City hopes to aid development of local businesses
The city of Northfield is working to increase density and encourage redevelopment to make the city’s economy more accessible. The city helped fund the opening of Reunion bar and restaurant and the forthcoming Fifth Street Lofts apartment complex, among other endeavors.
The emphasis on redevelopment follows a study completed in December 2018 by Urban3, a community development consulting firm from Asheville, NC. The Economic Development Authority (EDA) of Northfield commissioned the firm to analyze Northfield’s density and locate areas suitable for redevelopment. They used a per-acreage assessment of the health and utility of each parcel of land the city owns.
“[The EDA was] able to identify some key parcels within the community, especially in the downtown, Division Street, where some of the properties were high value and low cost,” said Northfield Economic Development Coordinator Nate Carlson ’15.
While the study concluded that Northfield has developed sustainably over the years, it recommended a return to the denser development of the town’s early history. This recommendation encouraged the EDA to utilize or redevelop existing land in more efficient ways, as was done with the Fifth Street Lofts apartment complex.
The complex will be constructed on an under-utilized plot of land downtown, Carlson said. The market-rate housing development will help move the city’s tax base away from single-home residential property taxes.
“Northfield has had a majority of the burden of property taxes on the residential population,” Carlson said. “Efforts like the Fifth Street Lofts, Reunion, the hotel – these are all commercial businesses that, prior to their original use, have a much denser footprint and generate much more tax that can balance out the rest of the tax base.”
Northfield worked in partnership with these commercial businesses, offering hefty loans to incentivize development through their Northfield Revolving Loan Fund Program. In the case of Fifth Street Lofts, the city created a new tax-advantaged financing district to meet development needs, the Messenger reported in early October, alongside a $250,000 loan through the EDA.
In the case of Reunion, which occupies the former J. Grundy’s Rueb ‘N’ Stein space on Division and Fifth Street, the EDA approved a $100,000 loan on Feb. 8, 2019, to “assist with construction and renovation costs,” according to a March economic development update. Reunion used the loan to build new sidewalks surrounding the restaurant that meet Americans with Disabilities Act (ADA) standards, Reunion manager Chad Jenkinson said.
Alongside these larger loans, the EDA also issues micro-grants of up to $5,000 to local businesses under the Clement F. Shearer Micro-Grant Program. The program aids growing mid-range businesses that need help expanding, according to the grant application.
In December 2018 and January 2019, Groundwire Coffee Roasters, a downtown cafe that promotes equitable coffee sourcing, and Launch5 Media, a downtown digital video consulting agency, both received grants of $5,000 to bolster expansion efforts.
These micro-grants follow a development philosophy that Carlson defined as “economic gardening,” placing emphasis on the consistent growth and expansion of local, stable businesses.
“You want to take care of what you currently have,” Carlson said. “So by offering loans or grants, you’re tending to your current businesses and acknowledging them for their importance.”
Many of the EDA’s efforts reflect a growing need for diversifying the tax base due to current over-reliance on residential property taxes. The EDA also hopes to make the economy more accessible for new business ventures by offering to meet gaps in financing through grant and loan programs, Carlson said.
Reunion has seen business flourish since its opening in June 2019. The restaurant has increased foot traffic in the surrounding downtown area, Jenkinson said.
Hideaway Coffeehouse and Wine Bar has also seen its number of customers rise in recent months, primarily due to spillover business from the opening of Reunion only a couple of shops away, owner Joan Spaulding said.
While business has increased for several downtown establishments, others, such as Ragstock and Antiques of Northfield, reported negligible increases since the opening of Reunion. Owner of Antiques Carol Christenson said that property tax rates have heightened for local businesses in recent years. The store has also seen its rent increase. However, Christenson noted that tax and rent increases are natural processes and wouldn’t necessarily be caused by a shift to higher density.
Carlson said the development of Fifth Street Lofts will revamp the downtown area, assuaging fears that growing density will drive out smaller businesses.
“I think it’s been a positive belief,” Carlson said. “It’s going to be pretty monumental to have 79 units a block off of Division, and having that many people in that area to drive small town, local businesses.”
Finally, Carlson, a St. Olaf graduate, is confident that a more accessible and revamped Northfield economy will attract students to the community.
“Sure, you can stay on Olaf, you can stay on Carleton’s campus as much as you want, but ultimately what’s driving that community is what the city’s doing,” Carlson said. “When it’s vibrant and active, the colleges themselves are benefitting from that vibrancy.”