Lawmakers seek to extend tax exemption to rebuild Mazeppa property destroyed by fire

MAZEPPA — Nearly five years ago, WD’s Bar and Grill in Mazeppa was completely destroyed in an overnight fire. The loss of the historic building, built in 1860 and a local gathering place, made an impact on Mazeppa.

After the fire, then-Rep. Steve Drazkowski, R-Mazeppa, successfully introduced legislation to provide a tax exemption for building materials, supplies and equipment purchased to rebuild at that site. But the COVID-19 pandemic halted rebuilding plans, and the exemption expired on Jan. 1, 2022.

Now, there's an effort to stretch that exemption to 2025.

SB 313 , authored by now-Sen. Drazkowski, was heard by the Senate Tax Committee on Tuesday morning and was held over for potential inclusion in an omnibus bill later this session.

"We put both a property tax exemption and a sales tax exemption initially into law in 2019," Drazkowski said. "The sales tax exemption was never utilized because the property wasn't built, and it still hasn't been rebuilt."

Extending the exemption to Jan. 1, 2025, Drazkowski said, would lower the barriers to entry for the property owners to construct a new building on that site. The lot at 217 First Ave. N. was cleared after the fire, but new construction hasn't started.

Mazeppa city administrator Karl Nahrgang said the WD's property has changed hands since the fire. He testified in support of the bill Tuesday.

Contributed / Minnesota Legislature

"The plan from the individual that owns it now is that they would like to start building this spring," Nahrgang said.

A new investment in Mazeppa, Nahrgang said, could spur more business growth and development in the city of 847 people.

"We don't have a very big downtown, so anything that helps to add on to those, it's a positive in our book," Nahrgang said. "The more amenities you have, the more you have to offer people, the more likely they are to either purchase a home or build a home in your community."

Drazkowski said he's optimistic that SB 313 will pass the Legislature as part of a larger bill this year.

"I've had discussions with the chair of the committee, and she seems to be very supportive," Drazkowski said. "It appears it's likely going to be rolled into the omnibus tax bill in both houses at this point."

Reps. Steve Jacob and Pam Altendorf introduced the companion bill, HF 351 , in the Minnesota House.

The property's new owners could not be reached for comment.