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AGENDA RECOMMENDATION |
Consent Calendar 5.H.
City Council Regular Meeting
- Meeting Date:
- 10/14/2025
Agenda Item:
Resolution requesting Decertification of Tax Increment District No. 19-6 (121 Power Drive); Johnson Outdoors.
Recommendation/Action(s):
Adoption of the attached resolution.
Summary:
On April 9, 2018, the Mankato City Council approved the establishment of tax increment financing district 19-6 and the accompanying development and business subsidy agreement. The purpose of the tax increment district was to assist with an 88,128 square foot building expansion of Johnson Outdoors, Inc. in order to accommodate the consolidation of Mankato manufacturing operations and the addition of manufacturing lines due to business growth.
The amount of assistance was $504,370 plus 5.5% interest, on a pay-as-you-go basis, and consisted of soil corrections that were required in order to accommodate the building expansion. Soil corrections consisted of excavation of up to 9 feet and backfilling with suitable material for the entire building expansion area.
At the time of development approval, Johnson Outdoors had 220 direct full-time employees in Mankato and five direct part-time employees. As part of the building expansion at 121 Power Drive, Johnson Outdoors agreed to create at least 4 FTE jobs at an hourly wage of at least $12.75 per hour and 2 FTE salaried jobs at an annual salary of at least $75,000, while also maintaining 226 FTE within the City. Johnson Outdoors satisfied the job retention/creation requirements in 2022. A total of 11 tax increment payments were made beginning in 2020 and the final tax increment payment was made in July 2025. The total amount of tax increment payments was $615,899 or $504,370 net present value.
Johnson Outdoors has complied with the terms of the agreement and the amount reimbursed to Johnson Outdoors was fully amortized effective July 2025, and the tax increment district can now be decertified. That also complies with the Minnesota Statute that limits the term for reimbursement associated with Economic Development Districts to nine years. The recommendation is to adopt the attached resolution decertifying the TIF District.
The amount of assistance was $504,370 plus 5.5% interest, on a pay-as-you-go basis, and consisted of soil corrections that were required in order to accommodate the building expansion. Soil corrections consisted of excavation of up to 9 feet and backfilling with suitable material for the entire building expansion area.
At the time of development approval, Johnson Outdoors had 220 direct full-time employees in Mankato and five direct part-time employees. As part of the building expansion at 121 Power Drive, Johnson Outdoors agreed to create at least 4 FTE jobs at an hourly wage of at least $12.75 per hour and 2 FTE salaried jobs at an annual salary of at least $75,000, while also maintaining 226 FTE within the City. Johnson Outdoors satisfied the job retention/creation requirements in 2022. A total of 11 tax increment payments were made beginning in 2020 and the final tax increment payment was made in July 2025. The total amount of tax increment payments was $615,899 or $504,370 net present value.
Johnson Outdoors has complied with the terms of the agreement and the amount reimbursed to Johnson Outdoors was fully amortized effective July 2025, and the tax increment district can now be decertified. That also complies with the Minnesota Statute that limits the term for reimbursement associated with Economic Development Districts to nine years. The recommendation is to adopt the attached resolution decertifying the TIF District.