Ramsey attempts to decertify land in city’s TIF district

Although they voted against it Oct. 23, Ramsey Mayor Bob Ramsey and Councilmember Colin McGlone have had a change of heart regarding the COR’s tax increment financing (TIF) district.

The voters have spoken, they want the city out of the development business and TIF is a tool for the city to use for development, not a private developer, Ramsey said at the Nov. 13 Ramsey City Council meeting.

Ramsey made the motion to decertify the unencumbered parcels in the 400-acre TIF District 14.

But the majority of the council voted 4-3 against the decertification, with Councilmembers David Elvig, Jeff Wise, Randy Backous and Sarah Strommen voting no.

When the issue was brought up at the end of October, Ramsey said he voted against decertification because the city was moving forward as the COR developer.

But there was no mistaking the election results because the people who ran on a message that the city should not be involved in development were elected, Ramsey said.

TIF was created to offset the costs that developers are responsible for and for the things the original vision of the old Ramsey Town Center (RTC) had planned as well as to protect the interest of the people who built in the project, he said.

According to the COR website, the city received approval by the 2010 Minnesota Legislature to create the $65 million TIF district, which covers the entire COR project area, for “infrastructure, amenities and private development incentives to ensure that the COR maintains its competitive edge in the marketplace.”

When he was elected four years ago, there had been no buyers for the project, not for pieces or as a whole, Ramsey said.

With the recent sale of some parcels, perhaps a new developer will now purchase the rest of the COR development, he said.

But there is no place for TIF if a private master developer purchases the project, Ramsey said.

The city invested up to $17 million in the old RTC project, which was a private development, by installing infrastructure and that is still in the ground for a future developer, according to Ramsey.

“It would be irresponsible to subsidize a developer with TIF dollars on top of that initial investment,” he said.

Since then, the city has also invested in a Northstar Commuter Rail station, planning for an Armstrong overpass, building The Draw park, expanding the municipal parking ramp and realigning Sunwood Drive, he said.

“Surely, a private developer can make a go of (the COR) without public subsidies,” Ramsey said.

There is no reason to keep TIF District 14 intact unless the new city council decides to keep the development and not sell it, he said.

While Councilmember Randy Backous agreed with the sentiment, it is the timing that concerned him,

“The people did speak loudly and clearly to replace the council with three new members and it is very disrespectful to make a move like this before they are sworn in,” he said.

If the new council decides to decertify the district in January, Backous said he would support it.

Decertifying the TIF district needs to be thoughtfully planned, said Strommen, who was elected the city’s next mayor.

The future of the TIF district needs to be part of the strategic planning of the new council as is discusses its participation in the COR project, she said.

“It would be unfair to hamstring the discussion by moving forward with this now,” Strommen said.

She would be supportive of staff researching the options and doing a financial analysis so the new council can have a deliberate and thoughtful discussion in January, she said.

Councilmember Jason Tossey said he wished the mayor and McGlone had supported his motion to decertify the district Oct. 23.

“TIF has clearly become a political football and it should not be,” he said.

The residents want the city out of the development business and therefore he can no longer support the city being in that role or the TIF district, said McGlone, who testified before the Minnesota Legislature to get the special legislative action to create TIF District 14.

“If the city is out of the development business, it should be out of the TIF business,” he said.

There are people interested in the COR property, like SuperAmerica and McDonalds, and they know there is a TIF district, Wise said.

TIF exists because taxes are too high and if it goes away, those companies may go somewhere else, he said.

Having TIF allows the city to get the capital improvements and infrastructure built, Wise said.

This council should not encumber future councils because the city is going to be the developer for a little while and there are infrastructure projects that need to get done, like the Armstrong overpass, he said.

“Everyone knows the big box won’t come unless the interchange comes,” Wise said.

“It is a reason to keep it right now.”

If the city is not able to use TIF for the overpass, it will have come up with a way to pay for its share, said Elvig.

“It is in the city’s best interest to keep the TIF in place until all existing obligations of the district have been paid back,” said City Administrator Kurt Ulrich.

Once fully developed, TIF District 14 will generate approximately $85 million in revenue during its 25-year life, he said.

Tammy Sakry is at tammy.sakry@ecm-inc.com

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