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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. 

The city received five bids for the project, ranging from a low bid of $126,771 from Apex Fence in Rochester to a high bid of $255,250 from Century Fence in LaCrosse, Wisconsin. 

The city accepted the bid from Apex, along with a donation of $2,500 from the company, for a total cost of $124,271. 

Estimated cost was $157,000.

The council also approved two additional projects at Snyder Field for the construction of dugout roofs and of concrete dugout pads. 

Brooks Construction LLC of Albert Lea, will complete dugout construction for $27,720, according to a quote received by the city, and Koeppen Custom Concrete LLC of Northfield will complete concrete dugout pads for $22,750.

• Voted to reapply for a Clean Water Fund grant through the Minnesota Board of Water and Soil Resources that, if awarded, will be used for new cleaning resources, including a street sweeper.

The city had applied for the grant in 2022 but did not receive it and then went on to apply for and receive a zero percent interest loan from the Minnesota Pollution Control Agency to purchase two sweepers and a leaf vacuum. 

Thus far, it has used the loan to purchase one sweeper. 

Since the rest of the equipment will not be purchased until 2024, the city has decided to apply for the grant again. If it obtains the grant this time, it will not need to use the portion of the loan to buy the new sweeper.

Rigg said the city and Shell Rock River Watershed District have had discussions about purchasing a third sweeper, which the district could assist in operating. 

City Engineer Steven Jahnke said currently the city has two sweepers — both of which have different advantages. 

He said it has been shown that the best way to keep the lakes clean is to limit the amount of phosphorus going into them.

The sweepers are used primarily in spring and fall and at those times have between three and six people running them. 

• Approved an interfund loan for the advance of qualified costs in connection with Tax Increment Finance District 5-30 for the Freeborn National Bank and Jacobson Apartments building. The council previously authorized the advance of $200,000 to go toward the cost of setting up the district but now is amending that to be between $400,000 and $450,000. 

Rigg said the city had found out that a preservation grant it received for the facade repairs of the Jacobson Building would have hampered the city’s ability to put the building back to private use and noted that it would have had to go through the Budget Management Office of the state for the sale. 

To move forward with the sale of the property, the city is not using the grant and instead is putting a larger amount of the facade repairs into the TIF district, which would increase the city’s chance of being reimbursed for those costs in the future, he said. 

Second Ward Councilor Larry Baker asked when the facade repairs are expected to be completed. 

Building Official Wayne Sorensen said the crews are hoping to return to town the first week of September and that the project had been delayed because several of the hand-crafted terra cotta blocks had cracks in them. 

Rigg said he was meeting with the potential investors for the two buildings on Wednesday and that the investors had signed a lease agreement, which allows them to enter the buildings and clean up the site.  

• Approved a Main Corridor Renewal grant for $25,000 for Jerry and Angela Collins, for work done at 1039 S. Broadway, which is being redeveloped into Big Dream Organics. 

Rigg said the Collins have submitted over $60,000 in expenses thus far for improvements including new windows, doors, siding, gutters, lighting, signage and parking lot repairs, though he recognizes there will be more expenses still coming. 

He said there has been a vast improvement to the building, and he was confident in the work being done and the investment the city made. 

The maximum total grant possible for the project was $25,000.

• Approved combining lots at 102, 110, 118 and 120 Columbus Avenue. The properties were purchased by Midwest Ag Properties, who wishes to utilize the building complex as one facility.