Mille Lacs County has come through with a tax abatement offer for Dave Walters, owner of Coin-Tainer. Walters is considering rebuilding in the Milaca industrial park where his factory was destroyed by fire the evening of Jan. 15.
The county’s offer, which the County Board approved at its July 15 business meeting, comes about a month after the Milaca City Council approved an offer for abating city property taxes.
The term of the county property tax abatement shall be the earlier of 12 consecutive years, commencing with taxes payable in 2016 or when the county abatement payments total $277,788. The county has calculated that the estimated annual county property tax abatement would be $23,149.
The Milaca city tax abatement offer is for 15 years for a total of $325,785, with the possibility of extending the abatement of city property tax out to 20 years to give a total city abatement of $438,380.
If Walters accepted the tax abatement offers from both Milaca and Mille Lacs County, the total tax benefit would range from $603,573 to $716,168, depending on if the Milaca city’s tax abatement is for the extended period.
Both the county and city offers carry job and wage goals to be met by Coin-Tainer. The county’s tax abatement, for example, calls for Coin-Tainer retaining at least 29 full-time-equivalent jobs in the county and increasing the number of full-time-equivalent jobs to 35 within 24 months and to a total of 40 within five years. The county proposal also calls for Coin-Tainer, if it should accept the abatement, to maintain jobs for the abatement term. The full-time-equivalent positions would have to include a wage of at least $11 per hour including benefits.
The county’s tax abatement also carries remedies if Coin-Tainer does not meet the operation and job goals, namely having to repay the tax abatement subsidies according to a formula based on the number of years into the abatement period when the goals were not met.
Walters was not at the County Board meeting when commissioners approved the offer July 15, but he was at the Milaca City Council meeting when the council approved its tax abatement.
The Mille Lacs County commissioners met in a workshop about two months ago with Richard Baker, the county’s economic development coordinator, to discuss how the county might set up a tax abatement agreement. Baker at that time told the commissioners that the county had competition in Elk River for offering tax incentives to have Coin-Tainer re-establish its manufacturing of paper coin wrappers and other currency containers.
Later, when the county had drafted the tax abatement that the County Board recently approved, Baker said that between the Mille Lacs County and Milaca city tax abatement offers, they should at least match what Walters might be offered to stay in Elk River.
Not long after the fire destroyed the Coin-Tainer factory, Walters set up operation in rented space in Elk River to continue being a nationwide supplier of his products.
One of the Mille Lacs County commissioners asked Mille Lacs County Administrator Roxy Traxler during the commissioners’ workshop July 15 what happens next. Traxler said it is now up to Walters to make the next move.
The commissioners did not discuss the tax abatement during their regular business meeting because the abatement was part of the meeting’s consent agenda. The board approved the 11-subject consent agenda in one motion without any discussion.
Old Coin-Tainer building site clear
The concrete pad where the burned metal-clad building had housed the Coin-Tainer operation in the Milaca industrial park is now cleared off. If Walters should decide to rebuild there, it’s likely the decision would come soon to take advantage of the most favorable construction-season weather remaining this year.
The county already had a tax abatement program before the Coin-Tainer fire, but it didn’t have a provision for helping a business due to a facility being destroyed. As one of the commissioners explained it, when such a calamity happens, it is like having to build brand new.
Mille Lacs County is relatively poor as far as having tax-producing industrial or business properties compared to Sherburne and some other counties. Having Coin-Tainer rebuild in the county would not only be a boon for the county’s tax revenue, but would mean restoring some of the indirect business benefits that were lost when Coin-Tainer left Milaca after the fire. That would include local suppliers that might have lost some business from Coin-Tainer, plus businesses that workers patronize, like restaurants, gas stations and grocery outlets.