JOBZ

The JOBZ program marked an important milestone last month when the very first company to sign on for JOBZ benefits — Andersen Corporation — flung open the doors and invited people in to see its new facility in North Branch. Andersen Corporation — the world’s largest manufacturer of wood windows, patio doors and storm doors — marked its grand opening with an open house on August 12 for more than 80 people. They included state and local government officials, contractors and construction workers, and Andersen employees, who were treated to a tour of the new facility.

Andersen selected the North Branch site after an extensive search in both Minnesota and Wisconsin. As late as the fall of 2003, the company was leaning toward a move to Menominee, Wisconsin, but abruptly shifted its attention back to Minnesota when company officials realized that JOBZ benefits could tip the scales in favor of their home state. The company selected the Industrial Estates site in North Branch for a new 150,000-square foot extrusion facility. It had outgrown an existing plant in White Bear Lake, where the company employed 40 employees. Some of those employees have already been transferred to the new facility, and all have been invited to move when the White Bear Lake facility closes down within the next several months. Andersen expects about 135 people to work at the new plant when it becomes fully operational over the next few years.

In the photo above Andersen President and CEO Jim Humphrey (second from right) greets Rep. Steve Sviggum, Speaker of the Minnesota House of Representatives (second from left, in safety glasses). On the left is Tom McGough, Sr., president of McGough Construction Company of St. Paul (the contractor for Andersen’s expansion project) and on the right is North Branch Mayor Gloria Karsky.

Return to Top

Opening a daylong forum in Hibbing, DEED Commissioner Matt Kramer characterized the JOBZ initiative as “a work in progress” that — while already achieving some remarkable successes — is destined for a lifetime of review and fine-tuning. The commissioner’s characterization held up throughout the day, as speakers, panelists and presenters offered analysis and views from all perspectives of Minnesota’s marquee rural economic development initiative.

The August 18 forum, co-sponsored by DEED and the Center for Rural Policy and Development (CRPD), was billed as an evaluation of the first six months of the program’s 12-year life. JOBZ earned plenty of good reviews — and some less than stellar reviews as well. Overall, the consensus matched Commissioner Kramer’s assertion that “JOBZ is going to change every year” because like all such programs, it “needs to be tweaked in concert with the economy.”

The forum — “Working the Deal: JOBZ in 2004” — was attended by scores of zone and sub-zone administrators, local government officials, economic developers, academics, business people and other interested stakeholders. CRPD President Jack Geller and Bob Isaacson, director of DEED’s Office of Analysis and Evaluation, presented reports on JOBZ’s progress to date based on surveys of businesses and subzone administrators. Their reports are available for download, along with PowerPoint presentations used by a first-rate collection of speakers that cover such topics as business location decisions, marketing, and deal evaluation at the local level.

To download these reports and presentations, click on: http://www.mnsu.edu/ruralmn/pages/Policyforum2004/policyforum2004.html

Return to Top

While it is always appropriate to encourage businesses located outside of a JOBZ area to expand onto any parcel in the zone, remember that communities are expressly prohibited from actively recruiting businesses from other JOBZ communities — a practice sometimes referred to as “poaching.” It’s not just DEED policy, but wise business practice to refrain from poaching. If anyone becomes aware of a JOBZ community that intends to use JOBZ benefits to recruit businesses away from another JOBZ community, please contact DEED immediately. The department will then conduct an investigation to determine whether a state intervention is necessary.

Return to Top

In response to growing demand from local officials, economic developers and sub-zone administrators, DEED is planning a series of JOBZ technical training workshops throughout the month of October. These training sessions are designed to answer questions about statutory requirements, DEED and Department of Revenue policies and procedures, and other issues surrounding the administration of local JOBZones. The training sessions will be offered without charge in five locations around the state. E-mail information on all workshops will be sent to all JOBZ Newz subscribers about September 15.

To Register now for a Workshop: RSVP Irene Dassier at irene.dassier@state.mn.us identifying the workshop you plan to attend, and listing the names and affiliation of participants. Use “WORKSHOP RSVP” in the subject line.

• ST. CLOUD
  Date: Friday, October 1
  Place: Minnesota Center for Business Development, 616 Roosevelt Road, St. Cloud, MN 56301
• BEMIDJI
  Date: Friday, October 22
  Place: Beltrami Electric Cooperative Community Room, Beltrami Electric Cooperative, 4111 Technology Dr. NW, Bemidji, MN 56601
• MARSHALL
  Date: Monday, October 18
  Place: Southwest Minnesota State University, 1501 State Street, Marshall, MN 56258
• ROCHESTER
  Date: Monday, October 25
  Place: Heintz Center, Rochester Community and Technical College, 1926 College View Road SE, Rochester, MN 55904
• DULUTH
  Date: Thursday October 28
  Place: Kirby Ballroom, University of MN-Duluth 1120 Kirby Drive, Duluth, MN 55812

