A project to transform a decrepit building on West Broadway Avenue into a center for workforce training and retail is likely to receive $500,000 in tax breaks after a vote by council members today.
While the vote by the economic development panel was to direct development staff to continue studying whether such aid was appropriate, Committee Chair Lisa Goodman noted that projects nearly always receive tax increment financing by the time they reach this stage of analysis.
The building at 800 West Broadway has been empty since 2006, languishing in tax forfeiture after a separate $70 million proposal for a YWCA, shops and offices fell through.
Developer George Sherman, who owns the Hawthorne Crossing shopping center next door, has plans to lease the structure to the Minnesota Department of Employment and Economic Development. Other health and educational facilities will also share the space.
A report prepared by Minneapolis project coordinator Erik Hansen said that redevelopment costs would exceed the finished value of the building, creating a financial gap necessitating pay-as-you-go tax increment financing that would comprise 7 percent of the project’s total cost.
The tool, once widely used in city projects including the Target Center, allows developers to divert property taxes to help pay for construction.
“People want to see more activity on West Broadway,” Hansen told council members, noting that the project would bring training opportunities to an area where educational attainment was low.
The development will also make use of the underused parking lot at Hawthorne Crossings to minimize concerns about adding a lot of extra surface parking.
Goodman initially voiced some skepticism, citing an article that ran in today’s paper about Minneapolis already putting $14.3 million into West Broadway.
“It falls under the ‘West Broadway, we have to throw money at it’ category,” she told Hansen. “I guess I buy your argument if someone doesn’t do something right now, the building will sit vacant for a long time, and this is a part of West Broadway that perhaps we need to pay more attention to more than others given that it’s a Gateway area.”
Sherman’s goal is to finish the sale of the building – which is still owned by Hennepin County – and begin redevelopment by the end of the year.
Also along Broadway, a mixed-use development at Penn and Broadway and an expansion by the DC Group of its company headquarters at River Road are on track to receive tax increment financing.