Brainerd adds incentives for business development – Brainerd Dispatch

BRAINERD — Those who want to bring business to some of Brainerd’s commercial districts are in luck.

A new central business district incentive policy will waive certain fees for projects. The Brainerd City Council voted 6-1 Monday, July 1, to essentially expand the city’s existing River to Rails initiative, adding more locations where businesses can benefit.

Put in place in 2019, the

River to Rails

initiative focused on revitalizing the city’s core blocks between the Mississippi River and the Northern Pacific Center, and between Washington and Oak Streets. Sewer and water availability charges for building projects are waived in that district, as part of the initiative, as are building permit and inspection fees on projects less than $150,000.

The new program keeps those incentives but expands the area. The larger zone the city agreed to July 1 includes South Sixth Street down to Buffalo Hills Lane East and Washington Street from the city’s eastern to western limits.

The approval came after a recommendation from the city’s Economic Development Authority, which took up the issue June 6. When faced with a few options for the program — including only waiving the sewer and water charges in part of the district — they recommended offering all incentives in the full district.

“I think we should be in for a penny, in for a pound,” said Kelly Bevans, EDA member and City Council president. “Give all the incentives to the entire red district. But I also think we should put a deadline on it.”

Bevans proposed an end date for the incentive program of 2027, when the planned reconstruction project on Washington Street would wrap up. EDA member Toni Bieser suggested setting the end date as 2029, which was the original date the River to Rails program would expire. Bevans agreed that would work, saying a definitive end date might create enthusiasm and incentivize more people to tackle projects.

Staff originally proposed expanding the district’s boundaries west along Washington Street to the city’s border with Baxter, and south along South Sixth Street. EDA member Paul Sandy suggested going farther, saying there are also businesses in the East Brainerd Mall and farther east that could benefit from the program. EDA members agreed to extend the parameters, recommending the larger district for City Council approval.

Central Business District incentives.png

Brainerd’s new central business district incentive policy extends from the east to west limits of the city on Washington Street and south along South Sixth Street to Buffalo Hills Lane East.

Contributed / City of Brainerd

Once the 2029 deadline is up, the council and EDA could explore the idea of extending the time period if they wanted to. Mike O’Day, EDA and City Council member, said his idea at that time would be to devote smaller time frames to other, smaller areas of the city that could also benefit from an incentive program.

“Downtown is important, but so are some of these other shopping areas,” O’Day said.

When the issue was later discussed at the City Council’s Personnel and Finance Committee Meeting June 26, Community Development Director James Kramvik said the sewer and water availability charges waived totaled — at most — $10,000 a year for the last five years, with some years not seeing that high of charges waived. He said the primary projects that benefited from that incentive were housing projects.

The housing project in the works for the

old Thrifty White building

on the corner of South Eighth and Laurel Streets downtown will benefit significantly from the waives sewer and water charges, Kramvik said. The city typically charges $3,300 per unit for those fees, and this project is proposed to have 78 housing units, along with some commercial space.

Kramvik told the EDA and council that Public Utilities commissioners had some concerns about the incentive program, stating the city has aging utility infrastructure for which those sewer and water charge fees could be used. The commission did not provide an official recommendation to the council on the item.

Council member Jeff Czeczok, council liaison to the Public Utilities Commission, pointed to that concern during the council’s July 1 meeting.

“I like to incentivize business growth and opportunity, but sometimes we have to look at where we get money to pay for things,” Czeczok said. “The cost of doing business is expensive.”

He questioned whether the $3,300 charge would really prevent someone from starting up a business and said he wasn’t sure if this program was the right move for the city.“Incentivizing is good, he said, “but I think we need to find another way because we’re losing funds.”

According to a memo provided by staff in the last council packet, nearly $140,000 in fees were waived as a result of the River to Rails program. The permit values and fees waived for each year are as follows:

  • 2019 — 54 permits issued with a total project valuation of $708,353 and waived fees amounting to $33,439.
  • 2020 — 95 permits issued with a total project valuation of $2,836,123 and waived fees amounting to $28,285.
  • 2021 — 30 permits issued with a total project valuation of $113,220 and waived fees amounting to $5,142.
  • 2022 — 101 permits issued with a total project valuation of $2,353,763 and waived fees amounting to $39,390.
  • 2023 — 79 permits issued with a total project valuation of $3,533,900 and waived fees amounting to $31,786.

Czeczok was the sole vote against the central business district incentive program, which will now be in place through 2029.

THERESA BOURKE may be reached at

[email protected]

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Theresa Bourke

Theresa Bourke started working at the Dispatch in July 2018, covering Brainerd city government and area education, including Brainerd Public Schools and Central Lakes College.