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  Wednesday January 28th, 2015    

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City mishandles its tax base (04/27/2008)
By John Edstrom

This April will be remembered as a month in which the city of Winona and its council were especially active in the practice of bad government. At its April 14 meeting the council denied, by a 6-1 vote, a zoning change which would have enabled JNJ Properties to build student housing at Mark and Main where the old railroad warehouse stands (barely) near the tracks. This, despite a 7-1 recommendation in favor by the city Planning Commission.

Now certainly, the elected City Council does not exist to rubber stamp the decisions of the appointed Planning Commission, but if it upends them, there should be a solid rationale for it. Otherwise, why have a Planning Commission? In fact, the reasons given for the refusal were such bogus nonsense it is hard to believe they were taken seriously by those who offered them.

There are few who take historic preservation more seriously than this newspaper, but the notion that the dilapidated old warehouse deserves renovation for some unknown use because of its historic value is just the sort that gives preservation a bad name in many circles. And then there was the contention that the site's proximity to the Canadian Pacific rail line made it unsafe, as if student housing didn't already line those tracks from east of Franklin to west of Huff. When council people put out such rubbish to defend their votes, it can only lead the public to suspect that the real business is being done behind scenes.

There were neighbors who came forward to complain of congestion and a lack of parking in the area, and you have to sympathize with them. However, if the council hadn't passed the ill-advised 30% rental housing cap, in response to neighborhood complaints, their homes wouldn't be worthless, as an editorialist warned back then. And the JNJ plan offered almost double the required parking spaces and would have housed students within easy walking distance of the campus. Now they must rent farther away and will drive to school, compounding the congestion and parking problems. Why is it so hard for the city to think sensibly about this question?

The bottom line here is that local government will be without something like $15,000 in yearly property taxes going forward.

More recently, at the April 21 meeting, the city compounded its mismanagement by granting an out-of-town developer, United Properties, nearly $500,000 in tax increment financing (TIF) for a housing project along East Burns Valley Road. This amounts to a half million dollar subsidy in tax forgiveness to the developer, which has plainly stated that the project wasn't feasible otherwise. So why is it the city's job to subsidize unworkable projects for out-of-town interests? Particularly when there are local developers building for the same market, who apparently are too naive to come begging to the city council?

There is some case to be made for TIF financing if it brings jobs or economic development which will fuel growth and add more to the tax base than it subtracts. Upscale housing for seniors (units priced from about $125,000 to $220,000) masquerading as shelter for the needy does none of that.

City Economic Developer Judy Bodway told council member Al Thurley that the TIF package would have "no direct impact" on Winona property taxes, but that very much depends on your point of view. Nearly $7 million in tax-free housing for the senior market certainly means that $7 million of that need is filled. It will, therefore, no longer exist to generate development that is taxable. Bye-bye $500,000 from tax collections in the future.

If Winona city government had a record of frugal governance and open and aboveboard dealings, this carelessness with the tax base could perhaps be forgiven. But it does not. When, years back, the city wangled a special sales tax from the voters by promising an industrial park that eventually turned into a retail development, it was warned that we would never see the end of that special tax and, sure enough, there it is on the ballot again this fall, this time for "recreation." City government mishandles the money it has. Giving it more would be very foolish.



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