We have had another great summer with successful Street Dances, amazing Celebrate Isanti Day, Rodeo/Jubilee Days, Farmers’ Market, Rum River Rods Car shows and our productive Community Garden. The Redbirds have played hard all summer, our large soccer complex has hosted numerous teams and Rum River BMX has continue to go strong year long. All three of these groups provide fun free entertainment in Isanti. We welcomed Rum River Mallards to town this summer as our new USPHL Hockey team. They will provide exciting hockey as they develop players’ careers. These are just a few of the many events and groups that provide a great Hometown feel to Isanti.
We are working on the City budget for 2019. Some of the highlights are our 10% property tax cut for 2019 which when added to the 7.4% cut in 2018 gives us the biggest tax cuts in our region. We have the second portion of the Dog Park funding budget which allows construction to begin Spring of 2019. We received health insurance rates for 2019 that have increased over 15%. We are working on budget cuts to absorb this large increase in rates as well as working with our Union and Non-Union employees on options to help reduce the ongoing health insurance rate hikes.
We are spending 14% less in 2019 on debt payments than in 2016, which saves us $85,788 in the 2019 budget. I have made paying down City debt a priority which has led to eliminating over $6,000,000 in Net Debt. This has many benefits for the City including saving hundreds of thousands of dollars on interest payments over the years and increasing our credit rating. Isanti’s credit rating has improved from Baa or 1 step from Junk/Speculative rating to AA+ or High Quality. This dramatic increase over my time in office has also saved the City hundreds of thousands of dollars in interest payments. The improvement in City finances along with strong Commercial/Industrial growth is what allows us to improve City services while making big tax rate cuts and water/sewer rate cuts.
We are having another strong year for housing starts. We are on pace to match or exceed last year’s total of 91 new homes. We have been working with developers on several new residential developments. The first submitted plans are for the Legacy Pines Development which will occur near Legacy Park in the northwest part of Isanti. In our discussions and Development Agreement negotiations, we are ensuring that new development pays all the cost associated with the project. Our mantra is development pays for itself. Legacy Pines will add another projected 177 new homes as it is built in phases. We also have ensured that the natural areas in this development are maintained to enhance the development.
Kwik Trip and Best Western Plus are both under construction. These projects will add services, tax base and jobs to Isanti. We have a number of other projects we are working on that will add even more. We have had a 48% net increase in businesses and a 40% net increase in jobs from 2010 to 2017. We added nearly a 1,000 jobs in Isanti since I was first elected. We leveraged $700,000 in State Economic Development Funds to incentivize $12,079,000 in private investment along with tens of millions of dollars in other business investments during my time as Mayor.
I want to discuss the Best Western Plus Hotel Project and incentives used to make this a reality. There seems to be a lot of misinformation floating around on this catalyst project. The parcel of land being built on has been vacant since Isanti’s founding over a 100 years ago. We believed it was an ideal location to help spur growth along highway 65 and this growth would not happen unless the City was involved. The City used tax abatement, land grant, SAC/WAC incentive and straight dollar investment in the project. The amounts are SAC/WAC: $70,952 and land value/Cash: $948,000. Total value is $1,018,952 investment in the $6,874,944 Best Western Plus project. There also is an abatement used in the project but that pays for itself as I will explain below. Now why did we make this investment, how do we get paid back, and what other benefits does it bring Isanti. When we presented this project to Council we had a 15 year payback on the investment. The Abatement works by rebating back a portion of the taxes paid by the Hotel. The first five years the City receives $240,660 in taxes and rebates back 50% of those taxes after the full amount is paid. It is a ‘Pay as you go” Abatement. This leaves $120,330 the City keeps. As reference, the parcel of land currently provides $1,501 per year in taxes. Year 6 through year 9 the project receives an ever smaller amount back totally $48,132 and the City keeping $144,396 during the same period. The 10th year and all future years the City retains all the taxes. The 10th through 15th year taxes used to pay back the incentives equals $288,792. The total property taxes paid that the City keeps in the first 15 years is $553,518. We also will have a Lodging Tax that will generate $35,910 each year or a total of $538,650 which will be paid by those using the Hotel. This will be used to market the community and offset/reduce City property taxes currently used in our Economic Development Department. The total net taxes paid by the project is $1,092,168 in the 15 year pay back period.
Bringing a hotel to Isanti has been a goal of the City Council for over a decade. It helps numerous event locations, sports facilities, businesses and residents. The hotel project has already brought interest by restaurants, retail and large events looking to locate in Isanti. The increased economic activity provides jobs, services, and tax base. The growth of the Highway 65 corridor is key to the long term viability of Isanti and continuing to reduce property tax rates and utility rates in Isanti. The School District did partner with Isanti and is providing an abatement as well. The same 9 year abatement with the same percentages will net the School District $116,836 in 9 years. If there is no hotel the parcel of land would have paid only $5,832 in School District Property taxes.
The last question seems to be what if the project is not successful. If this happens, the City gets repaid its incentives per our development agreement. It’s a good project being built in the Highway 65 Commercial District.
If you have any questions, concerns or comments please contact me at 763-442-8749 or email me at George@georgewimmer.org . You may also follow me and keep up to date on all things Isanti on Twitter at twitter.com/mayorwimmer, Facebook at www.facebook.com/MayorGeorgeWimmer, or my blog at georgewimmer.org