New Ulm receives JOBZ designation

SE, Springfield, Comfrey get

piece of pie

By FRITZ BUSCH

Journal Staff Writer

BROWN COUNTY -- Economic development prospects in greater Minnesota got a shot in the arm Thursday when Gov. Tim Pawlenty unveiled the boundaries of the new Job Opportunity Building Zones (JOBZ).

He called the approved tax-free zones the most significant economic initiative in state history. The JOBZ zones cover 10 geographic regions, 28,902 acres and 325 sub-zone communities. Eleven counties surrounding the Twin Cities metro area were excluded.

The program was created to stimulate economic development activity in distressed areas of Minnesota by providing local and state tax exemptions. Taxes thrown out the window for 12 years include those on corporate franchises, operators, investors, business purchases, capital gains and property taxes. High-paying jobs will get an employment tax credit.

The Positively Southern Minnesota JOBZ Growth Corridor -- which included Brown, Blue Earth, Watonwan, Cottonwood, Waseca and counties along I-90 from Jackson to the Wisconsin border -- was the biggest winner with 4,271 acres approved in 57 communities.

New Ulm got all 215 acres it requested approved for the program. Baudette was the biggest winner with 862 acres. Bemidji got 710, Wyoming 611, Crookston 503 and Marshall 499.

The New Ulm Economic Development Corporation touted the 2004 JOBZ tax-free zones its its Web site even before Thursday's announcement.

Sleepy Eye earmarked 88 acres on the south, west and northeast edges of town in its application. The land would enable Del Monte Corp. and Norwood Promotional Products to expand their plants.

Sleepy Eye Economic Development Director Rob Anderson said he was excited about the news. He considered the acreage more than adequate to identify development needs well into the future.

Mark Kober, Sleepy Eye City Manager, said Norwood and Del Monte stand a good chance of expansion. He added that the designated acres that were approved are not cut in stone and could be changed to different land.

Kober was thankful for the help he got in New Ulm.

"It's great, a tool that can really let us compete with other states," Kober said. "I think we'll see benefits. Expansion in New Ulm is good for us too, and vice versa. I'm glad (New Ulm Economic Development Director) Brian Tohal really spearheaded our effort. He did a good job, an awful lot of work. We really appreciate his efforts."

Mac Tilberg -- Springfield City Manager/Economic Development Director --said his community applied for about 50 acres of tax-free land near Coleman Powermate and the industrial park west of town.

"It's the main wrench in our economic development toolbox," Tilberg said. "We were challenged last year by Coleman. They wanted to expand or close and move to Kearney, Neb. We scrambled and did a phenomenal amount of work to get low-interest loans for them to be competitive with Nebraska tax rates."

Tilberg said he appreciated the JOBZ program because it packages everything together now when firms want to expand. He credited the work of Tohal and state rep. Brad Finstad of New Ulm for getting Brown County included in the Positively Southern Minnesota JOBZ Growth Corridor.

Comfrey applied for nearly 18 acres of land in the JOBZ program on the south edge of town along BCSAH 17, near the Cenex store. Hanska did not participate in the program.

Small area communities that did not get into the program included Butterfield-Odin, Henderson, Paxton Township in Redwood County, and Milroy, according to a news release by Rep. Matt Entenza, the House DFL Leader.

Other small towns that were rejected by JOBZ included Onamia, Barnesville, Deer River, Nashwauk, Buhl, Floodwood, Elkton, Lanesboro, Hersey Township in Nobles County, Taunton (near Willmar) and Atwater.

Entenza said he didn't think places like Wyoming, Minn., in the northeast corner of the metro area, should get bigger zones than most rural cities.

Other gripes about the JOBZ program are that it forces state and local governments to forfeit tax revenue and will pit existing businesses against tax-free zone businesses.

Overall, state communities applied for JOBZ designation for 38,281 acres. About one-fourth of the acreage was rejected.

The Associated Press contributed to this story.