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AGENDA RECOMMENDATION |
Consent Calendar 5.I.
City Council Regular Meeting
- Meeting Date:
- 10/14/2025
Agenda Item:
Resolution requesting Decertification of Tax Increment District No. 34-1 (3 Civic Center Plaza); Neubau.
Recommendation/Action(s):
Adoption of the attached resolution.
Summary:
On April 28, 2008, the Mankato City Council approved the establishment of tax increment financing district 34-1 and the accompanying development agreement. The purpose of the tax increment district was to assist Neubau Holdings, LLC, with the renovation of the approximately 30,000 square foot Graif Building located at 3 Civic Center Plaza. The renovation included interior demolition and improvements to bring the building into compliance with City code. The project also included changes to the exterior of the building to restore the façade to original condition, including reinstalling window openings that were closed. Upon completion of the renovation, the building was and continues to be leased to office/retail tenants.
The amount of assistance was $312,399 of net increment for the 15-year term of the district, on a pay-as-you-go basis, and consisted of interior demolition and renovation of the building. Additionally, a City Center Renaissance Revolving Loan was provided to the developer in the amount of $200,000 and a $15,000 storefront rehabilitation deferred loan to assist with the redevelopment activities, which have been satisfied. Per the development agreement, the Developer agreed to create or retain 10 FTE positions. The development agreement also included a lease for reserved parking stalls at the adjacent City surface parking lot located at 9 Civic Center Plaza. A first right of refusal in favor of the Developer for the leased parking area was also executed as part of the development agreement and remains in effect through December 31, 2033. The first right of refusal gives the Developer an option to purchase the property on the same terms if another party proposes to purchase and the Council consents.
At the time the Developer purchased the property, there were approximately 22 tenant spaces with 40 employees, and the Developer contemplated the building would have over 100 employees after completion of the improvements. Neubau Holdings, LLC satisfied the job retention/creation requirements. A total of 33 tax increment payments were made beginning in 2009 and the final tax increment payment was made in July 2025. The total amount of tax increment payments to the Developer was $294,013, which is less than the amount of increment that was projected and approved by the Council. The City is not responsible for the shortfall in TIF. The tax increment district has reached its 15-year term that was approved by the City Council and the district needs to be decertified. The recommendation is to adopt the attached resolution decertifying the TIF District.
The amount of assistance was $312,399 of net increment for the 15-year term of the district, on a pay-as-you-go basis, and consisted of interior demolition and renovation of the building. Additionally, a City Center Renaissance Revolving Loan was provided to the developer in the amount of $200,000 and a $15,000 storefront rehabilitation deferred loan to assist with the redevelopment activities, which have been satisfied. Per the development agreement, the Developer agreed to create or retain 10 FTE positions. The development agreement also included a lease for reserved parking stalls at the adjacent City surface parking lot located at 9 Civic Center Plaza. A first right of refusal in favor of the Developer for the leased parking area was also executed as part of the development agreement and remains in effect through December 31, 2033. The first right of refusal gives the Developer an option to purchase the property on the same terms if another party proposes to purchase and the Council consents.
At the time the Developer purchased the property, there were approximately 22 tenant spaces with 40 employees, and the Developer contemplated the building would have over 100 employees after completion of the improvements. Neubau Holdings, LLC satisfied the job retention/creation requirements. A total of 33 tax increment payments were made beginning in 2009 and the final tax increment payment was made in July 2025. The total amount of tax increment payments to the Developer was $294,013, which is less than the amount of increment that was projected and approved by the Council. The City is not responsible for the shortfall in TIF. The tax increment district has reached its 15-year term that was approved by the City Council and the district needs to be decertified. The recommendation is to adopt the attached resolution decertifying the TIF District.