Northfield Downtown Development Corporation

Indeed, I had a phone conversation with Craig Greene on stimulating investment in downtown. Here’s is my complete follow-up e-mail:

Hello Craig:

Just to be sure I’ve made myself clear on this topic, the NDDC has a proven approach and specific plans but with the turbulence in the economy, we need to stay somewhat flexible so we can be responsive. The rising costs of energy, the dropping values of homes, as well as the continuing changes in retail due to big boxes, the internet and foreign competition require the people at the NDDC, just like the downtown businesses, to constantly evaluate their efforts and make changes when advisable. When we go longer term, the unpredictability increases.

As you heard in Red Wing and Stillwater, it’s sometimes ten years before you see dramatic changes. You’ve got to keep plugging away year after year, believing that you’re going in the right direction, in the hope that your small accomplishments eventually add up, or multiply, into big changes.

As you know, the NDDC structures its work on a model that has been tested and proven for over three decades, the Main Street’s Four Points. It may seem simple but we have learned that it is so important not to think that any one thing will meet all challenges and take advantage of all opportunities. It takes more than Promotion, marketing and events, it takes more than Organization, increasing leverage and advocating, it takes more than Design, storefronts and streetscape, and it takes more than Economic Restructuring, tweaking the business mix and responding to critical issues, to achieve on-going downtown vitality.

In the area of Organizing, we are pleased that it appears that the City Council will create a Building Board of Appeals, We must continue to work to make sure that the entity meets the spirit of the intent. We will continue to advocate for keeping the Public Library and Liquor Store downtown. Of course, we will also continue to host our Monthly Forums, Quarterly Block Head Gatherings, and Annual Mixers.

As a result of a surge in interest from folks in supporting the NDDC, we’ve had many people join our Events and Marketing Committee. In our recent efforts to get more work done at the committee level, this group may lead the way in creating new initiatives. Getting greater leverage from the efforts in advertising, events, and promotions will be increasingly important.

For progress in the area of Design, we will continue our sometimes quixotic quest for additional bike racks. We will also continue to work closely with City Staff on the bigger picture streetscape planning and implementation. We have developed a particular interest in projects that offer better connections with the Cannon River. Finally, we will gather input, analyze information and make a recommendation on the matter of public toilets in downtown.

In the area of Restructuring, the issue of ever-rising property taxes continues to pose the greatest threat to downtown economic vitality. We are restarting our work with the City Council on an Outside Dining Ordinance and continue to explore the possibilities of a Downtown Management District. Finally, as part of the increased collaboration between the Four Economic Development Partners, the Chamber, the EDA, the NDDC and the NEC, we are going to pursuing coordinated Business Retention, Expansion and Recruitment efforts.

In our conversation, you and I focused largely on the area Design. As you so correctly pointed out, it is in this area that the most visibly dramatic changes occur. People notice projects like Village on the Cannon and The Crossing perhaps more than the complete restoration of the Bierman Building, the Scriver Building, or the Sitze Building. However, all of these projects, large and small, require private financing. There must be an environment that encourages private investment that makes it happen.

Perhaps it’s as simple as the public sector “priming the pump”. Using some combination of financial support or incentives, the city induced the Village on the Cannon and The Crossing project. However, the Bierman and Sitze projects were entirely privately financed. Were those projects induced by the NDDC’s banner program, Downtown Mixers or Taste of Northfield? Was the real reason that Mendota Homes decided to do The Crossing was seeing the private investment in the Bierman Building, the Scriver Building and the Sitze Building? Will the Old Bank Building at 5th and Water be redeveloped because of the inspiration and energy of the Arts Commission, the Skateboard Coalition, and the Kayak Association?

If we keep plugging away at the Four Points, maybe someday we’ll see some big projects like the St. James Hotel renovation and the next door Riverfront Center (and a handful of their many public parking structures) in Red Wing or the renovated Historic Carnegie Library (with adjacent parking structure) in Stillwater. I’ve been told by residents of Red Wing that they prefer our restaurant offerings and residents of Stillwater that they prefer our slower-paced shopping district. Hopefully, we will adopt their good ideas without forgetting our own wise choices.

We believe that Organizing for business-friendliness, Promoting for greater leverage, Designing for private investment and Restructuring for economic vitality will make a difference each month. As the months become years and the years become a decade, the changes will no doubt be visible. Hopefully, the end result will be recognizable as our current vision.

Thanks much,

Ross

This piece appeared as a Guest Column in today’s (December 29) Northfield News.

For pretty much most of this century, owners of commercial property in downtown Northfield have been complaining about steadily and substantially rising property taxes. Since 2000, these building owners have experienced annual average tax increases of 30%. Think about it, their property taxes have risen 30% each year for the past seven years.

Almost all of these building owners live in Northfield. Comparing their residential property taxes to their commercial property taxes effectively illustrates the issue. During these same seven years, their residential property taxes gone up about 10% per year. For example, on a residential property for which they were taxed $1,200 in 2001, they were taxed $2,100 in 2007. On a commercial property for which they were taxed $3,000 in 2001, they were taxed $14,500 in 2007. That’s a $900 increase in residential taxes and an $11,500 in commercial taxes over the same number of years.

Both residential and commercial property owners pay property taxes from the same source: their income. Typically, the residential taxpayer’s income comes from their employment. The commercial income source is rent paid by business or residential tenants, at least in theory. Unfortunately for building owners, in recent years market rents have not kept up with the increases in property taxes.

