Wadena City Council members took the first steps in a process to consider tax abatement for Tri-County Health Care’s new health care complex during their regular meeting Tuesday, July 13.
The council unanimously gave preliminary approval to move ahead with reviewing the application from TCHC. Interim City Administrator David Evans said the project scored high in an initial review, a 40 out of 48 points possible. Next, the application is to go through an economic review by a committee made up of Evans, Economic Development director Dean Uselman, and Council members Bruce Uselman and Jessie Gibbs. Evans said they will discuss how much of an abatement and for how long they would allow an abatement. Similar review will be done by other entities that this affects including the Wadena-Deer Creek School District and Wadena and Otter Tail counties. Tax abatement allows cities to provide a tax break to all of or a portion of property taxes levied by a city for a given purpose, such as public infrastructure improvements, new construction, economic incentives or redevelopment.
The public will also be able to weigh in on the proposal during a public hearing at 5:30 p.m., Tuesday, Aug. 31, at the Wadena City Hall.
Also attending the meeting was TCHC President and CEO Joel Beiswenger. Mayor George Deiss asked Beiswenger if he cared to comment. He did not have further comment at that time.
Later in the meeting, during his report, Deiss said he hoped the public would attend the public hearing and share their thoughts on the proposal.
“We’ve got to think hard about that, how it will financially impact the city and its citizens,” Deiss said of the decision to abate taxes. He further commented that allowing a tax abatement of this new construction would have an adverse effect on the city’s tax revenue, which would then affect other taxpayers in the community.
Deiss harkened back to the first meeting with Tri-County Health Care at Karvonen’s Funeral Home where he recalled that no public funds were going to be used for this construction project.
“We start abating taxes, somebody has to make up the difference,” Deiss said. “So I hope we do get a good turn out of people at that public hearing voicing their concerns.”
Deiss said the TIF district option was there for the hospital, but they did not take advantage of it.
Later contacted concerning the TIF option, Beiswenger said that TCHC fully planned to pursue TIF, however, they discovered they were disqualified from such an option after they had already done some work of removing debris from the site not long after purchasing the property. With TIF no longer an option, he said they immediately moved to pursuing abatement.
Beiswenger said the reason for the requested abatement, much like TIF, is for economic development purposes, as the application states. The new hospital construction is expected to maintain the 460 current employees and provide for an additional 36 new jobs with added services. TCHC bought the 77 acre property to construct a $70 million hospital and clinic and has hopes for additional future development on the large site.
Further benefits outlined in the application are that this development will increase tax revenue; has allowed the city to annex more land; allowed for added utilities and is bringing a new County State Aid Highway inside the city.
Based on the application, the project does meet qualification requirements and scored highly.
In the first fully assessed year, it’s expected the project will pay annually $100,553 in property taxes.