A legislative discussion for a Farmland tax increment financing district in Albert Lea started in the House Monday, and the proposal passed its first test.

Tuesday, February 05, 2002

A legislative discussion for a Farmland tax increment financing district in Albert Lea started in the House Monday, and the proposal passed its first test.

Mayor Bob Haukoos and City Planner Bob Graham testified at the Local Government and Metropolitan Affairs Committee on behalf of the city’s application. The bill was passed without conditions to the Tax Committee.

The bill, introduced by Rep. Dan Dorman, R-Albert Lea, aims to designate the old Farmland site near downtown and a new site in a city industrial park as one non-contiguous TIF district.

The TIF designation is essential for putting together the city’s comprehensive incentive package to lure Farmland back, which consists of a land-swap and the city’s takeover of cleanup on the old Farmland site, where the plant was destroyed by fire in July.

If authorized, the city can capture all the incremental property tax as a result of the development on both sites and appropriate the revenue to payment for bonds. The bonds will cover part of the cleanup cost for the old site, which is estimated to be about $5 million. Federal and state grants would cover the rest, the city says.

In the committee, Graham testified that with the increased property tax revenue from the TIF district the city would finance about $2 million for cleaning up the old Farmland plant.

Mayor Haukoos emphasized that the ultimate goal of the project is to bring more jobs into the community.

Lawmakers questioned whether the city’s efforts to provide the incentives using the TIF would assure Farmland would build a new plant. But the majority of the committee members voted for the bill.

Dorman and the city officials are concerned about proceeding with the legislative arrangement for the incentive package without knowing Farmland’s decision.

&uot;This is a completely unique way of using TIF. It would help if we knew the plant would come back for sure,&uot; Dorman said. &uot;But it is not necessary to pass the bill.&uot;

Haukoos also said, &uot;I don’t think the pending decision will influence the legislative discussion. And I am still optimistic about the decision.&uot;