Last year, Red Wing officials made a nice contribution to Red Wing Shoe Co.’s efforts to expand its downtown store, but now there are problems with the complex financial deal.
According to the Red Wing Republican Eagle, the deal involves $300,000 from the Red Wing Port Authority and Housing Redevelopment Authority. The money was to be repaid from the additional property taxes generated by the expansion.
Now they find, though, that the expanded store’s assessment isn’t high enough to generate those additional property tax dollars. And city officials just realized the deal was written to repay only the $300,000 principal to the loan funds, not the $113,000 interest that would accrue over 15 years.
City Council members must now decide how to deal with the situation.