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The cost of the Woodbury campus for public safety is rising as voters approve new sales taxes to fund it

The cost of an expansion of the public safety campus in Woodbury has risen to an estimated $60 million as the city prepares to ask voters to implement a sales tax to help pay for the project.

That number is up from April 2023, when officials projected it would cost about $50 million for plans that include building a new fire station for the fast-growing east metro area.

Inflation and rising construction costs have driven up cost estimates, city spokesman Jason Egerstrom said. The higher costs mean the city will likely have to turn to property taxes for at least part of the project, even if voters this fall approve a local sales tax proposed as the main financing tool for the renovations and expansions.

Woodbury was one of 26 cities authorized by the Legislature last year to implement a local sales tax, and has the authority to raise $50 million. With voter approval, the city will add the 0.5% tax to receipts starting next spring. The tax is a nickel for every $10 spent on taxable items. Woodbury’s current sales tax rate is 8.38%.

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“We are grateful that our Legislature has given us the opportunity to do this,” said Woodbury Mayor Anne Burt. The mayor and city council members cannot argue for or against the tax, but the city has sent out information about it to help voters understand how it could work.

A University of Minnesota study found that 53% of the money raised through local sales taxes would come from visitors. A half-cent sales tax in 2021 would have raised about $4.9 million, the study found. The study also looked at the effect of a sales tax on purchases and found that it had a negligible effect in 11 Minnesota cities that implemented a local sales tax between 1999 and 2006.

The public safety expansion will continue whether the sales tax passes or not, and Burt said the city would have to turn to property taxes to pay for it if the sales tax referendum does not pass. The city estimates that because of visitor spending, it would be cheaper for residents to implement the sales tax than to pay for the project through property taxes alone.

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A sales tax would cost the average Woodbury household about $82 to $96 a year, depending on their purchases. The project’s rising price would require an additional $13 in property taxes from the average Woodbury homeowner, for a total of about $102, according to data shared by the city this month. Without the local sales tax, property taxes would increase about $154 per year to pay for the project.

The sales tax would also raise the needed $50 million more quickly after about 13 years, the city said. A property tax increase would take 20 years to raise the $50 million.

The expansion of the public safety campus would see the city purchase the Washington County Service Center building at 2150 Radio Drive; the province plans to move that office to a new location next to the Metro Gold Line. According to a draft of the plans, the building would be demolished or renovated if necessary to make room for a new fire station. The new fire station would be located south of the existing police station at 2100 Radio Drive, and a new public entrance would be built on the north side of the renovated complex.

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Woodbury Police Chief Jason Posel said the expansion is necessary. The Public Safety Building was built in 1975 and expanded twice, but Woodbury has grown rapidly and is now the eastern metro area’s largest suburb and the state’s eighth-largest city, with more than 80,000 residents. The city’s busy shopping district along I-94 is used by many visitors, increasing pressure on police, fire and ambulance services, he said.

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