MITCHELL — The owner of the former Woolworth building in downtown Mitchell was given the green light Monday to utilize a Tax Increment Financing district to help him fund rehabilitating the century-old building.
With the Mitchell City Council’s approval of the TIF, it sets up John Adamo, a California developer who owns several Main Street buildings, to begin renovating the 300 N. Main St. property that’s been a downtown fixture since 1910. He’s eyeing to bring $1.7 million in improvements to the downtown property.
“I want to point out the owner has committed to $1.7 million, but the TIF is a little over $525,000. So it’s not like this TIF is covering the entire project,” said council member John Doescher, who gave his nod of approval.
Don Petersen, a Mitchell attorney representing Adamo, provided more details of the project timeline during Monday’s meeting and said the renovations will likely be complete by 2024. He explained the elevator replacement — a key part of the rehabilitation project — will likely dictate the timeline.
According to Petersen, the TIF will support $527,257 of the rehabilitation project. Among the notable renovations that will be made to the 34,881-square-foot building are remodeling the main floor for commercial, retail and office space, sprucing up the top floor apartments and replacing the non-functioning elevator.
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City Administrator Stephanie Ellwein said there are portions of the building that aren’t accessible and suited for use. But Adamo’s plans seek to change that.
“They are going to open up some of the areas that are blocked in the building now. So it will give more access to those first floor spaces and make the building more useful,” she said.
The Woolworth building TIF is the second TIF Adamo has secured since buying a pair of aging Main Street buildings. Across the street from the Woolworth building is the former Crafty Fox property that Adamo is using a TIF for to help fund remodeling the large building into a mixture of loft apartments and retail/commercial space on the main floor.
Crews have been working on the former Crafty Fox, more commonly referred to as the Western building on Main, over the past couple years. The Western building on Main is in the process of undergoing $1.5 million in renovations, and plans entail turning the neighboring vacant lot into a parking lot with landscape features.
Combining the remodeling efforts of the two century-old buildings, Adamo has committed to investing over $3 million in rehabilitating a pair of fixtures on Mitchell’s Main Street.
TIFs are intended to fund site improvements within the boundaries of a TIF through increased property values resulting from new development or improving existing buildings. The increase in property taxes within TIF boundaries is referred to as the “tax increment,” which the city passes on to the developer as it generates over a 20-year window.
The Woolworth building TIF will not include new structures within the boundaries, which means the planned improvements made to the existing property will aim to increase its property value.
According to Ellwein, of the 24 TIFs that have been approved by the city of Mitchell, 13 are still active. When a TIF is active, it means it’s yet to have been paid off.
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“I think the important thing to point out is, in total, so far, $7.9 million in increment has been paid out (by the city). If you want to look at the total value that’s been added to the community from the TIF districts, it’s $117.9 million,” Ellwein said.
The total increase in taxable value that’s been added to Mitchell’s tax rolls from all of the approved TIFs equates to $85.9 million — excluding three TIFs due to reports not available on the Department of Revenue’s website — according to data provided by city officials.
Majority of Mitchell’s TIFs have been used to spur economic development in the form of new businesses and industry. However, some developers in Mitchell are turning to TIFs to aid housing developments.
Adamo’s TIF for the Woolworth building has a 20-year timeline, as does his nearby Western on Main property.
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