Water and sewer access charges can be costly when some businesses relocate or expand.
When the city of Anoka learned it had more than 600 sewer access charge (SAC) credits on its tab with the Metropolitan Council, the agency that regulates water and sewer usage, it created a revolving loan fund to help local businesses.
The most recent loan from this urban redevelopment fund is to Anoka’s Selah Salon and Spa, which intends to relocate to 1926 Second Ave., once site of J. O’Donaghue Books. Converting this property from a book store to a salon means additional SAC charges of $11,070.
The Anoka City Council unanimously approved a loan to Selah Salon to offset the initial cost of those SAC charges.
The salon, currently located in the 100 block of East Main Street, is expected to move into its new location in May.
The city will receive payments on the loan over the next five years at an interest rate of 5 percent.
To date there have been five loans made from the urban redevelopment fund, totaling just over $200,000, according to Finance Director Lori Yager.
Councilmember Jeff Weaver said the salon met nearly all the criteria questions for the city loan, which include redevelopment potential, employment retention or increases and private investment.
“Is this a redevelopment project.? Of course,” Weaver said. “Change the use, it’s a redevelopment in my mind, especially in these downtown buildings.”
He said that by adding another women’s centric business downtown, it will only encourage others to follow.
“That’s the way downtown works,” Weaver said. “They play off one another.
Mayor Phil Rice agreed.
“It opens a prime spot on Main Street and it’s expanding our downtown area,” said Rice.
The city still has a bank of about 600 SAC credits valued at over $1 million with the Met Council.
“Eventually they will go away and we’re keeping our fingers crossed that they will,” said Community Development Coordinator Erik Thorvig. “That means we’ve got a lot going on.”
But as these credits are used and loans are paid back to the city, the loan plus interest will be reinvested as cash in the revolving loan fund, which can be used to assist other businesses that want to expand or relocate.
“This fund we have set up has proven to be very beneficial to the city of Anoka,” said Councilmember Carl Anderson.
Mandy Moran Froemming is at [email protected]