MASON CITY – The Mason City council has agreed to hundreds of thousands of dollars in tax breaks that will help a fast food coffee chain, a restaurant and a retail store locate to town.
The council agreed to terms with Mason City Investors LLC – formed by an Omaha real estate company known as Woodsonia. The investors will purchase land at the east edge of the North Iowa Fairgrounds, between the Target parking lot and the main entrance to the fairgrounds. The land will be split into lots, and the west lot will be developed first with a three-unit structure going in, consisting of a Starbucks coffee with a drive-through, a retail unit in the middle, and a restaurant on the east side with no drive through.
The developer will receive a $222,000 tax break for the $2.1 million in improvements to the property. City hall only says in the development agreement that the developer will “create employment at the site and hire employees from the community”. The agreement outlines no requirement from the developer on the pay rate or number of jobs it tenants may offer. Speculation is that the jobs will be overwhelmingly low-paying.
According to Forbes, in July, Starbucks announced that it is raising its coffee prices even though it had “an excellent second fiscal quarter recording its 17th consecutive quarter with above 5% comparable sales growth. Starbucks feels that the price hike will be barely noticeable considering the coffee enthusiasts can already afford the lofty prices and the increased prices won’t have much of a dent on customer visits.”
The arrival of the nationally-recognized coffee chain could have an ill-affect on several existing coffee shops town that are operated by Mason City entrepreneurs, which compete for the coffee-drinker dollar. There are a number of strip malls and retail locations scattered about town that are completely vacant at this time, most notably in the downtown and west side areas.
An email from NIT to Mayor Eric Bookmeyer, all six council members and City Administrator Brent Trout asking about the possible affects of the development on other small businesses – most notably, other coffee shops owned and operated by Mason City entrepreneurs – was not immediately answered.
Deals like this may be one of the reasons that the city council and the mayor need to come to the meetings armed. Just saying.
The president of Woodsonia is Drew Snyder. I wonder what his relationship is to Dean Snyder Construction (if there is any connection)
Instead of TIF for this project, another use of the money would have been to provide sewer and water service to the north side of 122 at the fairgrounds. That way future development, should they decide to sell more land, wouldn’t need the same sort of incentives because they wouldn’t have the high start up costs which necessitated this tax incentive.
Of course TIF is self-financing and utilities would have been an additional cost to the tax payers, so that’s likely why they did it.
“self financed” was a bit of a short cut because I was running out of characters. TIF, as most know, uses the increase projected from property improvements and the subsequent tax on that higher assessment to ‘pay back’ the pledged money for the project. There isn’t additional expense to current taxpayers, but there is a delay in the funds from the additional property value which would have helped out the community as a whole.
Thus the argument goes both ways.
Another thing that you people are to stupid to realize – they gave away your local human service department and now their selling public property – worst of all the fairgrounds – they really don’t have the right to do this and it should of had a public vote – think some 100 bills were circulated ?
In other words TIF – which means the tax assessment will be paid for by the locals every year – look at you new assessment down at the bottom on the percentage breakdown. It does not mean this company will not be taxed – it means the tax is paid by all property owners who reside in Cerro Gordo county – TIF -just another way to screw the small guy into paying for the BIG corporations.
@bad-Great comments. I have been saying this forever but the Kool Aid drinkers keep supporting the fat guy in city hall.
Of course they gave away more money. Why not give it back to the taxpayers instead of giving it to a retail sales outfit who will offer low wages with no benefits and gouge the people?
I’ll bet $1 that the retailer will sell mostly crap made on the other side of the planet. The wages paid will be low, except the manager might make a meager $30K and be required to work 50+ hours a week. What a great addition to MC. Why should anything like this get a hand from the taxpayers? If their business is so great and profitable, build the dam building and open up for business and make your profits! Quit coming to City Hall for handouts and breaks.
@Matt-I completely agree and think I have said that many times.
The current administration are legally looting the Mason City treasurer. How much reserves do we have left?