That project involves a privately funded seven-story office tower on the Warren Street side of the block and a four-story mixed-use building on the Front Street side, totaling more than $15 million in private investment. The ramp makes up the vast majority of $4.9 million in parking improvements, most of which is publicly financed.
The original plan was to cover part of that ramp financing with $1.6 million from a bond sale. Using the excess TIF revenue will reduce that to $1.1 million, allowing the bonds to be repaid in 12 years rather than as many as 17 years.
And that would mean a lot less interest costs.
“The value of that is about $700,000 in principal and interest,” Hentges said of the plan to pay more cash. “My father the small businessman would have said, ‘I think it’s better to pay for something in cash than borrow for it.’”
If the council doesn’t authorize the transfer at its Dec. 9 meeting, the $527,000 will go back to the three jurisdictions that share local property taxes — 40 percent to the city, 40 percent to Blue Earth County and 20 percent to the school district.
Most council members at a recent work session didn’t reveal how they’d vote, although Councilor Tamra Rovney indicated she’d support reducing the ramp borrowing.
“It just makes sense for us to utilize that money,” Rovney said.