Panel approves TIFs for Kestrel, Connors Point

Economic development on Connors Point and near the Bong Airport could get a helping hand after the city’s Plan Commission approved modifying one Tax Increment District and creating another.

The districts will help pay for incentives and develop infrastructure to accommodate growth of two businesses on Connors Point and development of Kestrel Aircraft Co.’s assembly plant at the fairgrounds.

Taxes from the development and expansion projects would pay for the incentives and improvements over time.

To accommodate development of Kestrel’s aircraft assembly plant the city anticipates making about $2.3 million in expenditures. Initially the city would spend about $750,000 for the phase of the tax increment district to meet its obligations addressed in a development agreement between the city and Kestrel.

The remaining phases of the airport tax increment district are preliminary at this point, said Sean Lentz, a financial adviser with Ehler’s & Associates, consultants working with the city.

“The expectation is all those costs will be paid back by … the tax increment over the life of the fund,” Lentz said.

The goal of the new district, No. 12, is to promote industrial development at the airport by making public infrastructure improvements and creating development incentives that are expected to create more than 600 jobs.

During a public hearing Wednesday, lifelong resident and businessman, Kevin Peterson, spoke in favor of the plan, but expressed concern because the plan didn’t analyze the risks.

“Because such a project will strengthen the community in many ways, fiscally and socially, and basically immeasurable ways to impact us positively, I’m here to speak on TIF 12,” said Kevin Peterson, a lifelong resident. “I’m not here to shoot it down, but I would like you to modify your plan before approving it.”

Peterson said when the council approved another tax increment district on the site of the former Central Middle School, no one talked about the risks and four years later, nothing has happened at the site.

“It’s the thought process that concerns me,” Peterson said. He said to learn from the successes and failures the plan’s economic feasibility study should include an analysis of the strengths, weaknesses, opportunities and threats and asked commissioners to consider amending the plan before adopting the tax increment district.

He said if that analysis had been done on the Central site, it could have strengthened the plan before the commission on Wednesday.

County Administrator Andy Lisak spoke in favor of the plan during a public hearing Wednesday, even though the county won’t receive any taxes from the project for the next 20 years.

“I’m here to speak in favor as a citizen,” Lisak said. “… From the county’s perspective, and from my individual perspective, the reason we support this TID is because of the ‘but, for’ test. Without the creation of this tax increment finance district, the Kestrel project would not go forward.”

He said creating this district now is creating a better future for the children and grandchildren of the community 20 years out, in addition to the job opportunities it creates now.

He said that’s why he personally, and the county, supports creating the tax increment district.

“This is a project where you cannot have pieces missing,” said Dave Minor, president and chief executive officer of the Chamber of Superior-Douglas County. “This is a project where you can’t have one thing missing.”

He said having been involved in the project to bring Kestrel Aircraft Co. to Superior from the beginning, he said it’s a project that depends on all the pieces being in place.

The commission adopted the plan as presented, which is still subject to consideration by the Superior City Council and Joint Review Board.

“Everything we do in life has a risk to it,” said Mayor Bruce Hagen, a member of the Plan Commission. “We believe that this isn’t a risk.”

After all, the Kestrel K-350 fits into a particular niche of similar class of aircraft with some distinct advantages over its competitors, the mayor said.

No one spoke either in favor of or against amending tax increment district No. 8, which led to industrial development of Connors Point since it was created in September 1997.

The plan calls for total expenditures of about $5.2 million providing an additional $2.3 million to help with expansion projects, including Exodus Machines plans to ramp up production in support of its alliance with Caterpillar.

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