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Nisswa: Council learns more about tax increment financing - Sportland Corners bank proposal public hearing set July 18

The building on the corner of County Road 13 and Highway 371 formerly housed a restaurant and convenience store. Nancy Vogt / Echo Journal1 / 2
The building on the corner of County Road 13 and Highway 371 formerly housed a restaurant and convenience store. Nancy Vogt / Echo Journal2 / 2

Proposed redevelopment of the Sportland Corners property in Nisswa led to a lesson in tax increment financing for the city council Wednesday, June 20.

Tom Denaway, of Springsted, Inc., the city's TIF consultant, provided a detailed overview of a TIF redevelopment district in light of a proposal from American National Bank to build on the Sportland Corners property on Smiley Road, just off Highway 371 and County Road 13.

American National Bank would seek a total of around $500,000 in TIF funding from the city to build a bank with Stonehouse Coffee as a possible tenant and room for another tenant.

Last month, PJ Smith, of American National Bank, told the council the bank wants to build at the Sportland Corners location, but only with a TIF redevelopment district. Otherwise, another location in Nisswa for a standalone bank building would be sought.

TIF is a method of financing public or private improvements that are needed to serve new development. While the existing tax on the property continues to be paid, the increase in tax value of the property is returned to the developer for a set period of time to help pay off the cost of the development.

Denaway said a TIF redevelopment district could have a term of up to 26 years, and TIF revenue is typically used to pay for public improvements, reimburse developers for land and building acquisition, site preparation and demolition, relocation, financing fees and interest costs associated with improvements.

The developer pays for public improvements and is reimbursed by the tax increment, and that reimbursement is limited to the amount of TIF collected, Denaway said, noting the risk falls on the developer, not the city.

A public hearing will be held at the council's next meeting Wednesday, July 18, after which the council could decide whether to approve a TIF redevelopment district for American National Bank.

Council member Don Jacobson said at the June 20 meeting that the council has two options: Create the TIF redevelopment district - "That's tax money; half a million dollars to clean up Sportland Corners," he said; or do nothing and have the bank build elsewhere, which would generate a full tax amount plus continue to generate the full tax amount of Sportland Corners as it is now.

"How much is it worth in city money - is it worth half a million dollars to fix up Sportland Corners?" Jacobson asked. "It's real money. It's real tax money."

The council did accept a proposal for engineering services from Widseth Smith Nolting not to exceed $3,800 to do a study to identify blight of the Sportland Corners building, which would be necessary to move the TIF project forward to the July public hearing. The developer will incur this cost regardless of whether the city approves the TIF district, City Administrator Jenny Max said.

Public safety

Firefighters had 34 runs in April, including 22 emergency medical services calls, five gas line hits, three fire alarms, and one each vehicle fire, motorcycle crash, mutual aid to Brainerd and mutual aid to Pequot Lakes.

Police had 249 calls for service in May. Activity included 88 criminal citations, 39 traffic citations, 26 agency assists, 17 EMS calls, 11 arrests and nine alarms.

In other business June 20, the council:

• Held a public hearing and then approved a request to vacate the public right of way known as Rice Landing within the Gull Lakes Shore Subdivision. The area is on the east side of Camp Lincoln Road just north of Nashway Drive.

• Approved a request from Jim Hurd Anderson to rezone a 3.5-acre tract of land from commercial waterfront to open space residential. The property is on the north side of County State Aid Highway 77 just east of Nokomis Avenue.

• Approved Anderson's request for a metes and bounds subdivision to split two properties totaling 61 acres into three separate tracts. The property straddles the north and south sides of CSAH 77 just east of Nokomis Avenue.

• Approved Jack Grotkin's request to rezone a 2.98-acre parcel of land from open space residential to shoreland residential. The property is on the south side of Mission Road just west of Highway 371.

• Accepted a quote for $14,400 from H&R Construction Co. to install a guardrail on Edna Lake Road. The Minnesota Department of Transportation previously agreed to pay $10,000 of that cost.

• Awarded a bid of $963,742 to Knife River Corp.-North Central of Sauk Rapids for 2018 street improvements. Nisswa would pay $806,331 and Crow Wing County will pay $157,410 for roads it owns in the project.

• Accepted turnback property of 3.07 acres at Highway 371 and CSAH 18 from Crow Wing County at no cost. The property was used as excess right of way during the 2012 road project.

• Approved a request from Bridges of Hope to conduct its annual Run for Hope 5K/10K race Saturday, Sept. 15, in Nisswa.

• Appointed election judges for the primary and general elections at $10.50 an hour and established Nisswa City Hall as the city's polling place.

• Learned the council was to meet at 7 p.m. Wednesday, June 27, to approve the bond sale for the 2018 street improvements.