MAGIC Fund

Last updated

The Minot Area Growth through Investment and Cooperation Fund, or MAGIC Fund, is a growth fund financed through a one percent sales tax in the city of Minot, North Dakota. The fund was approved by voters on May 1, 1990, and the money is used for economic development, capital improvements and property tax relief. As of 2012 the MAGIC Fund has invested over $33 million into 200 projects in 44 communities. [1]

Contents

Role in Economic Development

Forty percent of the one percent tax is earmarked for economic development and is used to help finance relocations, start-ups and expansions in the Minot area. Minot Area Development Corporation, the lead economic development agency for the city of Minot, targets primary sector businesses such as those in value-added agriculture, knowledge-based business and the energy industry. The availability of MAGIC funds makes Minot more appealing to businesses. The MAGIC Fund is very progressive in that it was one of the first growth funds in the state of North Dakota and the first one to be used regionally. [1]

Guidelines

When the MAGIC Fund was originally established, it was designed to operate with minimal guidelines to allow for the high level of flexibility necessary when assembling financing and incentive packages to benefit potential businesses and the community of Minot. This nonrestrictive nature of the fund has been a source of some criticism though. Local leadership acknowledges that throughout the life of the MAGIC Fund it has been a challenge maintain openness with the public about specific spending while at the same time respecting the confidentiality of business information. Leaders are striving, however, to keep communications clear. [1]

In 2005, new MAGIC Fund guidelines were set in place to clearly define “full time” and to require a breakdown—not an average of—salaries of proposed positions. [2] More recently, in October 2008, the guidelines of the MAGIC Fund underwent public review and area residents were encouraged to offer suggestions. Suggestions included making MAGIC Funds available for private sector projects such as housing, recreation and childcare or using the money for infrastructure purposes such as streets and sewer in order to encourage more housing projects. [3] After consideration, the guidelines review committee decided to continue using MAGIC Funding for business-related projects. [4]

History

The initial creation of the MAGIC Fund in May 1990 established it through 2006 and come June 2004, city voters approved an extension of the 1% city sales tax through the year 2014. [5] The MAGIC Fund has a rich history of aiding economic development in the Minot region, and study after study shows the local economy has benefited drastically from its availability. Historically MAGIC Funds have been used in three main areas of primary sector economic development: knowledge-based employment, agriculture and energy.

Five of the ten largest employers conducting business in Minot today were recruited using MAGIC Funds. Choice Hotels International was one of the first businesses to be recruited using the MAGIC Fund in November 1990, selecting Minot as the location for the company's largest reservation center. Eight years of particularly high productivity later, Choice capitalized on the advantages of the area again and began construction on a $1 million expansion to bring the number of year-round employees in Minot to over 400. Once again, the MAGIC Fund played a big role. In the years between, other service centers such as Sykes in 1996, were attracted to Minot. Drawn also by the MAGIC Fund, Sykes Enterprises came to North Minot's technology park to offer technical support to customers of major companies such as Fortune 500 firms. Sykes notes the level of technology-based education in local schools such as Minot State University have proven extremely important to Sykes’ success in Minot.

In 1998, after searching 29 cities nationwide, Minneapolis-based ReliaStar (now ING Service Center) made the decision to expand its financial services company to Minot, ND with a new 90,000-square-foot (8,400 m2) service center employing 400 full-time workers. In February 2000, the company expanded its Minot work force from 450 to 600 workers thanks to the financial assistance provided by the City of Minot's MAGIC Fund. MLT Inc., a Northwest Airlines Corporation company, was offered one of the most aggressive incentives packages at the time and it soon followed suit by coming to Minot in 1999 and a year later expanded their workforce to approximately 600 as well. [2] Local businesses such as Midwest Telemark International (MTI) have also flourished with the help of the non-provincial MAGIC Fund. Started by two entrepreneurs in Mohall, ND, MTI now has employs over 450 people in seven centers in rural communities including Bottineau, Kenmare, Stanley, Beulah, Langdon, and Grafton.2002 annual report

Companies often cite an available, quality workforce and infrastructure for why they chose Minot to conduct business and expand. In the communications world, this necessary infrastructure is seen in the form of a sophisticated telecommunications network, offering fiber optic and high-speed internet access. Locally owned SRT Communications offers just that, as well as phone service to the Minot area. State-of-the-art systems are in place to support these expanding businesses, but without the MAGIC Fund which helped fuel the growth of the communications business throughout the area, they may not have seen the need to upgrade so rapidly.2002 annual report Continual capital investments in infrastructure keep the city prime for expansion.

