US Bancorp's plans were delayed almost four months, and the ensuing changes cost the bank project, under development by Minnetonka, MN-based Opus Corp., an estimated $2 million to $3 million in TIF funds.The city covered the shortfall with a bridge loan as part of a $12-million to $14-million TIF package approved last month.
"They were raring to go," says Brian Sweeney, the city's planning and economic development director. The Minneapolis-based financial services company will spend about $65 million for the project.
The tax reform legislation also created a grant fund of $91 million for fiscal 2002 and $38 million for each year thereafter to fill the gap between the lower property taxes and TIF collections. The city has yetto decide whether it will apply for the supplemental funds.
"The state pool is so complicated, so onerous, we're just not sure," Sweeney says.
For one thing, applying for the grant requires a myriad of calculations related to tax increment districts both by the city and St. Paul PortAuthority, Sweeney says. Sweeney says St. Paul must consider alternative financing arrangements, such as loans, property taxabatement and the development of new loan pools to fill the gap left by the reduction in TIF funds. But he is optimistic St. Paul can continue its robust development.
Minneapolis-based US Bancorp is relying on TIF subsidies to help build two office buildings and a parking ramp on the West Side Flats. Opus will begin construction of a 150,000-sf building in October, anda 200,000-sf building and a 2,000-space parking ramp will begin construction next spring. The bank aims to have the first building and the parking ramp finished in December 2002 and the second building completed in November 2003, he adds.
Plans for the housing component of the West Side Flats, being developed by Jerry Trooien and George Sherman, will build more than 1,100 housing units ranging from high-price waterfront condominiums to government-assisted rental units, Sweeney says.
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