Herald Journal Howard Lake-Waverly Herald, April 1, 2002

Bank relocation project moves forward in HL

By Lynda Jensen

A controversial plan to expand the Security State Bank and Ridgeview Clinic moved forward Tuesday.

The Howard Lake City Council approved a subsidy cap of $39,000 with four conditions placed on the agreement:

· a non-compete clause for 10 years. This would protect other established businesses, such as the drug store (Ridgeview owns its own pharmacy), and Stellar Health Care.

· a requirement that the tax base value may not be lowered on the property, since the city is depending on the tax revenue collected on the property

· the clinic must move in at the same time as the bank

· the subsidy agreement is contingent on the approval of the city attorney and financial consultant Michele Hartman.

Currently, the bank is in the middle of negotiations with the clinic, making a concerted effort to entice the clinic to become a long-term tenant of the development.

The bank is taking the following steps:

· pledging $12,000 lease cash assistance for 12 months.

· pledging $17,000 from no assessments of construction interest.

· pledging $10,000 toward the purchase of lobby furniture and furnishings (pledged by Forstrom Bank corporation).

In addition, there is financial support being pledged by three other businesses to entice the clinic.

The bank is looking for support of the clinic project, and expects to make a presentation to Ridgeview by Monday, April 15.

Some ask 'What if clinic doesn't do it?'

Some residents wondered what would happen if the clinic does not join the expansion project, since this would greatly reduce the amount of tax increment financing money to be collected on the project.

Documents distributed during the March 20 meeting showed $274,000 less revenue for the city during the life of the TIF district, if the clinic does not go for the deal.

Whether the clinic goes or doesn't go with the project, it's still taxpayer money ­ money that could be used for something else, resident Ron Miller commented.

Others are wondering why the existing bank building seemed to be appraised for so much, since $600,000 appeared higher than other buildings along the Highway 12 strip.

Hartman indicated that banks are literally built differently, and assessed in a different class than other buildings. She encouraged those who were wondering about the bank appraisal to call the Wright County assessor's office with questions.

"Banks are assessed differently and worth more," she said.

Residents at the March 20 meeting also asked if the city was subsidizing the bank, which does not need help with money.

"The city is not subsiding the bank," Hartman said. The city council made a conscious decision to clear off blocks 16 and 17 for commercial development, Hartman said. This clearing off of properties amounted to $536,064 for the city, when the resale of the property was accounted for, since the city paid for the cost of demolition and removal of asbestos for the properties.

The difference, $536,064, is what the tax increment financing addresses, Hartman said. The city will collect $551,540 with the clinic or $335,250 without the clinic from TIF.

Part of the reason that TIF exists is because cities have such a hard time re-developing the city interior and wouldn't do it otherwise because it takes too much time and expense, Hartman said.

TIF is supposed to address the lost costs of redevelopment such as what was experienced to demolition the downtown lots along Highway 12, she said.

"It didn't have to be the bank (that purchased the land), it could have been anyone," Hartman said.

Some expressed strong skepticism about this, saying the deal was done with the bank in mind a long time ago.

Back to Current Stories Menu | Back to Archives List

Howard Lake-Waverly Herald & Winsted-Lester Prairie Journal
Stories | Columns | Obituaries
Community Guides | Special Topics | Cool Stuff | Search | Home Page