Other areas of development include value-added agriculture. In 1994 Bourgault Industries was recruited to Minot with the availability of MAGIC Funds, although the Saskatchewan-based agriculture equipment manufacturer did not in the end need to use the funding. By 1995 construction was complete and the facility was up and running as the main office for Bourgault's U.S. assembly, marketing and distribution center. Bourgault Industries recently announced (2008) expansion to bring several production lines to Minot, creating 20-30 new jobs in the area. Similarly, in 1996, Minot Milling (a division of Philadelphia Macaroni Company) came to Minot with the help of the MAGIC Fund although it turned out the company did not need monetary assistance. [6]

As per the nature of economic development, risk will sometimes be realized and ventures will fail. MedVision, for example, came to Minot in 1997 and left a year later after only creating several jobs. [2] It took several years for the MAGIC Fund to recover the $2 million loan in full. [2] WebSmart Interactive, initially a provider of telemarketing sales verification was founded at the height of the internet boom. After a short period of rapid growth WebSmart began outgoing sales calls, the primary client of which was a Georgia-based company. This company eventually failed to forward payment to WebSmart, forcing an abrupt closure of the company. [7] At the outset of 2001, after the failures of aforementioned businesses, there was essentially no money to work with in the MAGIC Fund. A measure was proposed to divert money from a one percent sales tax for Northwest Area Water Supply and extend the fund but it was defeated. [8]

Multiple studies were conducted in attempt to measure the successes of the MAGIC Fund and find areas for improvement, including reverse analyses to show what Minot's economy would be like if not for the MAGIC Fund. [9] One such study, conducted in 2001 by the Economic Strategy Center Inc. of Atlanta, Georgia found that for every 10 jobs created through MAGIC Funding, approximately 8.5 additional jobs are created in the area. Further, for every dollar earned through MAGIC Fund activity, an additional 70 cents was added to the local economy. [10]

The balance of the fund grew, but officials wanted to implement changes to further decrease the risk involved in assisting ventures. After the 2002 mayoral election, a 3-man committee was appointed by Mayor Curt Zimbelman to study issues such as repeat failure to meet job creation targets with no clear penalties for such actions and the conditions that MAGIC Fund grants were disbursed under being ignored and to create a new set of guidelines. The new guidelines were officially approved by the city council.[ citation needed ]

Recent events

MAGIC funds are currently being utilized in three major area projects. The MAGIC Fund has supported all of these projects through payments directly related to building permanent infrastructure such as water and roads. In the future, the Fund plans to continue supporting infrastructure grants and loans. The first of its kind in the state, intermodal transportation facility The Port of North Dakota is in the works in northeast Minot. The Port anticipates to benefit businesses in an approximate 150-mile (240 km) radius of Minot stretching into Montana, South Dakota and Saskatchewan by offering identity preserved bulk transportation at the intersection of two Class One railroads, two major state highways and airport runway facilities, all near the geographical center of North America. Construction began in 2006 (citation), and in March, the project took a huge step forward when BNSF Railway announced its cooperation with a proposed statewide rail strategy to reduce rates for containers of bulk commodities shipped from the Minot and Fargo-Dilworth areas.

Another major project the MAGIC Fund is aiding in is in the Value-added Ag Complex, an agri-business park also located in northeast Minot. Minot Milling, anchor tenant of the complex, recently celebrated its tenth anniversary of operations in Minot and was named the recipient of the Corporate Citizenship Award for its years of service to the community and for being such a valuable asset to the Ag Complex. In late September 2008, California-based C&F Foods closed on the purchase of MG Grain, an unfinished lentil processing facility in the Ag Park.

The third major project aided by the MAGIC Fund is the Great Plains Energy Park. [11] The project was first conceptualized in March 2008 and in April $1.1 million in MAGIC Funding was approved for the infrastructure of the park. The first Phase of the Park has been entirely sold out, allowing Minot Area Development Corporation to pay back $857,000 to the MAGIC Fund [12] In October, after the repayment of initial funding, $1.69 million in additional MAGIC funding was approved for the build out of Phase II of the Park.

