File #: Res. 2024-110    Version: 1 Name:
Type: Resolution Status: Passed
File created: 10/23/2024 In control: City Council
On agenda: 11/12/2024 Final action:
Title: Decertification of Aurora Economic Development TIF District
Attachments: 1. 1 - Resolution
Date Ver.Action ByActionResultAction DetailsMeeting DetailsVideo
No records to display.

City Council Meeting Date:                     November 12, 2024                                                               

 

To:                                          Mayor and City Council

                                          City Administrator

 

From:                                          Nate Carlson. Economic Development Coordinator

 

Title

Decertification of Aurora Economic Development TIF District                     

 

Body

Action Requested:                     

The Northfield City Council shall make a motion to approve resolution decertifying the Aurora Economic Development Tax Increment Financing District.

 

Summary Report:

On September 4, 2018, The Northfield City Council approved the use of Tax Increment Financing (TIF) to Strobel and Werner Real Estate Holding Company, LLC (dba Aurora Pharmaceutical) to assist with a major expansion of the facility. The City Council approved the creation of an Economic Development TIF District, which has the maximum duration of 8 years.

 

Strobel and Werner Real Estate Holdings Incorporate (dba Aurora Pharmaceutical) is requesting Tax Increment Financing (TIF) incentives from the City of Northfield to assist with a major planned expansion of the current facility. Dr. Michael Strobel and Dr. Mark Werner (owners) have submitted an application for an Economic Development TIF District which can be found attached to this report.  The proposed pay-as-you-go TIF District requires the developer to pay all development costs with their own funds.  As the net tax capacity of the district increases, the increase in property taxes paid by the developer (tax increment) can be used to reimburse the developer for eligible costs such as land acquisition, site preparation, and public infrastructure.

 

Community Development staff began working with Dr. Strobel and his development team in March, 2018. Community Development Director Chris Heineman and Economic Development Coordinator Nate Carlson met with the developer regarding the project scope and required land.  After examining several potential options, it was determined that no other alternative would accommodate Aurora Pharmaceutical’s needs and facilitate the proposed expansion project.

 

Strobel and Werner Real Estate Holdings have proposed a $1.5 million expansion on the current Aurora facility located at 1200 Highway 3 South, Northfield, MN. Significant site improvements are required for this expansion project, including the construction of a retaining wall, relocation of the current stormwater pond, relocation of the chilling unit, relocation of an Xcel transformer, and relocation of the current 10’ utility easement.

 

Strobel and Werner Real Estate Holdings received the TIF to assist with the site improvements and acquisition of City-owned land that was also conveyed to assist in the expansion.

 

The pay-as-you-go TIF note required the developer to pay all development costs with their own funds. As the net tax capacity within the taxing district increases, the increase in property taxes paid by the developer (tax increment) can be used to reimburse the developer for eligible costs such as land acquisition, site preparation, and public infrastructure.

 

This TIF Note obligation will be satisfied at the end of this year, and the Council can take action to decertify the district before the full 8 years of the district occurs.

 

The City of Northfield is not only committed to attracting new business enterprises to Northfield, but also to helping local businesses thrive as we continue to cultivate an environment that keeps Northfield a community with great appeal for everyone.

 

Alternative Options:

No alternative option at this time.

 

Financial Impacts:

The proposed Tax Increment has a projected revenue value of $231,809. All incentives paid to the developer will be from the property taxes paid by the developer (tax increment) and there is no direct financial impact to the City of Northfield.

 

Tentative Timelines:                     

Council resolution to decertify the district - November 12, 2024

Decertification submitted to Rice County - By end of 2024