October 11th, 2005

Public funding of private developments has historically earned a bad reputation when a developer is viewed as scamming a city, or when a development plan doesn’t pan out and a city ends up bailing it out.

Granted, one could easy find examples of when public financing of a private development was a misappropriation of public funds from the start.

However, in the case of Mendota Homes asking for tax increment financing (TIF), a type of publicly funded development tool, to assist in paying for land acquisition and infrastructure costs to re-develop what’s known as the Riverfront site downtown, the Northfield City Council should view the request as an investment opportunity for the future.

Northfield Community Development Director Brian O’Connell told the council Monday at a public hearing regarding the TIF request that the developer is asking for about $3.6 million in TIF assistance, meaning that for a period of 26 years the city would forgive the taxes on the Riverfront site in return for collecting the increased taxes the city will receive when improvements are made to the property. Mendota Homes owner John Mathern has stated that he plans to build two condominium buildings and five mixed-use buildings, all of which would be collectively known as “The Crossing,” on the site. When completed, the development will make for a grand entrance to Northfield’s downtown.

But to make this development possible Mathern has had to make a large investment in procuring land from the city and private interests, and he will spend a lot more to construct the necessary infrastructure and then still more to finally construct the residential and commercial buildings. This development will not come cheap, but ultimately it will be a tremendous asset to Northfield’s future.

Given the enormity of the project and its potential to enhance the downtown, Mendota Homes’ TIF financing request is a fair exchange. City officials have been looking for years for a developer who would take the Riverfront site and do with it something unique that would benefit the city. The Crossing is what they’ve been waiting for.

When the TIF request comes before the council again in November, the councilors should approve the request. For what is a relatively small up-front investment, the return not only the city coffers will see from future tax collections, but the synergy The Crossing will have on all of the downtown will be well worth the investment.

Reprinted with permission from the Northfield News.