by CHRIS ROGERS
While the coronavirus may have sparked a global economic downturn, Winona’s tax base is still riding a building boom.
Across Winona County in 2019, developers erected new buildings worth a total of $57 million — a 79-percent increase over last year and the highest figure in over a decade. Winona County hasn’t seen that much construction activity since before the 2008 housing crash.
The bulk of that new construction — $34.6 million of it — occurred in the city of Winona. Winona County Assessor Steve Hacken said just three large projects are responsible for the much of the uptick: the Main Square Community at Fourth and Main streets downtown, Bluffview Estates next to Sugar Loaf Senior Living on Mankato Avenue, and Gundersen Health’s renovation and expansion of the former Kmart on Vila Street. “Some real expensive properties — we haven’t seen anything like that in my 23 years,” Hacken said. Those new developments will start paying taxes on all that new value next year.
On a smaller scale, St. Charles’ hot housing market also contributed to the tax base bump. There was nearly $5.8 million in new construction in St. Charles last year, and the total value of all homes in St. Charles increased by roughly $14 million — largely due to the rising value of existing homes. Like other small towns surrounding Rochester, St. Charles has seen Med City’s sky-high housing costs drive up home prices and new home construction. “St. Charles is hopping,” Hacken said.
To the relief of farmers and rural landowners — who saw farmland values and property taxes rise for years even as corn and milk prices plummeted — the assessed value of rural land cooled off some last year, falling 3.75 percent for farmland and 6.7 percent for woods and rural vacant land.
A tight home market across the county sent existing home values upward, and the total value of apartments and commercial properties in Winona County rose 8.5 percent and five percent respectively last year, mostly because of rising values for existing properties, Hacken said.
If Fastenal breaks ground on its major, new riverfront office building, 2020 may be another good year for new construction values in Winona, Hacken said. In May, Fastenal officials said the company would start construction in July. While Fastenal has not released a project budget, Hacken speculated the new building would easily be worth over $20 million.
Will Winona’s building boom continue beyond 2021? “With coronavirus, who has any idea what’s going to happen in the future right now? I guarantee I don’t,” Hacken responded. A lot of commercial businesses are really hurting right now, and the assessor said his office will face a challenge at the end of 2020 trying to determine how much that affects commercial property values. “I think certain types of properties are going to struggle more than other types of properties,” Hacken stated. What happens with local colleges in the fall and the student housing market could also have an affect on real estate values, he added.
Having valuable, new properties go on the tax rolls helps all local taxpayers by spreading out the burden of local taxes for schools, roads, and public safety over more properties. However, significant as the spike in new construction is, it is still relatively small in comparison to Winona County’s total tax base. With new construction and rising values for existing properties combined, the total value of all taxable properties in the county rose by $83-million; however, that is just an 1.5-precent increase in the county’s $5.4-billion total tax base. “Even $57 million county-wide — over $5 billion or whatever our market value is, it’s not anything life-changing,” Hacken said.