Caledonia Argus

Hearing set for EDA projects

Posted: 4/20/04

By Shannon McKinney
Argus News Reporter

Two tax abatement applications for job development in Houston County were approved for public hearings by commissioners Tuesday, April 13.

The hearings for the projects are scheduled for Tuesday, May 11.

Kermit McRae, Economic Development Authority (EDA) president, appeared before board members in place of Joyce Iverson, EDA Director, to describe the applications.

John and Eileen Loken plan to build a 4 unit apartment complex and a 10 unit motel in Houston to serve the tourism industry and meet housing needs.

They are seeking to abate up to 75 percent of total taxes on new construction in the first six years and 50 percent on the last four years to not exceed $25,500 in a 10 year period.

The total square footage of construction will be 6,600. Part of the construction will include 1,200 square feet for a second floor. There will also be a small room in back where small game can be processed.

The Lokens will raze a car wash that is currently located on the property. After construction, the estimated market value of the land and structure will be $550,000. The property will also increase the taxes from $2,000 to $13,000.

John and Eileen appeared before board members to show the construction plans. ìWe have wanted to do this for quite a awhile. Then, the EPA (Environmental Protection Agency) came down last year and sped the process along,î said Loken.

He explained that the EPA required upgrades to the car wash that were too expensive, so now seemed like a good time to build.

The business will be called ìLokenís Sawmill Motel and Apartments.î It will employ at least two part time employees.

Their business subsidy application received 85 points out of a possible 100. Applicants need to score at least 75 points to qualify.

Commissioner Dave Corcoran stated, ìThatís the type of business weíre looking for. Itís a real benefit in that area.î

Loken said he hopes to have the project completed by November 1, 2005.

Winona Controls application

The board approved a public hearing for abating taxes for the construction of a facility for Randy Klinski of Caledonia, who owns and operates a division of Winona Controls. He is looking to expand in the industrial park in Caledonia.

He is seeking abatement of taxes on the new construction at 75 percent for the first six years and 50 percent for the last four years not to exceed $10,000.

Klinski bought a division of Winona Controls in 1998 and has six full time employees. He currently operates his business from his farm.

The proposed building will be made of steel and measure 80'x80'.

The total estimated market value on the land and structure is $250,000 and the taxes generated by the new construction would be $7,694.

Although Winona Controls pays its journeyman between $24.55 and $30.86 per hour, the application did not guarantee an increase in its labor force. In his application Klinski stated, ìWe feel strongly that our new facility would help maintain our operations and provide us with the opportunity to continue our current growth rate.î

Hearing set for JOBZ program

The board approved a public hearing for considering JOBZ subsidy business criteria.

McRae recommended that a public hearing be held despite a letter from Heather Gray, Spring Grove, who believes Houston County should not be telling city governments how much new businesses should pay its employees. Gray objected to the wording where any business applying in the JOB Zone must pay an employee $9.73 per hour for every $20,000 of tax benefit it receives. The hourly wage represents 110 percent of the poverty level in Minnesota.

Commissioner Kevin Kelleher said, ìIf we want to subsidize a business, we donít want to want to subsidize the working poor. The state set it (JOBZ) up. We were the responsible party. This isnít saying that the developer goes through this program.î

He added, ìAll weíre offering is another tool.î

McRae suggested comments be made at the public hearing or at the next board meeting.

Commissioner Ann Thompson said, ìItís a good time to air objections and concerns.î

Highway agreement approved

The county gave permission for the highway department to prepare an agreement between themselves and Yaggy Colby Consulting to share in the inspection services for the county project with regards to the grading and resurfacing of Co. Rd. 29 in La Crescent.

The total expenses are estimated at $157,00. The county will be responsible for 60 percent of the cost, or $94,000.

The agreement will prevent services from being duplicated because Yaggy Colby Consulting will already be doing inspection services for the city of La Crescent.

MCIT report

Commissioners received a member report from Bob Goede, account executive for MCIT (Minnesota Counties Insurance Trust.) Houston County has been a member of it for 25 years.

MCIT was formed with other counties as a way to pool resources and manage claims effectively.

Each year the county receives dividends from its contributions. In 2002 and 2003 dividends decreased because reinsurance companies were backing away from government entities because of the 911 crisis.

For example, in 2002 the countyís contribution was $168,587 with a dividend of $153,752. Then, in 2002, the contribution was $153,465 and the dividend was $74,009.

Houston Countyís contribution for 2004 is $206,906. The dividend is yet to be determined.

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