The suburb’s big jobs haul comes with a lot of subsidies, ones so large that other cities’ officials are unwilling to match them.
For a midsize suburb at the far edge of the metro, it’s an eye-popping haul.
In just 15 months, Shakopee stands to reel in well over 1,000 jobs from five new employers, representing hundreds of millions in investment and covering well over 100 football fields worth of land.
But at what price?
The millions in tax subsidies that Shakopee is dishing out to land those jobs, counting deals in hand and deals in progress, has eyes rolling among some civic leaders in Scott County. Nor are the deals ones that every other suburban competitor is willing to consider. But the city insists that the long-term gains will justify the short-term sacrifice.
The latest to surface is a possible deal to bring the headquarters of Datacard Group to Shakopee from Minnetonka, where the maker of secure ID and card personalization products had outgrown its space.
With Shakopee’s once-commanding lead in Twin Cities housing development slowly melting away, the cascade of subsidies is starting to suggest a community anxious about its future prospects.
“We have a lot of people traveling out of town now to have those kinds of jobs,” said the city’s newly hired economic development chief, Samantha DiMaggio, who commuted from her home in Shakopee to St. Paul before starting her job in April. A lot of her neighbors work in Minneapolis and nearby suburbs like Eden Prairie, she added, and “we want to bring them back here.”
The pile of deals has some business owners, already unhappy with their own tax bills, grumbling, said Joe Wagner, a county commissioner who runs small businesses along the highway south of Shakopee.
“What I hear from people is ‘the big guys get the breaks and the little guy is on his own,’ ” he said. “And there’s an element of truth to that.”
There’s also the problem, added Chanhassen City Manager Todd Gerhardt, of where you stop.
“You kind of wind up going down slippery slope. You start abating taxes for one and having to explain why you’re not for others,” he said.
Chanhassen lost out to Shakopee in a competition for a major new installation for a division of Emerson Electric partly because the company wanted to spread out its operations, Gerhardt said. Emerson already has about 1,500 employees in Chanhassen.
But the company did ask about the possibility of financial assistance for one Chanhassen property it had looked at, Gerhardt said. The city offered Emerson some breaks on permitting fees, Gerhardt said, “but nothing that could come close to the deal that Shakopee put together.”
Shakopee Mayor Brad Tabke concedes that the city will take a financial hit for quite some time — but he says it will be worthwhile.
“We were a sleepy rural town that went through a heavy growth stage and then hit a very decisive lull,” he said.
“Something that does us immediate good in six months might not be the right path to take, versus something that’s beneficial five or 10 or 20 years down the road. All these deals are extremely beneficial in the long term.”
And the deals the public knows about are just the start, he added; the city expects to announce more in the coming weeks and months.