Minnesota Investment Fund Incentives Help Secure $100M Kraft Heinz Expansion For New Ulm

The Kraft Heinz Company is making an investment of $100 million at its New Ulm food manufacturing plant in southern Minnesota.

Kraft Heinz

Kraft Heinz (Photo – The Kraft Heinz Company)

Supported by a forgivable loan being provided by the Minnesota Department of Employment and Economic Development (DEED), the company is investing $100 million to expand its existing plant in New Ulm and add four new production lines.

The project is expected to create 50 new jobs, and also supports retention of 90 jobs. The new jobs being created will have an average starting wage of $22.16 per hour, plus benefits.

Kraft is already the third-largest employer in the city with 376 existing full time equivalent positions at its New Ulm plant, which has been operating since 1955.

The New Ulm City Council had earlier this year adopted a resolution to authorize the submittal of an application to DEED for financial assistance from the Minnesota Investment Fund (MIF) to assist the Kraft Heinz Foods Company with facility improvements.

DEED is therefore supporting the project through a $450,000 forgivable loan that will be forgiven if the company meets hiring and investment goals, and it also requires a local match of New Ulm economic development incentives.

MIF Funding awards are disbursed to local governments and then provided as loans to businesses. Last year, this Minnesota economic development program awarded $11.2 million in loans to 21 businesses. Those loans resulted in more than 1,700 jobs and attracted $1.4 billion in private funding.

Minnesota Lt. Governor Tina Smith said in a statement that the Minnesota Investment Fund helps generate well-paying jobs all across our state. “I thank Kraft Heinz for their continued partnership and for choosing to expand their operations in New Ulm,” said Lt. Gov. Smith.

New Ulm Mayor Bob Beussman likewise said that “The city of New Ulm would like to thank Kraft Heinz for their significant investment in our community.”

DEED Commissioner Shawntera Hardy noted that The Kraft Heinz food manufacturing plant has been an institution in New Ulm for more than 60 years. The Kraft Heinz Company (KHC) formed when Kraft Foods and H.J. Heinz merged last year, creating the fifth-largest food and beverage company in the world with annual sales of $27.4 billion.

Matt Hippe, New Ulm plant manager, noted in the release that “This expansion is a tribute to the strong work ethic and dedication of the New Ulm workforce, both past and present.”

Takeda Pharmaceutical Selects Brooklyn Park, MN For First U.S. Manufacturing Plant

Takeda Pharmaceutical Company Limited (TSE:4502) announced the acquisition of a biologics manufacturing facility located in Brooklyn Park, MN from Baxalta US Inc (NYSE:BXLT).

Takeda Pharmaceutical Company HQ

Takeda Pharmaceutical Company HQ (photo – Lombroso/wikimedia)

The Brooklyn Park facility will be Takeda’s first U.S. manufacturing operation, and will primarily manufacture the prescription medication Entyvio (vedolizumab) and other biologic products.

Osaka, Japan-based Takeda Pharmaceutical Co. Ltd. is Japan’s largest pharmaceutical company with more than 30,000 employees worldwide, and develops and markets medicines for treating cancer, gastrointestinal disorders, diabetes and other health problems.

Thomas Wozniewski, Global Manufacturing and Supply Officer at Takeda, said in a release that “Acquiring the state of the art Brooklyn Park facility and gaining access to a highly experienced and dedicated team is a very important strategic benefit for Takeda that reinforces and expands upon our global operations for Entyvio and future biologic products.”

Minnesota Lt. Governor Tina Smith noted that “Takeda Pharmaceutical Company will be a great addition to our state’s bioscience sector, and we are glad to welcome them to Minnesota.”

Minnesota Department of Employment and Economic Development (DEED) Commissioner Katie Clark Sieben added that “This project will enable Takeda to expand its global footprint and further build the Twin Cities’ reputation as one of the country’s leading biotech hubs.”

Another major Brooklyn Park economic development benefit resulting from the project is that it puts to good use, once again, the Baxalta facility at 9450 Winnetka Ave. N. The facility was opened in 2004 as a $200 million project by PDL BioPharma Inc., which sold it to Genmab, who then sold it to Baxter International.

