To promote economic development, Sherburne County has helped plenty of businesses locate within the county by providing property tax abatements. 

 

Historically, the decision to offer an abatement has been based on a number of criteria, including the amount of property taxes generated, the number of jobs created, wages paid and the overall economic impact to the area.

 

Last week, at a county workshop, Assistant Administrator Dan Weber introduced proposed changes to the county’s abatement policy, which hasn’t been updated since it was created in 2008.

 

Under the current system, a business seeking an abatement would present its project to county administration, where it is reviewed by the economic development specialist, county administrator, county auditor and county attorney.

 

They go over the project and use a scoring system to determine if it meets the requirements for an abatement. The group makes a recommendation to the county board for approval or denial.

 

Under the proposed policy revision, the project would first go to the Sherburne County Economic Development Authority (EDA) for review.    

 

 Another proposed change is lowering the amount of equity a business must provide from 20% to 10% to make more people eligible for an abatement.

 

Wages will be required to meet the MIT living wage calculation, which is based on the cost of living within a particular community, as opposed to the  Occupational Employment Statistics (OES), which is a semi-annual survey of approximately 200,000 non-farm business establishments conducted by the Bureau of Labor Statistics.

 

Weber said under the new policy, the “But For” test, which is used to show how a project couldn’t proceed without an abatement, would be eliminated from the process. 

 

“It used to be that a project couldn’t start until all the approvals were done,” he said. “This give us a little more flexibility, but it is replaced by an economic analysis scoring system.”

 

Weber said the county now has a new software program called IMPLAN, which can improve and accelerate the scoring process.

 

“I input the number of jobs or total sales a project has and it automatically calculates figures in two minutes,” said Weber. “It lists all the jobs the business has and it will automatically give you the economic impact analysis the project will create.” 

 

The program also shows indirect and induced jobs  the project will create, like in the supplier chain and transportation, and it calculates the money employees will be spending in the community at restaurants, for groceries and other items.

 

The software cost about $1,100 a year. 

 

“I think that’s a pretty reasonable amount,” said Weber. The “But For” test is $1,500.”

 

The policy would also take into account the scoring in relation to the amount being requested. In the past, if a project scored moderately high or higher it received 100% of the abatement requested. Now, with a tiered system, if it scores in a moderate range, it only gets a portion of the request.

 

 Weber said another change will be adding bonus points for projects that relocate from outside the area, like Iowa or Wisconsin.

 

“We want to award them more points than someone who is coming from Wright County to Sherburne County,” he said. “The theory is we don’t want to be stealing (businesses) from our neighbors.” 

 

The new policy is expected to be presented to the board for its approval in September.