Council to consider approving TIF to help fund $2.2M renovation of former Mitchell Shopko building

Jan. 14—MITCHELL — The Mitchell City Council on Tuesday will consider approving a Tax Increment Financing District that would facilitate a major renovation project inside the former Shopko building.

The Tax Increment Financing (TIF) district would fund over $500,000 in renovation work at the Shopko building. Frank Krohmer, owner of Krohmer Plumbing, purchased the building in the spring to move his plumbing business into a portion of the property with plans to share the other half of the building with a pair of retail businesses.

According to the TIF project plan, the roughly $2.2 million in renovations Krohmer is planning to bring to the vacant commercial property are designed to meet the specifications for the retail store considering opening a location in the building.

During the Jan. 8 city Planning and Zoning Commission meeting, Krohmer said he was in the negotiation stages with the national retail business. Krohmer Plumbing will occupy about half of the 71,846-square-foot building, Krohmer said.

The name of the retail business eyeing to open on the north side of Mitchell has not been disclosed.

The increase in property taxes from the building improvements and new retail businesses within the TIF boundaries is referred to as the "tax increment," which the city would pass on to the developer as it generates over a 20-year window.

According to the TIF project plan, the renovations are anticipated to be complete in the fall of this year.

Krohmer purchased the building, located at 1900 N. Main St., for $1.8 million. The building has sat vacant since Shopko closed in 2019 after the company filed for bankruptcy.

Upon completion of the remodeling project, the assessed value of the property is estimated to increase by $1.4 million. The increased taxable value of the property would generate $27,750 in annual property taxes.

The potential of welcoming a new retail business on the north side of Mitchell has been met with strong support from some city council members who have expressed concerns about the loss of businesses that north side of the city has seen over the past few years. While the council has yet to vote on Krohmer's TIF, the council approved a tax incentive grant program to entice the retailer that's considering opening inside the former Shopko building.

If the council approves the TIF, it would be the 32nd TIF district created in Mitchell.

In addition to the potential pair of new retail stores moving into the building, the renovation project would allow Krohmer Plumbing to expand its workforce with around 25 new employees.

Krohmer Plumbing's existing Mitchell office is located on the west side of the city.