Supported by Minnesota and Brooklyn Park economic development incentives, Baxter was supposed to create 190 jobs and invest $300 million into the facility. The company was, however, unable to qualify for post-performance state incentives due to its inability to fulfill job creation and investment commitments, and Baxalta was spun off from Baxter as a separate publicly-listed company last year.

The facility has once again changed hands, this time to Japan’s largest pharmaceutical company. Takeda is more than capable of making good use of this state-of-the-art facility and creating good jobs for the community. The company has already committed to offer jobs to the facility’s existing employees.

Brooklyn Park Mayor Jeffrey Lunde noted that Takeda fits into Brooklyn Park’s strategy to attract and retain high-quality jobs. “We are excited that Takeda will join the city’s growing headquarter and manufacturing corridor along Highway 610,” said Mayor Lunde.

Minnesota Economic Development Dept Awards $11M Grants For Broadband Projects

The Minnesota Department of Employment and Economic Development (DEED) has awarded $11 million in grants for projects to expand broadband access in 15 Greater Minnesota communities.


Broadband (photo – Sean MacEntee/flickr)

The grants will be provided through a Minnesota economic development initiative called the Border-to-Border Broadband Development Grant Program, which was signed into law by Governor Mark Dayton last year in May.

The program’s first round of funding awarded $19.4 million to 17 Greater Minnesota communities. This year, DEED received 44 applications totaling more than $29 million in funding requests. Recipients were selected based on an internal review and scoring process.

This latest round of broadband grants will improve access to high-speed broadband for 3,222 households, 786 businesses and nearly 90 community institutions throughout the state.

Lt. Governor Tina Smith said in a release that “Broadband Internet access isn’t just nice, it’s necessary for Minnesota businesses to grow and our students to thrive. While these grants are a good start, significant need remains.”

The largest grant award this year of $4.95 million was for Federated Telephone Cooperative for a $12.5 million project covering parts of De Graff, Swift Falls and rural parts of eastern Swift County. With nearly $5 million in state funding, the rest of the funding will be provided by a loan from Swift County to Federated.

This project will deliver high-speed Internet service to 600 households, 425 businesses and 75 community institutions. As a result, more than 500 jobs are expected to be created over the next few years related to farming, home-based startups, commercial expansions and more. Nearly half of the county’s 800 farms are in the project area.

The full list of broadband grants awarded this year is as follows:

BEVCOMM Cannon Valley Telecom – Rural Freeborn Fiber-to-the-Premises Project, $149,625;

BEVCOMM Blue Earth Valley Telephone – Rural Winnebago Fiber-to-the-Premises Project, $142,690;

Consolidated Telecommunications Co. – Fort Ripley Phase II, $759,525;

Federated Telephone Cooperative – Swift County FTTP 2015, $4.95 million;

Halstad Telephone Co. – Gentilly Township, $424,460;

Hiawatha Broadband Communications – Whitewater area in Winona County, $247,000;

Midcontinent Little Fork Middle Mile – $277,448;

MVTV Wireless Middle Mile – Southwestern Minnesota, $808,080;

New Ulm Telecom – Goodhue Fiber Project, $115,934;

Otter Tail Telcom – Fergus Falls 864, Highway 59, $295,432;

Otter Tail Telcom – Highway 59/94, $164,207;

Paul Bunyan Central Itasca County Fiber – $1.98 million;

Runestone Telephone Association – Holmes City, $189,990;

West Central Telephone Association – Highway 71 Wadena North Expansion Project, $189,525; and

Winona County Hiawatha Broadband Communications – Cedar Valley Area, $314,450.

Minnesota Department of Employment and Economic Development Commissioner Katie Clark Sieben noted that “By gaining access to broadband, these rural communities will increase economic development, improve living standards and enhance education and public services.”

Comcast Expansion in St. Paul, Minnesota to Create 400 New Jobs

Comcast has announced plans for an expansion of the company’s regional office in downtown St. Paul, MN that includes the creation of 400 new jobs.

Comcast Xfinity

Comcast Xfinity (Press photo – Comcast)

In order to accommodate this growth, Comcast will add an additional 45,000 square-feet of lease space to its existing 125,000 square-foot Twin Cities regional facility.

Governor Mark Dayton said in a release that Comcast’s decision to add 400 new jobs in St. Paul is tremendous news for Minnesota. “I congratulate Comcast for its success, and thank the company for its continued commitment to Minnesota,” added Gov. Dayton.

