Eau Claire RDA OKs lower value guarantee, incentive package for grocery store

Aug. 17—EAU CLAIRE — Menomonie Market Food Co-op is reducing its guarantee for how much its new grocery store planned in downtown Eau Claire will be worth.

Initially agreeing to pay property taxes for a building worth $6 million — even if it doesn't turn out to be assessed that highly — the local cooperative asked to trim that promise down to $4 million.

While the cooperative believes the new store's value will likely exceed $4 million, it wasn't comfortable committing to the $6 million figure, said Crystal Halvorson, Menomonie Market's general manager.

The value guarantee establishes a minimum level the cooperative would be responsible for paying property taxes on. If the building is assessed at a higher value, it will be taxed based on that higher, full amount.

On Wednesday morning, Eau Claire's Redevelopment Authority agreed to the lower guarantee, but also a corresponding cut in public incentives for the project.

In spring the RDA agreed to a $600,000 incentive package for the new store slated for a lot along North Barstow Street that the city has long been working to redevelop, but has now trimmed that down to $400,000 due to the smaller value guarantee.

Halvorson appeared at Wednesday's meeting in a last-ditch effort to request that the full $600,000 incentive package be maintained even with the lower guarantee.

In her appeal to the board, Halvorson spoke about differences between corporate grocery stores and the local cooperative.

"Our first goal is to provide fair prices for our customers and our farmers," she said.

She spoke about the cooperative keeping money in the community through local ownership, giving food vouchers to the needy, buying from local food producers and returning any profits it makes to its shareholder customers.

"It's really hard to make a buck in groceries if you're small, independent and doing what we are doing," she said in her plea to keep the entire incentive package.

City Attorney Stephen Nick advised against the last-minute change as the cooperative had already signed its end of the deal agreeing to the smaller $400,000 incentive package prior to Wednesday's meeting.

He also told the RDA Board that public incentives equal to 10% of a project's guaranteed value have become the norm for new buildings in the North Barstow area being redeveloped. That guideline is in place to ensure public incentives provided through the tax increment financing district covering that area are in balance with property tax revenues coming into it.

Wayne Wille, a member of the RDA Board, said he appreciated Halvorson's comments, but Wednesday's meeting would not reopen negotiations that had already been done.

"We heard what was said, but we're reacting to what's on the agenda and what's proposed here," Wille said.

The board voted unanimously — four of seven members were present Wednesday — to the amended agreement lowering both the guarantee and incentives.

The co-op's original $600,000 incentive package consisted of two parts. The RDA is providing the co-op with $300,000 to prepare the land — currently an asphalt parking lot — for the store. And the other $300,000 would be in forgiven payments on the lot priced at $400,000.

Wednesday's decision to decrease the incentives came out of the land credits, meaning the co-op will be required to pay $300,000 for the lot. Those payments are $50,000 a year without interest.

In recent deals with developers who are building in the North Barstow area, the RDA and city have been offering incentives equal to 10% of planned projects' final value. The public incentives are provided in installments, often tied to milestones such as starting construction, reaching the halfway point and finally opening a new building.

Larger buildings with apartments and storefronts — including the nearly complete Andante building and two planned construction projects — are promising higher value amounts than the cooperative based on their size.

Nick called those larger buildings "critically important" for the finances of the TIF district there. As for the grocery store, Nick said the city is looking more toward its ability to fulfill a longstanding goal of having a grocery store in the downtown area.

"It's primarily about the use," he said.