Nisswa: Bank to be built at Sportland Corners property - Council approves TIF redevelopment district
The Sportland Corners building in Nisswa will come down and a bank building with coffee shop will go up.
The decision to approve a $570,518 redevelopment tax increment financing district for American National Bank wasn't easy for Nisswa City Council members Wednesday, July 18, and two opposed it. Bank representatives sought TIF to build a bank with Stonehouse Coffee as a tenant and room for another tenant on the Sportland Corners property on Smiley Road, just off Highway 371 and County Road 13.
The building has been vacant and deteriorating since the Sportland Cafe closed an estimated 10 years ago.
A first vote to deny the TIF district failed 3-2, with council member Don Jacobson and Mayor Fred Heidmann opposed to the TIF district. A second vote to approve the TIF district passed 3-2, with council members Gary Johnson, Ross Krautkremer and John Ryan in favor.
Jacobson and Heidmann opposed TIF financing from the start. 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 (in this case, 21 years) to help pay off the cost of the development.
"There is no one up here (on the council) who would not like to see that corner developed into something nicer than what we see today," Jacobson said, but he had concerns over the amount of money, saying the $570,518 would come from all taxing jurisdictions, including the city, Crow Wing County and Brainerd School District. "Are we willing to spend $570,000 of taxpayer money over a period of 20 years to develop this site or not? I would like to say yes, but I'm thinking no. ... TIF is OK on some projects, but not this one."
Heidmann said his decision wasn't difficult. He talked to three dozen citizens and not one thought there was a need for TIF financing for that location, he said. They indicated other locations were available for the bank where TIF wouldn't be needed.
The three council members who supported TIF financing for the project said they struggled with the decision and didn't fully make up their minds until it came time to vote.
Johnson shared Jacobson's concerns but said the risk of doing nothing meant a continued decrease in revenue on the Sportland Corners property. He saw the project as an opportunity for the city to eventually gain revenue and to get rid of an eyesore.
Krautkremer struggled with the cost, but said the project is an appropriate use of TIF.
"I'm on the fence but lean toward no because of the total cost," he said at first. "The way the economy is going, I think someone may buy it. But I don't know that and it could prove to be the wrong decision down road."
After more discussion, Krautkremer ultimately voted in favor of the TIF district.
Ryan also said he struggled with many of the same issues, including the cost and the cost to taxpayers.
"It's not our money," he said, adding that though he isn't a fan of TIF, the city has a lack of needed economic development.
"I've leaned both ways on this, but at some point in time we have to let people know that Nisswa's open for business," Ryan said. "I don't like the number, but I like what that corner looks like even less."
Heidmann talked about the city cleaning up the property and assessing that cost to the property owner, but city attorney Tom Pearson said there is no magic fix or easy way to do that.
Before discussing the project and voting, the council held a public hearing on the proposed redevelopment TIF district. Tom Denaway, vice president of Springsted Inc., the city's economic development adviser, gave an overview of tax increment financing, and then several people spoke, some questioning whether the proposed project warranted the TIF investment.
Bank representatives, including PJ Smith, said the sale price for the property is $775,000, and the bank project wouldn't happen without TIF. The property's market value is $554,200. After the bank project, the estimated market value is projected at $1.8 million.
Smith said by phone Monday that American National Bank has a purchase agreement for the property that is contingent upon a couple of factors, including securing TIF financing. There are still several steps to take, including a meeting with the city's planning and zoning commission that was scheduled Tuesday, July 24, but Smith said they hoped to start demolition this fall, build over the winter and occupy the new building by next summer.
American National Bank has branches in Pequot Lakes and south Brainerd, and Smith said he envisioned all locations staying open.
"We held off for over a decade expanding here (in Pequot Lakes). We're busting at the seams here," he said, noting American National Bank always wanted a branch in Nisswa.