Delano Herald Journal

Serving the communities of Delano, Loretto, Montrose, MN, and the surrounding area

Winsted implements TIF district



The Winsted City Council passed a resolution creating a
Tax Increment Financing (TIF) district at the city’s industrial park in
a short meeting Tuesday evening.

The TIF district will allow the city to divert property
taxes from the industrial park to pay for infrastructure costs for any commercial
developments at the site.

Part of the process was to notify the Howard Lake-Waverly-Winsted
School District and McLeod County, since their portion of the property tax
money will be used to cover the infrastructure costs, as well as the city’s
portion.

City Administrator Aaron Reeves said both parties had waived
their right to a 30-day waiting period to consider the proposal, and the
city is free to move ahead with its plans.

On hand at the meeting was Joanne Foust, an associate with
David Drown Associates, whom the city hired to execute the TIF district.
Drown answered questions from the council and addressed recent changes that
the state requires for implementation.

Foust said one aspect that the city had to complete was
to show some kind of local contribution to the development of projects within
the district.

In the case of RAM Builders, Inc., the district’s first
resident, the land the city donated covers that local contribution for the
next 11 years, the time period of the TIF district.

The city will also be required to hand in annual reports
on the district, as well as prove that the development within the district
could not have been done without the creation of a TIF district.

For RAM, the city provided a letter from the owners stating
a need for the district to bring the business to Winsted.

Foust added that the state auditor’s office has added staff
to enforce this provision more stringently than it has in the past.

Another requirement for TIF districts as of August 1 will
be the need for the city to require a minimum number of jobs created by
the industry.

Foust said that the goal should be realistic, and include
a wage minimum that is considered to be a “living wage.” That
figure is to be determined by the council.

In a previous development agreement with the city, RAM
said they would create five jobs in two years.

While the district includes the whole of the industrial
park, the city has actually created a larger development district that surrounds
the TIF district, as required by state law. The assumption is that development
will most likely occur in the area of the TIF district, and creating a general
development district will make it easier to create future TIF districts.

The city will pay for the initial infrastructure costs
out of its enterprise fund. It will then reimburse itself with the diverted
tax money, or increments.

During the life 11-year life of the district, the city
will receive nine yearly installments of increments, estimated at about
$4,500. That amount could change as RAM develops its site, adding value
to the property.

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