Willmar, Minn., City Council OKs tax abatement policy
WILLMAR -- Willmar City Council members now have a policy to guide their decisions on granting or rejecting tax abatements for business and economic development.
The policy was recommended by the Community Development Committee and approved by the council Monday night.
The council had asked Bruce Peterson, director of planning and development services, to draft a policy to be used as a guide to review and evaluate tax abatement requests.
The council can approve or reject an abatement request, but Peterson said the policy gives the council the necessary legal support for its decisions.
The four-page policy includes sections on purpose, statutory authority, eligible uses, approval criteria, evaluation criteria, project financing, and application and fees. Peterson said it was necessary to keep the policy simple.
Mayor Frank Yanish thanked Peterson for drafting the policy and said it was a job well done.
Peterson researched and reviewed other tax abatement policies and drafted a policy that will guide the use of tax abatement as an economic development tool, while at the same time giving the city flexibility to consider and make informed decisions on tax abatement requests.
Tax abatement is defined as a reduction of, or exemption from, taxes granted by a government for a specified period, usually to encourage certain activities such as investment in capital equipment.
According to information provided by Peterson, the city first used tax abatement as an economic development tool in 2004 to assist Gurley's Foods with a major expansion. Gurley's abatement expires in 2015 and is not to exceed $34,000.
Abatement has been used to assist four other projects:
n Northern Factory Sales, expired 2012; abatement total: $17,371.
n MinnWest Technology Campus, expires 2016; abatement allowed on non-JOBZ properties because the balance of the campus is in a JOBZ district, which also expires at the end of 2016.
n West Central Steel, expires 2016; abatement not to exceed $44,500.
n Torgerson Properties, 2016 to 2025; abatement not to exceed $189,750.
Peterson has said each abatement project has been successful, reflecting the proper use of abatement as an economic development tool.