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Commentary: The compelling reasons to support Jennie-O project

By Steve Salzer

Willmar Area Development Corporation

The Willmar Area Development Corporation primarily consists of business persons from Willmar and Kandiyohi County; our purpose is to support business activity in our area. In recent years we have actively supported Bushmills, the MinnWest Technology Campus, Buhler Manufacturing, the Burlington Northern Santa Fe Railroad bypass and industrial park service expansion project and, now, the Jennie-O Turkey Store two-phase expansion.

With several components of the Jennie-O project before the city, county and school district, it is appropriate that we indicate our project support and some reasons why we feel there are significant local benefits received from the company’s location in Willmar/Kandiyohi County and west central Minnesota.

A leader in a strong local economy

Jennie-O is the leader in regional employment and customer of goods and services. A study of the net economic effect of the company will reveal the company makes nearly a billion-dollar difference in our region.

Jennie-O Turkey Store belongs as a leading member of the list of reasons why Willmar is a regional center. There are an abundance of local economic and social benefits derived from regional leadership that are realized in our city and county.

The company has kept its headquarters element in Willmar and Kandiyohi County. It has been the practice of Hormel, the Jennie-O Turkey Store parent company, to absorb senior management into its Austin operations. The corporate recognition of the unique characteristics and strengths of local company management has kept many well-paying jobs in Willmar and Kandiyohi County.

Why we specifically support the Jennie-O two-phase project

The corporate investment in capacity in Phase One will likely secure the Jennie-O Turkey Store headquarters in Willmar/Kandiyohi County for the foreseeable future. This, of course, retains many well-paying and significant jobs with their corresponding effect on the population and economic activity.

The project’s second phase will make ready our new industrial park for significant corporate growth. The new company activity may come in several market-driven manners but the expanded headquarters element gives Willmar/Kandiyohi County an advantage compared to other “seeking to grow their industry” communities.

All projects have risk but the Jennie-O Phase One and Phase Two elements have minimal risk for the local tax payer:

The first phase solidifies the local opportunity to keep the Jennie-O Turkey Store headquarters in Willmar and Kandiyohi County. The project will retain and expand the local employment base and it will create a significant local building project with corresponding increase in property taxes.

The second phase of the project will allow substantial new corporate growth with minimal taxpayer risk. We support utilizing the city’s new industrial park land buy-down program. This program allows the company to reduce the purchase price of the land as a result of new corporate buildings and new employment. The net amount of reduction is a formula created by the city and is a result of the new growth (tax base) and employment increases.

There will be a variety of meetings and public hearings on the first and second phase of the project with oversight of the Willmar City Council and public input opportunity. There are a list of eligible expenses that will cause the need for tax increment financing (TIF) for this project. A review of TIF will indicate the taxes previously paid by the company to the city, county and school district will remain in place. The new taxes that are a result of new corporate growth may be used to pay for the eligible activities for a limited number of years.

Again, any use of tax increment financing requires public hearings, public input and development agreements all designed to protect the taxpayer’s interest.

A review of Willmar Area Development Corporation support for the Jennie-O Turkey Store project will reveal the business community is in favor of an expanding local economy. We realize the leadership position Jennie-O has in the health of the local economy and it is in our interest to secure their long-tern corporate headquarters and provide the likely opportunity for future company growth.

We believe the public participation is reasonable when comparing the potential size of the project and the economic development participation of other similarly sized communities in Minnesota. We believe the public risk is minimal with cash TIF benefits paid only after the company first pays its now expanded property taxes. We support this project and hope you do as well.

Steve Salzer is chairman of the Willmar Area Development Corporation.