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NAPA store gets OK

The Hastings City Council decided Monday to establish a tax increment financing (TIF) district on the corner of 15th and Vermillion streets, where Linn Companies plans to build a new NAPA store.

"In this particular case, I think this is a classic example of the need for TIF," councilmember Joe Balsanek said after stating he's not usually a fan of TIF districts. "...I don't see any other way than to do this, and I think it's a very responsible agreement."

Councilmember Tony Alongi led off the discussion questioning whether or not establishing the district for Linn Companies would lead other property owners in the area to request the same treatment.

Other properties may come forward with requests for more TIF districts, community development director John Hinzman said, but each case would have to meet the same guidelines as this property has.

"We look at that but-for test," Hinzman said.

Simply put, the test determines that a property would not be developed but for receiving assistance.

The property at 15th and Vermillion requires a number of costly upgrades in order to support the new NAPA store. Besides the cost of buying enough contiguous land, Linn Companies also has to pay for fuel tank removal, soil tests and remediation, asbestos abatement and replacement of the top four feet of soil.

The existing soil is not polluted, Stephen Linn told the council, but it's primarily fill and won't compact properly to bear the weight of the building he plans to construct. The gas station that had occupied the spot didn't have much in terms of structure. The new store will be considerably heavier and engineering standards have changed since the fill was originally placed there, Linn said.

The store's design also routes traffic away from the intersection, allowing access from an alleyway off of 15th Street rather than Vermillion. The current alleyway is unable to handle the amount of traffic expected, and upgrading it impacts construction costs significantly, Linn said.

"These are all factors that make this a fairly exclusive situation," Alongi said.

The Hastings TIF District No. 5 expects to receive about $403,000 in tax increment revenues from 2013 through 2028. Dakota County would shift $118,752 in property tax revenue that would have been received from these properties over 16 years to other properties in the county.

Construction should begin soon and the store expects to open around December.