City of Sauk Rapids approves move intended to help business with $4.21M expansion
SAUK RAPIDS ― Sauk Rapids' largest employer will undergo a significant facility expansion after the city approved a tax increment financing district to subsidize the construction.
The Sauk Rapids City Council approved an approximately six-year TIF district for J-Berd Companies, a trio of companies that includes Security Fire Sprinkler, J-Berd Mechanical Contractors and Berd Electric. A TIF district allows part of the increased property tax revenue from the site can be used to help pay for costs of redevelopment ― or, as city documents describe it, the district "will allow the EDA to capture the new taxes generated to provide the development assistance and reimburse the EDA for administrative costs."
According to city documents, J-Berd Companies (located at 1 Industrial Boulevard) plans to construct a 9,600 square-foot stand-alone building as well as a 33,600 square-foot addition to its existing building. The development would occur in two phases likely to begin this fall depending on market conditions. The first phase would encompass the stand-alone building, while the second phase would include construction of the addition.
J-Berd President Brad Smith said the separate building would be for storing semi trucks and excavation equipment, while the addition would expand the company's warehouse for storage.
The proposed development would increase the market value of the facility by $4.21 million.
City of Sauk Rapids Community Development Director Todd Schultz said J-Berd is "overwhelmingly" the largest employer in the city.
The redevelopment agreement between the city and J-Berd states that the company must create at least five new jobs in phase one, 20 new jobs in phase two, maintain its business at the property for at least five years and complete improvements with a total tax value of $4.21 million or more to meet the terms of the TIF district and receive the incentives.
In turn, the city will provide a maximum of $471,551 in TIF financing spread out over both phases, city documents say.
J-Berd Companies declined a request for an interview with the Times. In a letter to the Sauk Rapids City Council, Smith said the company felt it needed TIF for the expansion to move forward.
"With higher interest rates and inflation, we are concerned about the future of the construction industry," Smith said in the letter. "For now, we have plenty of backlog, but 3-5 year outlook is uncertain."
He also mentioned the additional warehouse space would trigger an increased sales tax rate in Benton County that is 0.25% higher than in other counties the company does business in.
The TIF District will last for about 6 1/2 years. Schultz said the TIF type approved is one used to spur economic development, and is the type the city of Sauk Rapids uses the most often.
This article originally appeared on St. Cloud Times: Sauk Rapids approves TIF district to help J-Berd Companies expand
