A Public Hearing at a special meeting of the City Council of the City of International Falls, Minnesota was held in the Council Chambers of the Municipal Building and via BlueJeans Conferencing on the 26th day of April, 2021 at the hour of 5:00 P.M.
MEMBERS PRESENT: Councilors Buller, Ditsch, Holden, and Mayor Droba.
Media and public via BlueJeans Conferencing. All members noted they could hear the others and the discussion.
MEMBERS ABSENT: Councilor Krause.
| Presentation by Tammy Omdal, Northland Securities | Tammy Omdal, Northland Securities, explained that Northland Securities has performed a financial analysis of IF Properties, LLC [AmericInn Hotel by Wyndham Hotels & Resorts International] on behalf of the City of International Falls. IF Properties, LLC submitted an application for property tax abatement, in the form of a business subsidy, which would result in an increase of the tax base of the city and provide employment opportunities in International Falls. IF Properties, LLC plans to construct a four-story, eighty-four (84) room hotel. IF Properties’ tax abatement application requested $1.6 million in tax abatement over a fifteen (15) year period. Ms. Omdal stated that the financial analysis completed by Northland Securities determined that the completion of this project is not feasible without tax abatement; however, Northland Securities is recommending tax abatement not to exceed $1.056 million over a ten (10) year period. |
| IF Properties, LLC comments | David Harchanko, IF Properties, LLC, stated that the AmericInn by Wydham group is very eager to get this project started as it has been in the works for many years and the group has long desired to have an updated hotel in International Falls. Mr. Harchanko stated they are very excited to see this project so close to becoming a reality. |
| Public input/questions/comments | Rhonda Benedix, 909 6th Street, asked for the definition of public infrastructure, as it was stated in the notice that the tax abatement was for costs associated with the project and construction of public infrastructure. Tammy Omdal, Northland Securities, explained that tax abatement is in the form of a business subsidy, because this project will generate jobs and increase the property tax base in the City of International Falls. Ms. Benedix inquired as to whether other City residents would see a tax increase due to this tax abatement. Ms. Omdal explained that City residents will not see a property tax increase due to this tax abatement, as the property owners will still pay the taxes on the land, but the taxes will be abated for the ten (10) year period not to exceed $1.056 million for improvements made to the property. After the ten (10) year abatement period lapses, the City will see a larger tax capacity to draw from for the property tax levy.
Paul Nevanen, Director of the Koochiching Economic Development Authority (KEDA), spoke in support of the project, stating KEDA already voted and approved this project. Mr. Nevanen stated that this project has been in the works for over two years, and while it has faced many hurdles, the developers have persevered and done a marvelous job with creative problem solving to ensure that the project moves ahead. Mr. Nevanen noted that due to economics, developments like these almost always require tax abatement or some form of assistance. Mr. Nevanen noted that the last hospitality project constructed in International Falls was in the 1980s and the area is in need of this first class property development. |
| CLOSED the public hearing | There being no further public comment, Mayor Droba closed the public hearing at 5:16 P.M. |
| ADOPTED Resolution No. 26-2021 authorizing the abatement of taxes and granting a business subsidy, and authorizing execution of a tax abatement agreement for IF Properties LLC | MOTION by Councilor Buller to adopt Resolution No. 26-2021 authorizing the abatement of taxes pursuant to Minnesota statutes, section 469.1812 through 469.1815 and granting a business subsidy. Motion seconded by Councilor Holden.
Mayor Droba thanked Tammy Omdal of Northland Securities for all of her work on this matter. Mayor Droba also thanked previous City Administrator Ken Anderson for the implementation of the tax abatement policy during his tenure with the City. Mayor Droba stated that in his years on the City Council projects like this always felt unattainable, but this is a major step towards progress. Councilor Buller thanked Ms. Benedix for her questions, noting they are questions that need to be asked and understood by the public. Motion carried unanimously. MOTION by Councilor Holden to authorize execution of the tax abatement agreement by the Mayor and Interim City Administrator. Motion seconded by Councilor Ditsch and carried unanimously. |
| ADJOURNMENT | Mayor Droba adjourned the meeting at 5:24 P.M. |
Harley M. Droba, Mayor
ATTEST:
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Betty Bergstrom, Interim City Administrator
