Nov. 13, 2006
Custom Precision Technology gets tax increment financing
By Roz Kohls
The Dassel City Council approved tax increment financing last Monday for Custom Precision Technology’s new location behind the former A+ Sports and Marine building, after a public hearing at the city council meeting.
The project will provide a stream of increments over nine years totaling $48,464 to develop the manufacturing site for Marty Boerboom of Dassel. The project to upgrade the 7,800-square-foot post and beam building will not financially obligate the City of Dassel in anyway.
Boerboom will add power, heating, air-conditioning, sanitary sewer, and water to the building for manufacturing glass and optical components. The upgrade will raise the value of the building, purchased from the city’s new municipal liquor store complex, to $28 per square foot from $3 per square foot, City Administrator Myles McGrath estimated Sept. 18. The building’s value for this year is $75,600. After development it will be an estimated $301,000.
If it wasn’t for this business subsidy of $5,992 increments each, the project would not occur, McGrath said.
Waivers of comment and objections were acquired from Meeker County and the Dassel Cokato School District, he added.
Marty and Pam Boerboom will be paying approximately $150,000 to the city for a portion of the city’s $600,000 property. Custom Precision’s current location in Cokato, 688 3rd St. E., is overflowing with equipment to manufacture the glass components for its medical, aerospace and vision customers, he said.
The building is a rear storage structure, part of a complex the city agreed Sept. 5 to purchase for a 13,000-square-foot liquor store and possibly community hall. The current liquor store, rented from Howard Page, is 3,000 square feet in size, and also is crowded, according to Liquor Store Manager Marvin Vetsch.
Vetsch said by the end of February, he and the liquor store staff will begin getting the new building ready for the move.
In addition, Steve Mattson of Northland Securities brought the documents to the council for signing for the city’s 15-year $625,000 revenue bond financing for the liquor store complex purchase. The bonds have a 4.5 percent interest rate and are virtually sold out already, Mattson said.
The city will get its money Dec. 1 for the purchase of the property, owned by Stuart Turnball of Darwin, Mattson said.
Bill Ward, administrator of Dassel Lakeside Community Home, also asked council members what they thought last Monday of giving a tax abatement type of business subsidy for the nursing home’s apartments if Augustana Care Corporation buys the home. Ward, nursing home officials, and the city have been negotiating with Augustana about a deal to keep the nursing home viable.
At first, Augustana of Minneapolis considered paying property taxes on the nursing home a “deal breaker,” Ward said.
However, after talking to the county assessor, the property tax will be merely a “nuisance,” he said.
Ward wanted the council’s opinion, though, on giving an ongoing $8,000 tax abatement for the nursing home’s apartments to Augustana.
“I don’t think that will be very good for the city,” said Mayor Ava Flachmeyer.
“Everyone else is paying taxes,” McGrath agreed, pointing out that Augustana’s ownership is outside the city.
Also, $8,000 is so small, the year-after-year administrative costs for a business subsidy wouldn’t be worth it to the city. Business subsidies, like Custom Precision’s TIF, have a specific ending date, and this one for Augustana wouldn’t.
Council Member Bob Wilde expressed disappointment in what he has heard about Augustana’s offer to the city, although his information about the negotiations isn’t recent, Wilde added.
It appeared to Wilde, he said, that the city is losing assets, but gaining increased responsibility and risk.
Ward responded that the city hasn’t collected taxes from the nursing home for the past 24 years, so it won’t lose anything. Also, no one will profit from the sale to Augustana, except the nursing home residents, if the nursing home stays viable, Ward said.
To access past and present minutes of city council meetings, go to the web site ci.dassel.mn.us or contact the city at (320) 275-2454.