Donnelly asks to amend 2005 JOBZ agreement
Donnelly Custom Manufacturing in Alexandria was doing extremely well six years ago - so well that it decided to expand.
It asked for, and received, state and local tax exemptions under the Minnesota Job Opportunity Building Zones (JOBZ) program to help pay for its 19,500-square-foot expansion.
It easily exceeded the JOBZ requirements of adding and retaining at least eight new jobs every year. In fact, it added and retained more than 20 new jobs in 2006, 2007 and 2008.
But then in 2009, the economy soured nationwide. Sales at Donnelly fell by 31 percent. It wasn't able to keep some of the new jobs it created, falling three jobs short of meeting the JOBZ requirement.
"There was an unforeseen meltdown in global market activity," Donnelly President Ron Kirscht told the council at its February 14 meeting.
The company is now asking to amend the JOBZ agreement, allowing it to continue to receive tax exemptions through 2013 as long at it continues to retain the eight new jobs.
Kirscht is confident the company can do it. He said that in 2010, the company was once again able to maintain more than 20 new jobs. It did it by picking up new business from molding companies that went bankrupt.
The JOBZ incentives are significant, saving the company between $25,000 and $30,000 a year, Kirscht said.
If the agreement isn't amended, Donnelly would no longer be eligible to receive JOBZ incentives, retroactively, starting from January 1, 2010.
"I think we've been a good employer and good for the community," Kirscht told the council.
The council voted 4-0 to schedule a public hearing on Donnelly's request to amend the JOBZ agreement. It will take place Monday, February 28, at 7:15 p.m. during the regular council meeting at City Hall.