MAGIC Fund Screening Committee

Seven area residents sit on the MAGIC Fund Screening Committee, appointed by the mayor and confirmed by the City Council. Members represent the financial, professional, labor, business and trade communities. [13] Initially, the MAGIC Fund Screening Committee's singular role was to review applications submitted by organizations for MAGIC funding and pass them along to the Minot City Council if approved. In the next step of the process, the City Council votes on the request at its next monthly meeting.

In 2003 the Committee adopted guidelines to require its chairman to submit a written report including fiscal information, performance evaluations, an assessment of the management health of the MAGIC Fund and a listing of all applications not approved by the committee. [11] Two years later members of the committee recommended that all members be required to obtain some level of education in economic development. Suggestions for this included Souris Basin Planning Council seminars or statewide economic development conferences. [14]

Related Research Articles

<span class="mw-page-title-main">European Investment Bank</span> Investment bank of the European Union

The European Investment Bank (EIB) is the European Union's development bank and is owned by the EU Member States. It is one of the largest supranational lenders in the world. The EIB finances and invests both through equity and debt solutions projects that achieve the policy aims of the European Union through loans, guarantees and technical assistance.

<span class="mw-page-title-main">Minot, North Dakota</span> City in North Dakota, United States

Minot is a city in and the county seat of Ward County, North Dakota, United States, in the state's north-central region. It is most widely known for the Air Force base approximately 15 miles (24 km) north of the city. With a population of 48,377 at the 2020 census, Minot is the state's fourth-most populous city and a trading center for a large part of northern North Dakota, southwestern Manitoba, and southeastern Saskatchewan. Founded in 1886 during the construction of James J. Hill's Great Northern Railway, Minot is also known as "Magic City", commemorating its remarkable growth in size over a short time.

<span class="mw-page-title-main">John Hoeven</span> American banker and politician (born 1957)

John Henry Hoeven III is an American banker and politician serving as the senior U.S. senator from North Dakota, a seat he has held since 2011. A member of the Republican Party, Hoeven served as the 31st governor of North Dakota from 2000 to 2010.

<span class="mw-page-title-main">Baltimore Convention Center</span>

The Baltimore Convention Center is a convention and exhibition hall located in downtown Baltimore, Maryland. The center is a municipal building owned and operated by the City of Baltimore.

The Trans-European Networks (TEN) were created by the European Union by Articles 154–156 of the Treaty of Rome (1957), with the stated goals of the creation of an internal market and the reinforcement of economic and social cohesion. To various supporters of this policy, it made little sense to talk of a big EU market, with freedom of movement within it for goods, persons and services, unless the various regions and national networks making up that market were properly linked by modern and efficient infrastructure. The construction of Trans-European Networks was also seen as an important element for economic growth and the creation of employment.

<span class="mw-page-title-main">European Structural and Investment Funds</span>

The European Structural and Investment Funds are financial tools governed by a common rulebook, set up to implement the regional policy of the European Union, as well as the structural policy pillars of the Common Agricultural Policy and the Common Fisheries Policy. They aim to reduce regional disparities in income, wealth and opportunities. Europe's poorer regions receive most of the support, but all European regions are eligible for funding under the policy's various funds and programmes. The current framework is set for a period of seven years, from 2021 to 2027.

The Northwest Area Water Supply (NAWS), is a project to divert water from Lake Sakakawea to the area around Minot, North Dakota, which is in the Souris River watershed. Minot is roughly 40 miles north of Lake Sakakawea.

<span class="mw-page-title-main">Jawaharlal Nehru National Urban Renewal Mission</span> 2005–2014 city-modernisation scheme in India

Jawaharlal Nehru National Urban Renewal Mission (JNNURM) was a massive city-modernization scheme launched by the Government of India under the Ministry of Urban Development. It envisaged a total investment of over $20 billion over seven years. It is named after Pt. Jawaharlal Nehru, the first Prime Minister of India. The aim is to encourage reforms and fast track planned development of identified cities. Focus is to be on efficiency in urban infrastructure and service delivery mechanisms, community participation, and accountability of ULBs/ Parastatal agencies towards citizens.

