TIF district up for grabs in Wells Business Park
The city of Wells, Faribault County and the United South Central School District all approved of a Tax Increment Financing TIF district in the Wells Business Park when Amos Boeck, owner of Ron’s Plumbing, HVAC and Electric, showed interest in purchasing a lot in the new business park.
However, that process has come to a halt for Boeck and for the city.
Wells City Administrator CJ Holl, informed the Wells City Council last Monday, Sept. 9, during their regular council meeting that the business will not be proceeding with the property.
“The TIF is already in place, but the property will not be developed,” Holl informed the council. “I spoke with EDA president, Brad Heggen, and Amos, who informed us he would not be proceeding with a development at the Wells Business Park.”
Holl stated he spoke with Jessica Green, vice president of public finance at Northland Securities, who helped the city set up the TIF?district which is still in place for that specific property.
“We held a public hearing, and all public bodies including the council, the USC School District, and the county acted to put the TIF in place. It’s already been filed by Northland Securities with the county and the state, so that property is set to generate tax increment,” said Holl. “It is what it is. We will move forward. The good news is that we already have two businesses interested in filling that property. It’s a bad news/good news situation. If nothing happens by the end of the year, Miss Green says we should decertify that district.”
There was some concern from council members as to how the city would rebound from the financial loss that was set up to assist Boeck with starting up the TIF district.
“There was some cost. Many small towns go through those costs to get businesses in place for the long term. Even Miss Green says it’s pretty unusual to go this far into the process and have them bow out,” said Holl. “Amos had to provide financials, building plans, specific quotes for things being done to the property so the county assessor could get a proper value of the project. It’s quite a long ways into the process, but it happens sometimes.”
The city sunk $9,600 to assist with up front work by Northland Securities, development agreements, and legal costs. Holl stated he asked Boeck if the city would be reimbursed and gave all the necessary documentation to fit the bill.
“We’ll see how that goes,” was Holl’s reply. “However,?I have had two meetings with two other businesses who are interested in the property. The city will work with them to see if we can get it filled by the end of the year.”
In other business, the Wells City Council approved $515,000 for general obligation tax abatement bonds over a 20-year structure through Northland Securities to finance the remodel of the new liquor store and to pay costs associated with the issuance of the bonds.
These bonds have been structured to result in relatively level annual debt service payments over its 20-year life. The par amount back in August was set at $565,000, and came in $50,000 less than the city predicted.
A motion to accept the bond resolution was made by John Herman and seconded by Crystal Dulas. When it came to a vote, councilwoman Brenda Weber voted against the bonds, and Mayor David Braun voted in favor. The motion passed with a 5-4 vote.
Later in their conversations, with regard to the new liquor store, the council found out the state will be reviewing the property located on Highway 22. According to state statute, if the incubator building changes businesses, which it will with the new proposed liquor store, the state can review access on the highway and potentially change it.
Holl stated this review could potentially change the access out on Highway 22 by having the incubator building’s access removed altogether. He also cited a potential roundabout or additional turn lane could be on the docket from MnDOT in 2025.
The Wells City Council also held a work session on Wednesday, Sept. 11, to discuss preliminary budget numbers for 2020.