Cloquet to help finance Upper Lakes Foods expansion

CLOQUET — The city is granting one of the largest private local employers a subsidy to assist in a 7,000-square-foot addition expected to create 11 new jobs.

The Cloquet City Council on Nov. 21 unanimously signed off on a development program and tax increment financing plan for food distributor Upper Lakes Foods.

Commonly referred to as TIF, this method of real estate financing is used by local governments for redevelopment, infrastructure or other community-improvement projects in a designated area. TIF is a subsidy tool to attract developers and new businesses, as well as retain existing businesses. The local government issues bonds to pay for the project and then uses the increased property taxes generated by that project to pay off the bonds.

Project: 7,000-square-foot, estimated $2.7 million freezer space addition.

Jobs: 11 new full-time positions within two years paying at least $19.35 per hour plus benefits.

Construction start: Expected in spring; required to begin by July 1.

In their words: This is a “win-win for the city of Cloquet and Upper Lakes Foods,” Jesse James, chief financial officer at ULF, said.

Upper Lakes Foods is using TIF to assist with its construction project. To do so, the city will create a development district and then create a TIF district as part of it. The city will grant a $154,296 subsidy to ULF. All costs for the creation of the development and TIF districts will be paid by ULF — $24,358 annually for the nine-year project (or district), with 1% annual inflation on the project’s value over time.

Estimated tax increment over 9 years from school district levies: $54,036.

Estimated tax increment over 9 years from county levies: $99,295.

In their words: “We very much appreciate Upper Lakes Foods, one of our very best businesses here in Cloquet,” Mayor Roger Maki said.

Daqota Systems:

$256,000 in TIF assistance for construction of new building in Cloquet Business Park, 2010.

Potlatch

(now Sappi): $2.6 million in TIF assistance in 1986, $3.8 million in 1992 and $11.8 million in 1993 for construction projects.

Cloquet location: 801 Industry Ave.

Current workforce: 258 in Cloquet; 144 in Janesville, Wisconsin; 52 in Northfield, Minnesota.

Current Cloquet facility: 185,000-square-foot office and warehouse.

Cloquet fleet: 60 tractors and 80 trailers.

Serves: Minnesota, Wisconsin, North Dakota, South Dakota, Iowa, Illinois, Michigan’s Upper Peninsula.

History:

Founded by Lawrence Sorensen in 1967 in the Duluth Terminal building. Moved into current corporate headquarters in Cloquet in 1981. Opened Northfield distribution center in 2009 and Janesville distribution center in 2017. Eleven members of the Sorensen/Ryan family are employed at ULF.

Katie Rohman is the managing editor of the Duluth News Tribune and Cloquet Pine Journal. She started with Duluth Media Group in 2017 as regional editor of the Superior Telegram, Pine Journal, Lake County News-Chronicle, Eastern Observer and Western Weekly. She has worked in newspapers around the Midwest since 2004.