A dozen counties close to tax-free bid

Published 12:00 am Saturday, August 30, 2003

Albert Lea and Freeborn County are part of a 12-county conglomerate that has joined together to apply for one of the state’s 10 tax free zones.

According to Pam Bishop, executive vice president of Greater Jobs Inc., who has been representing Albert Lea in this group, the counties joined together to increase their chances of landing a zone.

&uot;Part of the requirement in making application for a JOBZ zone is to develop a regional concept,&uot; she said. &uot;It makes good sense for an I-90 corridor.&uot;

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This summer, the state legislature passed a bill that will allow for 10 5,000-acre tax free &uot;Job Opportunity Building Zones&uot; (JOBZ) in rural Minnesota. The program is designed to help economic development in these areas. Qualified businesses are exempted from the corporate franchise tax; income tax for business operators or investors; sales tax on goods and services used in the zone; and property tax on improvements, but not on land.

Freeborn, Houston, Mower, Fillmore, Faribault, Martin, Jackson, Cottonwood, Watonwan, Blue Earth, Waseca and Brown counties are all joining for the application. The counties stretch from the Wisconsin border west to Worthington and north to New Ulm.

Each county would get approximately 426 acres to designate as tax-free, said Ed Tschida, a consultant who is writing Albert Lea/Freeborn County’s application.

&uot;We just decided to do this as simply as we could,&uot; he said.

Tschida has worked for the city in the past, setting up tax-increment financing and assisting with other business-development efforts.

Lining up all the counties for one application was much easier than he expected.

&uot;All the counties came together very easily on this,&uot; he said.

A template application was put together, so each county could just plug in their information. Tschida said Faribault County hired someone to edit and clean up the final application.

The application is almost finished. By next week, all counties will have their parts done, and will send them to Faribault County to be finalized.

Tschida and others are expecting good news from the state.

&uot;We’re pretty confident we’ll get one,&uot; said Bob Graham, Albert Lea City Planner. &uot;I think there are 10 areas that have shown interest in applying, and there will be 10 zones given out.&uot;

As soon as an area gets a tax-free zone, the 12-year period without taxes begins. Graham said the city is focusing on pre-existing industrial sites that have utilities, roads and water, so they won’t have to waste tax-free years while the sites are prepared.

Tschida said the city has mapped out possible sites, but hasn’t made definite plans yet. One possibility he mentioned was the historic Vault/Freeborn Bank building downtown, which the city owns and hopes a developer will renovate.

&uot;There are no existing businesses being considered,&uot; Tschida said. &uot;We want new businesses, new jobs. We don’t want to use the zones if there will not be reciprocal benefits.&uot;

But, he added, the most likely candidates for the zones would be existing businesses that decide to expand in other locations.

&uot;We would be very pleased if we got a couple of new businesses, but you have to remember that we will be competing with many other cities with JOBZ,&uot; he said.

But marketing, according to Bishop, will be regional.

&uot;We are looking at a marketing effort that would tie us all together,&uot; Bishop said.

She said that many companies have already shown interest in locating in Albert Lea if a tax-free zone located here.

The application will be submitted in mid-September, the state will pick the ten zones on Jan. 1.

Freeborn County will be holding an informational session about the zones for city and township officials at 7 p.m. on Thursday, Sept. 4 at Freeborn-Mower Cooperative Services in Albert Lea.