Northfield council places moratorium on northwest business district, in order to target specific development

With an eye toward fostering targeted types of business development, so as to broaden the property tax base and limit the tax burden on residential taxpayers, Northfield’s City Council is redoubling its focus on the northwest part of town.

The currently undeveloped area west of Northfield Hospital was annexed by the city from Greenvale Township in 2009, with the vision that it could eventually help the city to grow its industrial tax base articulated in the 2008 Comprehensive Economic Development plan.

Economic Development Director Nate Carlson told the council that, outside of the northwest area, there are no other significant areas of 50 or more acres within city limits, the size typically required for a significant industrial development.

While the currently undeveloped land does bring some revenue to the city in its current use as agricultural land and as home to solar gardens, Carlson’s figures show that an industrial development could bring in over 100 times the revenue the city is currently getting.

City staff have emphasized that, currently, Northfield’s industrial tax base is much smaller than most cities that might be regarded as Northfield’s peers, based on size, like Faribault and Owatonna, making it difficult to fund major improvements in other areas.

At the recommendation of the Planning Commision and staff, the council opted to put a temporary moratorium on development in the northwest area, as it considers the latest update to the comprehensive plan.

Community Development Director Jake Reilly said that the 2008 plan, while laying the groundwork for the annexation of over 500 acres, did not fully envision the kind of potential development which has been imagined over the last several years.

By contrast, moving forward with projects with the guidance of a revamped comprehensive plan could provide councilors and Planning Commission members with a greater perspective to more easily determine how potential projects could meet the city’s goals, according to Reilly.

“It’s the ease of a developer to respond to those needs and for policymakers and policy advisors to make those decisions with those developers that will be improved with slowing down to go fast,” Reilly said.

Moreover, proceeding with the current comprehensive plan could make it difficult for the city to justify denying smaller projects, such as the proliferation of solar gardens, which are not in line with the kinds of developments increasingly envisioned and could in fact inhibit them.

City Administrator Ben Martig noted that, under the current zoning restrictions, solar gardens can be added in the northwest area with only a conditional use permit. Behind those solar developments tend to be contracts which run for decades.

In particular, city officials have cited the recently announced $700 million data center, which Facebook’s parent company Meta has announced it will build in Rosemount as a prime example of the kind of development Northfield should look to attract.

The idea of a data center or similar project in the northwest part of town could make sense from a variety of perspectives. High on value but relatively low on workforce needs once construction is complete, it wouldn’t put too much strain on an already tight labor market.

When it comes to data centers specifically, it’s also notable that the United States is the world leader and that Minnesota is particularly attractive for companies like Meta because of its well educated workforce and relatively favorable tax structure for such developments.

In order to prevent communities from blocking vital development, the state has put significant restrictions on the use of interim ordinances. However, Reily emphasized that the city would use the temporary moratorium to better position itself to move forward with an ideal development.

“It’s our intent to make sure that we get the very best outcome for Northfield by taking this sort of slower approach,” Reilly said.

Quizzed by Councilor Jami Reister as to whether the moratorium could actually signal to businesses and to cities some hesitance in attracting development to town, Reilly acknowledged that he has heard that concern from developers and site selectors.

That said, Reilly said that businesses tend to react favorably to an argument that a moratorium should be understood in the context of the city taking its time, when essential infrastructure upgrades on the site are ongoing, to ensure any development fits with the city’s broader vision.

“That’s an important part of the message; we want to make sure that we get great projects and that we’re doing this in order to facilitate projects, not stop them,” Reilly said.