Evers’ Fournet redevelopment clears final hurdle
After they tabled it three times in a span covering six weeks, the Crookston City Council at a special meeting this week approved the development agreement with Jeff Evers, a required facet of the Tax Increment Financing (TIF) District the council previously approved for his redevelopment of the Fournet building downtown that Evers bought three years ago.
The approval means the TIF District can be officially certified with Polk County. It also means that Evers can secure a building permit to start actual renovations on the building, instead of just doing some demolition and material removal.
As part of the first of a potential three-phase redevelopment – a financing package has only been lined up for the first phase – Evers is renovating the building’s second floor, adding an elevator and refurbishing the building’s skylights on the roof. Tri-Valley Opportunity Council, looking to vacate its aging headquarters across the street on North Broadway, has agreed to relocate to the second floor and become Evers’ primary tenant.
Tax increment financing (TIF) is defined as a public financing method that is used as a subsidy for redevelopment, infrastructure, and other community-improvement projects. Through the use of TIF, municipalities typically divert future property tax revenue increases from a defined area or district toward an economic development project or public improvement project in the community. TIF subsidies are not appropriated directly from a city's budget, but the city foregoes additional property tax revenue derived from the property’s increased value, made possible by the development, over the defined length of the TIF District.
Tax-increment financing isn’t a simple thing and the City of Crookston rarely utilizes it as a financing tool. The City retains a law firm, Dorsey & Whitney, LLP of Minneapolis for the specific purpose of handling the legal work necessary for things like TIF districts.
The council tabled the development agreement resolution twice because Evers had yet to secure a life insurance policy, necessary because of financing he’d received from the City and CHEDA for the Fournet project. He subsequently secured the policy, but then council members were concerned about a bit of the language in the development agreement, concerns that the TIF attorneys subsequently eased with their explanation regarding the language.
“We don’t do TIFs very often, so the questions and comments by the council are very normal,” CHEDA Executive Director Craig Hoiseth said. “It’s OK to go through this process and hear what everyone has to say. The next time we do a TIF we’ll be that much better at it. It’s a good lesson to go through a TIF now and then.”
The TIF district’s structure and timeline give Evers “a lot of incentive” to continue to pursue phases two and three at the Fournet, City Administrator Shannon Stassen explained. If he only does the first phase, he won’t come close to the maximum amount of tax revenue he could derive from the development, which is projected to total $208,400.
“If Jeff puts in $800,000 it’s not going to (raise the Fournet’s value) $800,000; it would be substantially less than that,” Hoiseth added. “If he does phase two and phase three, he would come a lot closer to realizing the full amount.”
Phases two and three would involve renovations for future tenants on the first and third floor. Evers has told the Times previously that he’d welcome just about any kind of development on the main floor, previously home to Four Seasons Clothing for many years, whether it’s some kind of restaurant or a suite of offices.