New details emerge about potential equipment sales business in Detroit Lakes

DETROIT LAKES

— More details have emerged about a power equipment sales, parts and service facility wanting to set up shop on the southeast side of Detroit Lakes at 29075 U.S. Highway 10 by fall.

An application for Tax Increment Financing (TIF) was reviewed by the Detroit Lakes Development Authority during its monthly meeting on Tuesday, May 7. In the application, the business was identified as QF5, which is owned by Todd Doege of Shakopee, Minnesota.

The application stated the 15,000-square-foot facility is to be constructed of pre-cast concrete and is slated to be built in the summer of 2024 with completion by fall. The information provided to the Development Authority stated the business had the potential of employing up to 12 full-time workers and estimated annual sales of $4-6 million.

Two parcels of land were purchased for the business. According to the Becker County Parcel search, the two combined parcels (

030075000

and

030074000

) are about 12 acres. The site for the new business was designated to be on the northern portion of the parcel farthest from the intersection of Highway 10 and 290th Avenue.

The rendering in the packet indicated the primary access to the commercial business would be from Highway 10, with a turning lane in the eastbound lane. A secondary ingress/egress point would be along 290th Avenue. The plans indicate there will be 46 parking stalls for customers, including two designated for those with disabilities.

“The applicant anticipates approximately 4-to-10 visitors during off-season normal business hours and 10-to-25 visitors during peak-season normal business hours at any given time,” the application stated.

The information provided to the Development Authority stated the business had the potential of employing up to 12 full-time workers and projected estimated annual sales of $4-6 million.

Contributed / Detroit lakes Development Authority

Annexation of the land from Burlington Township began in

February with a Planning Commission public hearing

. The commission approved the annexation. It was sent to the

City Council, which approved the annexation in

March and zoned it B-3, which allows for motor vehicle-orientated or dependent commercial and service activities. Also permitted in the B-3 district are: retail and service, gasoline service stations, food-based establishments, hotels, offices and more. Burlington Township will receive five years of taxes. Starting in 2025 and concluding in 2029, the annual tax payment would be about $610.

QF5 requested the Development Authority consider offering Tax Increment Financing for the new business.

“The TIF plan has to be approved by both the Detroit Lakes Development Authority and the City Council,” Remmen explained in an email after the meeting. “Each entity must hold a public hearing. The public hearing dates have not been scheduled yet.”

The

Minnesota Office of the State Auditor

wesbite explains that a TIF “is a financing tool meant to support local economic development, redevelopment and housing development that would not otherwise occur without assistance.”

“TIF is not a tax reduction; taxes are paid on the full taxable value,” the auditor information noted.

In a phone interview, Remmen explained if the TIF application was approved, the business would continue paying taxes based on the fair market value of whatever is on the property. Those taxes would be distributed to all taxing entities.

“Once the new project is built, they pay full taxes for the new project,” Remmen explained.

When the county distributes the taxes to the city, TIF agreements call for the city to send 90% of its taxes back to the developer until the agreed-upon amount is paid. (QF5 requested the Development Authority consider offering TIF in the amount of $623,570.) When the agreement is fulfilled, the TIF is decertified, and tax collection begins as it would for properties outside of a TIF zone.

Remmen explained that businesses or developers sometimes seek TIF to “help make a project affordable.”

The QF5 TIF application stated that “increment assistance will be used to assist the applicant with costs of the remediation of asbestos in the current structures located on the property” (which must occur prior to demolition), “the demolition of the existing structures, grading and excavation work necessary … extension of municipal water and sewer service to the property and the building to be constructed on the property.”