With the addition of these new jobs, the company will employ more than 2,400 individuals across the Twin Cities, where it serves more than 650,000 customers, including thousands of local businesses.

Jeff Freyer, Regional Vice President, Comcast Twin Cities, said in the release that “These jobs will not only make a positive impact in our community, but will also help Comcast deliver a better customer experience here and in communities across the western half of the United States.”

Comcast has a considerable impact on Minneapolis and St. Paul economic development, with total employee investment including payroll, payroll taxes, benefits, healthcare, training and tuition reimbursement totaling more than $150 million last year.

Since 2007, Comcast has invested more than $550 million in technology and infrastructure into the Twin Cities region. Last year alone, the company contributed more than $580,000 to Twin Cities community organizations and non-profits.

Comcast Corporation (NASDAQ: CMCSA, CMCSK) is a global media and technology company. Comcast Cable is one of the largest video, high-speed Internet and phone providers to residential customers in the United States under the XFINITY brand, and also provides these services to businesses.

The new jobs and expansion in St. Paul are part of Comcast’s multi-year plan to reinvent the customer experience and create a culture focused on exceeding customers’ expectations. This plan calls for major investments in employee training, simplified billing, store renovations and the development of new technologies.

As part of the plan, Comcast is adding more than 5,500 new customer service positions across the U.S. over three years. The company has also committed to hiring military reservists, veterans and their spouses or domestic partners for these new roles. On a company-wide scale, Comcast is committed to hiring 10,000 veterans, reservists and their spouses or domestic partners by 2017 across all levels of the organization.

Minnesota Considers $26M Economic Development Package For Sweetwater Energy

Renewable biochemical producer Sweetwater Energy, Inc. is getting ready to start construction on a commercial-scale facility located in Mountain Iron, MN that will implement their patented biomass processing technology.

IRRRB Sweetwater, MN

IRRRB Sweetwater, MN (photo – mn.gov/irrrb)

Supported by a $26 million financing package from several Minnesota economic development agencies, the company will establish a $52.8 million biotechnology manufacturing facility to extract components from Minnesota’s local timber and waste wood, without producing harmful byproduct chemicals.

These extracted components become the building blocks of many types of biochemicals used throughout the world. It’s a sustainable and renewable process that would be fed by northeastern Minnesota forestry resource.

Sweetwater expects the facility to support the creation of up to 300 new jobs for northeastern Minnesota, including agricultural, logistical, manufacturing, and operations positions to support the facility.

The Iron Range Resources & Rehabilitation Board (IRRRB), a state economic development agency serving northeastern Minnesota, will be meeting this Friday to consider an $18 million loan for the Sweetwater project. IRRRB Commissioner Mark Phillips said in a release that this project places northeastern Minnesota into the leading edge of the growing green biotechnology industry.

“It’s an innovative process that makes use of our region’s natural resources, creates new well-paying jobs, and helps diversify the region’s economy,” added Phillips.

Sweetwater Energy Chairman and CEO Arunas Chesonis was likewise full of praise for the support provided by Minnesota. “Right from the start they’ve been welcoming and energetic, and we’re looking forward to offering solid employment in the region and expanding there as we grow,” said Chesonis.

In addition to the IRRRB loan, the Sweetwater Energy project will also receive another $6 million loan from the 21st Century Minerals Fund. The Minnesota Department of Employment and Economic Development (DEED) will chip in with $1 million from the Minnesota Investment Fund. The Minnesota Agricultural and Economic Development Board will come up with another $1 million.

St. Louis County has additionally provided the land the company needs for the project in the Mountain Iron Renewable Energy Industrial Park.

Sweetwater has raised its own financing too, including $16 million in a Series A funding round in 2013. That funding, supported by grants from the New York State Energy Research and Development Authority (NYSERDA), allowed the company to develop its technology and establish a demonstration-scale plant in Rochester, NY.

Sweetwater Energy, Inc. also closed on a $10 million bridge loan earlier this year, in advance of the funding the company will need for construction of their commercial facilities. The Mountain Iron, MN biotech processing plant is expected to be complete and become operational in 2017. Sweetwater is also building another commercial-scale facility on a 11.66-acre site in the Eastman Business Park in Rochester, NY.

