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Wendy Reuer, Published January 13 2012

Stalled plans in Glyndon spur tax hike

GLYNDON, Minn. – An attempt to grow the commercial tax base here ended up costing residents.

In December, Glyndon City Council faced a taxing dilemma: how to make its bond payment after a commercial development failed to pay special assessments on infrastructure the city installed.

The city’s preliminary budget – set in September – would have raised the tax levy 18 percent. County Auditor Lori Johnson said that would have made the property taxes in Glyndon the highest in the county.

Johnson calculated the increase to be about $600 on a $100,000 home.

In late December, the City Council was able to lower that amount. The Council unanimously approved a 9 percent increase of property taxes instead.

City Clerk Pamela Ness said numerous projects needed to be paid for, such as a citywide sewer improvement project, but the most pressing matter was the 2012 bond payment.

In 2008, the city spent $1.4 million to build roads and sewers for Stockwood Business Park. Stockwood is a 23-acre parcel meant to be developed for businesses, a former field owned and farmed by the Kuehl family.

The infrastructure came, but the businesses have not followed. After a three-year deferment, the assessments due in 2011 weren’t paid.

In 2011, the city considered the roughly $120,000 bond payment a loss, Ness said. But looking into 2012, the city knew it would have to find a way to once again make its bond payment. In a city with few businesses, a property tax increase on homes was the top option.

“We don’t have any commerce. Glyndon is basically a bedroom community for Fargo-Moorhead,” Ness said. “So we don’t have the commercial tax base; we have to rely on residential.”

The city also faced a loss of $68,000 in Local Government Aid last year.

Mayor Cecil Johnson said residents were concerned about the large tax in­crease, though the city had not raised taxes the past few years.

“They were kind of upset, which I would be also. They did all voice their opinion, but they also knew why we had to do it,” Johnson said.

Johnson said developers will have another three years to pay the assessments on Stockwood before the city could claim the property. He said he hopes the commercial development will still take off.

“I would like to see them try to work harder to try and sell a piece of property out there. It would be much to our benefit,” Johnson said.

The real estate agent who until recently was seeking occupants for the park, Brad Rivers, of Horizon Real Estate Group, said four warehouse condominiums were sold.

However, he dropped the listing around November, and it was picked up by NAI North Central, a Fargo-based agency, Rivers said.

Representatives of NAI did not respond to email or phone messages left by The Forum.

Ness said one good thing to come out of the 2012 budget discussion is that residents became involved with the city council and staff. Residents attended meetings and asked questions. That is something staff is hoping to see more of in the future.

“We want our citizens engaged,” Ness said.

Still, Ness and Johnson said the city hopes to better prioritize projects to avoid a similar situation in the future.

“We do have a long-term plan for development, but the financial and timeline (pieces) had not been applied in the past,” Ness said. “It’s critical we have that plan of where we want the city to go … We don’t want to have to raise taxes every year.”

Readers can reach Forum reporter Wendy Reuer at (701) 241-5530