Brown

County

staying out of JOBZ

controversy

By KURT NESBITT

Journal Staff Writer

NEW ULM -- Even though they agree with much of its language, Brown County officials likely will not vote on a resolution that asks the state to exclude some large, area cities from the state JOBZ program designed to help economically depressed areas.

Martin County officials recently approached commissioners and administrators in many area counties with the resolution.

Most of the counties approached are part of an application for Job Opportunity Building Zones, a state program that would provide tax breaks and tax credits to encourage economic development for parts of Minnesota that are economically struggling.

Ten groups representing parts of about 76 Minnesota counties submitted applications earlier this month. Brown County joined Cottonwood, parts of Blue Earth, Waseca, Houston, Filmore, Mower, Freeborn, Faribault, Martin and most of Jackson County in making its application. That group decided to deliberately leave out Mankato, North Mankato, Rochester and Winona over concerns that the state would frown on the application, because those cities have prospered with little help from the state.

But representatives of those cities recently met with officials from the Minnesota Department of Employment and Economic Development and learned that the state would allow them to make applications, provided that the applications were made for troubled property only. The application, which also includes the city of St. Peter along with Le Sueur, Rice, Goodhue, Wabasha, Steele, Dodge, Olmsted, Winona and Blue Earth counties, was made through the Region 9 Regional Development Commission, a regional development group that many area counties support.

"We were wondering if we could apply and the state said we could as long as we used under-utilized properties," said Rick Fazio, executive director of the Greater Mankato Economic Development Commission. "This is not for prime real estate by any means."

Fazio said Mankato is interested in JOBZ designations for some vacant city property in the downtown area, an old, vacant industrial park and a 150-year old building that he said is facing demolition.

The resolution says that while North Mankato, Mankato, Rochester and Winona aren't specifically left out of the program, they would nonetheless be excluded from JOBZ. It asks the state, the Department of Revenue and the Department of Economic Security to "respect the true intent of the legislation as passed and the representations made to 'economically depressed rural areas' during the debate on the legislation and eliminate the likes of Mankato, North Mankato, Rochester and Winona from any JOBZ application.'

"My impression of the legislative intent is that it's for areas that are depressed. Clearly, Mankato and Rochester are doing better than some areas around them so it's a question of what is economically depressed," said New Ulm Economic Development Corporation Director Brian Tohal. "When we put together our application, we specifically excluded Mankato and Rochester and we did that because we thought it would stay true to the intent of the legislation."

Brown County declared its intent to support the regional application in July. That vote was followed by similar actions in city councils and school boards in Sleepy Eye and Springfield. Brown County administrator Chuck Enter said the county board is not planning to take any action on Martin County's idea, saying that county officials will likely let the process run its course.

"We're kind of caught in the middle," said commissioner Andrew Lochner. "Officially, the board isn't going to take any action because we're a part of Region 9."

JOBZ is a state program created during the last legislative session that will allow 10 zones where businesses will be exempt from every state tax for no longer than 12 years. The program is geared towards the communities with the most economic distress. Applicants were required to submit detailed development plans that centered on how they could use a JOBZ designation to attract business development in their area.

A team of representatives from the Department of Revenue, the Office of the State Demographer and several divisions within the Department of Employment and Economic Security is currently reviewing the applications. The review is expected by the end of this year with the JOBZ designations taking effect on Jan. 1, 2004.