Spring Valley will receive $265,423 from the Rochester sales tax option as a result of Rochester City Council action Monday, June 17.

Spring Valley was targeted to receive $265,423 for economic development over the next two years when the state Legislature in 2012 allowed, and voters approved, Rochester's sales tax extension request with the condition that $5 million of the sales tax proceeds go to 17 area cities for economic development purposes.

However, in the most recent legislative session, a provision was added that the Rochester City Council must hold a public hearing and approve the distribution again.

In April, Rep. Tina Liebling (DFL-Rochester) said she would fight to take the money back and use it toward Mayo Clinic's Destination Medical Center initiative, although that bid was unsuccessful in the state Legislature. She did get the Legislature to give the Rochester council one more chance to review the issue and she continued her opposition after the legislative session by urging the Rochester council to vote down the proposal.

However, at Monday's meeting, there was no opposition. In fact, council member Ed Hruska said he was disappointed the issue was back before the council, according to the Post Bulletin, which had a reporter at the meeting.

Rep. Greg Davids (R-Preston), who was instrumental in getting the original language in the bill when he was chairperson of the House Taxes Committee, had earlier argued that the state can't go in and reverse the decision of the voters. The half-cent sales tax option went before the voters in Rochester last fall. The proposal, which included the language regarding the distribution to surrounding communities, was approved by 65 percent of the voters.

Rochester council members said that they want to be good neighbors and realize that the communities surrounding Rochester contribute to the sales tax money available.

With the final action of the Rochester City Council, Spring Valley and the other 16 cities will have funds available in two distributions this year and next to use for economic development projects. Earlier, Rochester officials said they would generally leave the details to the individual cities as long as they meet the state requirements.

Spring Valley City Administrator Deb Zimmer said that since Rochester issued a bond for the funds, rather than waiting until the sales tax money came in, the city will have to abide by the decision of its bonding attorney. There are restrictions on how funds raised through bonds can be used and some uses, such as housing incentives, may not be allowed, depending on the opinion of the attorney.

The Spring Valley City Council has discussed that a large portion of the funds be used for a matching grant to improve highway access of the industrial park.

The Spring Valley EDA has also recommended that a small portion of the funds be considered for a demolition account to help take down buildings on lots that could be used for new businesses. Another idea was to set aside funds for development of lodging, in particular bed and breakfast inns. The EDA would also like some of the funds to be used for housing incentives if allowed.