Lil Pimp 
Group: Members
Posts: 62
Joined: Oct. 2003
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Posted on: Dec. 04 2003,12:53 am |
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An update from the N. Mankato Port Authority soap opera. And a soap opera it has been. Now the city is up in arms with the announcement of a 10 story Hilton hotel being built (in Mankato) about 1/8 of a mile from the Marigold site, a site primed for a big hotel, just across the river from the civic center.
The N. Mankato PA has a black eye (or maybe a pair of them). The only consolation is the city of Mankato appears to be ready & waiting to take any reasonable development offers and make them work. Good for Mankato taxpayers, not so good for N. Mankato taxpayers. Goes to show you, do your homework and make solid decisions and things will work out. Make the wrong decisions and someone will be waiting in the wings to snatch away your hopes for their own benefit. Free enterprise baby!
December 3rd, 2003
Our View - Why Retail shouldn’t be subsidized
The North Mankato Port Authority, having mismanaged its way into a corner, has few good options concerning the Ray’s Market building on Commerce Drive.
The Port Authority and City Council members appear resigned to accept an offer of $1 million for a building the city spent nearly $2 million to build just a few years ago.
Taking the loss and ending the city’s painful, misguided foray into subsidizing a retail store, is the only real choice left.
The Port Authority, the economic-development arm of the city, built the store in 1999 in order to get a grocery store to the hilltop. The fact private-sector grocers did not want to build a store in the area should have tipped off the city to the risk. The new city-backed grocery closed about a year after opening.
After sitting empty for several months, a new tenant took over, opening Ray’s Market.
Ray’s has also fallen behind on lease payments and taxes on the building. Ray’s owners offered to pay $1 million for the building, hoping they can reduce their overhead costs and remain a viable business.
Many North Mankato residents are no doubt startled that the value of a newer building could fall so far, so fast. But when a big space for a specific retail business is built, its value drops precipitously when the business it’s designed for is struggling. That’s one of many reasons cities usually steer far clear of subsidizing retail.
Matters are made worse because the Port Authority lost control over part of the property — the gas pumps that were not part of the original publicly funded building. The operators of Ray’s own the pumps and land underneath.
That split ownership means that if the Port Authority keeps the main building and the grocery store closes in the future, the city would have a tough time selling the grocery building when the gas pumps are owned by someone else.
If the Port Authority commission votes to sell the building, they will buy some time, but will still need to find more money to pay off the balance owed on the project. They hope to sell some undeveloped land held by the Port Authority to make up for the loss.
Hanging over that depressing scene is the cloud of the old Marigold site in lower North Mankato. That property, too, is a drag on the city. The Port Authority sunk a lot of money into the site chasing a proposed, but never realized, hotel project. The longer the site remains undeveloped, the longer it will siphon off other Port Authority funds.
The sale of the Ray’s building will at least put an end to the public spectacle that has consumed so much of North Mankato politics in recent months. It won’t, unfortunately, end the financial liability the Port Authority faces.
The only positive that can come from the situation is if the city administration, council and Port Authority learn a lesson from the fiasco and stay clear of similar projects in the future.
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