(Spencer)– The Spencer City Council Monday approved an economic Development Forgiveable Loan for Fridley Theatres for a major renovation of the theatre in the South Park Mall in Spencer. The project has a total cost of $3 million dollars. The loan through the city is for a million dollars. City Manager Dan Gifford says it will be covered through local sales tax revenue generated by a tax increment finance district…
“10 or 12 years ago someone had the foresight to institute this local option sales tax TIF around the Menards and TJ Max and that area. It brings in over $200,000 a year and there’s a little over a million in the fund now. A project like this is exactly what that local option sales tax TIF was adopted to do, is to increase retail down in south Spencer.”
Gifford says several provisions are in place to protect the city…
“For one, it’s a forgivable loan so if the theatre closes in the first five years, they owe the entire amount back. In years 5 through 10 that amount gradually goes down to zero at 10 years. They have a 10-year lease with the mall, so that protects us. We get our money back if the theatre doesn’t continue to operate. We also will pay this out as the project commences, so they spend money and then we reimburse the money.”
He says the mall is also involved…
“The mall owners have agreed to fix the parking lot, put a new roof on from Hobby Lobby over across to where the theatre is to protect their investment, and so that also protects the city’s investment.”
Gifford says Clay county is also chipping in financially…
“Our local option sales tax TIF is only going to be affected by $750,000 total after we count the $250,000 the county is participating in this project, and I want to thank the county for doing that. They think it’s a pretty good project too, and they wanted to participate, so it’s a good thing.”
Gifford says no property tax dollars will be involved in the project.
