BIX Produce Co. will get nearly $200,000 in tax breaks to move its headquarters and 400 employees from St. Paul’s North End to Little Canada.
The growing company, which processes and distributes fresh fruits, herbs and vegetables, has finalized a development agreement with Little Canada to take over a Slumberland Furniture warehouse just off the intersection of Interstates 35E and 694.
The city has agreed to create a tax-increment financing (TIF) district at the new headquarters that will expire once it raises $190,000 or in nine years, whichever comes first, according to the agreement.
The cap, relatively modest for a TIF district, is a fraction of the $3 million cap that Rose-ville is considering offering to Colder Products Co., another St. Paul business that is looking to expand to a new suburban headquarters.
“This is not only going to enhance our employee base, but the money they are investing in this property will raise its value for years to come,” said Little Canada City Administrator Chris Heineman. “It’s also right in an area where we think this is going to help us attract future development.”
On top of the local incentives, BIX Produce was awarded up to $350,000 from the Minnesota Department of Employment and Economic Development for the move. The state money is conditioned on the company spending at least $25 million buying and upgrading the property, while also creating at least 129 new jobs over the next four years with an average wage of $15.59 an hour.
The expansion will triple the size of BIX’s current food-processing facility on Arlington Avenue in St. Paul. The company ran out of space there and wanted to find a new location close enough to avoid disrupting its workforce, said CEO Reed Watson.
“We love the city of St. Paul and wanted to stay, but we just did not have the space,” Watson said.
The key to the Little Canada site, he said, is that it’s large enough for BIX to expand if the company continues to grow in the years to come.
“We’ve seen steady growth over the last 20 years and this new facility is going to let us get to a higher level of service in a bigger space that will really allow us to plan for long-term growth,” Watson said.
The company does not yet have a timeline for starting renovations or a move-in date.
With the TIF district in place, BIX will pay the same taxes that Slumberland is paying on the site until the TIF expires, while making millions of dollars worth of improvements.
Those improvements normally would raise the taxable value of the property somewhere between an estimated $1.5 million and $2 million a year, according to a review by the Ramsey County Assessor’s Office. The company will be required to divert the thousands it would have paid in increased taxes to upgrade the facility.
Heineman said he doesn’t expect it will take the full nine years for the TIF to hit the $190,000 cap, at which point the property will be taxed at its full value.