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P.I.L.O.T. proposal draws questions, concerns
January 10, 2020

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A payment in-lieu of tax proposal for an incoming business drew questions and criticism from a pair of Rugby businessmen during a hearing on the matter Monday evening at Rugby City Hall.

The Rugby City Council held the hearing during their regular meeting, prior to voting on the proposal.

Home of Economy, Inc., submitted an application of property tax incentives for a new or expanding business with the city, applying for payment in lieu of taxes from 2021 to 2025. Over the five year period, Home of Economy will receive a $44,774.48 reduction in real estate taxes-rates based on a 2018 tax rate of $16,281.63 per year.

As per the incentive, Home of Economy would pay $814.08 in year one; $4,070.41 in year two; $7,326.73 in year three; $10,583.06 in year four; and $13,839.39 in year five.

Randy Westby, a former Rugby CPA, gave a brief history of the former Shopko building and introduced Home of Economy co-CEOs Wade and Scott Pearson.

Wade Pearson said Home of Economy was hoping to open the Rugby location in April.

County Commissioner Mike Christenson informed the council that Pierce County commissioners voted 4-1 in favor of providing Home of Economy tax incentives. The city also received a letter from the Rugby Public School District No. 5 Board of Education stating the board approved the request.

Envision CEO Steve Dockter first asked for clarification on the payment in-lieu of tax incentive. Dockter went on to state he was not opposed to Home of Economy coming in.

"Welcome to Rugby," Dockter said.

Dockter said he wanted Rugby to be "economically attractive" to both new and existing businesses, but he also wanted council members to "consider doing the right thing."

Hardware Hank owner and former councilman Terry Wentz said he also wasn't opposed to Home of Economy coming in but mentioned Home of Economy offered several items similar to those offered by Hardware Hank, Envision and others.

"Understand now, the pie is only so big," Wentz said. "When you sell the same things, you split the pie up. So this piece gets smaller, that piece gets bigger, you got the same thing in the end though. Competition's not a problem, not worried about that, it's what you gain."

Both Dockter and Wentz shared concerns about fair competition.

Job Development Authority Executive Director Liz Heisey said incentives are available to anyone who comes to Rugby, and the JDA has had multiple businesses apply for FlexPace buydowns.

"[It's] really important to have these anchor businesses," Heisey said.

The payment in-lieu of tax percentages was approved by a 7-1 vote, with Ward 1 Councilman Bruce Allen Rheault being the sole no vote.

Other actions

During Monday's meeting the council:

- Approved the appointment of Dave Anderson as extraterritorial representative on the city's Planning & Zoning Board.

- Approved an abatement application for Myron Schmaltz.

- Approved a proclamation for FBLA Week, which will be Feb. 2-8.

- Approved designations of depositories, results of a 2018 audit from Brady Martz, and 2019 year end budget amendments, cash, revenue and expenditure reports.

- Approved December meeting minutes, bills, Municipal Judge's report and JDA minutes and financials.

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