Mankato Mayor Eric Anderson, after largely staying silent on the city’s largest downtown development project in nearly two decades, came out strongly opposed to a tax-increment financing plan to support the $15 million Front Street office complex Monday night.
Anderson, who had abstained on previous votes because he owns property near the planned project, was alone in his opposition at the council meeting. A public hearing on the financing plan for a city-constructed parking ramp drew no comments, and the council voted 5-1 to approve the subsidy.
The vote leaves only the approval of the final development agreement with developer Tailwind Group, expected within 30 days, before the project goes to bid and construction can get under way on the parking ramp, a seven-story office tower and a four-story mixed-use building.
Anderson’s primary concern was that the tax-increment financing district would generate more revenue than is needed to build the ramp and that a future council might be tempted to use the extra revenue for downtown improvements that might even involve condemnation of property.
“This TIF district looks very different than what I envisioned last December,” Anderson said, referring to the original presentation of the ambitious redevelopment of the block bordered by Riverfront Drive and Cherry, Warren and Front streets.
Tax increment financing is a development tool whereby the extra property taxes generated by an improvement are set aside for several years to help cover the costs of the improvement. In this instance, a minimum of $180,000 in added taxes will be produced annually when the project is complete.
The money, set aside for up to 25 years, will be used to finance a portion of the $4.9 million parking ramp adjacent to the office tower and the construction of a surface parking lot on the south side of Front Street.