Most of the buildings in downtown Northfield are old, many are historic. If rental income is relatively flat and the property tax costs are steadily and substantially rising, there is less and less cash flow for maintaining these older buildings. In fact, in recent years, some building owners have had to dip into their savings to make needed repairs. Even more discouraging, some are being forced to tap savings just to pay their property tax bills. Essentially, they are personally subsidizing the preservation and operation of these historic structures. Increasingly, owning a building is less a profitable business venture and more a labor of love.

There are as many theories about how this situation developed as there are theorists. Different downtown building owners probably have different ideas about the causes of their plight. However, at the end of the day they all agree, something has got to be done about it, and now.

Some of us who don’t even own downtown commercial property also think something needs to be done about it. We believe that trends that threaten the economic vitality of our downtown present an economic risk to the broader community.

That sense of place, and community pride that it fosters, inspires citizens to leadership and promotes civic involvement. Many of us believe that having our downtown buildings owned by people who live here helps assure that they will be preserved and enhanced. It also gives us hope that the necessary financial investments and essential volunteer efforts in the community will be made.

Downtown building owners are not asking for a reduction in their property taxes. They are not expecting future increases in their property tax bills to be zero. All they are requesting is that future tax burdens be more equitably distributed and that their property tax costs rise at a rate that is in line with their other costs.

With a more equitable distribution of the tax burden and tax increases that are in line with other expenses, building owners have a chance to make their economics work. If they can make their building economics work, our downtown has a better chance of remaining economically viable. If the downtown remains economically viable, Northfield will continue to attract good families, creative individuals, inspired entrepreneurs, and innovative businesses.

On Friday, December 7^th, the Northfield Downtown Development Corporation convened a Regional Summit on Real Estate Taxes and their impact on historic downtowns in Greater Minnesota. The purpose was to determine the geographic extent of the issue and to unite behind strategies for addressing it.

Downtown Northfield has averaged thirty percent annual real estate tax bill increases since 2007. We can’t take any more and we’re looking for allies.

Representatives from Faribault, Hastings and Owatonna attended the event. Red Wing was unable to attend at this time and connections with property owners in Stillwater were only made at the Summit. Both towns will be represented in future efforts.

The group made a number of determinations. First, that all older downtowns in the region are experiencing this issue to some degree, many suffering double-digit increases for several years. Second, although there are a number of reasons for rising real estate taxes, the bottom line is that the burden is not being equitably shared between residential and commercial property. Finally, something must be done now as the economic viability of older downtowns is seriously threatened.

The gathering also agreed on a multi-faceted strategy to address the issue. The ultimate goal is to build a state-wide coalition to achieve legislative action in the upcoming session. Specifically, we are advocating that defined districts be established in older downtowns for special commercial property tax treatment.

We must implement our plans by the February 18^th, 2008 start of the legislative session. We plan reconvene, with our additional allies, and our work completed, in late January or early February and be ready to take our proposal to St. Paul.

This is a 90-page PDF of the Downtown Northfield Streetscape Framework Plan that was discussed at last week’s NDDC forum.

See Ross’ blog post here on the NDDC blog as well a blog post on our Locally Grown that discussed the issue.

You can view the document via the slideshow below, though it’s better to hop to the Slideshare website for the document and click the ‘Full’ button to view the slideshow with the full screen of your computer. You can also copy/paste the embed code in your own blog, or email it to others.

| View | Upload your own

The City of Northfield, featuring Bonestroo consultant John Slack, presented the planning work to date and the project schedule as currently envisioned for the Water Street Parking Lot and 5th Street Reconstruction work this morning at the NDDC’s Monthly Downtown Forum.

Slack opened the presentation by saying that the goal of the Streetscape Framework, the overall design theme, was to increase the feeling of hospitality in the community by enhancing the built environment. The tactics in that strategy include maintaining the parking quantities, identifying new tree locations, and adding amenities such as benches, signage and, we hope, bike racks.

He then focused on the upcoming Water Street Parking Lot project. One goal is to better connect parking, downtown and the river. Details of this project include reconfiguring the vehicular traffic flow, adding trees to lessen the heat generated by the parking lot, working to protect the river from stormwater, and maintaining space for the DJJD Beer Tent.

The presentation of the proposed 5th Street Reconstruction took a bit longer. There are five concepts, A through E, and appear to vary on parking counts, street width, and whether or not bump-outs are installed. Some of the concepts include a bike lane and some do not. Cost estimates are yet to be developed.

As expected, the audience of about 40 business and building owners was very concerned about disruption from the construction work. The 5th Street work is currently scheduled to be completed first, requiring 7 to 9 + weeks. The next phase is the Water Street Parking Lot, requiring 6 to 7 + weeks. The final phase is the crosswalk pavers at both 5th and Water and 5th and Division, requiring 3 weeks.

The City will be developing a parking plan, detour routes, information on the web, and additional signage to help lessen the adverse impacts of construction on business. John Stull, former Mayor and current Mill Towns Trail Activist, pointed out that by facilitating the use of bicycles, you could lessen the issues related to vehicular traffic in downtown.

Another session, a Neighborhood Meeting, will be held tonight at the City Hall, in Council Chambers, from 5:00 to 6:30 pm. A Public Open House on the final design will be held on December 18th.