An extension was granted to Southern Minnesota Tooling (SMT) and S&H Capital to meet job and wage compliances connected to a tax abatement program approved by the New Ulm City Council in 2022. The tax abatement program allowed SMT add a 10,000 sq. ft. addition to its building in June 2024.

NEW ULM – Southern Minnesota Tooling and S&H Capital was granted a one-year compliance extension for its tax abatement.

In July 2022, the New Ulm City Council established a tax abatement program for Southern Minnesota Tooling Inc. (SMT) and S&H Capital. A tax abatement allows a city to rebate a portion of property taxes to offset development or redevelopment costs to a property owner.

In 2022, SMT plan to construct a 10,000 square-foot building addition to the building at 1212 N. Front Street. The addition was needed to house additional machinery, offices and employees. SMT request an abatement to assist with the construction.

The city council agreed to a $150,000 abatement over a 15-year term. The abatement came with job creation goals. With this project, SMT had to retain 15 full-time employees and add two full-time jobs paying a minimum of $22 per hour by Sept. 30, 2025.

The addition to SMT was completed in June 2024, but SMT has not yet reached the job creation goal. In a letter to the city council, SMT president Gregg Holm said manufacturing slowed down at the time of the addition was completed and has remained slower than expected. Holm dose not think SMT will reach the job requirements by the end of September and requested a year extension to meet compliance.

Community Development Director David Schnobrich said the city council has approved similar extensions for three tax abatement programs.

The council held a public hearing on the extension, but received no comments. Councilor David Christian made motion to approve the request of extension for SMT to reach its wage goal with a second from Councilor Eric Warmka. It was unanimously approved by the council. The new deadline for compliance is Sept. 30, 2026.