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Winsted proposes program to give downtown a facelift
November 22, 2010

By Linda Scherer
Staff Writer

WINSTED, MN – Winsted City Council gave its approval at Tuesday’s meeting to move forward with its “downtown beautification program.”

The program is being proposed by the council to close out a $40,000 balance in tax increment financing (TIF) District 2-6, which was created to assist in redevelopment and rehabilitation activity within the downtown.

Because of new rules adopted by the Minnesota State Legislature in 2010, the use of cash balances in existing TIF districts can be used as long as certain guidelines are followed.

The downtown beautification program proposal offers downtown property owners or renters a forgivable loan, up to $5,000, to be granted by the city, to make any exterior improvement that meets the design guidelines for downtown Winsted and has an estimated life of more than 10 years.

The loan can also be used as the property owner’s portion of matching funds for the small cities grant currently available in Winsted.

At the Nov. 2 city council meeting, Shannon Sweeney of David Drown Associates was hired by the council to set up program guidelines for acceptable uses of the TIF funds.

Sweeney said, “We have intended for this program to be used as matching funds for our small cities grant, so it would further reduce the applicants’ obligation to pay project costs. The only difference is that this program has to be used for exterior improvements.

“The small cities grant focuses on weatherization, heating, ventilation, and electrical work.”

Sweeney presented the guidelines to the council, as well as a two-page form to apply for the loan, and a procedure for applicants to follow to be approved for the loan.

Some of the guidelines outlined by Sweeney include:

• Program funds cannot exceed 50 percent of the total project cost.

• Construction must start by July 1, 2011, and be completed by Dec. 31, 2011.

• Applicants must repay the outstanding loan amount if they sell their building within five years of receiving assistance. One-fifth of the loan amount is forgiven each year.

• Improvements must be made to the exterior of the building only.

• Projects seeking funding through this program must, at a minimum, create construction jobs during project implementation.

• Projects must be located within the established boundaries of the downtown area.

• Costs incurred before the loan application has been approved may be considered as eligible expenditures, subject to financing by the city loan, at the discretion of the city.

• The city staff or Sweeney will review each application on a first come, first served basis.

The city’s new downtown beautification program promotes downtown improvement suggestions, which have been encouraged for several years.

In 2004, suggestions were made by the design team for ways to improve the look of the downtown, and in 2006, the downtown renewal commission published a brochure on guidelines for downtown improvements.

Council member Dave Mochinski said, “I think this program is a very good thing. It shows we are trying to get something going in the downtown area, and something that will beautify the area for upcoming generations. I hope some of the downtown owners will take advantage of this.”

Council member Tom Ollig agreed with Mochinski and added, “I think it is an opportunity for people to have some work done on their building at half of the price.”

Mayor Steve Stoko also agreed the loans were a good idea, and was willing to go along with them being interest-free but wanted the loans to be paid back.

“I just don’t think we should be giving that money away. That money should come back so other people can have the opportunity to use it, too.”

Mochinski responded to Stotko’s comment, telling him, “I don’t think we are just giving the money away. I think we are investing in the downtown area’s future.”

A public hearing to get resident comments on the proposed spending plan will take place Tuesday, Dec. 7 at 6 p.m.

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