WILLMAR -- The Minnesota Tax Court has approved stipulations to tax agreements between the owners of the Prairie Correction Facility in Appleton, Swift County and the city of Appleton.
The stipulation, which is to a 2003 agreement between the parties, was filed Friday in Swift County District Court, according to Byron Giese, Swift County auditor. It allows the county to value the 1,600-bed medium-security prison at $24 million for 2007 payable taxes, $28 million for 2008 and $32 million for 2009.
The owner of the prison, Correctional Corporation of America, had appealed the county's valuation of $31.9 million for the facility in 2007. Previously, the prison was valued at $14 million as part of the 2003 agreement.
The city of Appleton's portion of the agreement includes raising the minimum amount of taxes the city can receive from the prison for the years 2010 to 2014 and lowering the maximum amount of taxes that can be abated on the property from 2007 to 2014.
Under the previous agreement, the city is guaranteed $200,000 of taxes per year until 2009 from the facility, according to Bob Thompson, city coordinator for Appleton. The new stipulation guarantees the city $300,000 in tax revenue from the prison per year from 2010 to 2014. It also reduces the potential tax abatement to $160,000 per year; previously the abatement was $200,000 per year.
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The county continues to be guaranteed $100,000 in taxes per year, Giese said. The maximum abatement by the county remains at $200,000 per year, as part of the 2003 agreement.
The increased valuation will mean more tax dollars paid to the city and county.
For example, Thompson explained, the city's preliminary estimate for tax dollars on the prison property for 2007 is $483,000, less the abatement of $160,000, leaving the city's net tax on the property at $283,000, based on the $24 million valuation of the property.
Correctional Corporation of America has owned the facility since 1996, according to the company's web site. The facility hosts male inmates from Minnesota and Washington.
Steve Owen, spokesman for the Correctional Corporation of America, said the company appreciates the good faith effort between all the parties involved to reach the agreement.
"We are pleased that everyone has come up with an amicable agreement," he said. "The result is a settlement that works for everybody."
