Short of job goal, Shutterfly granted one-year extension in Shakopee

Shutterfly Inc. has roughly another year to reach a job-creation goal under a tax-break agreement that helped bring the company to Shakopee.

The photo company, which opened a manufacturing plant in Shakopee in 2014, fell 28 jobs short of the 258 jobs that it agreed to create within about two years. Both the Scott County Board and the Shakopee City Council voted 4-1 this week to extend the deadline, while also reducing Shutterfly's tax abatements by 11 percent — amounting to $51,863 and $54,388, respectively — to reflect the job shortage. The new deadline is May 27, 2017.

Besides job creation, the company, a fixture in the south-metro city's growing industrial workforce, aimed for an hourly $18.78 average wage, which it exceeded at $24.81 per hour.

"It's kind of a fine line that you're walking because, granted, they didn't meet that portion [job creation] of the goals," said Samantha DiMaggio, the city's economic development coordinator.

The company's business subsidies from the city included $758,771 over nine years in tax abatements, $174,600 in city fee credits and a $1 million forgivable loan from the Minnesota Investment Fund. The county agreed to tax breaks of $734,878 over nine years.

"It's hard to look ahead two years and know where you're going to be from an employee standpoint," Jamie Riddle, Shutterfly's senior director of operations in Shakopee, said at Tuesday's City Council meeting.

Riddle, also a city resident, added that he's "very confident" that the company will fill the jobs within the next couple of months. He cited a lagging initiation process for new employees and shifting technology and products as factors for the delay.

The dissenters, Council Member Matt Lehman and County Commissioner Tom Wolf, weren't sympathetic.

"It's pretty obvious that too much was done too fast," Lehman said Tuesday night. "Now we're spending massive amounts of dollars at every level of government to bus them all [workers] down here."

DiMaggio defended Shutterfly's investment and stressed "flexibility."

"Think about trying to pick a goal and thinking about three years from now. 'How much are you going to spend on gas?' " she said. "I couldn't predict that."

Natalie Daher • 612-673-1775