CENTERVILLE — A discussion Aug. 28 on whether to transfer two pieces of property from the city to its own Economic Development Authority (EDA) had a curious result: some Centerville City Council members, past and present, wondered aloud why the city had an EDA in the first place.
Former Mayor Tom Wilharber and former Councilman Steve King attended the meeting to express their concerns at the council's loss of control over two pieces of city property.
The discussion started when the council reviewed an action item before it, which was to decide whether to transfer two pieces of city-owned property to the EDA. The EDA would then take over marketing the properties, which have proven difficult to sell. In return, the proceeds of the property sales would go to the EDA to further its mission of marketing to promote development within the city.
Both properties are located in the downtown area and contain several remnant parcels at the northwest corner of Main Street and Centerville Road (including 1691 and 1695 Main St.) that the city bought from Anoka County after the Main Street (CSAH 14) improvements and two parcels at the northeast corner of Main Street and Progress Road that used to be the Steffel Insurance property.
King said he was concerned that the EDA, a separate, unelected entity that is not answerable to council, can buy and sell city property. “I'm just worried that somewhere down the line that more powers will be given to the EDA,” he said.
City Administrator/Engineer Mark Statz pointed out that council didn't give its EDA any taxing authority, as some cities have done. “The EDA is getting funds that aren't coming out of the city's budget, and the transfer is a nice way to give the EDA something to work with,” he said.
Councilman D. Love, who serves as the council’s liaison member on the EDA along with Councilwoman Michelle Lakso, noted that the city was not giving the EDA more power by transferring the two parcels of land.
“I was in the council that voted for the EDA and I struggled with handing over power. But I gave it a 'yes' vote,” Love said. “I sat on the EDA and found it to be conservative, scared to make a mistake and wanting to help Centerville.” Love said he wanted the EDA to do things for the city, but in his conservative mindset suggested the city push over half the properties to see what happens.
The city originally established the EDA in July 2017 to actively market business development opportunities throughout the community by encouraging new businesses, relocating existing businesses to Centerville and investing in improving businesses that currently exist.
“When I came in as mayor the second time, the city had nine pieces of property for sale,” Wilharber said. “Now we have two. I got council together and gave them a directive to clean up and sell the properties. We got a Realtor, advertised and sold some of them. Now they are not advertised. I agree (with King) that you don't give it away to the EDA who might have weird ideas about the property — like building a swimming pool in town or something.”
The city is collecting zero taxes on the properties as they sit there, Mayor Jeff Paar said. By transferring property to the EDA, the city is trying to increase the tax base and get more property owners coming to Centerville.
The EDA’s current annual budget is $20,000. Councilman Russ Koski wondered aloud what the EDA had done with the money. “It they want more, they'll have to show me that they deserve that budget,” he said.
“In my opinion, a $20,000 budget is not effective,” Paar said, “that's why we're giving them the proceeds from the two properties.”
Koski reiterated his question about whether the EDA had hired Realtors or had even tried to sell the properties. Furthermore, Koski asked, why did the city even form the EDA?
“The money (the city) gets from selling the properties can be put back into the city. For example, there's no air conditioning at City Hall,” Koski said.
Statz replied that the EDA hired a tax increment financing consultant for downtown’s Block 7 and recommended Northland Securities serve as financial guide throughout the process, a total cost of $11,000.
“In doing nothing from nothing, you get nothing,” Paar reminded council. “That's why I wanted to form the EDA. We can keep living in the past, I guess. We can hold open houses and hope something happens too.”
In the end, council tabled action, agreeing that it was essential for all council members be present to vote on such an important issue. Councilman Matt Montain was absent.