The Anoka City Council has given the go ahead to establish a tax increment financing (TIF) district in the area around Green Haven Golf Course.
The city held a public hearing last Monday on the potential Greens of Anoka TIF District, named after a long-term plan to redevelop housing and business in the area around the golf course.
TIF districts allow cities to capture increased property taxes as a result of development, earmarking them specifically for development project in a defined area for a period of up to 25 years.
The city was under pressure to get the district established before construction starts on the new HealthPartners medical clinic, in order to capture the city’s tax revenues as part of the district.
“This is part of the implementation of the Greens of Anoka planning process we’ve gone through this past year with a lot of input from a lot of people,” said Community Development Director Bob Kirchner. “This is just one of maybe several ways to approach the redevelopment of this area.”
The area in the newly approved district will include 11 properties around the south side of the golf course, including the current Castle Field site which will soon become a new health clinic, along with the old Pizza Hut building and the city-owned building that was once home to Anoka’s Parks and Recreation Department.
Kirchner said the new HealthPartners clinic will be the epicenter of this TIF district but will focus on redevelopment of adjacent properties including the vacant parks building and the parks building as far as the corner of Jacob Lane and Fairoak Avenue.
To create a district, more than half the buildings on properties included in the district must be deemed structurally substandard, meaning they don’t meet the current full building code.
According to Kirchner, many older homes and commercial buildings do fall short of the full code, although they are still fully usable.
While most of the money generated must be spent on redevelopment within the district, 25 percent of the revenues collected can be spent outside this area identified as the Greens of Anoka TIF District, said Kirchner.
“There’s certainly significant work to be done within the district, including the Greenhaven Road reconstruction and possible road construction along the (north side of the) future HealthPartners site,” he said.
Plan called into question
The creation of the district was unanimously supported by the council. But during the public hearing Anoka resident Pat Walker questioned whether the city should be tying up those revenues for the next 25 years.
Walker has been critical of the city’s use of tax increment financing.
He has argued those increased taxes collected should be directed to the general fund, providing relief for the taxpayers in the city, rather than earmarking the funds for development.
“If this tax increment plan doesn’t pass tonight, I bet you money that HealthPartners is still going to move ahead with their project,” said Walker. “And that in itself does not meet the requirement. It doesn’t take a subsidy to cause this development, the development is occurring on its own.”
Tax increment financing was created by the state Legislature to encourage development or private improvements or to help pay for public improvements such as streets, sidewalks and utilities.
Qualifying districts must pass a “but for” test, showing that a subsidized development would not occur “but for” the use of tax increment financing.
According to the city’s legal opinion, this particular case qualifies because the HealthPartners project is not being subsidized by the city.
“I have not always been a huge tax increment advocate,” said Weaver. “But I do believe that the argument Pat is making is rather flawed because it is just a snapshot, a very small piece of the pie, and not looking at the bigger picture that is the Greens of Anoka.”
The city makes the argument this area as a whole would not redevelop without government assistance.
“This district is going to be the engine that drives that train for the next 25 years and make that (development) happen,” said Weaver.
Councilmember Mark Freeburg, who has also had reservations about TIF in the past, said the state created tax increment financing to allow older towns to redevelop areas that nobody else would.
By establishing TIF districts in places like the industrial park, Freeburg said the residents of the city have been able to enjoy upgrades to the city without paying for it on their taxes.
“You have to keep renovating your city and TIF district is a tool to do that without feeling a whole lot of pain,” said Freeburg. “It’s above board and it’s worked well for the city for a long, long time.”
A larger look needed
Mayor Phil Rice is advocating the city look at an even larger area for this TIF District than the 11 parcels approved by the council.
He said he was disappointed the Highland Park neighborhood was not included.
According to Kirchner, a time crunch to get the district in place before construction starts on the HealthPartners clinic limited the ability to propose a larger district.
City staff had several months for this particular proposal, compared with the three years it spent working on the TIF District established last year in the Commuter Rail Transit Village.
“I’m hopeful over the next five years we will add several parcels to the district that are in that neighborhood,” said Rice. “The HRA has had that neighborhood in particular on its radar for maybe as long as they have been around. So to look at a TIF district as near to that neighborhood as we are and not to include it I think is a mistake.
The city does have five years to add qualifying parcels to the district.
“In this case we didn’t have anywhere near that amount of time to bring in a larger project,” said Kirchner in comparison to the rail village district.
Staff looked at areas east and west of the golf course, but ran out of time to get additional properties surveyed to see if they were eligible, he said.
“In the future it’s possible you could identify additional areas that could be added to the district to achieve that broader vision,” Kirchner said.
Mandy Moran Froemming is at firstname.lastname@example.org