Daqota Systems requests TIF to build in Cloquet Business Park

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An engineering and automation business has proposed building a 36,000-square-foot building on two of the four lots they’ve purchased in the industrial section of the Cloquet Business Park.

Daqota Systems, a local company with offices in Cloquet’s historic west end and in McKinleyville, Calif., has been working with the city for several years to secure a deal. In recent weeks, they provided a preliminary and final application which includes seeking tax increment financing (TIF) assistance.

The project, expected to cost just over $2.3 million, includes $200,000 in TIF assistance, which is a designation that currently does not exist at the park. So, the city would have to designate the Daqota parcels of land as a TIF district for it to qualify.

The Cloquet City Council took the first step in the process at Tuesday’s city council meeting when they unanimously approved holding a public hearing on the matter at 7 p.m. Tuesday, June 15, at Cloquet City Hall.

The project seems to fall under the TIF guidelines, according to a memo written by Cloquet’s financial advisors at Ehlers and Associates. TIF uses the additional property taxes paid as a result of development in the district to pay for part of the development costs.

According to the application submitted by Tim Woodward, Daqota Systems president, “the use of TIF funds will allow Daqota to move forward with the construction of a new facility … that we otherwise would be unable to fund.”

The bulk of the remaining funding is coming through private financing institutions, along with $300,000 in “other public funds” and $400,000 in developer equity.

If Daqota and the city come to an agreement, they would begin building as soon as later this year and would be the second business to move to the Business Park. Cloquet Home Center built a new facility there in 2007 after their building was destroyed in a fire.

The Cloquet Business Park, built in 2006 for $4 million, is 120 acres with commercial sites for retail and office businesses and light industrial sites for manufacturing and offices, according to Fritsinger. The park also features a mile-long asphalt walking trail around the edge of the park near trees and wetlands.

“It’s nice to see it at this point,” said council member Deb Hill about the Daqota project.

“It will mean a lot to the community to have another business locate in the park,” Fritsinger added.

Tags: city council, news, business, tif, cloquet