5/8/2014 1:56:00 PM Topline JOBZ will not remit tax benefits, state commissioner decides
The Commissioner of the MN Department of Revenue has notified Chisago County that “clawback” provisions available in state law are being waived in the case of Topline Automotive. Topline was constructed in the North Branch ESSBY business park and got special tax considerations as a JOBZ site. To attract industrial development to Minnesota lawmakers created the Job Opportunity Business Zone; which is a contract providing tax breaks in return for the project resulting in creation of a certain number of jobs and property value improvements. Clawback is provided in the JOBZ agreement as a possible action in the event the project falls short on promises. A deputy county assessor explained that Topline Automotive did pay property taxes on the value of the lot only.
Taxes on the value of structure improvements, sales tax and employee income taxes are waived as state incentives in the JOBZ program. The total property tax not collected is estimated at $80,000; split between the city and county. The Chisago County Press asked the state commissioner’s media coordinator what the entire tax amount being waived came to, and the Press was advised that this is not public data. Topline was financed by Bridgewater Bank or BWB Holdings LLC. When the bank got the property back, after the business folded, BWB petitioned to waive payment of JOBZ tax benefits. The waiver request covered the time period “two years preceding Topline’s date of non-compliance” with JOBZ conditions. The Dept. of Revenue also declined to provide the date of non-compliance, or the point when state officials became aware the business had fallen short of what it promised to provide. One of the reasons the Dept. of Revenue Commissioner stated in support of not attempting to collect or pursue “clawback” on unpaid taxes is because Topline “...ceased to be a JOBZ qualified business due to circumstances beyond its control” according to the notice from the Dept. of Revenue.
The Press asked a Department of Revenue media coordinator to explain what these circumstances beyond the company’s control consisted of. Ryan Brown, with the MN Dept. of Revenue, responded that this is not public information. The Chisago County Board had disapproved of the state accepting the bank’s petition to waive clawback. North Branch City Council was split but DID support waiving collection. In discussing the best way to move forward, Chisago County Commissioner Ben Montzka had stated he felt other financial institutions in this county need to keep current on taxes for bankrupt/foreclosure parcels and Topline should be no different. (Bridgewater Bank, according to a 2013 real estate journal article with the bank’s officials, stated the bank had 32 quarters of profitability and pre-tax earnings of $10.2 million. The Topline site has been sold to Lakes Region EMS, according to recent tax information at the government center. The ambulance service has plans to relocate operations to this site, from its headquarters in the North Branch industrial park just a few blocks away.