County hustles to have tax abatement for Coin-tainer

Mille Lacs County Commissioners gave a nod to changing the county’s tax abatement policy that would compete with Sherburne County’s policy in order to entice Coin-Tainer, whose plant in Milaca was destroyed by fire Jan. 15, to rebuild in Milaca.
The Mille Lacs commissioners, along with County Administrator Roxy Traxler and county Development Coordinator Richard Baker came to that decision during the commissioners’ April 15 workshop.
Coin-Tainer is a manufacturer of coin and currency handling products, including paper rolls used to hold packs of coins.
After the devastating fire, Coin-Tainer owners Dave and Barbara Walters regrouped to continue operating by contracting with competitive manufacturers. Dave Walters said in early March that he had repositioned 25 of the company’s 63 workers to continue operations at a rental space in a facility in Elk River. He also said at that time that he plans to rebuild in Milaca.
The Mille Lacs board, in response to the Coin-Tainer fire, modified its tax abatement policy to include helping businesses, through tax abatement, whose facilities have been destroyed by some disaster.
But Mille Lacs commissioners appear not to be assuming anything, perhaps getting a little concerned that the Walters may find it more to their benefit to rebuild in Sherburne County, considering Sherburne’s tax abatement policy would be more generous than Mille Lacs’ – that is, if Mille Lacs County didn’t modify its tax abatement policy.
Baker noted that Sherburne can offer tax abatement for up to 20 years for qualifying applicants. Traxler told the board on April 15 that the state allows tax abatements for up to 15 years, with a additional five years to make a total of 20 in certain cases.
Historically, Mille Lacs County aimed its tax abatement policy to help a business in a seven to 10 year time frame and not go longer, Traxler said.
Mille Lacs Commissioner Phil Peterson presented concerns about what precedent the county would set by having a policy allowing 20 years of tax abatement for a business.
Baker asked the Mille Lacs commissioners if they want to see Milaca and the county permanently lose the jobs and the contractor business that Coin-Tainer had before the fire. Baker suggested that Mille Lacs could change some wording in its tax abatement policy to extend the number of years that it could help a business through tax abatement.
Traxler noted that Mille Lacs’ tax abatement policy uses a point system to arrive at the number of years a business would qualify for tax abatement. Factors that affect the amount of points include number of jobs that would result, the pay scale and the amount of taxes produced, Traxler said. She cautioned that to just have a policy allowing 20 years for everyone would result in everyone asking for such.
One option would be to increase the number of points in order to get a tax abatement with 15 possible years, and then have a clause in which the County Board could add another five years, Traxler said.
“From an all-business standpoint, it doesn’t make sense for it (Coin-Tainer) to come back here,” Baker said.
He explained that Coin-Tainer could operate in a 50,000-square-foot building with leased space in it. So if the Walters decide to rebuild in Milaca, it could be partly based on “emotions,” such as the final outcome’s effect on the employees, Baker said.
One thing that could “tip the balance” in favor of rebuilding in Milaca is that a 30,000-square-foot standalone building without any lease arrangement in Milaca might be the most desirable, Baker said.
Traxler noted that just modifying the tax abatement policy does not mean deciding if a business is to get as many as 20 years of tax abatement. The first step is for the business to make an application, and Coin-Tainer has not made one, Traxler said.
After more discussion, Baker asked for the board’s direction on what he could offer business owners who are asking what Mille Lacs County could do in tax abatement. Baker mentioned that he knows of a company in Mille Lacs County considering adding a nearly $500,000 addition.
Baker noted that Coin-Tainer is obligated to pay the full property tax for the remainder of this year but that next year, if its building were not rebuilt in Milaca, the county would only receive the tax on the value of the land the building was on.
A new building in Milaca that has been talked about for Coin-Tainer could produce $19,147 in taxes per year, and the tax abatement could be $18,364 per year when subtracting the value of the land, Baker said.
Peterson noted that public input during the forming of the new Mille Lacs County comprehensive plan supported removal of regulatory burdens that businesses find in locating in the county.
Traxler asked if the board would be comfortable going up to 20 years for tax abatement even if an applicant doesn’t qualify under the point system. The concern is how consistent the board would be in applying the policy, Traxler added.
Commissioner Roger Tellinghuisen said that Heggies Pizza, since relocating its manufacturing plant from Onamia to Milaca with the county’s tax abatement help, has been growing since then. He said he feels that the more local people a business hires, the more valuable the business is to the area, and then the tax abatement would be more worthwhile.
Baker said that the city of Elk River and the county of Sherburne could offer as much tax assistance as $44,000 per year for 20 years under a certain scenario for Coin-Tainer. The commissioners agreed that Mille Lacs could offer about $40,000 per year to Coin-Tainer over 20 years if it granted Coin-Tainer the abatement.
Baker was asked if he has a “gut feeling” as to whether the Walters would rebuild Coin-Tainer in Milaca and Baker said he couldn’t answer that.
Traxler and Baker had three suggested options to consider for changing the tax abatement policy in Mille Lacs County and favored the third the most.
That option states: “Multiply points by 1.5 (rounding up or down to conform) which puts tax abatement policy in line with Minnesota statutes. And, in an effort to spur commercial development we add another lower tier and lower the minimum point requirements. Plus include the clause: The county board may choose to increase or limit the tax abatement period.”
Baker and Traxler pressed again for the board to answer if the board could entertain giving a 20-year tax abatement while negotiating an agreement with applicants.
Tellinghuisen asked Baker if he has seen any paperwork showing that Coin-Tainer could get 20 years of tax abatement in Sherburne County and Baker answered that it has been part of negotiation-type discussions.
The Mille Lacs Board then agreed that Baker could tell future applicants that the board, under a revised tax abatement policy, could look at a 20-year tax abatement possibility. The commissioners agreed they liked the idea of having that discretion.