increase in activity and remarked on the extensive list in the building inspector's office as one indicator of the number of projects in the city currently.

Heitke said: "We're coming back."

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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