New law frees extra revenue for stalled NW Quadrant

New Brighton has an extra bone to offer prospective builders for the stalled Northwest Quadrant redevelopment project.

A law passed during the recent legislative session grants cities more leeway to use certain tax revenues to help with new construction or rehabilitation projects, provided those projects will create jobs.

The tax money in question is excess revenue from projects funded by tax-increment financing, a development tool that uses taxes generated by a project to help pay for it.

Depending on how the city approaches the opportunity, the new law could untether from $563,000 to more than $1.2 million to offer developers toward project-related expenses.

Plans for a mixed-use development at the Northwest Quadrant, on the northwest corner of Interstates 35W and 494, fell apart when the residential developer pulled out at the end of 2007. The city has used the years since to proceed with cleanup on the 100-acre site and to re-envision its future in a postrecession economy.

New Brighton has several successful tax-increment financing districts, including the LA Fitness site on Silver Lake Road and the Brightondale Senior Campus on Rice Creek Road. Normally, any excess tax revenue such districts produce can be used to provide only for their own maintenance and debt service. But the new legislation will allow cities to pool excess funds to use on new projects.

City officials have sought out conversations with developers and consultants to determine the most viable start to development there.

The city has been in talks with developers Dominium, Dunbar and TOLD about creating a rental residential development as a first step, probably attached senior or multifamily housing, with rents ranging from $750 a month for a one-bedroom to $1,500 for a larger unit.

"There is demand out there for that," Lotter said. "It's just a matter of whether they can make the economics work. Or, if not, if we can find some way for the economics to work, but they need an extra nudge. For a year, we have an extra tool we can use."

This month, the council toured other metro-area apartment complexes built by the three developers.

"It was a way to develop a connection with a potential developer," Lotter said. "What kind of development do we want in our community? Does this meet our vision? "

There is a catch, however: Construction must start before July 1, 2011, and the money must be spent before the end of 2011.