Chanhassen Residents Concerned as Massive Building Plan Moves Forward

A new tax district and Met Council money are in play for six-story project.

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Photo by Bidgee (CC BY SA 3.0)

CHANHASSEN, Minn. – After a downtown redevelopment plan for Chanhassen was approved, the Chanhassen City Council is now considering implementing a tax increment financing (TIF) district to aid private developers.

The development plan centers around the proposed construction of an Aldi grocery store and a new 134-unit apartment building. The new buildings will be constructed on the site of the Frontier Retail strip mall, next to the Chanhassen Dinner Theatre. The plan was approved in a 3-2 vote earlier this month, reports the Chanhassen Villager. Part of this funding is expected to be secured via a $715,000 grant from the Metropolitan Council.

In a 3-2 vote, the city council simultaneously decertified an existing TIF district 10, called for a public hearing on the proposed TIF district 11, and authorized an interfund loan of up to $50,000 if needed to maintain proper funding in TIF district 11.

The City Council’s 3-2 split fell the same way in both this vote and the first vote to approve the development plan. Mayor Danny Laufenburger and Council Members Jerry McDonald and Bethany Tjornhom voted in support of both resolutions, while Council Members Elise Ryan and Dan Campion voted against it. Video of the full July 10 and 24 city council meetings is available online.

The redevelopment plan including an Aldi grocery store and a new apartment building has already been approved and is expected to raise the property’s value from just over $2 million, to roughly $24.3 million.

However the development plan is contingent currently. The developers want $1.3 million in expenses relating to the apartment building construction costs to be reimbursed by the city, and the city would raise money to do that via the TIF 11 district. This would raise a total of $3.93 million in taxes over the course of 26 years.

In addition to financing the development reimbursements, money would be set aside in order to upgrade Market Boulevard to deal with the new traffic that is expected to result from the development project. The costs of expanding Market Boulevard to a four lane highway, with additional turning points, is estimated to be $3.4 million.

Chanhassen residents have not exactly been receptive to the idea of the new TIF district, nor the proposed development project. Facebook groups have popped up to call for “responsible, purposeful development in downtown Chanhassen,” and to “STOP the TIF.”

Previous TIF districts have just expired or been decertified in 2015, twice in 2016, and now in 2017 as well. This is the first time since prior to 1979 that Chanhassen has been without an active TIF district.

With the decertification of TIF districts 5 and 9 last year, 2016 was the first year since 1994 that the city had just one active TIF district.

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