Return to Top

Good news — the JOBZ Zone modification process has been simplified and clarified to make it easier to use. Complete information about the revised process is available at: http://www.deed.state.mn.us/bizdev/PDFs/jobzZoneModifProc.pdf

The Zone modification process is used when “swapping” acres from a current JOB Zone to parcels in — or outside — another JOBZ zone. Modifications will be considered if there is a qualified business ready to locate onto the requested parcels. A written request should be made by the sub-zone administrator to the appropriate DEED representative listed at the end of this document. This request should also be forwarded to the zone administrator for an opportunity to comment. Resolutions from the city, county and school district are not needed in relation to the “donated” acres, but must be submitted where the new acres are being requested.

Return to Top

A new JOBZ-exclusive search form is up and operating on the MNPRO site. The new “Property Search” function allows companies and individuals to search exclusively for sites within the state’s 10 Job Opportunity Building Zones. Users may view all properties within all zones or search by property specifications within individual zones, counties or communities.

This new feature gives us the opportunity to remind you again to please list your JOBZ properties on MNPRO. It’s fast, it’s easy, and it’s one of the most effective ways to ensure that the right people notice that JOBZ properties are available in your communities. Posting properties expands your potential market and is strongly recommended for all communities in Minnesota.

MNPRO is a comprehensive database of commercial and industrial land and buildings available throughout Minnesota, as well as community profiles. It is available at no cost to the public online at www.mnpro.com.

Return to Top

The investment decisions of business executives are critical in shaping Minnesota’s economy. Businesses invest in locations that maximize growth and profits, and DEED wants to know how Greater Minnesota is positioned to attract that investment. As part of the JOBZ initiative, all JOBZ businesses are asked to complete a brief business survey to help us and legislators better understand how Greater Minnesota’s attributes influenced business location decisions. It is a brief survey and should take fewer than five minutes to complete. Please indicate your zone at the bottom of the second page before forwarding it to DEED. If you have any questions about this survey, please contact Bob Isaacson at 651-297-3615, 1-800-657-3858 or bob.isaacson@state.mn.us.

Return to Top

With about 70 completed deals under its belt after eight short months, the Minnesota JOBZ initiative now has a host of success stories to use as case studies for marketing the program to companies. We recommend that local and regional JOBZ zones use a one-page executive summary incorporating a format called SOAR (Situation, Obstacle, Action, Result) to capture the ability of JOBZ to deliver value to business. For example:

1. Situation: A local business needed additional manufacturing capacity in order to add several more product lines in its market.
2. Obstacle(s): Capital investment and workforce costs of increasing manufacturing capacity were delaying the expansion and international competitors were lining up to take permanent hold of the market niche.
3. Action: After analyzing the business’s ability to capture market share while adding manufacturing capacity, the company used JOBZ tax exemptions to help relieve some capital investment and workforce start-up costs. The business began ordering additional equipment, expanding its facility and creating new jobs.
4. Result: Two months after increasing capacity, the business has captured additional market share in its niche industry, attracted a supplier that is moving a satellite plant into a nearby JOBZ zone, and projects a positive return on its investment.

By creating these snapshots of successful JOBZ projects from the business perspective, you can build an arsenal of marketing material to showcase the program’s value to potential JOBZ businesses. Case studies presented as a one-page flyer or PowerPoint presentation, or posted on a regional economic development web site reveal not what could happen, but what is happening. You’ll be able to clearly demonstrate the power of JOBZ.

For additional guidance on putting these SOAR reports together please contact Brad Canham, JOBZ Marketing, 952-346-4006.

The Marketing Best Practices column is an idea exchange. We know many communities have come up with some very good marketing ideas. This is the place to share them with others. If you wish to share marketing ideas, please send them — along with photos or other collateral materials — to John Fisher at DEED. You can use e-mail, john.d.fisher@state.mn.us or phone, 651-282-6791.

Return to Top

The countdown has started toward the mid-October release of the Twin Cities Business Monthly JOBZ supplement. Six of the 10 JOBZ zones are participating in the special marketing supplement, which is expected to reach our hands on or about October 15 and be inserted into 35,000 copies of the November edition. In addition, 1,500 copies will be mailed to all Fortune 500 companies throughout the U.S., and to the CEOs of every Minnesota bank. All told, we expect the supplement to reach about 81,000 readers, including 81 percent of all Minnesota companies with 50 employees or more and 89 percent of all non-retail businesses in Greater Minnesota with 50 employees or more.

DEED will receive 7,000 copies of the complete supplement and use them as part of a strategic JOBZ marketing effort. And finally, Twin Cities Business Monthly will provide 3,000 reprints of each profile to each of the six participating zones. Additional copies can be purchased directly from the magazine.

The Minnesota Department of Revenue will periodically contribute to this newsletter in an ongoing effort to clarify specific JOBZ-related tax questions.

