The council had earlier this month approved $800,000 in tax increment financing for the project, agreeing to rebate a portion of the property tax to be paid on the hotel. (See posts from Sept. 3 and Aug. 27.) The council has now added carrying costs of between $200,000 and $300,000 to the incentive, taking the total above the $1 million mark.
The $800,000 is spread over 14 or 15 years. BriMark Builders is borrowing money to build now, just as an individual would to build a house, with the anticipated TIF money part of the money used to pay back the loan. The carrying costs – or interest – on the borrowed $800,000 will amount to between $200,000 and $300,000 over the lifetime of the loan.
The question of carrying costs was taken back to the council for clarification. According to city administrator Mike Palmer, the TIF agreement with Cobblestone in early 2013, pre-casino, specified $800,000 in TIF plus a percentage for carrying costs. The resolution approved by the council on Sept. 2 did not include carrying costs.
The vote on the carrying costs was the same as the Sept. 2 vote on the incentive, with council members Gary Von Ahsen and Harry Ahrenholtz voting against, and council members Lisa Jaskey, Larry Teeples and Shannon Black voting in favor.
“Some mistakes happened. This is our chance to get them corrected and be consistent with what our original agreement was and to carry that forward, and to get this so there are no further delays on the project ,” Jaskey said. “The $800,000 plus carrying charges was the intent.”
“There’s a lot of emotion into this whole thing, and I think that’s carrying a lot of weight in this situation,” Von Ahsen said. He said he thought the council had agreed to a cap of $800,000, and he didn’t know why the council was revisiting the question.
Palmer explains that the incentive is not money the city is paying out, but property tax the city isn’t collecting.
Related to the Wild Rose/Cobblestone project, city engineer Rick McCollom reported that boring has already begun for the extension of water and sanitary services north of Highway 30, and Palmer reported that Wild Rose has begun the process of subdividing its property at the casino site to allow for out lots.
