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City Council committee backs formalizing Jennie-O subsidy agreement

WILLMAR — The Community Development Committee will recommend the City Council approve written documents that formalize earlier council approval of the land transfer and business subsidy for Jennie-O Turkey Store’s office expansion project.

The council will consider the committee’s recommendation during the 7 p.m. meeting today at the Municipal Utilities Building.

The council voted May 5 to amend the boundary of a 1989 municipal development district created under state law to assist with economic development in southwest Willmar.

Jennie-O’s Willmar Avenue Southwest turkey processing plant and corporate offices are located within that district.

The amendment allowed the city to add the former State Highway 40 roadbed and the remnant parcel at the south end of the Public Works Department property to the district where the expansion will take place.

Also, the council approved a tax increment financing (TIF) plan for the expansion. Under TIF, the estimated $82,542 annual increase in property taxes generated by the project will be paid back to Jennie-O to help cover the company’s cost of new access, parking improvements, lighting, utility extensions and relocation, soil correction, and storm water controls.

The eight-year TIF plan is estimated to make $594,304 in reimbursement available to Jennie-O for those costs.

Jennie-O will construct a 35,000-square-foot, $6-million-to-$7-million addition to the corporate offices. The expansion will primarily house administration, accounting, engineering, sales and logistics functions for the processing operations.

Bruce Peterson, director of planning and development services, said the closing date on the agreement is July 1. After that date, the city intends to detour traffic on Willmar Avenue and close old Highway 40 where Jennie-O can begin work within the right-of-way of the former highway.

“That’s really the key is to get (Jennie-O) access to that right-of-way so they can start their site preparation,’’ Peterson told the committee last week. “There’s a lot of utility work that has to occur: electrical water, gas, Charter, En-Tel. Jennie-O has been working with all of them to accomplish that.’’

Peterson said the agreement is consistent with every other developer agreement the city ever done. It includes goals that the company must meet as part of the business subsidy program.

“If they do not meet those goals, they have to pay back a portion of those costs. It references the business subsidy act for the state of Minnesota,’’ Peterson said.

He said the city is extremely well protected. The written documents accurately represent earlier council action.

Peterson said he’s been trying to keep the project on track. But he said Jennie-O has been frustrated by the fact that BNSF Railway has not been in town to complete the new Willmar Avenue Southwest crossing. Completion of the crossing will enable Duininck Inc. to complete the roadwork.

Peterson said the city, the Minnesota Chamber of Commerce and the city’s engineering consultant Bolton and Menk have requested BNSF get the work done.

“We have found out that July 14 is the date now that BNSF has committed to,’’ Peterson said.

In other business, the council will hold the assessment hearing for the 2014 improvement projects, and receive the annual storm water permit and pollution prevent presentation.

The council will receive comments from the public during the open forum; will receive reports from the Finance Committee and Public Works/Safety Committee; and will consider the master plan for the city parks.

Also, the council will meet with Willmar Fests royalty and review events.

David Little
David Little covers the Willmar City Council, Willmar Municipal Utilities and other city news.
(320) 235-1150