The Cost
The Community Center investment plan will cost approximately $116 million. The city will use a voter-approved half-cent sales tax levy, state bonding funds, and other funding sources to finance the plan.
Here’s a look at the three primary sources of funding:
Half-cent sales tax increase
In November 2022, Maple Grove voters approved a half-cent sales tax increase to generate $90 million in revenue for the Community Center project. The half-cent sales tax went into effect on April 1, 2023.
State bonding funds
During the 2023 session, the Minnesota Legislature approved an omnibus bonding bill that included $6 million for the design of the Maple Grove Community Center renovation and expansion.
Other sources, including sponsorships and donations
The city will pursue additional funding through sponsorships and donations, including contributions from athletic associations.
Why a sales tax?
A half-cent sales tax ensures that both residents and nonresidents share in the cost to reinvest in the Community Center.
Fifty-five percent of the half-cent sales tax will be paid by nonresidents, according to research by the University of Minnesota. That means nonresidents will contribute about $49.5 million for the Community Center project through a sales tax, based on the University of Minnesota’s estimates. If the project was paid with property taxes, the cost burden would fall solely on Maple Grove residents who own or rent residential or commercial property in the city.
The City Council explored other ways to pay for the Community Center project and considered whether to spread out the improvements in phases over several years. In the end, the council determined that moving forward now with a more comprehensive improvement plan would be the best way to provide the services residents are seeking for the future and decided to present that option to voters.
How will the sales tax impact me?
The half-cent sales tax amounts to a ½ cent for every $1 spent. For example, a $10 purchase will cost an additional 5 cents if the half-cent sales tax is approved. The average cost of the half-cent sales tax per Maple Grove resident will be approximately $38.40 per year, according to research by the University of Minnesota. That’s about $3.20 per month.
Here’s another way to think about the impact of the sales tax. Ehlers, the City of Maple Grove's financial consultant, analyzed the impact of the sales tax based on household income. The analysis determined that the sales tax will cost a total of $78 per year (or about $6.50 a month) for households with a median income of $113,793.
