2021 Neighborhood STAR Annual Report

Neighborhood Sales Tax Revitalization (STAR) Program 2021 Annual Report

The City of Saint Paul’s Neighborhood Sales Tax Revitalization (STAR) Program has completed twenty-seven (27) years of awarding loans and grants to revitalize Saint Paul neighborhoods.

This report includes:

Program History

In May 1993, the Minnesota State Legislature authorized the City of Saint Paul to levy an additional half-cent sales tax to make improvements to the Saint Paul RiverCentre complex and create the Neighborhood Sales Tax Revitalization (STAR) Program and a Cultural STAR Program. The goal of STAR is to utilize funds for capital improvements to further residential, cultural, economic and commercial development in Saint Paul.

Under its current structure, the Neighborhood STAR portion of the half-cent sales tax revenue equals 50 percent, a Cultural STAR effort uses 10 percent and the remaining 40 percent supports capital activities of the RiverCentre and economic development needs within the City of Saint Paul.

Key Features

The Neighborhood STAR Program is administered by the Department of Planning and Economic Development, and awards loans and grants for capital (bricks and mortar) projects within Saint Paul neighborhoods.

Eligible STAR applicants include for-profit, public and non-profit entities doing business within the City of Saint Paul.

All STAR grants and STAR loans over $50,000 are matched on a minimum dollar for dollar basis with non-city resources.

Neighborhood STAR dollars are for physical improvements with an expected life of seven or more years.

In 2021, Neighborhood STAR funds were awarded through one competitive application process. A virtual orientation was posted to the Neighborhood STAR website in late-January and 74 eligible applications were received by the March 24, 2021 deadline. After an extensive review process, the Mayor and City Council approved 24 loan and grant proposals on August 25, 2021, totaling $1,685,975 and leveraging over $17 million in non-city resources.

Neighborhood STAR Board

Community involvement and participation is essential to the Neighborhood STAR Program’s success. The twenty-one (21) member resident board provides advice and recommendations to elected officials on the Neighborhood STAR and Year-Round STAR Programs. Volunteer members are selected by the Mayor and approved by City Council to serve a four-year term. In addition to being geographically represented, the Neighborhood STAR Board provides a unique cross-section of knowledge and expertise.

2021 Members

Charlie VanderAarde, Chair
Angela Burns Finney, Vice Chair
Terri Banaszewski
RaeAnna Buchholz
Roxanne Draugh
Marjorie Ebensteiner
Jeremiah Ellis
Derek Anders-Turner
Owen Hansen
Erin Heelan
Chris Leifeld
Angelique McDonald
Fatima Moore
Patrick Ruble
Jon Schumacher
Jim Stahlmann
Tong Thao
Juliana Wilkins

Accomplishments & Outside Investment

Since 1995, Neighborhood STAR has assisted over 1,100 projects and programs with more than $128 million in grant and loan assistance. These funds are estimated to have generated more than $1.3 billion dollars of private investments throughout the City of Saint Paul.

Loan Component

Loan funds are available to non-profit and for-profit entities whose projects and/or programs would result in desirable improvements within Saint Paul neighborhoods. Fifteen (15) loans were awarded via the 2021 annual Neighborhood STAR Program equaling $629,311.

Neighborhood STAR Allocations

In 2021, the adjusted budget for Neighborhood STAR’s portion of half-cent sales tax collections equaled $9,877,300. From this total, $3,500,000 supported ongoing city debt for neighborhood investments; $2,938,425 was committed to repaying STAR economic development bonds; $476,348 was dedicated to the Neighborhood STAR Year-Round Program; $1,525,000 supported the City Capital Program; an additional $112,727.27 supported the replacement of portable fire department radios, $15,000 was allocated to Investment Services, and $1,422,527 was dedicated to the primary subject of this report, the 2021 Neighborhood STAR Program’s annual competitive application process of investing in Saint Paul‘s vitality and businesses, tax base and job growth and the city’s Cultural Destination Areas.

