Little Canada set to help produce distributor move to town


Mike Munzenrider Little Canada approved on Nov. 29 using tax increment financing to help BIX Produce Company purchase and move into the Slumberland distribution facility off Centerville Road.

The Little Canada City Council is ready to help a produce distributor take over a large warehouse complex at the north end of the city, with hopes that job creation will follow.

The council voted Nov. 29 to create a tax increment financing district that would help pay for needed upgrades at the facility, currently a Slumberland distribution center, that BIX Produce Company is planning to move into.

The St. Paul-based food distributor is eying Slumberland’s more than 200,000-square-foot facility located southeast of the Interstate 35E/Interstate 694 interchange, off Centerville Road.

As explained by City Administrator Chris Heineman, the 80-year-old company plans to move its 400 employees to Little Canada, and says it could have jobs for some 130 more people over the next four years.

“So it’s a major employment opportunity, a major reuse of an existing facility that’s potentially hard to reuse,” he said.

According to city documents, BIX would be spending upwards of $25 million to buy the property and upgrade it to meet its needs — it will take some $15 million to turn the current furniture operation into a facility fit for produce storage and distribution.

Little Canada is looking to help cover only a fraction of those costs — essentially the price of upgrading the building’s electrical connection — and is willing to do so with tax increment financing assuming it works out a development deal with BIX. The company has yet to purchase the building.

Heineman explained the way the financing works: “It’s not taking any funds directly from the city, it’s actually capturing increased tax value that the development would pay after the facility is improved, and providing a portion of that increment back to the developer for qualified costs.”

Ramsey County estimates building upgrades will increase the property’s value by up to $2 million. A financial adviser said once BIX is in the building, there will be $32,588 in annual tax increment, according to city documents, though just how much of that BIX will receive is dependent on a number of factors that would play out as it proceeds with the move.

 

What about the noise?

The handful of people in attendance for the public hearing on the tax increment financing weren’t all that concerned with the funding side of the matter — they were worried about the possibility of noise.

Mayor John Keis did his best to calm their concerns, explaining the majority of the traffic, and thus, noise, would come from the 20 or so trucks expected during normal business hours, plus the 40-60 delivery trucks that would leave the distributor each morning.

Council members Tom Fischer and Christian Torkelson added their own on-the-ground observations, with each reporting they visited BIX’s St. Paul facility at various hours, finding it to be a quiet operation.

Despite the lack of observed noise, council members said they were aware BIX was likely to have an effect on the neighborhood.

“This is going to be a lot more activity in that area than there ever was with Slumberland,” said council member Rick Montour, noting he lives nearby.

However, he pointed out, the fact that BIX was involving the city in the move — it could have bought the building on its own and not involved the city, Montour noted — means Little Canada has a bit of leverage.

“By us helping them through the tax increment financing, we have, so to speak, a horse in the race, so we can ask for things we wouldn’t have been able to ask before,” he said.

Torkelson made sure to make clear that the tax increment financing only happens if the city and BIX reach an agreement, and if the extra tax value is created as assumed.

If all works as planned, the city should receive the first tax increment in 2021 with BIX up and running, and the tax increment financing district would run through Dec. 31, 2029.

 

—Mike Munzenrider

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