The Council talks business park

If looks could kill, I wouldn’t be blogging today.

Tuesday’s worksession was devoted to economic development.  First, we reviewed the Business Park Master Plan (Part 1, Part 2, Executive Summary) followed by a discussion of Northfield’s core policy documents the Comprehensive Plan, Economic Development Comprehensive Plan, Arts Plan, etc.  It should have happened in the opposite order, but much of the business park discussion hints at the themes of our planning documents, so let’s just talk business park.

Rick Estenson and Jody Gunderson were staring daggers at me, but still failed to address my fundamental concerns about how the short and long-term costs of such a project will reduce or eliminate the stated benefit.  Simply repeating “we need to increase our tax base and create jobs” in the face of opposition is not an answer, it’s a dodge.

My position remains the same – until the EDA can answer questions about who will pay for the initial infrastructure improvements and how the maintenance of that much additional infrastructure will cost the city, and how much of those costs is projected to be offset by increased property taxes (including when the city will break even on its expenditure), there is no “tweak” possible which will get me to consider giving my support to this plan.

Infrastructure costs are a Really Big Problem. Reading MN Dot’s 20 year highway investment plan:

With a total estimated investment need exceeding $65 billion during the next 20 years, and projected revenues of about $15 billion, this analysis indicates that almost $50 billion remains in “unmet needs.” To place this level of funding in perspective, every 5 cents on the motor vehicle fuel tax in Minnesota provides just under $100 million per year to the State Road Construction fund. To meet five percent of the $50 billion gap, or $2.5 billion, over the next 10 years would require the equivalent of a 12.5-cent increase in the motor vehicle fuel tax.

Northfield’s pavement quality is also deteriorating (see Pavement Management info).  The City bonds annually for street reconstruction projects.  In 2011, reconstructing parts of Linden, Plum and W. 2nd Streets will cost about $2 million (reconstruction means replacing water and sewer services as well as the street itself), plus more projects to maintain pavement quality (but I think local drivers will agree that we’re not really keeping up with this).  We are planning to bond for about $10 million for a new Safety Center and watch our revenue drop with cutbacks in local government aid, so I don’t anticipate that our spending on infrastructure will increase any time soon and I wouldn’t be surprised if it decreases (and I’ll bet state spending will decrease, too).

Northfield needs to think long-term about infrastructure. Water, wastewater, and streets are core services which impact the city’s ability to attract business, are fundamental to public health and safety, and affect our quality of life.  How are we going to fund these bedrock services?  It would have been great if the EDA had made minimizing infrastructure extension one of the priorities for additional land for commercial industrial development to help keep the city’s costs lower.  I see the business park as part of a vicious circle – we need growth to expand the tax base to pay for city services.  By growing in such an infrastructure intensive way, the cost of providing city services is higher, so we need to grow the tax base even more.

The Comprehensive Plan’s emphasis on compact development is not about how Northfield looks, it is also about what development costs. Development on existing infrastructure, or as close to it as possible costs less and provides a higher return on investment.

The other issue which bothers me here is how little control the City of Northfield really has in terms of development of a business park.  No matter how wonderful the Master Plan is, it is only a plan.  Plans “guide” future development, but they do not have the force of ordinances.  Both plans and ordinances can be amended to meet current needs.  Northfield owns none of the land for the proposed business park.  The land is not yet subdivided (that would trigger higher tax rates) into the nice grid street plan in the plan.  Road improvements are dependent on multiple jurisdictions (state, two counties, townships, and city).  Oh, and then there’s the problem that we have master planned two sites – one in Greenvale Township and one in Bridgewater.  Attracting the “right” businesses will require luck, marketing, and favorable economic winds over many years.  When we’re thinking about allocating scarce dollars, is this a good bet?  I say no.

Placing my bets: The Comprehensive Economic Development Plan emphasizes providing additional land for development.  The plan says 120 acres and more would have adverse impacts on downtown on the community and downtown.  Former Community Development Director Brian O’Connell announced at the worksession that this number was more or less random – see the News.   Dodging the dodgy numbers problem, I’ll assume we need considerably less than the almost 1000 acres involved in the North and South sites of the business park plan.  What’s the lowest cost location(s)?  Does it have to be a pre-planned “park”?  Have we asked our current businesses?

The other parts of the economic development plan really look at (1) working with existing businesses and trying to meet their needs (did you know Malt-O-Meal is the largest taxpayer in Rice County?  I learned this at the worksession), (2) building on the assets two colleges bring to town (alumni and other creative class assets), (3) connecting with the workforce we already have (including our Latino population) and (4) enhancing Northfield’s sense of place especially the Cannon River.  Once again, when we are allocating limited dollars for economic development, I think directing resources toward known assets like colleges, current businesses, local entrepreneurs, and the downtown, allows us to direct dollars toward development which could provide a better return on a lower cost investment, rather than planning a speculative business park.