by Erin Johnson
Thisweek Newspapers

The 2,000 new jobs that were expected to come to Eagan as part of Thomson West's expansion could now be in jeopardy as a result of the vetoed tax bill.

Gov. Tim Pawlenty, himself an Eagan resident and former City Council member, vetoed a tax bill that included tax breaks for the planned $100 million expansion of Thomson West's Eagan campus.

The expansion, planned as 425,000 square feet of additional office space and 80,000 square feet of additional data center space, was expected to bring about 2,000 new jobs to Eagan by 2012. The jobs were expected to pay an average salary of $70,000.

The tax bill included $9 million in sales tax exemptions on construction materials and supplies for the expansion.

The tax breaks were controversial, but local legislators defended them as necessary to stay competitive with other states that also lobbied for the expansion.

"I'm very disappointed in the governor for vetoing it," said Eagan Sen. Jim Carlson.

Now that the tax breaks have been vetoed, many are wondering whether Thomson West will look to other sites around the country for its expansion.

The company has pulled its application for the office building portion of the project from the city. Eagan was looking to create a Tax Increment Financing (TIF) district for the expansion, which would have required approval from the Legislature. That item was pulled from the City Council's agenda last week after Thomson asked that the city "discontinue further consideration" of the matter.

The company also asked Dakota County to stop its work related to the expansion. The county's Physical Development Department had been researching traffic issues and tax implications of the expansion, said Dakota County Commissioner Tom Egan.

"We've basically been told to suspend all that," he said.

According to a statement from the company, Thomson West will move ahead with the 80,000-square-foot data center in Eagan due to immediate business needs.

The company said that the Eagan campus continues to be one of the most important Thomson business centers in the country, and it expects to have a sustained presence in Eagan.

However, the overall campus expansion will "need to be reviewed and reevaluated in the coming months," according to the statement.

That sentiment was echoed in an e-mail sent to the county by Thomas Walrath, director of facilities services for Thomson West, who stated that the company was going to "reevaluate its options" over the next several months.

"This wasn't supposed to be the way this ended," Walrath wrote.

The data center is only expected to create a small number of new jobs. The bulk of the new jobs would come with the office building, which would house new technology, operations, finance and customer service positions.

Eagan City Administrator Tom Hedges said the city remains hopeful that the company will continue its plans to expand the Eagan campus.

"Eagan has a great relationship with Thomson West and looks forward to that continued relationship," he said. "We hope they will decide to expand here, whether it's a modified plan or whatever they decide."

The 264-acre Eagan campus, which was purchased in the 1970s, already has 1.2 million square feet of manufacturing space, 1.2 million square feet of office space, and 200,000 square feet of data center space.

It is the city's largest employer, with 6,800 employees, and is the headquarters of Thomson West and the Thomson North American Legal business unit.

Thompson West is a giant in legal publishing and operates the leading online legal research service Westlaw. It is also the largest software developer in Minnesota.

Erin Johnson is at eagan.thisweek@ecm-inc.com.