Think long term about tax breaks for new businesses
Looking to boost economic growth, the city of Wadena has approved tax increment financing (TIF) agreement for a variety of projects over the past year.
The latest example happened last week, when the council approved TIF for a developer looking to build on a vacant lot between Super One Foods and Walmart on the north end of Wadena. Once complete in the fall, the building will be leased to discount retailer Dollar Tree.
Rick Johnson, principal at Green Bay-based United Development Group, said the project wouldn't have happened without TIF.
Though the final figure depends what value the county assessor places on the property, the TIF agreement means the developer will save up to $140,000 in taxes over nine years.
So is bringing a Dollar Tree to town worth giving up that kind of tax money?
That's the wrong way to think about it.
Currently, according to County Assessor Lee Brekke, the county, city and school district earn a combined $1,450 per year in taxes from the vacant property. Developed, he estimates it will yield between $30,000-40,000 annually. Of course, changes in market valuation and property tax law could increase or lower that amount. The bottom line: The project provides a long-term boost to local tax rolls.
But it's not just about taxes.
The store is expected to provide about 14 full-time jobs with health insurance benefits that pay between $10 and $13 an hour.
It also provides another discount shopping option for an economically challenged region.
Ideally, the Dollar Tree project will spark a development boom, creating a virtuous cycle of job and tax-base growth. At the very least, it's another example of incremental progress on the economic development front.