Council discusses TIF rebate for Molstead Motors expansion
By James Grob, firstname.lastname@example.org
The Charles City Council discussed granting Mike Molstead Motors a $110,000 tax increment financing (TIF) incentive rebate for an expansion project, at Wednesday’s planning session. If approved, the rebate amount would be paid over five years.
“This is a very stable company and very stable employer, and a growing company,” said Tim Fox, executive director of the Charles City Area Development Corp. “Beyond the job creation, the wages and the benefits — which we are very pleased with — there is some value in having certainties and consistencies in employment, from an economic development perspective. I think that this project provides that.”
The council intends to set a date for public hearing at its June 21 meeting, for official consideration of the TIF rebate agreement at the July 6 meeting. A public hearing is required in tax increment funding agreements.
Mike Molstead Motors announced plans for expansion of the dealership located at 1501 South Grand Avenue in May. The expansion adds 11,600 square feet of space for the service department and parts area. The project will add at least 12 new jobs, starting at $24 an hour. The construction itself is anticipated to cost $1,972,000 and will be completed by December 2021.
Fox explained that based on the project’s investment, added jobs and wages as well as added taxable valuation, it qualifies for a five-year 85% TIF rebate on the additional property taxes that will be assessed because of the added value. Fox said a draft agreement from bond council has been put together.
“A lot of people come from a long ways away to shop at Mike Molstead Motors, which generates a lot of cash flowing into the community,” Fox said.
Mike Molstead told the council that when the business came to town 25 years ago “we were doing 50 cars a month, and now we are doing more than 300.”
Molstead said the company has gone from 14 employees to more than 70, and said he had estimated 20 percent growth in the service area with the company’s previous expansion, and has actually seen more than 100 percent growth over the last four years.
“This will create some really good jobs,” Molstead said. “Good technicians today earn well over six figures, and this expansion should create 4-6 of those positions along with a lot of additional support staff.”
In other business on Wednesday, the council discussed the proposed renewal for transit services between the City and Circle K Communications. The renewal will include a 1.3% rate increase in contract expense paid to Circle K. City Administrator Steve Diers told the council that he did figure some additional cost to operation in the budget, and that the city can cover the 1.3% funding increase request.
Also Wednesday, the council discussed its annual one-day borrowing program. The city has been receiving a debt service levy for fiscal year 2021, and will be borrowing $309,000, which will cover expenses such as tree removal, clothing for police/fire/street employees, fire and police equipment purchases, nuisance abatement, squad car purchase and repairs to 401 N. Main.