New details emerge about potential equipment sales activity in Detroit Lakes – Detroit Lakes Tribune

DETROIT LAKES – More details have emerged about an electrical equipment sales, parts and service center that plans to set up shop on the southeast side of Detroit Lakes at 29075 U.S. Highway 10 by the fall.

An application for Tax Increment Financing (TIF) was reviewed by the Detroit Lakes Development Authority at its monthly meeting on Tuesday, May 7. The filing identified the company as QF5, which is owned by Todd Doege of Shakopee, Minnesota.

The application stated that the 15,000-square-foot facility would be built of precast concrete and that construction would take place in the summer of 2024 and be completed in the fall. According to information provided to the Development Authority, the company had the potential to employ twelve full-time employees and achieve an estimated annual turnover of $4-6 million.

Two plots of land have been purchased for the company. According to Becker County’s parcel search, the two combined parcels are (030075000

and 030074000

) are approximately 12 hectares. The location for the new business would be on the northern portion of the parcel, farthest from the intersection of Highway 10 and 290th Avenue.

Contributed / Detroit Lakes Development Authority

The rendering in the parcel indicated that primary access to the commercial business would be from Highway 10, with a turn lane in the eastbound lane. A secondary entry/exit point would be located along 290th Avenue. The plans indicate that there will be 46 customer parking spaces, including two designated for people with disabilities.

“The applicant anticipates approximately 4 to 10 visitors at any time during normal off-season business hours and 10 to 25 visitors during normal peak season business hours,” the application said.

According to information provided to the Development Authority, the company had the potential to employ twelve full-time employees and expected an estimated annual turnover of $4 to $6 million.

Contributed / Detroit Lakes Development Authority

The annexation of the Burlington Township land began in February with a Planning Commission public hearing. The committee approved the annexation. It was sent to the City Council, which approved the annexation in March and designated it B-3, which allows motor vehicle-oriented or dependent commercial and service activities. Also allowed in the B-3 district are: retail and service, gas stations, food establishments, hotels, offices and more. Burlington Township will receive five years of taxes. From 2025 through 2029, the annual tax payment would be approximately $610.

QF5 requested that the Development Authority consider offering Tax Increment Financing for the new company.

“The TIF plan must be approved by both the Detroit Lakes Development Authority and the City Council,” Remmen explained in an email after the meeting. “Every entity must hold a public hearing. The dates for the public hearings have not yet been scheduled.”

The Minnesota Office of the State Auditor wesbite explains that a TIF is “a financing instrument intended to support local economic development, redevelopment, and housing construction that would not otherwise occur without assistance.”

“TIF is not a tax cut; taxes are paid on the full taxable value,” according to the auditor’s information.

In a telephone interview, Remmen explained that if the TIF application was approved, the company would continue to pay taxes based on the fair market value of what is on the property. These taxes would be distributed among all taxing entities.

“Once the new project is built, they pay the full tax on the new project,” Remmen explains.

When the county distributes taxes to the city, TIF agreements require the city to return 90% of the taxes to the developer until the agreed-upon amount is paid. (QF5 requested that the Development Authority provide TIF in the amount of $623,570.) When the agreement is fulfilled, the TIF is decertified and tax collection begins as it would for properties outside a TIF zone.

Remmen explained that companies or developers sometimes seek TIF to “make a project affordable.”

The QF5 TIF application stated that “incremental assistance will be used to assist the applicant with the costs of remediation of asbestos in the current structures on site” (which must occur prior to demolition), “the demolition of the existing structures, grading and excavation work necessary…extension of the municipal water and sewer service to the lot and the building to be constructed on the lot.”