By Cathy Hay

The Mrs. Gerry’s expansion and St. John’s development can now proceed, after the Albert Lea City Council approved tax-increment financing plans for these projects.

Tax-increment financing, or TIF, is a public financing method that is used as a subsidy for redevelopment, infrastructure and other community-improvement projects. It’s a special tool that cities can use to generate money for economic development in a specific geographic area.

TIFs allow a city to reinvest new property tax dollars in the neighborhood from which they came for a set period. The new tax dollars result from increases in property values. When a property’s value goes up, so does its taxes. In TIFs, the additional tax money goes toward designated projects. In the local cases, the assumption is that the properties in the TIFs will increase in value because of the expanded manufacturing facility and new development.

The city, county and school district will continue to receive the same tax dollars they do now for the term of the TIFs, with tax dollars above that level going back toward these economic development areas. The TIF for Mrs. Gerry’s has seven years left. St. John’s is a new TIF with a maximum term of 26 years. State law mandates different time periods for economic development and housing areas.

Mrs. Gerry’s, a food manufacturer known for its potato salad and mashed potatoes, is expanding by 93,600 square feet on Y.H. Hanson Road. The expansion will increase the company’s mashed potatoes and side dishes business, and is expected to create 20 jobs.

Site preparation already started this year and building the structure can now start with the financing framework in place. The expansion should be finished by September 2015. Mrs. Gerry’s has expanded several times since beginning operations in Albert Lea in 1973. According to its website, the business has grown from its initial building of 1,100 square feet to its current 121,500 square feet.

The project also calls for improvements to treating stormwater runoff from the facility and ideally building a regional stormwater pond to benefit nearby properties. The council added six parcels of land to the existing two parcels in this TIF district.

St. John’s Lutheran Community, which provides several levels of nursing care, plans to build a retirement community on the site of the former Albert Lea Country Club golf course between Edgewater Park and Lakeview Boulevard. The U.S. Department of Agriculture recently announced a $19 million loan to St. John’s for building a nursing home and assisted living facility.

City Manager Chad Adams said the City Council could expect to hear more about the project at its next meeting, Nov. 10.

The loan will help in the construction of a replacement 84-bed nursing home and a new 32-unit assisted living facility in conjunction with the construction of a privately-funded 84-unit senior housing complex and a town center that will provide support services to all three buildings. The low-interest loan is through a program that supports rural communities of 20,000 or less people.

St. John’s built its first facility in Albert Lea in 1961.

The council’s action created the TIF district to help extend water and sewer services to the new development. The TIF would exclude the nursing home portion of the community because it is exempt from property taxes. The other two parcels would be taxable.

Also at Monday’s meeting, the council:

Received a capital credit retirement check of $35,000 from Freeborn-Mower Cooperative Services. The money will go into the city’s sewer fund.

Approved a $68,690 agreement with Harty Mechanical for replacing equipment at the City Arena.

Approved a 5-year agreement between the city and Southeastern Libraries Cooperating for regional services.

Approved a gambling permit for the Albert Lea Hockey Association.

Amended the city code to add the Albert Lea Senior Center as a city board, adding language to establish the board (with seven members) and its duties.

Amended the city code to include revisions to floodplain districts as updated by the Federal Emergency Management Agency. After FEMA makes revisions, local governments must adopt the new maps if they want their communities to have flood insurance.

 

Kudos

The council presented a certificate of achievement for excellence in financial reporting to city finance employees. The certificate is from the Government Finance Officers Association of the United States and Canada for Albert Lea’s comprehensive annual financial report for the year ended Dec. 31, 2013. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting. Albert Lea has received this Certificate of Achievement since 1983 for 31 consecutive years.

The Albert Lea Police Department presented Life Saving Awards to officers Brianna Lutz and Todd Deming for administering CPR to a patient who was not breathing and had no pulse. The patient eventually returned home after a short hospital stay. These are officer Lutz’s and officer Deming’s second life-saving awards since joining the department less than two years ago.