Corcoran favors downtown utility project

But must decide TIF allocation

The Corcoran City Council is generally supportive of revitalizing the city’s downtown with municipal sewer and water, and road realignment.

The question the council now must answer is how best to use Tax Increment Financing (TIF) for the project, or even if TIF would be used at all.

The council also continued discussion about project alternates for the new public works facility.



The city for years has pondered how to redevelop its downtown area, and has sat down with business owners to get their consensus.

Reached after the most recent council meeting, Mayor Ken Guenthner said he and councilors Rich Asleson, Tom Cossette, Diane Lynch and Ron Thomas have “consensus on constructing a downtown sewer and water system.”

He said the two outstanding issues are where to locate a lift station, and whether to do a full-gravity system (which would require road reconstruction), or to do a smaller scale, pressurized system that would be less expensive.

The original lift station was proposed for construction at the city park. But engineering analysis indicates that a lift station, just to the north on private property, would generate 20 percent more geographic coverage. The private property option would be more expensive since property and right-of-way would need to be purchased.

“The (lift station) issue is private property,” Guenthner said. “The other technical issue is, and it has an impact on cost, do we do a full gravity system downtown?”

The mayor said one challenge the city is facing is how to use TIF as a catalyst to downtown redevelopment. The city’s TIF district is decertified at the end of the year, meaning nearly two-thirds of any remaining TIF would be redistributed to the county and school district. If the city uses TIF for the downtown project, and then business owners are assessed for the cost, the assessments would then go back into the TIF account that would be decertified at the end of the year, meaning the city would lose two-thirds of that amount.

Another option is the city could spend the TIF on downtown and not assess business owners. Guenthner said he is opposed to that option which would “be a subsidy to the property owners. I have opposed that pretty clearly.”

So the mayor discussed with the council an idea to create a downtown development district. Such a district would include the infrastructure development area, as well as highway intersections and additional undeveloped areas where the city could locate a water tower.

“Then what we do is look at infrastructure development costs,” Guenthner said. “Estimate what would be the sewer costs, basic road costs and costs for a water tower. Then you have a comprehensive cost and divide it among the potential number of assessed lots, and now you have a single assessment cost that all would pay.”

He said the city of Medina used a similar downtown district when it calculated water access charges.

The mayor hoped this option would allow the city to spend TIF on certain redevelopment components while not tying assessments back to TIF that would be decertified Dec. 31.

“All we’re trying to do is get 100 percent out of the TIF fund and not lose two thirds,” he said.

One project he mentioned was realigning the County Rds. 10 and 50 intersection, such as using TIF to condemn a blighted property to help rebuild the intersection.

Financial and TIF consultants will iron out some of these issues and come back to the council with funding and analysis. There is a certain time period where the city must enter into contracts and commit the TIF funds.

Guenthner said staff will prepare a chart that will indicate a time line “so we understand when we must complete a feasibility study and specifications for the projects that we could put out for bidding.”

He said the council would have that calendar overview at its Thursday, April 25, meeting.



In other news, the council continued discussion about bids for the new public works facility.

Bids came in slightly lower than budgeted, and at hand are several project alternates, such as expanding the garage, constructing an overhead crane, and constructing a cold storage facility.

In order to maintain the project schedule, the city must reserve space for steel and iron for the garage expansion, and the council approved doing so. It doesn’t mean the garage project would happen, just that the materials need to be ordered now. The consensus is that the garage expansion would be needed some day, and to pay for it now while costs are cheaper.

Mayor Guenthner said the overhead crane is a safety issue; for example, mounting plows onto the trucks, which now is done with chains connected to a pay loader.

Some of the project costs, such as moving the salt shed from the current facility at Cain Road, are eligible capital expenditures that aren’t tied to the new facility’s bond that will pay for the project. Other expenses, like the garage expansion, would increase the bond amount.

“A final decision would be coming pretty soon,” the mayor said. “We’ll get some more feedback on how we would specifically allocate some of these additional expenses.”

In other action, the council:

REACHED consensus to consider a proposal for Hope Church to use TIF financing for a senior living facility.

APPROVED a resolution supporting legislation for the city option of establishing street improvement districts.