The Scott County commissioners voted Tuesday to approve a nine-year tax abatement for internet firm Shutterfly Inc., which plans to build a $60 million facilitiy in Shakopee.

Construction on the plant at the Dean Lakes business park by Minneapolis-based Ryan Cos. should commence next month, with occupancy expected next summer.

The abatement is valued at $551,159 to $734,878, and an agreement to allow the Redwood City, Calif.-based firm to use the county's fiber-optic infrastructure to defray data transfer costs was approved, as well.

The move comes after Shakopee's City Council approved a tax-abatement package earlier this month valued at  $569,078 to $758,771, also over a nine-year period. The deal also includes sewer access charge credits valued at about $174,000.

The actions come after Gov. Mark Dayton, Shakopee Mayor Brad Tabke and other goverment officials met in secret with Shutterfly's CEO Jeffrey Housenbold earlier this month to discuss an expansion in Shakopee. (Ultimately news of the meeting leaked out, and Dayton and others confirmed the confab.)

All told, the maker of digital photo and paper products is seeking up to $3 million in economic incentives from the city, county and state.

Shutterfly, founded in 1999, has annual revenue of about $500 million and has become a well-known supplier of customized photo albums and other personalized ­stationery products ordered online. It made headlines earlier this week with the release of an iPad app that allows customers to create and order products by using that mobile device.

Shutterfly plans to create 329 jobs over the next two to five years with an average hourly wage of $18.78. In addition, just over 200 people would work on a seasonal basis, according to city documents. It’s unclear how long the seasonal work would last.

The Minnesota Department of Employment and Economic Development has given preliminary approval for Shutterfly to receive a $1 million Minnesota Investment Fund forgivable loan, and $400,000 in matching grants from the Minnesota Job Skills Partnership program.

Janet Moore covers commercial real estate for the Star Tribune.


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