County OKs tax abatement for New London hotel project
WILLMAR--Kandiyohi County agreed Tuesday to a 10-year property tax abatement for a proposed hotel and event center project in New London--but not before two citizens spoke in opposition. John Burns of Willmar called the abatement request a "milli...
WILLMAR-Kandiyohi County agreed Tuesday to a 10-year property tax abatement for a proposed hotel and event center project in New London-but not before two citizens spoke in opposition.
John Burns of Willmar called the abatement request a "million-dollar giveaway" at the expense of local taxpayers.
If the public really understood what was happening, "this room would be packed," Burns said during a public hearing Tuesday on the abatement request by Glacial Ridge Hospitality and Little Crow Country Club.
The County Commissioners ultimately voted unanimously in favor of the abatement. Four commissioners-Jim Butterfield, Harlan Madsen, Rollie Nissen and Doug Reese-cast a vote. Roger Imdieke, chairman of the board, abstained from voting and also turned the gavel over to Reese, vice chairman, for the public hearing and discussion, citing a conflict of interest.
The developers plan to build a 51-room GrandStay hotel, 300-seat event center and year-round restaurant just outside of New London on Minnesota Highway 23. The project also includes construction of a new clubhouse for the Little Crow Country Club.
The $7.8 million project is "one of the largest private-sector developments in the New London area," said Aaron Backman, executive director of the Kandiyohi County and City of Willmar Economic Development Commission.
David Harchanko, president of Apollo Development, said it has been under discussion for more than a year. A feasibility study found a need in the New London-Spicer area for lodging to replace the many small resorts that have closed over the years, he said.
A new hotel and event center, in partnership with the golf club, will help turn New London into a destination, Harchanko told the County Board.
"It will bring jobs and activity to the area," he said.
An estimated 35 jobs will be created, according to Harchanko and Backman.
"We think this can have a significant impact on northern Kandiyohi County and on the region," Backman said.
Those conclusions were questioned during the public hearing by Burns, who said the tax break will essentially be borne by the county's property taxpayers.
"That's who will pick up the slack on this," he said.
The tax abatement is estimated at $983,000 over 10 years. Approximately three-fourths, or $720,780, is Kandiyohi County's share. The remainder is the New London-Spicer School District's share.
The property owners will continue to pay property taxes at the current level but increases will be abated at 100 percent for eight years and 80 percent for another two years. After 10 years, the owners will start paying the full amount.
Burns said there are projects for which tax abatement may be appropriate but questioned whether the New London project is one of them.
He called it a giveaway "to the well off and the well-connected." He also took aim at the projections for job creation, saying most come with low pay and are in a category for which there's no shortage of workers.
Coming on the heels of a property tax abatement granted last month for redevelopment and expansion at Willmar's Kandi Mall, local elected officials can't seem to say no, Burns said.
"This has become so routine. Everyone's doing it," he said.
Steve Brisendine, who lives in Spicer and is a member of Little Crow Country Club, echoed many of the concerns voiced by Burns.
Hotel development also is underway in Spicer, and the Willmar Conference Center and Best Western Plus received a tax abatement three years ago for renovation and expansion, Brisendine said.
"How many more are we going to do for like businesses?" he asked.
The project has evolved in the past year and many members of the Little Crow Country Club may not be fully informed, he said. "I question our organization moving forward without further discussion."
Supporters of the project said its long-term value will exceed the cost of the tax abatement-and they emphasized that the tax abatement is a key piece in the success of the project.
"It's not a giveaway," Backman said. "They have to make significant capital investments."
Dean Lindquist, of the Little Crow Country Club redevelopment committee, said there are still numerous steps that must be completed before the project can officially go forward.
"This is part of the process but it's such a vital part of the process," he said of the tax abatement.