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Entering tax-free zone
Crookston contractor first in region to benefit from JOBZ program

Grand Forks Herald
Written By: Elisa L. Rineheart, Herald Staff Writer

May 25, 2004 - A Crookston government contractor became the first small business owner in northwestern Minnesota to take advantage of a Job Opportunities Building Zone after signing an agreement Monday with the city of Crookston.

Jay Nimens, 47, director of 1st Mechanical Construction, is no longer concerned about borrowing money to start a business or the high cost of going out on his own.

Nimens, a local government contractor, officially has entered the tax-free zone.

"It is almost prohibitive to go into business today," said Nimens, who was in business with his brothers, Tom and John, at Associated Plumbing and Heating of Crookston for more than 30 years. "This makes it alot easier."

The business

Nimens branched out and is now located a the Valley Technology Park at the University of Minnesota-Crookston. His company specializes in cleaning, surveying and testing mechanical sewer and water systems. 1st Mechanical Construction has a commercial, municipal and industrial client base.

Approved by the 2003 Legislature, the JOBZ initiative aims to stimulate economic growth and create employment opportunities in job-strapped cities outside the Minneapolis/St. Paul metropolitan area.

The northwest Minnesota JOBZ district, known as the Land of the Dancing Sky, is comprised of key development areas in Polk, Kittson, Marshall, Pennington, Red Lake and Norman counties, said Kari Thompson, executive director of the Crookston Development Authority.

The application with the city is simple and quick, Nimens said.

"I asked Kari about the packages and incentives for business startups, and she told me that I qualified for the program," Nimens said.

Crookston's City Council reviewed the petition and approved it May 11.

By law, cities can dictate the number of jobs an applicant must create. It also has jurisdiction over employee benefits and minimum salary requirements, Thompson said.

1st Mechanical Construction was asked to create a minimum of two jobs at a rate of $9.75 per hour. Nimens said he plans to employ six to 10 people.

There are about 8,225 unemployed workers in northwestern Minnesota, said the Northwest Minnesota Labor Force Assessment report.

Also, for the next 12 years, beginning Jan. 1, 2004, Nimens will be exempt form retail sales tax. Considering that 1st Mechanical Construction will require a large amount of equipment and transportation vehicles, Nimens could save a lot of money, Thompson said.

"I find this very advantageous for a startup company," Nimens said. "I will have to borrow less capital."

The incentives of the program are numerous, said Nimens, but for him, the most important is reducing company expenses, which can lead to company growth.

Thompson said she has answered several requests for JOBZ application but, so far, no one else has followed through.

"I am hoping it creates a whole bunch of activity, because I have had alot of inquiries," Thompson said.

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Rineheart reports on northwest Minnesota.