St. Cloud Says ‘TIF’ Funding Essential to Getting Grocery Warehouse

(KNSI) – St. Cloud was able to land a grocery store warehouse thanks to a tool to spark redevelopment. St. Cloud approved Tax Increment Financing (TIF) for Associated Wholesale Grocers Inc. to build a 330,000 square foot $80 million warehouse facility in the I-94 industrial park.

TIF districts encourage economic development or redevelopment by allowing companies to tap the tax increases in the tax base and reinvest the money into the project. AWG’s TIF will allow the company to collect $1,752.839 over nine years for the land cost. St. Cloud Director of Economic Development Cathy Mehelich (Me-Hell-ich) says using TIF gave the city the edge in landing the business.

“AWG was considering multiple locations, both within the state of Minnesota and several outside the state of Minnesota, particularly in the Wisconsin area.”

She says the company will create a taxable benefit for St. Cloud, Stearns County, the St. Cloud Area School District and Minnesota. Taxes currently collected on the property will remain in place until the TIF is paid. After that, all the tax increases will be collected by local taxing districts.

“If not for that incentive the project would not be built in the city of St. Cloud, and we would not have a new tax base of $9 million.”

She says AWG will create 114 new permanent jobs, and 96 of those will pay $20 an hour or more.

AWG is new to the state and will serve independent grocery stores in Minnesota and the upper Midwest.

TIF was approved for use by cities from the Minnesota Legislature. In the last ten years, St. Cloud has created 8 TIF districts for projects, including the redevelopment of the Gateway motel property in East St. Cloud into a caribou and other commercial space.

For a project to be considered for TIF financing, it must be a new project consisting of 20,000 or more square feet and generate enough tax base to cover the TIF.

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