Massman's $17M project gets tax help from Alexandria

ALEXANDRIA – Massman Companies’ plan to build a $17 million manufacturing, office and warehouse in Alexandria will receive tax assistance and may get additional business help from the state.

Massman plans to build a 73,000-square-foot building on 80 acres of land at 2233 34th Avenue West to support its past and future growth expansions. There is plenty of room on the site and the company's long-range plan calls for an additional 150,000-square-foot expansion in the future, according to Jeffrey Hohn, president and CEO of Massman.

At its Monday night meeting, the Alexandria City Council approved several actions that will provide tax increment financing, known as TIF, for the project.

The current market value of the parcel is $867,000. The city assessor estimated the project’s value at $7 million. The annual property taxes, which are currently $23,366, would increase to $197,107 after the project is completed, according to Nicole Fernholz, director of the Alexandria Area Economic Development Commission.

With TIF, the taxes on the property are frozen at the current amount for a certain period of time, in this case nine years. The difference between the existing tax and the tax after the development is used to help pay for some of the project. The city benefits because property is being developed that otherwise would not have been improved. Also, the value of the property will increase, adding to the city’s tax base.

Massman’s annual TIF payment is estimated at $115,646 a year. The total amount of TIF benefits is $1,193,000.

The TIF agreement states that Massman must secure a building permit and start construction by June 30, 2023. The project must be substantially completed by December 31, 2024.

In its application, Massman said TIF would be used to develop the site, construct the manufacturing facility, and create an environment that’s attractive to employees and the community while preserving the integrity of the site and surrounding land, according to Hohn.

Massman’s plans include a site designed to employee well-being with an abundance of natural light throughout the facility, community space, outdoor access and walking trails, according to Hohn.

The company’s machines package boxes of cereal, microwave popcorn, butter, frozen foods and more.

In order to receive TIF, Massman must acknowledge that the project would not happen solely through private investment. Also, the development must yield a net increase in market value for the site compared to the likely development that would occur without TIF.

Massman is also applying for up to $150,000 in business subsidies from the Minnesota Investment Fund and up to $175,000 from the state’s Job Creation Fund.

MIF provides financing to help businesses add and retain high-quality jobs on a statewide basis with a focus on industrial, manufacturing and technology-related industries. JCF provides incentives to new and expanding businesses.

The council voted to support both of Massman’s applications. There is no direct financial impact to the city. The city acts as a “pass-through” for the funds, according to Fernholz.

Hohn said Massman looks forward to beginning construction this spring and summer, and plans to open in early 2024.

Plans for a new kindergarten-8th grade school to open this fall are back on track — at a different location.

Last fall, Sacred Journey Academy applied for a conditional use permit to build the school on land between County Road 46/McKay Avenue and Rosewood Lane, just south of 18th Avenue East near VIE Church.

The Alexandria City Council, however, tabled the permit at its Oct. 24 meeting so it could have more time to study the traffic flow in that area, along with drainage issues.

The academy is now planning to have the school in the existing Indigo Plaza building at 4133 Iowa Street, about 460 feet west of Apol’s Harley Davidson in the Heritage Industrial Park. There is also a vacant lot north of the site.

At Monday’s meeting, the council approved two more pieces of the puzzle — the academy’s rezoning request from industrial business to general business and to amend the city’s comprehensive plan, if necessary.

The council determined that the rezoning request:

• Is consistent with the city’s comprehensive plan.
• Meets land area, setback, shoreland, floodplain and wetland ordinances.
• Won’t depreciate the surrounding areas.
• Is consistent with the character of the surrounding area.
• Uses existing utilities and streets that are adequate to accommodate the request.
• Won’t place any financial burden on the city.

The actual plan for the school, however, requires a conditional use permit, which has not been presented to the city yet, said City Planner Mike Weber. The city’s planning commission will conduct a public hearing on Monday, March 20 at 7:20 p.m. at city hall to consider that permit.
Minimal remodeling is proposed. Existing tenant spaces would be incorporated into the school as their leases expire.

