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Cannon Falls officials weigh options as deferred assessments imperil Cannon Mall redevelopment
Summary
A finance committee presenter told the council that deferred special assessments on the Cannon Mall property (about $118,000 principal) have accrued nearly $500,000 in interest, complicating a pending sale and prompting staff to explore assessment agreements, potential donations and grant-funded demolition options.
A finance committee representative identified in the meeting record as John told the Cannon Falls City Council on June 2 that a prospective buyer has a purchase agreement for the Cannon Mall property, but deferred special assessments tied to street and utility improvements have grown into a major obstacle to redevelopment.
"There was a settlement agreement on those assessments with the owner at the time," the finance committee presenter said, adding that the remaining principal is about $118,000 and that "over 25 years, a lot of interest is accrued ... it's gonna be very difficult ... because they've accrued to almost $500,000 just in the interest." The committee is preparing options and expects to return to the council with a possible assessment agreement for the prospective buyer at the next meeting.
The presenter said the city discussed how those deferrals work and emphasized that carrying the historic assessment liability in full would likely deter development. Staff noted MnDOT District 6 and state highway access issues tied to a prior purchase agreement with a commercial operator (Kwik Trip), specifically whether traffic access from Highway 19 and use of Dow Street for left- and right-turn movements would be permitted.
The finance committee update also covered two related properties. The owner representative of a local nursing-home property has signaled a possible donation to the city; committee members said they are awaiting formal confirmation. The finance committee presenter said the building likely needs demolition and that staff are looking at grant options through Minnesota DEED that can reimburse up to 50% of demolition costs. He noted Minnesota DEED has two competitive application cycles (February and August), and said staff need inspection and cost estimates to prepare a competitive application.
Representatives of the Episcopal Church also approached the city about donating church property, the presenter said, and the historical society has expressed interest in stewarding any donated assets and museum-related items. The next steps for those properties include inspections and verification of costs and liabilities before the council decides whether to accept donations or pursue other options.
The council did not take a formal vote on these redevelopment items at the meeting; the finance committee indicated it will bring specific proposals back to the full council for consideration.
