The Port gets JOBZ

New development tool ‘isn’t about taxes; it’s about jobs’

The Port Authority added a powerful new economic development tool in December when more than 140 acres of Port Authority-controlled properties were designated tax-free Job Opportunity Building Zones.

The zones are part of a plan by Minnesota Gov. Tim Pawlenty to stimulate jobs and business development. “These have been called ‘tax-free zones’ in the past; but they’re not about taxes, they’re about jobs. JOBZ will empower communities to attract new and better jobs in greater Minnesota,” said Gov. Pawlenty.

“Many communities need an economic development tool with this kind of muscle behind it. They recognize JOB Zones have real strength to stimulate business startups, expansions and relocations and — most important — retain and grow jobs,” he said.

In all, Minnesota’s designated zones cover 10 geographic regions containing a total of 28,902 acres with 325 sub-zone communities. The seven-county Arrowhead region, including Duluth, received 4,000 acres from an application jointly submitted by the Arrowhead Regional Development Commission (ARDC) and the Iron Range Resources agency. The Department of Employment and Economic Development (DEED) was the agency reviewing applications.

Duluth’s share totaled 351 acres, with the Port Authority’s 140-acre portion including parcels at its industrial park adjacent to the Duluth International Airport and certain waterfront properties as well.

Minnesota’s JOBZ program was modeled on plans used by other states, including Michigan’s Renaissance Zones, started in 1996, and Pennsylvania’s Keystone Opportunity Zones, launched in 1999, with tax incentives designed to help new and expanding companies facilitate growth by lowering overall costs.

“It’s putting another tool in the bag,” said Steve Raukar, Port Authority and St. Louis County Commissioner and ARDC board chair. “It is a historic decision to help businesses looking to grow in the northland,” he said.

Eligible businesses in the zones will be allowed to operate in an environment nearly free of state and local taxes. To qualify for the exemptions, a business must start up in the zone, relocate from outside the zone or expand. Companies relocating from another Minnesota site qualify by increasing employment by 20 percent within the first year or making capital investments of at least 10 percent of gross revenues. In addition, businesses must also meet local business assistance goals to qualify for tax exemptions. The exemptions are available for up to 12 years.

For more information on the JOBZ program, including tax benefit calculations, contact the Port Authority at:

(218) 727-8525
Fax (218) 727-6888
amcdonough@duluthport.com
www.duluthport.com

The total number of companies now operating on Port Authority properties is 51 with more than 1,075 employees.