<span class="mw-page-title-main">GIFT City</span> Business district under construction in Gujarat, India

Gujarat International Finance Tec-City is a central business district under construction in Gandhinagar district in Gujarat, India. It is India's first operational greenfield smart city and international financial services centre, which the Government of Gujarat promoted as a greenfield project. In 2020 GIFT IFSC bagged 10th place in Finance Industry and top rank in emerging financial centres in Global Financial Centres Index. As of June 2023, it is home to 23 multi-national banks including HSBC, JP Morgan and Barclays; 35 fintech entities; two international stock exchanges with average daily trading volumes of $30.6 billion; as well as India’s first international bullion exchange with 75 onboarded jewellers.

<span class="mw-page-title-main">Minot, North Dakota micropolitan area</span>

The Minot Micropolitan Statistical Area, as defined by the United States Census Bureau, is an area consisting of three counties in North Dakota, anchored by the city of Minot. As of the 2010 census, the area had a population of 69,540. In 2012, it was estimated that the population of the Minot Micropolitan Area was 73,146.

<span class="mw-page-title-main">Chinese economic stimulus program</span> Government Plan

The 2008–09 Chinese economic stimulus plan is a RMB¥ 4 trillion stimulus package announced by the State Council of the People's Republic of China on 9 November 2008 as an attempt to minimize the impact of the financial crisis of 2007–2008 on the economy of China. Critics of China's stimulus package have blamed it for causing a surge in Chinese debt since 2009, particularly among local governments and state-owned enterprises.

The official history of motion picture production in the U.S. state of Michigan dates back to the beginning of the Post–World War II baby boom. As of March 14, 2013, the Michigan Film Office website contains a list of 319, filmed in Michigan titles, beginning with This Time for Keeps, starring Esther Williams and in 1946, followed by Anatomy of a Murder, starring Jimmy Stewart and Lee Remick in 1959. Contemporary nationally known works filmed in the state include the drama Conviction (2010), starring Hilary Swank and Sam Rockwell, Kill the Irishman (2011), starring Val Kilmer and Christopher Walken, HBO's series Hung was filmed, and is set in, Detroit, and the Discovery Channel's Motor City Motors (2009), formerly Monster Garage (2002-2006). Originally slated for Minneapolis, Minnesota, Clint Eastwood's film Gran Torino (2008) was filmed in the Detroit area.

Metropolitan Area Projects Plan (MAPS) is a multi-year, municipal capital improvement program, consisting of a number of projects, originally conceived in the 1990s in Oklahoma City by its then mayor Ron Norick. A MAPS program features several interrelated and defined capital projects, funded by a temporary sales tax, administered by a separate dedicated city staff funded by the sales tax, and supervised by a volunteer citizens oversight committee.

SRT Communications is the largest telecommunications cooperative in North Dakota, serving over 99,000 people with Internet, Security Alarm and Video Surveillance, and Business Phone Systems and services.

The New York City Regional Center (NYCRC) secures capital for real estate and infrastructure projects throughout New York City. Established in 2008, NYCRC has provided over $1.5 billion of capital to help fund a broad spectrum of economic development projects in Brooklyn, Queens, Manhattan, and the Bronx. These projects have successfully utilized NYCRC financing to assist in the construction of over 3.5 million square feet of new development and renovation as well as infrastructure upgrades resulting in thousands of new jobs for New Yorkers.

<span class="mw-page-title-main">Downtown Minot</span> Place in North Dakota, United States

Downtown Minot is the central business district of Minot, North Dakota, located south of the Souris River in the Souris Valley. Downtown is the site of the first permanent settlement in Minot in 1886. Downtown is home to many of Minot's cultural sites of interest. It is also home to numerous galleries, stores and restaurants. The Minot Riverwalk traverses the downtown.

<span class="mw-page-title-main">North Hill, Minot</span> Place in North Dakota, United States

North Hill is a neighborhood in Minot, North Dakota, located north of the Souris River, above the Souris River Valley. It is a primarily residential neighborhood, though there are industries and businesses in the area, primarily along North Broadway and 21st Ave NW. North Hill is also home to Minot International Airport.

<span class="mw-page-title-main">South Hill, Minot</span> Place in North Dakota, United States

South Hill is a neighborhood in Minot, North Dakota, located south of the Souris River, above the Souris River Valley. It is a primarily residential neighborhood, although there are commercial zones along South Broadway, Twentieth Avenue South and around the Dakota Square Mall.