Zone and sub-zone administrators should be aware that creating a JOBZ project in a TIF district will reduce increments in a TIF district because of the exemption provided by JOBZ. TIF districts will capture neither the exempted taxes nor the general obligation bond debt levies and pre-existing school operating levies. The JOBZ businesses must still pay general obligation debt-related taxes, but the value of the JOBZ improvements — strictly from the TIF perspective — is considered exempt and therefore not included in the retained captured value that yields increment. The taxes attributable to these exceptions to the exemption are still collected but they are not deemed to be tax increment.

Return to Top

The Department of Revenue has received questions about precisely when a business becomes a “qualified” business, and what constitutes “occupied” for purposes of beginning the property tax exemptions. In the first year of JOBZ, a business becomes “qualified” — or eligible for property exemption — from the date on the front page (Section I: Parties) of the Business Subsidy Agreement (BSA). The Department of Revenue will use this date to determine when property tax exemption eligibility occurs. If an agreement is dated June 30, 2004, or earlier, and the BSA does not get sent to DEED until later, sub-zone administrators must notify the assessor’s office of the BSA’s existence before July 1. Otherwise the qualified business will not receive its property tax exemption.

For subsequent years, the word “occupied” means the date on which a business begins operating at the location (not the date of purchase or the date equipment is first stored at the property). Businesses must be operating by July 1 in any year to receive property tax exemptions for that assessment year, payable in the following year.

For more information on these and other questions related to tax policy, contact Jason Nord at the Minnesota Department of Revenue, 651-556-6108.

Return to Top

The Department of Employment and Economic Development has teamed up with the Minnesota Pollution Control Agency to help individuals and businesses trying to navigate the labyrinth of state permitting, licensing and regulatory requirements. The goal is to make regulatory compliance a smoother, friendlier, more efficient and hassle-free experience for Minnesota businesses. And that includes businesses that are planning to take advantage of the incentives offered through the JOBZ program.

We encourage business owners to contact the BizNice Helpdesk (toll free, 888-234-5520) early in the planning process to help determine whether there are any environmental issues that will need to be worked out before construction can begin. An upfront understanding of the regulatory requirements and implications of proposed developments can head off last minute complications and delays. The BizNice Helpdesk can help you:

• Identify applicable permitting, licensing and regulatory requirements;
• Find the necessary information, forms and applications;
• Refer you to other state and local resources;
• Search for new options to protect the environment and save money; and Provide access to valuable, business-friendly information.

Businesses can call the BizNice helpdesk, toll free, 888 234-5520.

Return to Top

In August, we published a short blurb from Governor’s Clean Water Cabinet and Minnesota Environmental Quality Board stressing the importance of understanding the environmental implications of proposed developments and suggesting that early action might head off last minute complications and delays. In that spirit, a new packet of information about JOBZones and Minnesota’s water resources has been developed to aid those involved in economic development planning.

If a project appears to have implications for water, you will be able to get help from the Minnesota Pollution Control Agency, Department of Health and Department of Natural Resources to learn about specific environmental requirements. Below is the web address to go directly to the JOBZ and Environment report: http://www.eqb.state.mn.us/pdf/FileRegister/Environmentalpolicy/JOBZreportnarrative9-8-04.pdf

It is also possible to find the report on the Environmental Quality Board homepage under “Environmental Policy, Planning and Research” subheading: http://www.eqb.state.mn.us

JOBZ Resources The JOBZ initiative is a big program laden with detail and complexity. This newsletter can’t answer every question in a timely way, but here’s a list of key people you can contact if you have questions or comments about the JOBZ program.

General information and details on the JOBZ statute:
Mark Pederson, Department of Revenue: 651-556-4078
Louie Jambois, DEED: 651-297-3172

MNPRO and Community Profiles
Judy Parker, DEED: 651-296-3963

Marketing JOBZ
Brad Canham, DEED: 952-346-4006

Business subsidy policies, public hearings, annual reporting
Ed Hodder, DEED: 651-296-0580

Relocation Agreements and Zone Modifications

East Central Job Zone (7E), Land of the Dancing Sky (NW) Zone, Southern Minnesota Alliance Job Zone, and West Central Job Zone
Kristin Lukes, DEED: 651-296-1149

Northeast Minnesota (Arrowhead) Job Zone, Southwest Job Zone, Brewster Ag Zone, and Upper Minnesota Valley Job Zone (6W)
Lynn Heglund, DEED: 651-282-6789

Headwaters Job Zone, Positively Southern Minnesota Corridor Job Zone, and Region 5 Job Zone
Adam Kienberger, DEED: 651-282-5014

Department of Revenue
Sales Tax: 651-296-6181
Corporate Franchise Tax: 651-297-7000
Partnerships and S Corporations: 651-296-3475
Property Tax: 651-556-6109