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Wadena City Council approves tax abatement, interest rate adjustment for new hospital

Tri-County Health Care is estimated to see over $1 million in savings with these abatement and interest rate reducations.

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Estimates show over three years that around $170,000 will be abated.
Contributed art
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WADENA — The Wadena City Council and Tri-County Health Care came to an agreement on providing a tax abatement for the new hospital complex that would both provide a savings to TCHC and continue to raise tax revenue for the city.

The agreement is far from the original ask of 15 years at 100% abatement, but instead it offers a three-year abatement of city taxes on a sliding scale, 90% in 2024, 50% in 2025, and 30% in 2026. This abatement is based on the yearly tax statement provided to the city from TCHC. If the property changes ownership, the abatement will be terminated.

With the estimated value of the taxable clinic portion at $9.9 million, that’s an estimated tax amount of $100,553 per year. Over the life of this abatement, it’s a savings of about $170,940.10 for TCHC.

The tax abatement committee came to this decision after meeting about four times on the topic. That’s after a previous abatement committee brought a different proposal forward that was not found agreeable by TCHC. In a vote on the tax abatement approval, council member Bruce Uselman noted his opposition to abatement.

“I just think it’s the wrong approach to take for abatement of taxes when we're dealing with people on social security and low income,” Uselman said. “How much do we need to stimulate what they already have?”

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Uselman shared his appreciation for those that met to discuss this further.

The abatement passed with all but Uselman in favor.

But the abatement was just a small part of the savings that TCHC will realize after Interim Administrator David Evans brought up another idea, a reduction of the assessed interest rate. It’s expected that this move will provide a savings of about $869,000 for TCHC over the life of the 20 year bond just by reducing the city’s interest rate by 1.65%. Under that plan, the interest rate moved from 4.7% to 3.05%. The council approved a resolution departing from the City Assessment Policy for this project.

Other abatement discussions
A special committee recommended an abatement 1/10 the size of that which Tri-County Health Care requested.

This money comes from the interest on the nearly $4 million assessment for the utility extension. This acts as a funding source to pay for administrative costs related to the project. Evans noted that this reduced amount is a more fair amount considering the work involved and the expectation that these assessments will be paid in full.

“I think it’s more fair in what we should be charging,” Evans said.

Wadena Economic Development Director Dean Uselman supported the idea saying that it showed Wadena is open for business and willing to work with businesses.

“I think the package is a great economic development package and I appreciate the council’s support,” Uselman said.

Tri-County Health Care President and CEO Joel Beiswenger was in attendance and shared his satisfaction with the council’s approval.

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“Tri-County Health Care is very satisfied with the outcome here,” Beiswenger said. “The combination of these two … is a nice economic development package. I appreciate the creativity of the folks that put this together.”

Hwy10 CSAH 92 TCHC.JPG
The new facility is nestled amongst trees and nature in hopes the environment will aid in healing. It's also within the corner of U.S. Highway 10 and 11th Street, two roadways to see significant change in preparation for increased traffic.
Contributed by Tri-County Health Care

Other abatements

The Wadena-Deer Creek School District, also has the new hospital within its taxing district. They approved, in January, a 10-year tax abatement with a maximum abatement of $372,770. W-DC Superintendent Lee Westrum called the abatement “tax neutral” for taxpayers and the school district.

“Tri-County Hospital is the largest employer in the school district, they are critical to the economy and, for us, students and all that goes with it,” Westrum said. “It’s easy to connect the dots that it’s in our interest to see a prosperous hospital and clinic in our school district.”

According to Otter Tail County Deputy Administrator Nick Leonard, an abatement has not been approved or considered for this project with Otter Tail County.

He's a writer, editor, photographer, truth seeker and promoter of the Wadena area.
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