Academy leaders are forecasting a first year of 144 students with a total enrollment of 208 students when full.

Site improvements would include outdoor play space, a basketball court and added parking/access to Iowa Street.

The city received 11 letters of support for Sacred Journey Academy from local businesses, churches and individuals.

The city’s highway committee reviewed highway projects that are on the horizon, including:

• Three roundabouts. County Engineer Tim Erickson updated the committee on the status of the construction of two roundabouts at the intersection of Highway 27 and I-94, and on the scheduled roundabout at County Road 45 and County Road 82 (the YMCA intersection). The roundabouts will be constructed at both the east and west entrance ramps to I-94 on Highway 27. Utility relocation work is already underway on these projects. Both roundabouts will be constructed at the same time. The east roundabout project includes a driveway to the Pilot Truck Stop from 34th Avenue West. Work on the YMCA roundabout will start in the second half of the summer, after the I-94 roundabouts are open to traffic.
• Broadway corridor/city input. The Minnesota Department of Transportation is working with Stonebrook engineering on a corridor study of Broadway between Eighth and 18th Avenue. The highway committee recommended that city staff set up a meeting with MnDOT to talk about how city input will be incorporated into this study.
• Third Avenue corridor update. MnDOT is also in the process of studying the Third Avenue corridor between Broadway and Nokomis to address pedestrian safety. MnDOT is working with Alta Planning and Design on this study. The next step is for Alta to evaluate and develop concept alternatives. A study review team meeting will be scheduled later this spring along with a public meeting to review these recommendations and findings.

At the request of ALP Utilities, the council accepted a bid of $601,600 to put more power lines underground.

The winning bid came from Castrejon, Inc., in Blaine and is well below ALP Utilities' estimate of $660,000.

There is no financial impact to the city’s operating budget or other funds. ALP Utilities pays for the distribution improvements from its capital budget.

ALP Utilities has been moving power lines underground for many years. The latest areas where construction will take place are known as the Aga circuit mainline near the airport and the 44th Avenue/McKay tie that includes areas along Voyager Drive, Scenic Drive, Skyline Drive and South L’Homme Dieu Drive.

Alexandria and Douglas County are more prepared to address dangerous situations.

The council adopted the 2023 Douglas County Hazard Mitigation Plan, which will allow the city to receive funds from federal and state sources such as the Federal Emergency Management Agency, FEMA, and the Minnesota Department of Homeland Security and Emergency Management.

The 234-page plan updates the document that was approved in 2015.

In the county’s plan, hazard mitigation is defined as any sustained action to reduce or eliminate long-term risk to human life and property from hazard events.

Researchers at the National Institute of Building Sciences looked at the results of 23 years of federally funded mitigation grants and it showed that for every $1 spent on hazard mitigation funding in the nation, $6 is saved in future disaster costs, according to the plan.

The plan notes that Douglas County is vulnerable to a variety of natural hazards that threaten the loss of life and property – tornadoes, flooding, wildfires, blizzards, straight-line winds and droughts have the potential for inflicting vast economic loss and personal hardship.

The intent of the plan is to limit the damages and losses caused by specific hazards. It covers Douglas County, including the cities of Alexandria, Brandon, Carlos, Evansville, Forada, Garfield, Kensington, Millerville, Miltona, Nelson and Osakis.

Benefits of having a plan in place, according to city and county leaders, include the following:

• Saving lives, protecting the health of the public and reducing injuries.
• Preventing or reducing property damage.
• Reducing economic losses.
• Minimizing social dislocation and stress.
• Reducing agricultural losses.
• Maintaining critical facilities in functioning order.
• Protecting infrastructure from damage.
• Protecting mental health.
• Reducing legal liability of government and public officials.

Alexandria Fire Chief Jeff Karrow is the emergency management director for the city. Julie Anderson, Douglas County’s public information officer, is the emergency management director for the county.