School board signs off on tax abatement changes

Published 7:46 pm Monday, December 20, 2021

By Alex Guerrero

It was out with the old and in with the new as board members from Albert Lea School District heard from Ian Rigg, city manager for Albert Lea, about a policy change.

“Our current program is for new construction only, typically single-family or duplex homes, and 100% the increment gets abated, ” he said. 

Under the proposed change, which was passed unanimously by school board members, the same type of construction will be abated for three years. But those projects can also receive 50% abatement for another three years after that.

Rigg began looking at the idea back in August as a way to address the current housing crisis in the area and decided to go ahead with the tax abatement idea after consulting with his staff, county leaders and school administrators.

“When we began looking at this, we [asked] ‘do we know its effectiveness,’” he said. 

So Rigg started looking at ways to reduce energy consumption, ways to maximize tax dollars and ways to repurpose vacant properties.

“Some of the things [this project] provides the community is one, it does answer the call of what are we as a community doing to deal with the issues of climate change per our climate change policy,” he said. “Other things, it helps reduce costs long term because we already have that infrastructure laid out. So now we have more users and more tax base to cover that existing infrastructure instead of building new to gain a new tax base and new utility users.”

Megan Boeck, city planner, then touched on Clark Street East LLC and the proposed rehabilitation of 131 and 137 E. Clark St., currently a dilapidated VFW building. A developer has proposed making the buildings into 20 to 22 apartments.

“We have housing shortages, and it’s a blighted, vacant building in our downtown commercial historic district that could simply be put to better use,” she said. “This rehab, in addition to tax base, could provide employment opportunities and can fill that housing gap.”

Boeck estimated the cost to rehabilitate the building would be anywhere from $2.6 million to $ 3 million, and estimated after completion the area could be worth $1.4 million. It’s current value is $104,000.

The Albert Lea City Council approved the proposal last week, and all it needs now is to be passed by the Freeborn County commissioners, who will meet Tuesday.