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Crookston Times - Crookston, MN
  • Crookston's Business Incentive Plan: 'Stocking the Toolbox'

  • Hoiseth: The idea is all about keeping CHEDA at the forefront.
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  •    It's been in the works for months, at the Crookston City Council's request, and, while the finished product is seven pages in length and packed with tons of information, the Crookston Business Incentive Plan, entitled "Stocking the Toolbox," boils down to one basic, fundamental truth: If anything, big or small, minor or major, is happening on the Crookston business front, CHEDA is likely going to be heavily involved.
        "What we want to establish is that CHEDA is the place to go," CHEDA Executive Director Craig Hoiseth said at a CHEDA Board of Directors meeting late last week. "We want to avoid business owners going to the podium at a city council meeting."
        He's referring to this past spring, when Brent and Jasmine Melsa, owners of the soon-to-open Drafts Sports Bar & Grill, attended a council meeting to ask the city to extend them a two-year tax abatement. The request spurred a great deal of discussion about the benefits and drawbacks of tax incentives in general, but also how the city and CHEDA work with existing businesses and new businesses looking at setting up shop in Crookston. Eventually, council members directed Hoiseth and City Administrator Tony Chladek to formulate some type of business incentive plan that would drive future dealings with existing and new businesses.
        The "Stocking the Toolbox" plan doesn't indicate if the city will or won't give the Melsas the tax abatement they're seeking. While it appears there is more support for their request than opposition to it on the council, the Business Incentive Plan won't determine whether or not the Melsas get what they're seeking. Instead, the plan seems to be more about flexibility and process than anything else: Hoiseth and CHEDA are going to be the focal point for business activity in Crookston, and when Hoiseth needs to bring something to the council's attention he will do so.
        "Anyone can show up to any council meeting and talk about anything that they want to; that's the nature of a public meeting," Hoiseth said. "But if (another business person stood at the podium and made a specific request of the city), the answer would be to go see Craig and CHEDA and see what we can do."
        The Melsas' request also spurred a discussion about considering abatements not just for businesses new to Crookston, but existing businesses that expand. A frequently mentioned example was the addition of C-Town Cafe to RBJ's Family Restaurant. Council members have sounded generally in favor of abatements as a potential incentive for local businesses on the grow, as long as the growth is significant in that it results in more jobs and an increased tax base.
        "I don't want to give the impression that tax abatements will be rubber-stamped because we don't feel that way," Hoiseth said. "But when an existing business significantly adds to their operation and the benefits to the community are multi-faceted, an abatement is something we might look at if it's sought. But if they fix their roof, you're probably not looking at an abatement scenario."
    Page 2 of 2 -     Opinions vary widely on the necessity and benefits of tax abatements. Hoiseth said some communities think they're overrated, while others say they'd be dead in the water without them. As for Crookston, Hoiseth said a great deal of due diligence must be done when a business like Drafts, with established competition in the community, comes forward seeking an abatement or other benefit.
        At Large City Council Member and CHEDA Board Member Wayne Melbye stressed that consistency is going to be key over the long-term, even as council members and even CHEDA executive directors come and go. He also said it needs to be made clear that the council and/or CHEDA board will have a lot of clout when it comes to offering incentives to businesses.
        "I don't want you to offer the moon and then have the council not quite feeling the love that you're feeling with a business," Melbye said. "It kind of puts you on the spot."
        "That's where I want to be," Hoiseth responded.
        All he's looking for, he continued, is the ability to do what he does best. While not necessarily green-lighting all sorts of requests for business incentives, Hoiseth said he wants existing and new business owners to know there's a green light at the CHEDA entrance to get things done. "I want people to feel they can come here and get deals done," he said. "When I shake hands with someone I want to have a fairly strong feeling that it's going to be favored by the council. The last thing I want to do is put some glamorous package together and then have the council say they can't afford it."
        Mayor Dave Genereux endorsed the "Stocking the Toolbox" package. "I feel comfortable with this plan," he said. "Craig will put together the plans that he can and go to the council. If they don't go forward, he'll know he needs to tweak some things. This will be an ongoing process through the years, depending on what the priorities of the community are."
        

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