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County applies for tax-free zone program

St. Louis County will participate in the regional application for a tax free job development zone. Known as "JOBZ," the goal of the state program is to spur economic growth by creating up to 10 tax exempt zones outside of the Twin Cities metro ar...

St. Louis County will participate in the regional application for a tax free job development zone.

  Known as "JOBZ," the goal of the state program is to spur economic growth by creating up to 10 tax exempt zones outside of the Twin Cities metro area to attract development.

Each zone can have up to 5,000 acres spread across multiple locations and noncontiguous sub-zones.

The Arrowhead Regional Development Agency, which represents Aitkin, Carlton, Cook, Itasca, Koochiching, Lake and St. Louis counties, has put together a proposal representing 52 communities and 78 sub-zones.

ARDC director John Chell said the application totals 5,600 acres, two-thirds of which are in St. Louis County. The list includes 800 acres in Duluth. More than half of that is at Duluth International Airport to accommodate the possibility of having a Boeing plant or a Bombardier maintenance facility.

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Bombardier, Inc., a Canadian company, builds Learjets, regional aircraft, rail transportation equipment and recreation vehicles. It is considering a new aircraft service center to provide maintenance for its fleet of regional aircraft in the western part of North America. Duluth submitted a proposal for the service center last year and was to provide the company with more financial details last month.

The city also made an unsuccessful effort to have the state waive about $780,000 in sale taxes for materials, equipment and supplies used in constructing the Bombardier facility, which could create 300 jobs. However, Gov. Tim Pawlenty did meet with Bombardier officials in September to discuss state support for the project.

Boeing is considering building a new commercial jet that will mark a number of changes in the industry, while bringing some lucky city a possible 1,000 jobs. Numerous communities are competing for the project with a variety of enticements.

And even though the state has given up on trying to attract Boeing, Duluth may continue its efforts through Congressman Jim Oberstar's office.

Chell said unsuccessful development attempts -- particularly that associated with Boeing -- would be subtracted from the total acreage in the JOBZ application.

The list includes sites throughout the region from McGregor to Grand Marais. After Duluth, the largest site is 323 acres at the Chisholm Hibbing Airport, followed by the 300 acre Cliffs/Erie property in Hoyt Lakes. Balkan Township has a 240 acre site on Highway 5 and Hibbing has a 206 acre site at the North Hibbing Industrial Park.

Most of the proposed sites are considerably smaller, ranging down to a half acre in Warba. Proctor and Cloquet have each submitted three sites, and Silver Bay has two, including the North Shore Mining property.

Duluth's proposed tax free zones include the Garfield Avenue rail yards, the Clyde Iron site and the Atlas Cement site in West Duluth, which the city is in the process of purchasing. Those total about 125 acres.

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Other city sites are the Stora Enso paper mill expansion area, 14 acres, the DM&IR yard, 40 acres and about 140 acres spread over various properties at the Airpark, the port area and airport land.

While the statute permits commercial and industrial land uses, the Minnesota Department of Employment and Economic Development wants the zones focused on industrial land with the capacity to create high paying jobs.

Chell told the county board this week that he expects a decision shortly after the first of the year. The board passed a resolution approving the designated areas and approving the use of tax exemptions.

The tax exemptions may be give to qualified individuals, businesses and property for a maximum of 12 years.

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