Thursday, October 28, 2021

Oak Park Heights Objects to Federal Relief Fund for Stillwater Retail/Housing Development

Oak Park Heights officials are crying foul over Washington County’s plan to make the city of Stillwater a sub-recipient of COVID-19 relief funds to bring sewer and water to the southeast corner of Minnesota 36 and Manning Avenues.

The county board will vote on the $750,000 grant Tuesday. Stillwater would be the first municipality to receive such a grant from the county; Deputy County Administrator Jennifer Vegenius said the grant would complement the $2 million Stillwater is contributing to the project.

There are plans for Hi-Vee Grocery and about 200 luxury apartments. The $50 million project, called Central Commons, is the largest retail development proposed for Stillwater in the past two decades.

Stillwater City Council approved a tax-incentive plan in May that includes a 15-year estate-tax exemption of about $3.145 million.

Stillwater asked Washington County to consider $750,000 in tax exemptions for the project, but county officials proposed using funds from the American Rescue Planning Act 2021 instead, Vegenius said. ARPA provided billions of dollars in emergency funding to state and local governments to combat the COVID-19 pandemic.

He said the ARPA funds could be used to assist with some infrastructure issues, including sewer and water. Washington County received $51 million and allocated approximately $40 million. Projects include: $8 million for heating and cooling improvements at the Washington County Government Center in Stillwater; $6.8 million to convert a 50- to 75-bed hotel into a 30-bed shelter; and $700,000 to replace the boat launch at St. Croix Bluffs Regional Park.

But Oak Park Heights officials are questioning what criteria county officials are using to make Stillwater a sub-recipient of ARPA funds.

“Is this a fair use of public money to basically subsidize a private business?” City council member Mike Runk said. “Money should be spent for the general interest of the public and not just for the private interest.”

Looking for an ‘open process’

Before the county board votes on subrecipients for ARPA grants, they must establish a “systematic and open process,” Runk said.

“They should establish a process that is clearly laid out and open to the public,” he said. “How much money is available? How can it be used? How can cities and townships apply? What are the criteria? When money is disbursed, all relevant information must be publicly disclosed.”

Runk said he’s particularly concerned about how a new high-V might affect Kowalski’s grocery store, which is located in Oak Park Heights.

“It’s a subsidy for Hi-Ve,” Runk said. “Washington County should not be in the process of subsidizing a company that is up-and-coming and competing with existing businesses.”

Oak Park Heights City Administrator Eric Johnson said county officials told him that Washington County would follow the “guiding principles” of its economic development tax-exempt policy. But the Stillwater project doesn’t demonstrate meeting those criteria because it doesn’t have regional impact, doesn’t create a livable wage or affordable housing and doesn’t involve transit-oriented development, he said.

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