City Council Meeting Date: April 23, 2024
To: Mayor and City Council
From: Ben Martig, City Administrator
Jake Reilly, Community Development Director
Nate Carlson, Economic Development Coordinator
Title
Consider Authorizing Staff to Apply for Tax Abatement with Rice County.
Body
Action Requested:
The Northfield City Council is being asked to consider a Motion authorizing staff to make an application to Rice County to consider tax abatement related to the sale of 115 5th Street W. Northfield, MN.
Summary Report:
The Northfield City Council is being asked to consider a Motion authorizing staff to make an application to Rice County to consider tax abatement related to the sale of 115 5th Street W. Northfield, MN.
City staff will work with Rice County staff to coordinate the tax abatement process throughout the due diligence period of the Purchase Agreement. Project needs will be vetted as a determination is made on the tax abatement needed to recover the City’s investment.
A Public Hearing on the sale of 115 5th Street W. Northfield, MN and the related action are separate items on the meeting agenda. City staff and Ehlers Senior Municipal Advisor Nick Anhut will provide a presentation on the sale of the Northfield News Building and related Tax Abatement process.
Alternative Options:
None at this time.
Financial Impacts:
The City is considering the use of Tax Abatement to recover the initial investment of acquisition and holding costs related to the ownership of 115 5th Street. With the assistance of Rice County, the investment could be recovered within a 15-year time frame. There is roughly a $290,000 “gap” between the initial investment and the sale price of the property which the tax abatement tool would cover. This is a common approach cities, EDAs, HRAs and Port Authority’s use in related facilitation of redevelopment of property to meet broader community goals.
Tentative Timelines:
Purchase Agreement Action - April 23, 2024
Due Diligence period prior to closing - 120 Days (Closing to occur on or before October 31, 2024)
Tax Abatement Hearing - Tentative date of June or July