Council approves tax-increment finance plan for 300 block of South Broadway

Aug. 16—To make way for expected development that is proposed to begin on the 300 block of South Broadway in 2024, the Albert Lea City Council on Monday approved a tax-increment finance redevelopment district and plan for up to $1.6 million over the course of 26 years.

The redevelopment TIF district consists of all six parcels on the west side of the block, of which four are presently owned by the city and two are privately owned.

Tax increment financing is a tool communities have to provide gap financing for projects without impacting existing taxes. Through it, a municipality diverts the increase in property taxes that comes because of the new development for a set number of years to pay for development expenses.

According to a report prepared by Ehlers, a public finance advisement firm, the TIF district was created to facilitate the construction of a mixed-use development on the block with commercial space and rental housing units.

Though the city has not entered into a development agreement for the project, the council in June approved a purchase agreement with a group called Albert Lea Real Estate Fund LP, which is a partnership between a team of local investors, a Northfield firm called REVocity and the Albert Lea Economic Development Agency, for the four city-owned properties at 310, 314, 324 and 332 S. Broadway. The agreement states the city will essentially take the property off the market as it works with the group for a development agreement. The group already owns the corner building at 302 S. Broadway, presently occupied by Midwest Antiques of Albert Lea.

The approved resolution states the tax-increment financing will help the city realize the full potential of the project and afford maximum opportunity for redevelopment of the project by a private enterprise.

"Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing," the Ehlers report stated.

It also noted that the project will result in increased employment, renovation of substandard properties, increased tax base and the addition of a high-quality development to the city.

City Manager Ian Rigg said ultimately the amount of tax increment financing will depend on if there is a change in the scope of the project but as of now was estimated at $1.6 million.

Councilors approved

In other action, the council:

* Accepted the bids and awarded the contract for approximately 2,555 feet fencing at Snyder Field. Fencing includes new backstops, first- and third-baseline fencing and fencing for dugouts.