EDSR INFORMATION #1 11-13-2012 - Laserfiche WebLink

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10/25/12 Finance&Commerce>Print>The great property tax free-for-all "It absolutely wouldn't have happened without that money," Lazan said. "The banks were i just not comfortable with Ramsey." Bank executives had good reason to be uncomfortable. Back in 2009, three of their peers, former officers of the now-defunct Lino Lakes-based Community National Bank, reached a plea deal with federal prosecutors in a conspiracy to commit bank fraud case. The alleged fraud involved the collapse of what was then called the Ramsey Town Center development. In court documents, the U.S. Attorney's Office in Minnesota said the development came unraveled amid "fraud, debt and mismanagement." The city ended up having to buy 150 acres in the area. Two of the former executives — William Sandison and his son Ross — served months-long prison terms, according to a Federal Bureau of Prisons website search. It was only after Ramsey was able to grant and lend a total of$7 million that Pittsburgh- based PNC Financial Services Group was comfortable financing the Residence at the COR, Lazan said. "It was about building confidence in the banking community, and this did it," Lazan said. In Sauk Rapids, officials argue that a gas station they helped to build through the program is proving to be a catalyst for further development. A nearly $150,000 business subsidy helped pay for a 4,450-square-foot SuperAmerica that opened in spring 2012 at the southeast intersection of U.S. Highway 10 and Golden Spike Road. But local officials also argue that there is more than meets the eye. The money helped pay for Landwehr Construction to make $800,000-worth in site grading, sewer and water installation and other improvements. The improvements were needed for the $1.48 million gas station project handled by Welsh Construction on behalf of VL Development, an entity related to Cold Spring-based Alpha Development. The SuperAmerica and improvements at the VL site proved "instrumental" in the state awarding Benton County a $2.9 million Transportation Economic Development grant, which is going toward $4.9 million of interchange improvements, said Sauk Rapids City Administrator Ross Olson. The hope is that more retailers will express interest in the site. "Was the utilization of these dollars focused? Absolutely they were," Olson said. "Every community has different needs." Sauk Rapids officials, however, did not have jobs numbers for the projects the city funded, and did not require specific numbers in agreements. The subsidy agreement with VL Development, for example, had the developer agreeing to create "jobs" at the site paying at least $12.50, but did not specify a number. Unclear results after millions spent Many other Minnesota cities did not keep track, which raises the prospect that millions of dollars were spent with unclear results. Projects that counted construction jobs — what the state program was designed to create — accounted for only $18.1 million, or 50 percent, of the total TIF dollars awarded, Finance & Commerce found. { The situation with permanent jobs was better: Projects that counted permanent jobs accounted for$28.9 million, or 81 percent, of total TIF dollars. "I agree that there should be more information-reporting requirements," said Isanti Mayor George Wimmer, whose city spent $916,500 on $6.7 million-worth of projects, including a 33- unit hotel and a 20-unit senior memory care center. Isanti actually collected jobs numbers: The money helped produced 367 construction jobs and 24 to 34 permanent jobs. "We require it so we are able to effectively communicate with our citizens and taxpayers what benefits are being provided," Wimmer said. f inance-commerce.com/wp-content/plugins/tdc-sociable-toolbar/wp-print.php?p=52262 7/8