Minnesota Economic Development Workers Face Layoff Over Jobs Bill

Governor Mark Dayton’s veto of a jobs and energy bill has raised the possibility that Minnesota’s non-essential economic development workers could be asked to stay home if an agreement is not reached soon.

Minnesota State Capitol

Minnesota State Capitol (photo – Jonathunder/wikimedia)

Over the weekend, the Governor vetoed Chapter 80, HF 1437. This is an omnibus jobs and energy bill that appropriates money for state agencies involved with Minnesota economic development, workforce development, labor and industry, commerce, housing, and energy.

The bill was sent to the Governor for his signature after passing the Minnesota House 75-9 and the Senate by 34-29.

In his veto letter, Gov. Dayton explains that he vetoed the bill because it insufficiently funds the Department of Commerce, and says the Broadband Funding in the bill is seriously inadequate. The Governor also notes that the bill falls short in funding programs that advance Minnesota’s Olmstead Plan.

“I was disappointed that this bill did not include more funding for the Department of Employment and Economic Development and the Minnesota Housing Finance Agency to carry out their responsibilities under Minnesota’s Olmstead Plan,” said Gov. Dayton in the veto letter.

The Minnesota Office of Broadband Development (OBD) is tasked with administering the Border-to-Border Broadband Development Grant program. The OBD got $20 million for the current biennium for making investments in broadband infrastructure. This funding has been committed to 17 projects that were selected out of 40 applications.

For the next biennium, the omnibus funding bill that got vetoed provides barely half this amount, and furthermore earmarks $2 million for a specific broadband project. The Governor says in the letter that this undermines the program’s competitive application process, and sets a dangerous precedent.

Minnesota House Speaker Kurt Daudt issued a response statement in which he says that “The governor, the DFL-led Senate and the Republican-led House have had five months to get our work done for Minnesotans. While the Senate and House completed ours on time and in a bipartisan fashion, the governor wants more time. We will continue to work with him for Minnesotans.”

Gov. Dayton will now call the Minnesota Legislature for a special session in which state lawmakers will have to come up with an agreement on legislation to replace the vetoed environment, education and economic development bills.

If there is no agreement on the budget measures before June 1, layoff alerts will be sent to more than 10,000 state employees. A month later on July 1, when the state’s new two-year budget is set to begin, non-essential staff at state agencies involved in education, economic development and the environment will not be able to work.

Thief River Falls, Minnesota Economic Development Incentives Secure Arctic Cat Expansion

Arctic Cat Inc. (NASDAQ:ACAT) announced plans for an expansion of its Minnesota operations at two of its facilities in Thief River Falls and St. Cloud, MN.

Arctic Cat

Arctic Cat (photo – John.E.Robertson/flickr)

Supported by Thief River Falls tax abatements and Minnesota economic development incentives, the company is investing nearly $27 million and expects to create 50 new jobs.

This includes a $25,700,000 expansion of its Thief River Falls facility to add a new state-of-the-art paint line and other facility improvements that will result in the creation of 39 new jobs. This expansion will enable the company’s continued growth in the recreational off-highway vehicle sector.

At its St. Cloud facility, the company is investing $400,000 to expand assembly capacity for engine manufacturing. Arctic Cat manufactures ATV and snowmobile engines at the St. Cloud facility. Prior to bringing engine manufacturing and assembly in-house to Minnesota, these engines were provided to Arctic Cat by Suzuki Motor Corp.

Arctic Cat President and CEO Christopher T. Metz said in a release announcing the new Minnesota expansions that they are grateful to the local leadership of Thief River Falls and St. Cloud, and the state of Minnesota, for their support as they invest in their shared future.

Governor Mark Dayton said in the release that Arctic Cat has operated and expanded in Minnesota for over 50 years, creating thousands of jobs for hard-working Minnesotans. The Governor thanked the company for choosing to expand their operations again in Minnesota.

Earlier this year, Arctic Cat Inc., working through site location consultant JLL, informed the City of Thief River Falls that they would be conducting a multi-state site selection process for the expansion. The company applied to the Minnesota Department of Employment and Economic Development for approximately $850,000 in state incentives under the Minnesota Investment Fund.

