County board OKs tax break for Round Lake facility
WORTHINGTON — Nobles County commissioners on Tuesday approved a request from Ferrara Candy Co. for a three-year, 100-percent tax abatement on the former Farley’s & Sathers facility in Round Lake. The move means the forgiveness of approximately $9,200 in property taxes in 2014, 2015 and 2016.
Nobles County is the second party to take action on the tax abatement request, which was sought by Ferrara as it works out a three-year lease agreement with AGCO Jackson Operations for use of the facility. The city of Round Lake last week approved a $6,500-per-year tax abatement for each of the next three years, while the Round Lake-Brewster School Board opted not to address the tax abatement request.
The abatement will help offset the costs for some of the necessary improvements to the Round Lake facility to make it a workable space for AGCO, manufacturers of agricultural equipment such as the Challenger and Massey Ferguson tractors to Ro-Gators and other implements. Ferrara, meanwhile, will contribute $125,000 to improvements through a reduction in rent to AGCO.
A lease agreement between Ferrara and AGCO has yet to be signed. According to Scott Berglund, senior project manager for AGCO Jackson Operations, the final decision will be made by company officials from the Duluth, Ga., plant.
“At this point, I’m just trying to get the best financial proposal put together and they have to make the decision,” Berglund said. “I was asked to help identify a facility that AGCO can take possession of, at least on a temporary basis.”
In response to questions about the longevity of the lease, Berglund said the three-year term was mutually agreed upon between AGCO and Ferrara. Anything less would not provide a return on investment, he said, adding that a clause is included in the contract giving AGCO the option to buy the Round Lake facility.
If the lease is agreed upon, Berglund said the first phase would include development of warehouse distribution in the former candy packaging and warehousing facility.
“We bring a lot of product in from overseas,” Berglund explained, adding that AGCO leases numerous facilities for parts storage throughout the Midwest and as far away as Kansas City, Mo.
“We want to bring that closer to Jackson,” he said.
Initial plans are to create 20 full-time positions at the Round Lake facility, with the ability to grow as AGCO’s needs warrant.
“This operation will take up about 60 percent of the facility’s capacity,” Berglund said. “Hopefully we’ll get settled in and then start looking at the bigger picture.”
Commissioner Marv Zylstra, who represents the community of Round Lake, urged fellow commissioners to support the tax abatement request.
“Today we have a real opportunity to do something for that building and for the community of Round Lake,” he said. “It’s a win-win for both. For AGCO, it’s 22 miles. What better place to have (a warehouse) than in Round Lake?”
Board chairman Bob Demuth Jr. also spoke in favor of the abatement.
“It had to be very painful for the city of Round Lake to give ($6,500) than for us to give $9,000,” he said. “I think it’s a darn cheap investment.”
Commissioner Don Linssen said AGCO is a known commodity and also supported the request. Commissioners approved the tax abatement unanimously.
County administration was directed to draw up an agreement to present to Ferrara for the tax abatement.
In other action Tuesday, the board:
- Approved a financial advisory service agreement with Northland Securities and approved the refunding of two general obligation bonds for Prairie Justice Center. Refunding the bonds at this time will result in an annual savings of $75,000 per year for the next eight years.
- Approved a 2013 budget amendment for the Nobles County Public Works department. As a result of last April’s ice storm and overtime for disaster cleanup, snow and ice removal — along with two bridge replacements and other projects — the department exceeded the amount budgeted for expenditures. By amending the budget, the department can pay its contractors for work already completed.
- Accepted the final contract and payment of $21,444.78 to Larson Crane Service for the replacement of bridges near Kinbrae and Worthington.
- Approved a maintenance agreement with the Minnesota Department of Transportation for winter maintenance of Minnesota 264 between Interstate 90 and the community of Round Lake.
- Approved a Minnesota Department of Health Master Grant contract amendment, which extends the current contract with Nobles County Community Services through 2014. The $139,459 grant funds maternal child health programming.
- Approved a memorandum of understanding between Nobles County Community Services and Des Moines Valley Health and Human Services (Cottonwood and Jackson counties) for a shared, grant-funded position that will work primarily on tobacco, obesity, nutrition and activity initiatives.
- Approved the extension of the flexible scheduling pilot project for the Nobles County Attorney’s office, Assessor’s office, Public Works and the Recorder’s office through Dec. 31, 2014. Flexible scheduling will also continue for Nobles County Community Services, which implemented the option four months ago. Community Services Director Stacie Golombiecki said the program has “provided us a lot of benefit. Overall, it’s been extremely positive.”
- Approved a 3 p.m. closure of county offices on Dec. 24.
- Recognized Nobles County Environmental Officer Mark Koster with the Excellence in Performance Award for the month of November.