Napa Junction Community Investment

Wednesday, October 03, 2018

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Lately there has been some confusion regarding the investment that Dakota Plains has made in Yankton County.  Let me help by providing some facts in a format that is easy to understand.

A TID (Tax Increment District) was created by the Yankton County Commission as an economic development tool for the Napa Junction project.

A TIF (Tax Increment Financing) is the plan that is created to finance the eligible public improvement and other costs associate with the TID.

The “Increment” is the difference between the taxes being paid at the time the TID was established and the taxes due on the improved property in the TID. (In 2017, the increment at Napa was approximately $120,000)

The MOU (Memorandum of Understanding) between Yankton County and Dakota Plains Ag Center, LLC, stipulates that “in the event that in any year the Tax Increment generated by the District is insufficient to pay amounts due under the STIP Loan, Developer (Dakota Plains Ag Center, LLC) shall reimburse the County for such shortfall.”

Every year the taxes on the property are calculated at the same rate as other commercial properties. 

Dakota Plains Ag Center, LLC, pays taxes on the improved property value, so for 2017 their tax bill on the improved property was $125,368.63.  This is the point most people get confused about. Prior to them building on that property, the tax bill for that property was $4,700, compared to the $125,368.63.  And because the MOU with Yankton County says they must pay any shortfall on the STIP loan, they also have to pay an extra $208,981.37! 

As referenced in the invoice, Dakota Plains Ag Center, LLC, will be paying the $208,981.37 shortfall this year, which is due 11/1/2018. 

In looking at assessed property values in Yankton County, Dakota Plains Ag Center, LLC, holds the #1 spot at almost $30 million.  That is an incredible investment in Yankton County. As the assessed property value increases, so does the property tax they will be required to pay.  Keep in mind, after the TID is paid in full, all the taxes are coming back to the County.  Yes, that is years down the road, but all the other community benefits are ongoing.

The entire county is benefiting from the Napa Junction project.  Because of their investment, jobs are being created in Yankton County.  Their taxes are being used to pay for Yankton County infrastructure improvements.  Additional companies are looking to relocate and build in Yankton County because of the rail options at Napa Junction.  Donations are being made to local nonprofits to support community activities.  Dakota Plains AG Center, LLC, and other new properties built at Napa will pay considerably more taxes when the TIF debt is paid off than were being collected on the unimproved property, and that will have the effect of lowering the taxes owed by everyone else in the county.  Just imagine how much lower your tax bill could be today if Yankton County had been utilizing this economic development tool 10-20 years ago. 

Individuals will continue to try to find fault in the plan because it isn’t structured exactly the way they would perceive it should have happened.  The reality is that this is an outstanding project for Yankton County and we should be expressing our gratitude to them for locating here, promoting Yankton County and working to grow our tax base. 

Nancy Wenande

CEO, Yankton Area Progressive Growth

View Dakota Plains Ag Center, LLC's invoice here!

Category: Yankton, Business Community, Napa