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Published May 07, 2014, 09:58 AM

Council takes steps to advance Jennie-O expansion

The Willmar City Council has taken steps to advance development of Jennie-O Turkey Store’s corporate office expansion project.

By: David Little , Forum News Service

WILLMAR, Minn. — The Willmar City Council has taken steps to advance development of Jennie-O Turkey Store’s corporate office expansion project.

Jennie-O proposes to construct a 35,000-square-foot addition to the corporate offices, expected to cost $6 million to $7 million. The expansion will primarily house administration, accounting, engineering, sales and logistics functions for the processing operations.

Work is anticipated to begin in June and be completed in 2015.

The council voted Monday night to amend the boundary of a 1989 municipal development district created under state law to assist with economic development in southwest Willmar.

Jennie-O’s Willmar Avenue turkey processing plant and corporate offices are located within that district.

The amendment allows the city to add the former State Highway 40 roadbed and the remnant parcel at the south end of the Public Works Department property to the district where the expansion will take place.

A purchase agreement for the sale of the parcels by the city to Jennie-O has been executed, according to a city official.

In related action, the council approved a tax increment financing (TIF) plan for the expansion. The plan addresses all statutory requirements for presenting the project’s economic and fiscal impacts, said Bruce Peterson, planning and development director.

Under TIF, the estimated $82,542 annual increase in property taxes generated by the project will be paid back to Jennie-O to help cover the company’s cost of new access, parking improvements, lighting, utility extensions and relocation, soil correction, and storm water controls.

Those “non-building” costs are estimated at $1 million, Peterson said. The eight-year TIF plan is estimated to make $594,304 in reimbursement available to Jennie-O for those costs.

“The increased taxes from the expansion are available to use for public purpose expenditures,” explained Peterson. “Jennie-O Turkey Store pays everything up front and we enter into an agreement such that as they pay the new higher rate of tax, a portion of that will be repaid to them for those eligible costs that state law determined are consistent with municipal development.”

During public hearings, the council unanimously approved Peterson’s request to amend the development district boundary and to approve the TIF plan. No one from the public spoke during the hearings.