They also sought abatement of the increase in their property taxes that would result from the expansion. The total value of the abatement approved by the City of Thief River Falls, Pennington County and School District No. 564 is valued at up to $2.2 million over a 15-year period.

Securing the project for Thief River Falls ensures that the company will invest approximately $26 million, create 39 new jobs over the next three years, and retain 150 jobs at the Thief River Falls facility.

In the release, Arctic Cat cites their manufacturing roots in Minnesota as one of the reasons they chose to stay, in addition to a highly educated and skilled labor force.

Shakopee, Minnesota Economic Development Incentives Support Rahr Corp Expansion

The Minnesota Department of Employment and Economic Development announced state assistance for a major expansion by Rahr Malting Corporation in Shakopee, MN.

Rahr Malting Co.

Rahr Malting Co. (photo – rahr.com)

Supported by Minnesota and Shakopee economic development incentives and tax increment financing, the company is investing $68 million into the expansion to construct four new facilities at their Shakopee headquarters.

This expansion will make the site the world’s largest single-site malting facility. Rahr is a family-owned business that has been manufacturing malt in Minnesota for 168 years and distributing ingredients to brewery and beverage makers worldwide.

The company is expanding its operations to meet increased demand for its products from the craft brewery industry. The expansion includes the construction of a 115,000-square-foot malt house that adds another 70,000 metric tons of annual malting capacity, bringing the facility’s total capacity to 460,000 metric tons.

That’s enough to brew six billion bottles of the average craft beer, or twelve billion 12-ounce cans of the average light beer. This makes the Rahr malthouse and headquarters in Shakopee the world’s largest single-site malting facility.

The expansion also includes a 20,000-square-foot pilot brewery and technical center, a 15,000-square-foot maintenance warehouse, and an 80,000-square-foot warehouse and distribution facility for Brewers Supply Group (a Rahr Corp subsidiary).

The company is also making use of the expansion to add new green spaces, ponding, more parking, and other site improvements to their complex.

Another reason that this expansion is making history is that this is the first time in 168 years that Rahr Corp has asked the state for assistance in expanding and adding jobs. As part of the expansion, the company is creating 28 new full-time jobs at an average wage of $20 per hour.

Rahr Corporation President and CEO William Rahr said in a release announcing the project that they’re very excited to be able to continue growing in their home base of Shakopee, and appreciate the state’s recognition of the economic benefits that Rahr’s expansion will bring to Minnesota.

DEED has approved $610,000 in Job Creation Fund incentives for the Rahr expansion project. DEED Deputy Commissioner Kevin McKinnon said in the release that they thank the company for its continued investment in Minnesota and for its commitment to bring new jobs to the Shakopee area.

The Shakopee City Council has already voted to approve an economic development agreement that allows Rahr Corporation to make use of tax increment financing to partially fund the expansion.

U.S. EDA Announces Americas Competitiveness Exchange Sites and Participants

The U.S. Economic Development Administration and the U.S. International Trade Administration, along with the Organization of American States (OAS) and the U.S. Department of State, announced that 41 sites and 48 participants from 28 countries will be a part of the third Americas Competitiveness Exchange on Innovation and Entrepreneurship.

Americas Competitiveness Exchange

Americas Competitiveness Exchange (photo – riacnet.org)

The Americas Competitiveness Exchange (ACE) offers economic development officials the chance to see in person the results of economic development initiatives in the Americas that are strengthening innovation and entrepreneurship ecosystems.

It’s also a good opportunity to develop and renew long-term regional and global relationships that can lead to greater market access for U.S. exporters.

U.S. Assistant Secretary of Commerce for Economic Development Jay Williams said in a release that ACE is a prime example of what can be achieved when government silos are broken down and agencies come together to work toward a common goal.

The Third ACE provides an opportunity for a six-day tour (April 19-24) of successful projects and networking activities in the Midwest states of Illinois, Minnesota, and Wisconsin. Sites on the tour include everything from advanced technology centers to innovation hubs, public-private partnerships and strategic investments.

In addition to OAS Director for Economic Development Ms. Maryse Robert and high-ranking commerce and economic development officials from different countries in the Americas, the ACE participants include a large list of top U.S. officials.

Apart from Asst. Sec. Williams and Deputy Assistant Secretary for Economic Development Matt Erskine, the list includes, among others, MBDA National Director Alejandra Y. Castillo, and Deputy Assistant Secretary of Commerce for the Western Hemisphere John Andersen.

