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Financing brings new hope for blighted areas in Oakdale

  • Article by: Kevin Giles
  • Star Tribune
  • June 29, 2013 - 4:20 PM

Two blighted business areas in Oakdale will see new life after years of debate over finances.

Legislative approval to extend two tax-increment financing (TIF) districts allows the city to pay for public infrastructure costs at the Tanner’s Lake and Tartan Crossing redevelopment projects, said Bob Streetar, the city’s community development director.

Oakdale has tried for years to move beyond the checkered business history of those areas and create new sources of tax revenue, but needed an extension of the TIF districts and endorsements from Washington County and local school districts as well, Streetar said.

At Tanner’s Lake at the Interstate 94/Century Avenue entrance to Oakdale, the city envisions attracting a restaurant and more commercial space. The City Council is expected to discuss that proposal in July, Streetar said.

At Tartan Crossing, a proposed 250,000-square-feet senior living complex would have 68 assisted living units and 24 units of memory care. Construction would start in September with completion in 2014. The complex would be built on the site of Oakdale Mall, a vacant eyesore the city bought in 2011 for $6.9 million and then tore down. The city raised money for that purchase through TIF, a common development tool where a bond’s debt is paid from tax revenue generated by a district’s increased tax revenue.

“That mall had struggled since almost the day it was put into service. The time had come to do something about it,” Streetar said.

The city’s redevelopment costs will include grading, stormwater collection and at least one new street. Funding those improvements — and in turn attracting new businesses — was made possible through extending the life of the TIF districts another 10 years.

“It’s sort of like setting the table. We’re the plate, the fork and the knife and they’re the steak and potato,” Streetar said of the city’s role in helping establish new businesses.

Before the County Board voted 5-0 recently to support Oakdale’s request for TIF extensions, Commissioner Gary Kriesel questioned the Legislature’s reasoning in allowing much longer TIF districts. Doing so, he said, means the county will have to look elsewhere for tax revenue.

“Maybe this is their plan for economic development, that they push it down to cities, counties and school districts,” said Kriesel, who told Streetar he was supportive of Oakdale’s efforts. “This is of little consequence to the state. They’re going to capture the revenue eventually anyway and it sticks in my craw. What we need is some good old tax reform in this state.”

Kriesel and other commissioners in recent years have been critical of what they see as a shifting of state costs to counties and cities, while failing to relieve local governments of spending mandates. As a result, a growing share of the county budget has come from property taxes.

Commissioner Fran Miron, new to the County Board, had a different view. “These extensions, Commissioner Kriesel, seem to be commonplace,” he said, adding that TIF districts are vital to restarting economic growth in Washington County.

The county is drafting an economic development plan to find ways to assist cities in their quests for new business opportunities. Miron and the board’s other new commissioner, Ted Bearth of Oakdale, are former mayors who repeatedly have stated their interest in building a county alliance with cities.

Kevin Giles • 651-925-5037

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