STAR Economic Development Bonds

In 2005, the Minnesota Legislature provided the City of Saint Paul bonding authority for economic development investments supported by up to 20 percent of the revenue from the city’s half-cent sales tax. In 2007, the City of Saint Paul issued $25 million in economic development bonds to capitalize the Invest Saint Paul Program. In 2021, $2,938,425 was budgeted to this initiative. To date, $30,740,159 of Neighborhood STAR funds have been dedicated to economic development bond repayments.

Investment Services

Beginning in 2016, an annual allocation of $15,000 of the Neighborhood STAR Program budget was dedicated to city investments services. To date, $90,000 has supported this activity.

Debt Service

In 2003, the Mayor and City Council approved the use of Neighborhood STAR dollars for city debt service. Legislation adopted in 2005 and amended in 2009 capped funding for general city debt service at $3.5 million per year. In 2013, the law was once again amended to remove the cap and allow expenditures for “any economic development purpose,” which may include debt service. In 2021, $3,500,000 of Neighborhood STAR dollars were budgeted for general debt service totaling more than $68.4 million to date supporting this initiative.

City Capital Project Program

An annual allocation of $1,525,000 in Neighborhood STAR dollars began in 2006 for the lease or purchase of police, fire and parks vehicles and/or city equipment. In 2015, an additional $1.1 million was dedicated to this initiative. The 2021 allocation of $1,525,000 plus $112,727 for portable fire radios brings the accumulative total of Neighborhood STAR funds for city capital projects to $25,036,413.

2021 Neighborhood STAR Program Awards

(24 total awards - sorted in ward order)

Project	Ward	Loan	Grant
Victoria Theater Arts Center Renovation	1	$0	$100,000
West Indies Soul Food Project	1	$100,000	$100,000
Sterling Club Renovations	1	$32,800	$35,000
The Sanneh Foundation HQ Renovations	1	$0	$100,000
Little Szechuan on University Ave	1	$16,333	$16,333
Frogtown Crossroads	1	$10,000	$40,000
Best Roof for Best Steak	1	$7,500	$7,500
Beautiful Laundrette Landscaping & Mural	2	$7,000	$7,000
Papa Legba LLC	2	$25,000	$25,000
Seasoned Specialty Food Market	2	$0	$38,000
HVAC at 678 West 7th Street	2	$26,000	$0
Cafe Astoria LLC DBA Stella Belle	2	$0	$25,000
White Squirrel	2	$20,000	$20,000
Waldmann Kitchen Gardens & Greenspace	2	$28,798	$12,342
Childcare Center in Work it Building	4	$0	$27,275
OMG Studios	4	$100,000	$100,000
Business Building Renovation	4	$0	$20,000
Keystone Community Food Site	4	$0	$56,334
North End Revitalization Program IV	5	$0	$100,000
1624 Expansion	6	$50,000	$50,000
Plaza del Sol	6	$60,000	$20,000
1229 Payne Ave Rehab	6	$45,880	$45,880
Wakan Tipi Center	7	$100,000	$100,000
SSANEW Housing	7	$0	$11,000
	Totals	$629,111	$1,056,664

2021 Year-Round STAR Program Awards

The Mayor or City Council Members recommend STAR funds for individual projects throughout the year. The Neighborhood STAR Board reviews and ranks each proposal and forwards their recommendations to the Mayor and City Council for final approval. In 2021, seventeen (17) grants were awarded through the Year-Round STAR Program equaling $471,396 and leveraging an anticipated $478,416 in outside investments.

Project	Ward	Grant
Victoria Theater	1	$50,000
Wacouta Tot Lot	2	$25,000
Five Star Cafe	2	$10,000
Joey Meatballs	2	$15,000
Highland Sidewalk	3	$19,463
AEDS Snelling Project	4	$65,000
Black Garnet Books	4	$100,000
Urban Roots Water	5	$24,933
TST Catering	5	$45,000
China Friendship Garden	6	$15,000
Sir Boxing Gym	6	$15,000
Far East Restaurant	6	$15,000
NE Neighborhood Gardens	6	$10,000
Mounds Theatre	7	$12,000
G.W. Carver Cultural Center	7	$15,000
75 Market Deli	7	$15,000
St. Paul Saloon	7	$20,000
	Total	$471,396