The St. Louis County board has approved a deal with the City of Hermantown worth up to $860,000 in Tax Abatement Financing.
The financing will help Hermantown install a $6 million sewer line that would extend from the intersection of Okerstrom Road and Hermantown Road to the intersection of Haines Road and Maple Grove Road.
The expanded sewer services are needed to allow for multiple potential developments to proceed — both commercial and residential. It is expected to open up an additional 230 acres for development.
The board’s resolution will require the city use Project Labor Agreements on the sewer project.
Tax Abatement Financing (TAF) means the property taxes that would be due from the designated properties are instead reallocated to the city of Hermantown to help fund the sewer line. TAF is used to encourage economic development, recognizing that the resulting long term growth in the property tax base is of greater value than the missed property tax revenue for the short term.
The TAF for the sewerline project is expected to end in 2023.