The proposed Buffalo Ridge Energy got a financial boost Tuesday from the Minnehaha County Commission.

The ethanol plant, which would produce 50 million gallons a year, received approval for a tax increment financing district on a 4-1 vote.

The only dissenting vote came from Commissioner Bob Kolbe.

A cap of $4.3 million will be placed on the amount to be paid out through the TIF district. Once it has been collected and paid to the developer, tax increment payments end.

In tax-increment finance districts, increases in property tax revenue are used to make improvements.

Kathy Showalter of PlanScape Partners, spokeswoman for the project, said the ethanol plant would have no negative effect on taxing bodies.

Randy Pierret, who lives near the proposed site northeast of Sherman, spoke against the TIF.

He said Minnehaha County, which has opted out of the state-imposed tax freeze five times in seven years, should not be giving financial incentives to private projects.

"The county's share of taxes on a $100,000 assessed-value house has gone from $219 in 2003 to over $250 in 2006, or almost 15 percent increase in three years," Pierret said.

He also said the project will cost Minnehaha County more than expected in things such as repairing damaged roads.

Kolbe said finance officials he has talked to think a 20-year TIF is excessive.

Minnehaha County planning director Scott Anderson said the TIF could be paid off in less than 20 years.

Having a five-year TIF, as Kolbe suggested, would not be realistic, he said.

"It takes two years to construct and operate it," Anderson said. "A three-year period would not offer enough momentum."

TIFs are meant for blighted areas. Calling the land near Sherman "blighted" is a stretch, Pierret said.

Any agricultural land would fit into that definition.

"I think even some of you even considered this a stretch of the use of the law," Pierret said.

Kolbe agreed that "blighted" is an open-ended description.

But Anderson disagreed.

"The term blighted is a phrase that's used throughout the statute and it has been widely or commonly accepted that vacant land can be construed as blighted under state law and that determination has been made throughout the other TIF districts that have been approved throughout the state. It's basically common practice."

Jeff Eckhoff, executive director of the Minnehaha County Economic Development Association, said TIFs often are helpful to economic advancement.

The base and land taxes are frozen, but the building - or increment - portion, will continue to appreciate in valuation, he said.

"The philosophy behind TIF districts is that they (encourage) investment that will come back and pay itself off," he said.

Reach reporter Jill Callison at 331-2307.

 

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