At the local and regional level, ACE participants include Minnesota Department of Employment and Economic Development Chief Deputy Commissioner Cathy Polasky, Wisconsin Lt. Governor Rebecca Kleefisch, and the mayors of Midwest cities such as Minneapolis, Rochester (MN), LaCrosse, Madison, Milwaukee, and Wauwatosa.

U.S. Deputy Assistant Secretary of Commerce for the Western Hemisphere John Andersen said in the release that this year’s ACE is perfectly timed, as it builds on the enormously successful SelectUSA Investment Summit recently hosted by the Commerce Department.

The tour sites in Minneapolis include the Minnesota Department of Employment and Economic Development (DEED), and the Minneapolis – St. Paul economic development partnership Greater MSP.

Also on the itinerary in Minneapolis are the United States Cluster Mapping Project, 3M, Natural Resources Research Institute (NRRI) at the University of Minnesota – Duluth, and Minnesota’s Bid For the 2023 World’s Fair, among others.

The Chicago sites include Chicago economic development group World Business Chicago, Argonne National Laboratory, the DOD and Univ. of Illinois led National Digital Manufacturing Innovation Institute, the Champaign – Urbana – Blue Waters Super Computer, the Tri State Alliance for Regional Development, and the University Technology Park at Illinois Institute of Technology.

The Milwaukee sites include the University of Wisconsin-Milwaukee Innovation Campus, The Water Council Global Water Center, Midwest Energy Research Consortium, and the School of Freshwater Science, among others.

Participants will have the opportunity to see and learn from these first-hand site visits, and also explore prospects for advancing commerce and trade between the participating economies.

You can see the full list of sites included in the third Americas Competitiveness Exchange at riacnet.org.

Minnesota Job Creation Fund Helped 31 Projects Invest $344.3M and Create 1800 Jobs

The Minnesota Department of Employment and Economic Development (DEED) has released a one-year report card on the performance of the Job Creation Fund, an incentive program that was launched last year.

MN Job Creation Fund

MN Job Creation Fund (photo – mn.gov/deed)

According to data provided by DEED, Minnesota economic development incentives totaling $16.7 million have been provided through JCF to 31 expansion projects.

These 31 projects, of which 17 are in the Twin Cities and the rest in Greater Minnesota, are investing a combined total of $344.3 million and creating more than 1,800 jobs.

DEED Deputy Commissioner Kevin McKinnon said in a release that the Job Creation Fund has been an important economic development tool that is encouraging growth in Minnesota. McKinnon added that the program has been a major success story in supporting companies throughout the state, from Cottonwood to Duluth, in their efforts to create jobs and invest in growth.

JCF has won awards from state and national economic development associations. Earlier this year in Jan, the Economic Development Association of Minnesota (EDAM) named DEED for its Economic Development Initiative Award for launching the Job Creation Fund.

The Council of Development Finance Agencies likewise recognized the program last year, calling it one of the most innovative finance programs in the country.

Businesses can apply for up to $1 million in JCF funding subject to their meeting certain criteria that includes minimum levels of job creation and investments. Applicants are required to create at least 10 full-time jobs and invest at least $500,000 in order to be eligible for financial assistance through JCF.

The biggest and most recent project that received JCF incentives is the expansion by window and door manufacturing company Anderson Corp. The company announced an investment of $56 million and creation of 300 jobs for expanding operations in Bayport, North Branch and Cottage Grove, MN.

Medical device maker Cardiovascular Systems was approved for JCF incentives for a new $30 million headquarters project in New Brighton, MN that is creating 200 jobs.

Another major project supported by JCF incentives was the $20 million Polaris Industries expansion in Plymouth, MN that included the creation of 100 new jobs. Clinical trial company Axis Clinicals is likewise getting JCF incentives for investing $12 million and creating 100 new jobs to establish its first U.S. research and analysis facility on the site of a former Wal-Mart store in Dilworth, MN.

Other companies that have been approved to receive JCF incentives in the last 12 months include Super Radiator Coils, TEAM Industries, Daikin Applied Americas, Harmony Enterprises, Capital Safety, Ikonics Corp., North Star Mutual Insurance Co., and DC Group.

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