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Senate committe considers Duluth Central tax break

Duluth school Superintenent Bill Gronseth and school board President Annie Harala sit on either side of Sen. Roger Reinert Tuesday, April 26, 2016, as they propose to a Senate committee a tax break for the sale of Central High School. (Forum News Service photo by Don Davis)

ST. PAUL — The Minnesota Senate Tax Committee is considering giving a private business that buys the abandoned Duluth Central High School tax breaks to develop it.

The school has sat empty since 2011, when its last class graduated.

Sen. Roger Reinert, D-Duluth, said Tuesday that Central "has million-dollar views, but multi-million-dollar" needs.

The legislation, which will be considered as part of a larger tax bill, would eliminate state sales taxes on materials and supplies used to develop the Central property. That would apply only apply only if the property would be subject to property taxes, meaning the tax break would not come if a government or other entity that does not pay taxes buys it.

Giving a business owner a tax break to develop the property "could be the tipping point" helping the district sell Central, Superintendent Bill Gronseth told the committee.

The 77-acre property is one of the largest areas within the city that can be developed, Gronseth said.

"Private redevelopment of the Central site provides an opportunity to meet market demand for new housing, encourage new businesses, generate jobs and increase the tax base for the school district, city and county," the superintendent said.

Even though there has been interest in developing the property, he added, "significant infrastructure challenges proved too costly."

Committee members asked about a controversial March Duluth School Board decision to not negotiate a sale with a nonprofit organization on behalf of Duluth Edison Charter Schools for a high school.

Reinert said he was staying away from that issue, which he said needs to be made by the School Board, not state lawmakers. However, he added, when the board decided to close schools "there were some pretty strong statements made that this would be sold and it would become taxable property."

"This is a tool for whoever might use this parcel," Reinert said of his legislation.

The senator said the Central land and buildings are "probably some of the most valuable property in the city."

A similar bill is being considered by the House.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.