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JOBZ stalled over standards for businesses

Concerns of labor leaders and some city councilors have stalled action on adopting standards for tax free development areas. The standards pertaining to jobs and wages would become part of Duluth business subsidy policy. Known as "Job Opportunity...

Concerns of labor leaders and some city councilors have stalled action on adopting standards for tax free development areas.

The standards pertaining to jobs and wages would become part of Duluth business subsidy policy.

Known as "Job Opportunity Building Zones" or "JOBZ," 11 designated properties in Duluth can provide businesses with a 12-year exemption from state and local taxes.

To qualify, businesses have to start-up, relocate or expand in the zone and meet city criteria for job creation, wage and investment goals. The state program was designed to encourage economic development in Greater Minnesota and excludes the Twin Cities.

It was rolled out last December with numerous sites designated in St. Louis County and has since been adjusted with some boundary changes. After being delayed once, the new Duluth plan unanimously approved Monday has tax free zones ranging from two to 96 acres. The list includes the Atlas Cement plant site, the Airpark, the harbor and Stora Enso.

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But concerns came up as the council faced setting the job and wage requirements for businesses to get the tax breaks.

"We should set a very high standard," said Eric Lehto, a director with AFSCME Council 96. He suggested a worker retention rule, a local hire requirement, a higher wage than the proposed $9 an hour and project labor agreements.

"The community should get a substantial benefit from it," said Alan Netland, president of the Duluth Central Labor Body. "We have the opportunity to set a wage standard and health care as well."

David Ross, president and CEO of the Duluth Chamber of Commerce, said the goal of the program is attract high paying manufacturing jobs to Duluth. He said those sites could not be developed without this support and urged the council not to initiate requirements that would be detrimental.

"This has very big financial consequences," said Councilor Greg Gilbert, who wants to hear from more residents. "The public needs to think about it."

"This is a boondoggle we can thank both parties for," said Councilor Russ Stewart. "... Taxpayers at large will lose."

"If we hold this up, we're going to lose a company," said Councilor Neill Atkins, referring to the Atlas Cement site, which has a potential business ready to relocate.

Council President Jim Stauber opposed delaying action as well. "We do have a number of local businesses waiting for our approval to expand," he said.

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But Councilors Laurie Johnson and Donnie Ness also wanted more time to review the resolution. The vote was 6-3 to table it for future action.

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