Business Park one step closer to new occupantBy approving both a new development district and a new Tax Increment Finance (TIF) District Tuesday, the Cloquet City Council took one more step toward a deal that would help finance a new building in the Cloquet Business Park off Highway 33 north, just past Stark Road.
By: Jana Peterson, Pine Journal
By approving both a new development district and a new Tax Increment Finance (TIF) District Tuesday, the Cloquet City Council took one more step toward a deal that would help finance a new building in the Cloquet Business Park off Highway 33 north, just past Stark Road.
Daqota Systems, a local engineering and manufacturing company with offices here and in McKinleyville, Calif., wants to build an 18,000-square-foot industrial manufacturing facility on two of the four lots they’ve purchased in the industrial section of the business park. The company has been working with the city for several years on a comprehensive business assistance package, which includes both Tax Increment Financing and a loan from the city’s revolving loan funds.
After hearing no objections during Tuesday’s three public hearings regarding the issue, council members voted to approve the creation of Development District No. 3 and TIF District 3-1. The new development district would include the entire Cloquet Business Park, while the TIF district covers only the four Daqota lots.
City Administrator Brian Fritsinger said it’s been a long time coming.
“We’ve been working on this project for about seven years,” Fritsinger said. “The use of Tax Increment Financing as a financing tool has helped us get the developer to move forward with the construction of the project, which will result in new property taxes for the community and new jobs.”
The maximum amount of TIF funds the company could qualify for is $256,000, and the city is proposing a loan of $300,000 from existing revolving loan funds. The term is 20 years at 3 percent interest. The project would generate approximately $19,189 in new local property taxes, but those would be captured by the TIF district for up to 10 years as part of the agreement with Daqota Systems.
Currently Daqota operates out of rental space in the west end of Cloquet and employs between 7 and 10 people here. The new project will create an additional 10 to 15 new jobs, which will average a minimum of $25 an hour, according to the purchase and development agreement between the city and the company. Daqota designs and builds industrial control systems; they also provide engineering and programming services for several industries including forest products, water treatment, food processing and power generation in the United States and internationally.
Daqota would like to break ground on the project later this summer.