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JOBZ application deadline nears
by Bob Reha, Minnesota Public Radio
September 4, 2003

Vacant lots like this one in Perham, Minnesota could receive Job Zone status soon. Economic development officals in Perham, Minnesota hope lots like this will become part of the JOBZ program. (MPR Photo/Bob Reha)

Building or rebuilding a healthy economy is a tough job, especially in rural Minnesota. This year, small towns across the state are hoping to use a new tool for economic development, provided by the legislature. Minnesota's new Job Opportunity Building Zones, or JOBZ, allows cities to offer lucrative incentives to developing businesses in the designated areas.

Perham, Minn. — Louie Jambois is Community Development Director for the Minnesota Department of Employment and Economic Development. He says all someone needs to apply for the JobZone designation is a piece of land.

"The primary characteristic of this zone is the tax exemptions, both local property tax and a variety of state tax exemptions, become attached to that property," says Jambois. "That property then is used to entice business expansion or business development there."

Jambois says his department will select ten zones in the state. Each zone covers 5,000 acres. The zone can be split into sub-zones spread over a much larger area. Jambois says the state develops a formula to select the zone. It considers a broad variety of factors.

"The worse off an area is, the higher it scores on the socio-economic criteria," says Jambois. "That's poverty rate, income level, housing prices, business start ups and expansions, job loss, business closures stuff."

Jambois says the formula doesn't focus only on the negative. It also looks for factors which would make the zone attractive to businesses, such as facilities, transportation and work force. The goal of the JOBZ program is not to boost an individual community, but to build strong economic pockets across the state. Many areas are working on their Job Zone proposals.

Nancy Straw is Director of the West Central Initiative. The Fergus Falls based foundation is coordinating a Job Zone application for nine counties. Straw says the application will include 28 communities.

	Nancy Straw

"Of those, a majority of them are looking at only putting in 40 to a 100 acres," says Straw. "So even if all 28 of them put in 200 acres, we still wouldn't be at a total of 5,000 acres for the region."

Straw says because a Job Zone can be sub-divided, the economic benefit can be spread around. Straw says part of the application process is to identify land that communities own or plan to acquire. Then officials from the city, county and school district must agree the land could be a tax exempt development.

Rural communities say it's better to have new businesses paying some taxes, than a vacant lot or an empty building which pays very little by comparison.

	Chuck Johnson

Perham, in northwest Minnesota is a bustling little town with a thriving mainstreet. Chuck Johnson is the director of the Perham Economic Development Authority.

Johnson likes the idea of Perham being part of a Job Zone. He says it would be another tool he can use to attract businesses to the community.

But Johnson says being selected as a Job Zone is not a cure all. He says communities are mistaken if they think such a designation will solve their economic problems.

"Communities that have resources and things that they can sell, this makes that stronger. If you don't have resources and things you can sell, this is going to be tougher to compete against the others," says Johnson. "I think it's going to create a wider range of the have's and the have nots."

Johnson expects Perham to continue to do well, but some communities will gain no advantage from the JOBZ initiative. Applications for the Job Opportunity Building Zones are due October 15th. Zones will be designated December 31st.

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