Council approves redevelopment grant acceptance and TIF steps for Red River Valley Winter Showgrounds

The Crookston City Council voted to approve a redevelopment grant acceptance and to begin formation of a tax increment financing district for the Red River Valley Winter Showgrounds, actions councilors said are intended to unlock state and other funding to clean up and redevelop the site.

The council approved the redevelopment grant acceptance (item 7.01) and then passed an enabling resolution to call a public hearing and create Municipal Development District No. 3, Tax Increment Financing District No. 3‑12, for the Red River Valley Winter Showgrounds (item 7.02). Both votes passed by roll call.

Why it matters: council and staff said the city faces widespread deferred maintenance in water, wastewater and storm systems and that redevelopment of the showgrounds is linked to broader economic-development goals. Staff and consultants told the council that addressing the showgrounds could both remove environmental hazards in an aging building and make the site marketable to potential private investors.

City staff presented maps and analysis showing large infrastructure shortfalls across the city. "Currently, 25% of our water system is past its useful life. Approximately 63% of our wastewater or sewer is past its useful life. And 40 to 42% of our stormwater is past its useful life," a staff presenter said, adding that the city faces an estimated $130,000,000 in water, sewer and stormwater repair needs that are already beyond useful life. Staff and consultants said those totals exclude additional road work.

Council and staff discussed financing options. Staff and consultant figures cited a proposed bond for the Red River Valley Winter Shows project of approximately $1,590,000 with an estimated net bond amount after issuance costs of roughly $1.412 million and an estimated annual payment for that bond of about $120,000. Carrie (EDA staff) told council the earliest debt service payment on the particular bond would likely begin in 2027 and that the first payment could be as small as about $9,046 because capitalized interest is held in escrow during the early years of the issue.

On cost-sharing across infrastructure types, staff described a working rule of thumb used in the city's analysis: "Rule of thumb, usually 30% comes from water, 30% comes from wastewater, 30% comes from sewer, and 10% is levy obligated," a consultant noted. Councilors and staff also said the city will pursue grants and other state funding to reduce levy impacts. Carrie told the council her department has secured about $6,000,000 in grants in roughly two and a half years and that staff will continue seeking federal and state programs including the Minnesota Public Facilities Authority clean water/drinking water programs and redevelopment grant funding from DEED.

Councilors pressed staff on timing, reserve levels and the risk that the city's tax capacity could decline in coming years; staff said a county tax-capacity estimate will not be fully known until March and that reserves are limited following recent budgets. Several council members said they worry about simultaneous capital obligations — the highway corridor project, demolition of the Tri County building and other needs — and asked how the city would sequence and prioritize work without over-burdening taxpayers.

Staff answered that TIF would be used to repay much of the redevelopment bond and that the TIF district is structured so base taxes still flow to existing taxing authorities while increment is restricted to redevelopment repayment. Carrie said one TIF run in the packet showed the district could generate about $36,000 a year from the first parcel and that with additional development the TIF could cover a higher share—staff estimated scenarios where the TIF would cover a large portion of bond payments and, eventually, allow the city to recapture funds after bonds are repaid.

Staff also reported multiple funding opportunities that could reduce the city's direct costs: an exception in the redevelopment grant program that would allow engineering costs to be reimbursed; other DEED grants the city is pursuing; federal asbestos-abatement grants being researched; and the opportunity to place projects on the Minnesota Public Facilities Authority intended-use plan for drinking and clean water loans and grants. Staff cautioned that some federal or state grants may have timing or eligibility limits and that matching requirements vary.

Council action and next steps: the council approved the redevelopment grant acceptance (item 7.01) and voted to call the public hearing and create TIF district 3‑12 (item 7.02). Staff said the city will continue grant applications, finalize bond sizing with bond counsel and consult with Ehlers and other advisors on timing. The council also instructed staff to provide detailed cost and funding scenarios for upcoming meetings so members can compare bond, grant and reserve impacts before further commitments.

The council discussion included multiple requests for more precise schedules and for staff to identify contingency plans if grant awards are delayed. Staff said they will return with updated analyses and that the city remains in active discussions with potential private developers and the Red River Valley Winter Shows board about reuse and marketing of the property.

Votes at a glance: item 7.01 (redevelopment grant acceptance) — motion carried on roll call; item 7.02 (enable creation of TIF District No. 3‑12 and call public hearing) — motion carried on roll call. The council set the TIF plan public hearing process in motion and directed staff to continue pursuing grants and bonded financing options.

Staff noted that demolition, asbestos abatement and redevelopment timing will depend on grant awards and private-sector commitments; staff said some contractors and a financial institution have expressed readiness to participate but that some grants require the city to demonstrate commitment before private parties will sign definitive development agreements.