Posted: 10/8/03

Tax-free zone in the works for Polaris Industries plan

Alice Pickering
Wyoming Area Reporter

The financial tool to entice Polaris to locate near Wyoming, instead of somewhere in Wisconsin, is likely to be a job opportunity building zone.

A resolution approving the creating of a JOBZ program sub-zone and authorizing tax exemptions was passed unanimously by the Wyoming City Council Monday night.

Discussion before the vote was specifically about the cityís wastewater treatment site. Governing bodies of the township and the city unanimously passed a joint resolution to annex the wastewater treatment property to the city during special meetings on Sept. 30.

This allows the city to designate specific areas that would be temporarily tax-free zones. This resolution was passed for purposes of enticing Polaris Industries to locate at the city-owned wastewater treatment site.

Financial advisor Sid Inman explained that the new program was created during the 2003 legislative session. It is basically a financial tool that creates tax-free zones to encourage businesses to locate in an area. Inman said he, along with many others, is learning about its implications and implementation.

Enticements for businesses to locate have been some form of tax abatement for a period of years or the creation of a tax increment finance district. The first is a form of reimbursement for a period of years to pay for land or specific improvements. In the second, a portion of the taxes generated as a result of increased property value are used for the same purpose.

According to Inman, a business located in a JOBZ is forgiven all taxes for between eight and 12 years, a negotiated period of time. At the end of the negotiated period of years, the company begins to pay city, county and state taxes.

At a time when states are competing for businesses, he explained that the program can make a difference to a company choosing in which state it should locate its business.

However, the city was counting on $3 million from the Polaris deal to pay for infrastructure to connect the city with the regional waste-water treatment system.

Inman is proposing sale of general obligation bonds for the city to generate funds it needs to hook-up to the system. Council member Martin English wanted specific information from Inman about the type of bonds to be sold.

Other questions Monday were related to minimizing financial risk for the city and residential taxpayers.

Public hearings are to be scheduled about any tax abatement programs to be considered after the JOBZ expires. There will also be information about the development agreement.

An application for tax-free designation is being prepared for submission to the Minnesota Department of Employment and Economic Development regarding the cityís wastewater treatment site. All the terms must be negotiated.

The strength of this financial tool is to help create jobs, the consultant said. The limitation, at least initially, is that there are no commercial taxes generated for the negotiated period of the JOBZ.

Temte will retire

Council unanimously voted to accept the letter of retirement from Police Chief Mike Temte. According to the letter, Temteís effective date of retirement is Jan. 23, 2004.

The chiefís decision was announced at the Sept. 30 special meeting, but no details were available at that time.

The personnel committee will begin meetings soon to determine timing of retirement and work out financial details.

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