Destination distillery one step closer to reality with creation of new TID

RIVER FALLS -- A destination distillery, event space and restaurant proposed for the vacant and degrading Shopko site is one step closer to reality after the March 23 River Falls City Council meeting.

The council unanimously voted to pass two resolutions related to the distillery proposal, dubbed “Project Mustang”: One creates Tax Incremental District No. 17; the other approves the development agreement between the city and River Falls Holdings, LLC, doing business as Tattersall Distilling.

The next step is the Joint Review Board meeting on April 7, where members of local taxing authorities, such as the city, county, school district and technical college, will either approve or deny the creation of TID No. 17. 

“We’re unbelievably excited for this project and to immerse ourselves in your community,” said Tattersall Distillery co-owner and founder Jon Kreidler.

The project

Tattersall Distillery is a well-established distiller and bottling company founded in 2015 by Kreidler and Dan Oskey in Minneapolis. They produce more than 30 all-natural spirits and liqueurs, including gin, whiskey, vodka and bourbon, that are shipped across 30 states.

While they will keep their Thorpe building cocktail room in Northeast Minneapolis, Minnesota’s more restrictive liquor laws motivated the company to jump the river to Wisconsin. Minnesota laws say if a micro-distillery’s production exceeds 40,000 proof gallons, it’s not allowed to operate a cocktail room or sell products directly to guests. Wisconsin doesn’t limit how many bottles can be bought per day.

They will renovate the 76,000 square-foot former Shopko building, which will give the distillery expanded production capabilities.
The new space, set to open this fall, will boast the following:

• A destination distillery, production, bottling and testing facility from which the majority of production and shipping will take place.

• A barrel storage area, with room for events, tours and tastings.

• A retail store filled with Tattersall products, novelties, snacks and beverages, as well as a central tasting bar where you can try spirits before purchasing.

• A full-service restaurant and cocktail bar serving modern American fare for up to 150 guests.

• An outdoor patio with an indoor/outdoor bar, fire pits and lawn games.

• A grand ballroom that can accommodate up to 420 guests.

• A boardroom for up to 16 guests.

• Two VIP suites for bridal parties, green rooms or smaller meeting spaces.

The project will also focus on sustainability measures, which mesh well with the city’s Renewable River Falls campaign.

“It was a big draw for us to come to River Falls, and the city’s focus on that,” Kreidler said. “The two align very well.”

A 400kW solar array will be installed on the roof, producing 472,000 kilowatts of electricity annually. A water reclamation system will be installed as well, which will recycle production water. Spent grain will be upcycled by a local company, making it fit for human consumption. Unused grain will also be supplied to a local cattle and bison farm. Grain and ingredients will continue to be locally sourced from small farms, Economic Development Manager Keri Schreiner said. All the grain will be milled onsite by a new mill.

Kreidler said he expects to close on the property sale in April, with construction beginning immediately. Production should begin in late July or early August, with consumer-facing aspects open in September or October. The restaurant and event center will be open to the public seven days per week.

The distillery is expected to provide more than 100 local jobs and draw more than 160,000 visitors annually, Schreiner said.

Tattersall has hired Morrissey Hospitality to oversee the event center, retail store and cocktail bar and restaurant bar. Morrissey, which is experienced in hospitality management, currently manages large event center spaces including the St. Paul River Centre, The Saint Paul Grill, Bunker Hills Golf Club and Event Center and more.

The TID

Schreiner said Tax Incremental Financing has been the most widely used economic development tool in Wisconsin since 1976.
“So TIF allows cities to capture incremental property tax revenue from growth in a defined area and use that revenue to benefit that area,” said Schreiner.

A TID is a type of economic incentive municipalities use to promote development whereby tax revenue generated by the project is used to repay upfront infrastructure and other expenses.

TID No. 17 would encompass 11.77 acres, including the former Shopko property at 1777 Paulson Road and the adjacent 4.3-acre property to the north, which is owned by Fairview Health Services and is currently for sale.

The Shopko building, built in 1994, has sat vacant since the company declared bankruptcy in January 2019. The parking lot is deteriorating, Schreiner added. The stormwater pond on the site needs to be redesigned using current stormwater standards.

The city would spend about $3.7 million for property acquisition, stormwater improvements, trailhead construction and improvements, bridge and street maintenance, sidewalk infill, development incentives, Kinni Corridor Plan projects, water tower construction and contributions to a revolving loan fund. The development will have a taxable value of more than $10 million by 2026 and generate enough tax increment to pay all project costs within 25 years. The new value is expected to create up to $221,000 in tax revenue annually, a report in the board packet said.

The TID is proposed as a blight district, which means it’s allowed a 27-year life, ending in 2048. Some of the projects listed above are technically outside the proposed TID, but are eligible because they’re within a half-mile of the TID boundary.

Schreiner also listed the following parameters, which are part of the developer’s agreement.

• The project must start on or after May 1, 2021, with an estimated substantial completion date of Dec. 31, 2022.

• Minimum tax payments will be $154,885 annually for 15 years following certificate of completion

• The developer will reimburse the city for the stormwater improvement cost on adjacent Paulson Road property, an amount of $60,000. The agreement will allow the city to take possession of the stormwater pond located on the Fairview parcel, renovate it and maintain it.

• The city will provide development incentives of $1,360,566.

To learn more about Tattersall Distilling, visit tattersalldistilling.com

Source: Riverfallsjournal.com