The Free Press, Mankato, MN

Local News

November 12, 2013

As first TIF district expires council to decide $527,000 Question

Planned ethanol plant didn't happen but a lot did

Mankato’s oldest tax-increment financing district is finally going to die at the end of this year, leaving the City Council with the decision of what to do with a $527,000 cash balance in the district.

Tax Increment Financing District No. 1 was established in 1979 to cover costs of improving infrastructure in an industrial area on the north side of Mankato between Third Avenue and Riverfront Drive, starting just south of Highway 14 and extending well north of the highway.

Created in conjunction with Blue Earth County, the project was originally implemented partly in hopes of attracting an ethanol production facility.

“The ethanol plant never happened,” said Mankato City Manager Pat Hentges, but plenty of other development did. “... There’s been a variety of things, including a number of distribution operations.”

The extra taxes generated by the warehouses and manufacturers was captured by the TIF district and more than covered the drainage, sewer and other improvements. The district’s boundaries were later expanded to jump-start downtown redevelopment, allowing the north-side tax revenue to be directed to parking ramp construction in the city center.

The most recent was the construction of the parking ramp at the renovated and expanded Public Safety Center, but the TIF revenue also helped cover the cost of switching Warren and Cherry streets from one-way to two-way, Hentges said.

Still, with the district required to expire at the end of this year under state law, there’s the $527,000 surplus to deal with.

“The district has to be decertified, and the question is: Should any of what’s left in there go toward other redevelopment activities?” Hentges said.

City staff is recommending that the money be applied to another planned ramp — the one that the city and state are financing as part of the Tailwind Group redevelopment of South Front Street.

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