Two weeks after Drafts Sports Bar & Grill owners Brent and Jasmine Melsa attended a Crookston City Council Ways & Means Committee meeting to ask for a two-year tax abatement once their business opens this summer, the committee will meet again Monday evening to discuss the matter further.
But, whether or not the Melsas' request is granted, it appears that their request has spurred a discussion on a larger scope, as council members and city officials wonder if the city's development policy should be expanded in a way that makes tax abatements more a part of the city's development culture going forward.
One thing's for sure at this point, however, and that is that council members and officials, no matter what the city's abatement policy eventually ends up looking like, would like to avoid in the future a business owner stepping up to a podium at a council or committee meeting to ask for an abatement. Instead, council members and Mayor Dave Genereux would like to work toward a potential abatement policy that lets everyone know up front the city's stance on providing tax incentives to those looking to enhance the community through various development projects.
When the Melsas asked for the abatement two weeks ago, judging by remarks from council members it appeared as though the council was almost split. It also appeared that Genereux, who voiced concerns about creating an uneven playing field for existing restaurants in Crookston, might be against the abatement if the council deadlocked and he had to cast the deciding vote.
The committee on April 8 tabled the matter so more research could be done and more discussion could take place. That spurred Crookston Housing & Economic Development Authority (CHEDA) Executive Director Craig Hoiseth to add the topic to a CHEDA Board of Directors agenda, and at that meeting it appeared that there is interest to get something more substantial on the books when it comes to incentives for local development projects.
Genereux suggested that maybe such a policy should also include businesses that aren't necessarily brand new, but are existing ones that expand or add on. Although tax abatements are part of the city's current housing incentive package, the mayor said maybe the package, similar to his business example, should expand to cover local homeowners who add onto their homes or otherwise improve them in significant fashion. Chamber of Commerce President/CEO Shannon Stassen echoed Genereux's sentiments.
"It's a good way to appease current business owners who continue to invest in the community of Crookston," he said.
Many around the table, in response to concerns about "giving away" new tax revenue, said that two years will come and go in rapid fashion and that the city would eventually reap the rewards in the form of expanded property tax revenue.
Page 2 of 2 - Board member Craig Morgan said it's about having a proactive policy to consistently refer to, instead of being reactive. He said the CHEDA board several years ago had a similar discussion and he felt real progress had been made, but then the momentum fizzled.
"We need to be in creative mode. ...This is about the culture we create," Morgan said. "If we're not proactive and creative, it leads to negativity, and maybe rightfully so."
Citing the increased competitive culture as communities seek new and/or expanding businesses to call their cities home, board member Ross Matlack said it should be considered good news when a new business comes to down, even if the exact process isn't followed every single time. "If a new business is coming here and doesn't follow all of our process but is still coming to town, I wouldn't want us to say no because of the process," Matlack said.
Hoiseth said what policy, if any, is eventually crafted could be modified by the council whenever the council feels like doing so. It's not about drafting a "law," he said, but showing the rest of the world that "Crookston is open for business and that we have green lights out here."
Council member and board member Wayne Melbye said he likes the idea of CHEDA and/or city staff crafting some type of proposal and bringing it to the council for consideration. What he doesn't like is a situation like the committee meeting two weeks ago, with Brent Melsa standing at the podium asking for an abatement.
"That was not a good process, not at all," Melbye said. "I say it's kind of shame on the board; why did it take that guy building that business to bring this discussion to this board?"