The City Council approved the “Grow Austin” business incentive plan during its regular meeting on Sept. 5 at City Hall.

The city partnered with Mower County, Austin Utilities and the Development Corporation of Austin in developing the plan, which aims to support quality job growth and positively differentiate the community as a business-friendly location. The incentive plan builds upon the state of Minnesota’s Job Creation Fund and the Capital Investment Rebate and Job Training programs.

“(The plan) originated from the council’s objective to create some standout incentives for economic development,” said City Administrator Craig Clark. “One of their goals was to look at alternatives to promote economic development.”

Under the plan, participants will receive a 1 percent rebate  — capped at $100,000 — on a minimum $250,000 capital investment in real property. They will also receive a rebate between $250 and $3,000 for each new permanent full-time job per year. Austin Utilities will offer $200 to $1,500 per-job rebates tied to increased monthly electrical demand.

“We really put a focus on what we call ‘quality paying jobs,’” Clark said. “We want to incentivize paying more in wages.”

Clark said that in order for a business to take advantage of the “Grow Austin” program, it would have to offer wages that are at least 140 percent of the poverty line, or $16.55 per hour. Current state of Minnesota incentives require a minimum of 110 percent.

Development Corporation of Austin President and CEO John Garry said that the main businesses targeted for the incentives are manufacturing, technology, warehousing and distribution businesses.

“One way to think of it would be those companies who have a majority of their revenue coming in from outside of Austin to their business,” he said. “That’s the target of types of business and types of jobs.”

Businesses that apply for the program’s incentives will need to get approval from the city, Mower County, DCA and Austin Utilities.

The plan is still awaiting approval from Mower County. Once approval has been given, the next step can be taken to recruit businesses.

“In this specifically, (the DCA) will look for opportunities to market this program to businesses, whether they’re in Austin or outside of Austin, and then coordinate the application and the possible qualifications for the funds,” Garry said.

Clark and Garry are optimistic the framework of “Grow Austin” will attract businesses.

“The council has stated that they want us to be ambitious with economic development and job creation,” Garry said. “For us it’s good to have a tool that can be a conversation starter, so to have a framework that is clear to understand like this it’s a good way to start a proactive conversation with a business. They can see what you have to offer and it clarifies things right away.”

“I’d say (the biggest attraction) is the overall dollar amount in financial incentives,” Clark said. “We didn’t necessarily recreate the wheel as far as incentives were concerned, but if they were going to apply for state incentives, we could essentially make that application work for our purposes and as an avenue to get into the state incentives. We have a lot of businesses that have the potential to tap into those, and by structuring a local program it’ll be a conduit for them to take advantage of the incentives we’re putting on the table.”

“I’m hopeful (businesses) can see a productive environment that will allow them to take the leap and move their business forward when they know the city, county, DCA and AU want to be a part of that,” he added.