Every few months, the Minnesota Department of Employment and Economic Development (DEED) announces several new significant investments aimed at boosting job growth among Minnesota businesses.
The Job Creation Fund (JCF) provides financial incentives to manufacturing, technology, and other base-sector businesses. JCF works as a performance-based rebate: a business must first build the facility and hire employees before receiving any funds. This distinguishes it from programs that provide funding up front.
If the JCF is an earned rebate, the Minnesota Investment Fund (MIF) is a low-interest loan that can sometimes be forgiven. DEED provides a grant to a local unit of government, like the City of Grand Marais or Lake County, which then lends the money to a specific business. JCF is for industrial projects that create high-quality jobs and boost the tax base. Part of the loan may be forgiven if hiring and investment goals are met, a move the state uses to encourage companies to stay. Maximum awards are typically $500,000, but can go higher for large projects.
Last week, DEED today announced more than $762,000 for three business expansion projects across Minnesota. The projects are expected to create 55 jobs over the next three years and leverage more than $10.12 million in private investment.
“Minnesota has been consistently ranked as one of the best places in the country to establish and expand a business, no doubt in part because of the support offered through DEED programs like the Job Creation Fund and Minnesota Investment Fund,” said DEED Commissioner Matt Varilek. “In the communities where these businesses choose to expand, the job creation and private investment leveraged to promote economic vitality and a high quality of life — efforts DEED is proud to champion.”
Aircorps Aviation in Bemidji was awarded a JCF of $175,000. The business specializes in restoring, maintaining, and rebuilding modern, vintage, and legacy aircraft, as well as other aerospace manufacturing and parts sales. It will invest $986,000 to expand and improve its current site in Bemidji. It is expected to create 14 new jobs within the first three years.
Broekema Beltway USA in Pine City will receive $167,500 of JCF funds and $200,000 of MIF. It manufactures advanced sieving conveyor belt systems and components for the agricultural and industrial sectors across North and South America. The proposed project establishes a new manufacturing line at the current facility in Pine City. The total project cost is $5.6 million and is expected to create 12 jobs within the first three years.
Marotta Controls, Inc. in Chaska will receive $220,000 in MIF funding. Marotta designs, develops, and manufactures innovative electronic and electro-mechanical systems and sub-systems for the aerospace, space, and defense sectors. The proposed project will upgrade the Chaska facility to accommodate additional employees and enhance its capabilities. The total project cost is $4.2 million and is expected to create 29 new jobs within the next three years.
JCF, a post-performance rebate, and MIF, a potentially forgivable loan, are often combined to attract new companies or encourage existing ones to expand and stay in Minnesota.
Usually, between 15 and 30 projects per year are funded across both programs. A 10-year audit showed DEED made about 138 MIF awards over a decade—averaging roughly 14 per year. The dollar amounts can swing wildly. A “quiet” year might see $10 million in awards, while a year with a “megaproject” (like a new medical research lab) can push that number toward $50 million or more.
An “award” is not always a completion. About 20-25% of awarded projects are cancelled before any money is spent. Sometimes the business loses its private funding, or it realizes it can’t actually find the 30 employees it promised to hire in Two Harbors. For the Job Creation Fund (JCF), the state doesn’t pay a dime until the business proves the jobs are real and the building is standing. This actually protects the taxpayers.
Locally, MIF and JCF assisted the expansion at Lutsen Mountains over the past few years. They utilized MIF dollars through Cook County to help with the high costs of infrastructure on a mountain. Odyssey Resorts has been actively using the JCF across its various North Shore properties. They get a rebate for every “livable wage” job they create. Castle Danger Brewing in Two Harbors is a prime example of how MIF loans help local manufacturing. They’ve used state-backed financing to expand their canning lines and cellar capacity.
DEED is the state’s principal economic development agency, promoting business recruitment, expansion, retention, workforce development, international trade, and community development.
