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Duluth company that owes over $1 million in taxes given stimulus cash

Among the numerous Duluth companies to receive stimulus money was Polyphase Electric, even though the company has had nearly $1.2 million in state and federal tax liens filed against it, which the News Tribune first reported in August.

Polyphase was awarded $255,521 in June 2009 from $5.3 million in stimulus funding for a parking lot project as part of a new Duluth International Airport terminal.

Though Polyphase has been suspended from working on any state projects by the state's Department of Administration because of the taxes it owes, that suspension didn't come until May 2010.

The company at that time was a qualified contractor and a low bidder on the project, said Brian Ryks, executive director of the Duluth Airport Authority.

He referred questions about who knew whether Polyphase had unpaid taxes to Kraus-Anderson construction, the project's prime contractor.

Kraus-Anderson did not return calls seeking comment. Brett Cahoon, who was Kraus-Anderson's project manager for the airport project, told the News Tribune in August that Polyphase did good work on the job.

Records show Polyphase owes $403,000 for failing to pay unemployment insurance taxes to the Minnesota Department of Employment and Economic Development, $133,472 for failing to pay withholding taxes to the state Department of Revenue and $622,017 in federal tax liens. The state and IRS won't release the liens until they've been fully paid, and don't have documents showing how much has been made in payments.

Polyphase Vice President Tim Harkonen said in August that about $440,000 of the unpaid taxes is still owed. He did not return calls for comment for this story.