<span class="mw-page-title-main">Atal Mission for Rejuvenation and Urban Transformation</span> Indian government urban renewal scheme

Jawaharlal Nehru National Urban Renewal Mission was renamed to Atal Mission for Rejuvenation and Urban Transformation (AMRUT) and then relaunched by Prime Minister of India Narendra Modi in June 2015 with the focus to establish infrastructure that could ensure adequate robust sewage networks and water supply for urban transformation by implementing urban revival projects. Rajasthan was the first state in the country to submit State Annual Action Plan under Atal Mission for Rejuvenation and Urban Transformation (AMRUT). The scheme Housing for All by 2022 and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) were launched on the same day. The scheme is dependent with public–private partnership(PPP) model. If required, various other schemes like Swachh Bharat Mission, Housing for All 2022, along with the local state schemes like that related to water supply and sewerage and other infrastructure related schemes can be linked to AMRUT.

<span class="mw-page-title-main">Regional economy in Wales</span> Four regional economic boards in Wales

Regional economy in Wales is centred on four regional economic boards in Wales. Each board oversees a city or growth deal, signed between 2016 and 2022, lasting 10–15 years. Two of the deals are city deals signed and proposed by their respective economic boards, and their areas are described as "city regions"; the Cardiff Capital Region and Swansea Bay City Region. Whereas in North Wales, the North Wales Economic Ambition Board negotiated a North Wales growth deal signed in 2020, and in Mid Wales, the Growing Mid Wales Partnership, led negotiations for a Mid Wales growth deal signed in 2022. The programmes are based on the City deal and Growth deal initiatives set up by the Coalition UK Government in 2012, to promote the decentralisation of the UK economy, by stimulating local economic growth.

References

  1. 1 2 3 Schramm, Jill. “Minot’s growth fund has worked like MAGIC” Archived 2011-06-15 at the Wayback Machine . Minot Daily News. Hometown Headlines 2008. Posted October 1, 2008. Retrieved on November 1, 2008.
  2. 1 2 3 4 Schramm, Jill. “Minot’s growth fund has worked like MAGIC”. Archived 2011-06-15 at the Wayback Machine Minot Daily News. Hometown Headlines 2008. Posted October 1, 2008. Retrieved on November 1, 2008.
  3. ↑ Schramm, Jill. “Public shares advice for MAGIC Fund” Archived 2011-06-15 at the Wayback Machine . Minot Daily News. Posted October 8, 2008. Retrieved on November 1, 2008.
  4. ↑ Schramm, Jill. "MAGIC Fund guidelines reviewed." Archived 2011-06-15 at the Wayback Machine Minot Daily News. Posted on November 26, 2008. Retrieved on December 30, 2013.
  5. ↑ Davis, Jenna. “MAGIC Fund members want to know if spending taxpayer dollars is ‘paying off.’” Minot Daily News. March 27, 2005. pg A1
  6. ↑ Schramm, Jill. “Public shares advice for MAGIC Fund”. Archived 2011-06-15 at the Wayback Machine Minot Daily News. Posted October 8, 2008. Retrieved on November 1, 2008.
  7. ↑ Ondracek, James. The rise and fall of WebSmart Interactive: A cautionary tale. Archived 2011-08-26 at the Wayback Machine Small Business Advancement National Center. Retrieved on December 12, 2008.
  8. ↑ Rafferty, Tom. “MedVision expected to reimburse fund soon.” Minot Daily News. April 13, 2002. pg 1A.
  9. ↑ Rafferty, Tom. “Value under analysis.” Minot Daily News. December 22, 2000. p A1.
  10. ↑ Witte, Brian. “Study shows positive results.” Minot Daily News. June 5, 2001. p A1.
  11. 1 2 City of Minot Finance Department. MAGIC Fund Annual Compliance Report 2006 [ permanent dead link ]
  12. ↑ Schramm, Jill. “MADC repays $857K to MAGIC Fund.” Minot Daily News. September 25, 2008. pg 1A.
  13. ↑ Chapter 28 ½, Article IV, Section 112 (2). Minot Code of Ordinances. City Council Action, April 2, 1990 (Committee Membership and Terms). City Council Action, June 2, 1997 (Terms)
  14. ↑ Schramm, Jill. “More training requested.” Minot Daily News. October 4, 2005. pg B1.
City of Minot
Minot Area Development Corporation
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.