Five major Minnesota businesses benefiting from tax breaks and government aid
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Several big companies that plan to expand existing operations or start new ones in Minnesota got a big financial lift from the state's lawmakers in the legislative session that ended this week.
The funding that will help Rochester and the non-profit Mayo Clinic develop a destination medical center got the most headlines. But millions in subsidies also are headed to the Mall of America, and three members of the S&P 500--3M, Baxter International and Emerson Electric.
Here's a brief look at the taxpayer funds for each, based on local figures from respective city managers, and official State of Minnesota figures. Click on the audio link above to hear reporter Annie Baxter talk about the subject in more detail.
EMERSON ELECTRIC
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The company wants to take over a vacant property in Shakopee and convert it to a plant that manufactures industrial measurement and controls.
Local contribution: The city, Scott County and school district have come together for $4.5 million in assistance in the form of tax abatement, waiver of fees, and a forgivable loan.
State contribution: Sales tax exemption for construction materials on the project estimated at $860,000.
Jobs: Emerson is promising as many as 400 new jobs, and a supposed related 1,200 spinoff jobs. Sixty percent of them are engineering and administrative, 40 percent are manufacturing. If Emerson fails to make due on its promises for job creation, the company has to pay back a portion of the money from the tax abatement.
3M
The company is planning a research lab that will be built on the 3M campus in Maplewood. A few older structures will be demolished in order for the structure to be built.
Local contribution: Tax increment financing up to $14.5 million.
State contribution: Sales tax exemption for construction materials on the project estimated at $4.1 million.
Jobs: No new jobs are promised, but there are supposed to be 700 research scientists working in the facility, so 3M billed the project as involving job retention.
BAXTER INTERNATIONAL
The company wants to reconfigure a vacant biotech building in Brooklyn Park and manufacture what may be a pharmaceutical product. The city has to sign off on the purpose of the facility.
Local contribution: Financing on the existing structure is valued at $500,000. Tax abatement would range from $1 million -$1.6 million over a 10 year period. It's tied to the number of jobs they create and the wage levels.
State contribution: The sales tax exemption on construction material used in the project is estimated at $7.4 million.
Jobs: Baxter is expecting to create up to 200 jobs. If they don't deliver on full promise, the tax abatement decreases.
MALL OF AMERICA
The mall is about to begin the second phase of its expansion. Its preliminary development plan includes a mix of hotels, more retail space, office space, a water park and an ice skating rink.
Local contribution: The City of Bloomington will get up to $250 million from the Twin Cities Metropolitan Area Fiscal Disparities Fund. The amount of funding is contingent on the development projections. Public money for the project goes into pipes, pavement and parking.
State contribution: $24 million over a four-year period.
Jobs: The project will supposedly generate 5,000-7,000 construction jobs and 5,000-6,000 permanent jobs.
THE MAYO CLINIC
Mayo is promoting a "destination medical center" that will allow it to add new space to the clinic's existing buildings, upgrade patient rooms, and add research buildings. There will also be related infrastructure construction in Rochester.
Local contribution: $128 million.
State contribution: $457 million in the form of sales tax exemption for construction materials, state infrastructure aid, and state transit aid.
Jobs: Mayo officials estimate the expansion will add up to 15,000 highly paid medical positions and another 25,000 spin-off jobs in southeastern Minnesota.
