Council approves incentives for potential new cold storage company
Published 6:12 am Tuesday, November 24, 2020
The Albert Lea City Council on Monday unanimously approved tax increment finance and tax abatement incentives for a cold storage company considering building a new facility in Albert Lea.
Vortex Cold Storage is looking to develop a 125,000-square-foot cold storage facility with the option to expand in the future, said Rebecca Kurtz with Ehlers, a public finance advisement firm, who is working with city staff to draft an incentive package for the $20 million project.
Kurtz said if Albert Lea is selected for the project, it would build on two parcels owned by the Albert Lea Port Authority in the Jobs Industrial Park.
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The council approved nine years of tax increment financing for the project through an economic development TIF district, which would allow the company to use the increment of new tax dollars it would have paid for those years to pay down the overall cost of the project without impacting existing taxes. Ten percent of the increment would go to the city for administrative costs.
The total tax increment financing is estimated at about $1.3 million.
When the TIF district is decertified after nine years, tax abatement would begin for six years for an estimated $350,000.
Kurtz said the amount of taxes abated would decrease over the six years, with 80% being abated in the first year, 60% in the second year, 50% in the third year, 40% in the fourth year, 20% in the fifth year and 10% in the sixth year.
The building once completed is expected to have a market value of $4.55 million.
In other action, the council:
- Approved an agreement with Peterson, Kolker, Haedt & Benda Ltd. for a loan through the city’s state economic development revolving loan fund. The law firm is renovating the former Elks Lodge.
The agreement includes a traditional $40,000 loan for a term of five years at 2.5% percent interest and a $10,000 forgivable loan.
The company will have to create and retain three jobs until Dec. 1, 2025, and the $10,000 loan will be forgiven.
- Approved a tentative two-year labor agreement with the International Association of Firefighters Local 1041 for firefighters and captains in the city’s fire department.
The agreement includes a 3% general wage adjustment for 2020. For 2021, employees will be placed on the new wage scale completed during the study of the city’s compensation and classifications. There were also adjustments in health insurance costs for the employees.
- Accepted a donation from Matt Maras, president of United Employees Credit Union of Albert Lea, for a plaque that will go in the entry of the new fire station. The plaque is valued at $1,250.