Elk Run's developer behind on taxes

Article by: WENDY LEE , Star Tribune
Updated: June 7, 2012 - 9:31 PM

Tower Investments can't construct Elk Run's first building until it pays overdue taxes and fines.

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A 2010 sign for Elk Run Biotechnology Center along Hwy. 52 in Pine Island, Minn. A sluggish economy made it tough to recruit businesses.

Photo: Glen Stubbe, Star Tribune

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Elk Run, a long-awaited campus for biotech firms in Pine Island, faces yet another obstacle.

This time, the project's developer owes more than $741,000 in back property taxes and penalties to Olmsted County, preventing construction until the firm pays the fines.

Tower Investments said it hasn't paid because it disagrees with some of the assessments on the parcels of land. John Pierce, Tower's senior vice president, said the firm has been in the appeals process for more than a year.

"We're not going to let that hamper our ability to achieve our other goals," Pierce said.

However it was unclear how the company would resolve the tax issue. Pierce emphasized that Tower is committed to meeting the job goals. The Woodland, Calif.-based firm must create 20 bioscience positions there by the end of the year in accordance with a development agreement for the site.

Elk Run has been hamstrung by delays since it was announced five years ago. Supporters of the project hoped it would spark more innovation in the state and a boom in biotech. But a sluggish economy has made it difficult to recruit businesses to the rural property, located 15 miles north of Rochester.

Currently, there are no buildings in Elk Run's biobusiness park.

Pierce emphasized it as a long-term project and a lot has been done to lay the groundwork for development, such as adding utilities and the infrastructure for roads.

"If anything, we learned that we were just overly optimistic in our earlier projections," Pierce said.

The development is tied with the Minnesota Department of Transportation's construction of a new Hwy. 52 interchange. MnDOT will build four frontage roads that connect Elk Run with the interchange next year.

By the end of 2019, Pine Island must have 182 bioscience jobs at Elk Run. If none is created, the city will owe MnDOT $3.65 million.

"Is it frustrating that we're this far along without jobs? Certainly," said Terry Ward, manager of the Elk Run Interchange Project.

Abraham Algadi, Pine Island's city administrator, said he expects Tower to file for a new building permit between now and the end of August. Tower's previous permit expired in February.

"They assured us that the issue will be addressed and resolved well before they receive their building permit," Algadi said.

Tower said it is working with tenants for Elk Run, but declined to name the firms. In addition to the biotech campus, developers hope Elk Run will eventually include housing and other commercial real estate.

Staff reporter Janet Moore contributed to this report.

Wendy Lee • 612-673-1712