Governor plants ‘SEED’ for economic growth

By Karen Colbenson

Post-Bulletin, Austin MN

BROWNSDALE — A program proposed by Gov. Tim Pawlenty will target 64 Minnesota counties that are suffering from population decline or higher than average unemployment rates.

During a stop Monday at Akkerman Manufacturing in Brownsdale, Pawlenty discussed the initiative — the Strategic Entrepreneurial Economic Development, or SEED, which is designed to help strengthen communities and expand the small-business base throughout greater Minnesota.

"We think these tools will help reverse and change some of these trendlines," said Pawlenty. "Our success has been on getting small businesses started in Minnesota, and they like it, so they stay and grow. Most of our economic growth comes from smaller, earlier-stage businesses."


Rob Tumbleson, vice president, director of sales and marketing at Akkerman, said he hopes the initiative will be able to help the company in its expansion. Akkerman manufactures tunnel-boring machines and pipe-jacking equipment. Groundbreaking for an expansion at the Brownsdale factory is expected in about a month. Expansion plans include adding 25,000 square feet of factory floor area, increasing crane capacity and moving some of the outside functions inside the building.

"We will be looking into the programs that he’s offering up," said Tumbleson. "We just found about the program this morning when the governor was here announcing it, but we’re definitely going to look into it. We were pleased that he decided to make his announcement at our factory."

Companies with fewer than 100 employees account for more than 95 percent of the state’s businesses and generate most of the new jobs, the governor said. Pawlenty said SEED is an expansion of the 2004 Job Opportunity Building Zone (JOBZ) initiative. JOBZ promotes economic development in distressed areas of the state by providing local and state tax relief to companies that are starting up or trying to expand.

Dan McElroy, employment and economic development commissioner, said SEED would be open to a wide variety of businesses and would have fewer restrictions than JOBZ.

"Because the demographics in the country are changing, we want to make sure we have a quality of life in all areas," said Pawlenty. "We can’t have a healthy Minnesota unless we have job growth across the entire state. These small businesses are the backbone of our economy."

The proposal calls for an investment of $20 million from the state’s general fund and another $50 million in one-time bonding. The proposal will be presented to the Legislature in 2008.

Program details

SEED will have use 22 new or expanded programs to target three key areas:


  • Developing and growing entrepreneurs: Create a new Office of Entrepreneurship to help individuals interested in starting their own business.
  • New capital for rural businesses: Offer a 25 percent tax credit for investors in regional funds that focus on emerging businesses and new technologies. About $10,000 to $50,000 in micro-loan funds would be available for new and expanding small businesses in rural communities.
  • Sustained competitive advantage for rural Minnesota: Extend for 10 years local and state tax exemptions for new and expanding businesses, for agreements signed by Dec. 31, 2015.
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