A Tax Increment Financing District for possible future projects on the vacant lots in the Happel and Palubicki additions, and on East Main was approved at the Perham City Council meeting April 11.
Todd Hagen, vice president of Ehlers and Associates, a public funding agency, focused on the Happel addition for New Life Farms, a proposed new coffee house. TIF District 2-40 was created for the purpose of building an approximate 5,700-square-foot building for the new coffee shop, and potential future developments.
"It's expected to contribute annually, on completion, above $14,000 a year (in taxes)," Hagen said.
The City of Perham expects a reimbursement from the qualified costs from the tax increments derived from the TIF District. The estimated tax increment is up to $291,100 and the council agreed to fund it through an Interfund loan from the Economic Development Authority fund. The city can expect its first tax payment in 2018.
The duration of District 2-40 is eight years from the date of receipt of the first increment, for a total of nine years.
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New Life Farms will pay $9,500 in out-front costs incurred from creation of the district and will get some of that money back when future parcels are developed. As part of the agreement, New Life Farms must create at least one new and one part-time position.
The estimated market value is $676,054 and taxes are $14,237. Hagen estimated that the new facility would generate a increment of $114,074.
The Nest will open in the building which houses the Wild Goose. The Nest will take over the coffee shop, including the drive-through, gifts, gourmet foods and candies. The Wild Goose is converting to a high-end home décor business. The remodeling process will begin this summer on the exterior, with interior renovations starting this winter. The Nest expects to open Oct. 1.
In other business:
-The city approved renaming 450th Street to give it a city address rather than a rural address after purchase of an adjacent lot.
-Bongards and the City of Perham approved an agreement for how Bongards will discharge its wastewater. Any violation of the discharge limits by Bongards will result in a monthly penalty charge.
-At 2 p.m. Tuesday, May 3, the city council will receive and open bids for seal coating several streets, city parking lots and the Perham Area Community Center.
