Tax breaks for jobs heat up Shakopee races

  • Article by: DAVID PETERSON , Star Tribune
  • Updated: October 29, 2013 - 1:51 PM
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Shutterfly:  A California-based digital photo and paper products firm is building a new $60 million plant in town, creating more than 300 jobs.

Photo: Paul Sakuma, Associated Press

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The tax breaks that are helping lure thousands of jobs to Shakopee are the centerpiece of just about everyone’s campaign this fall for mayor and City Council.

Mayor Brad Tabke and a pair of the others in the field of candidates point to them as success stories.

Others are scathingly critical, calling them giveaways with dubious long-term consequences.

“We need to get more in return for these abatements,” challenger Mike Luce told a televised forum last week. “We need job guarantees, not just hoping. I understand that with people moving here, there’s a benefit with housing and food sales and the local businesses do benefit. But we need more guarantees from these companies before giving things away.”

Tabke and council candidates Kathi Mocol and Mark Reimler, seeking two open council seats vacated by the incumbents, are the most amenable to tax breaks.

“They can have a positive impact when implemented properly,” Mocol said. “Taxes are still paid until the criteria are met. And taxes continue to be paid on the previous value of the property; in some cases, the abatement is just 10 percent of the bill.”

Veteran Council Member Matt Lehman, challenging Tabke himself, has supported them at times but thinks the city has gone too far.

“I support them when done properly,” he said. “Right now there’s too much, too fast, not well thought through, and shoved on through, with no long-term strategy and a lot of risk.”

The mayor points out that the major deals have gone through on votes of 4 to 1, showing broad council support. “This is the biggest question of the election,” Tabke said.

The taxes being abated are on improvements that the city wouldn’t otherwise get, he said. “We’re forgoing future money that we don’t know whether it would be there or not if these projects didn’t happen.

“They have to meet specific job requirements” in terms of numbers of jobs and wages, Tabke said. “And they still pay millions in taxes. Only one involves any additional infrastructure, and none changes the need for policing and plowing. And it’s 4,500 jobs — lots of private investment in Shakopee.”

Conversely, some challengers agree with candidate Jordan Olson that the payoffs to the city can be uncertain.

“What is rarely spoken of,” Olson says on his website, “is the fact that jobs are not GUARANTEED to Shakopee citizens! Many of these High-Tech companies who are being granted abatement are looking for degrees. While our city certainly has people with degrees, companies moving from a few cities away will mostly bring their staffs with them. Some of these folks may move to our city but many will simply commute here. In the end, no guarantees are made to our citizenry.”

In the race for mayor, the question of tax breaks is plainly a symbol of a much deeper chasm in thinking about the role of cities and mayors.

For Tabke, the mayor is a leader, a visionary.

“He’s responsible for leading the way, showing where we can go. He’s the tip of the spear to get things done. He’s out there talking to the people, laying out a vision for what we can be in five, 10, 30 years.”

For Lehman, the mayor is the person who runs the meetings, signs the documents, but is really just one of five working together to find their way. “The opposite of that is dictatorship,” he said.

The difference in philosophy bleeds over into other issues, such as whether the city needs another indoor sheet of ice for skaters and hockey teams.

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