Minnesota

Minnesota Introduces Legislation to Secure $300M Baxter Project

Deerfield, IL-based healthcare company Baxter International Inc. (NYSE: BAX) and the State of Minnesota are close to finalizing what could be a $300 million biopharmaceutical manufacturing plant project in Brooklyn Park, MN.

Baxter

Baxter (photo – baxter.com)

The company has already purchased the shuttered Genmab facility in Brooklyn Park for $10 million, and plans to spend another $60 million to make improvements to the plant’s cell-culture manufacturing capabilities.

This initial phase would create 190 new jobs with average annual wages of $75,000. In the second phase, Baxter would expand the existing 215,000-square-foot facility.

This expansion would require a $100 investment for construction and another $150 million for equipment purchase, and the company is holding back on this investment decision because they want incentives for the expansion.

Without naming the company, Gov. Mark Dayton said the Minnesota Department of Employment and Economic Development (DEED) had been working on this project for months.

Their efforts seem to have paid off, because State Representatives Melissa Hortman and Ann Lenczewski introduced legislation (HF 1781) yesterday that amends Minnesota statutes to offer an unnamed biopharmaceutical manufacturing facility sales and use tax exemptions.

All this was done without the company’s name being disclosed to even the lawmakers, except under the code name of “Project Fern.”

The bill approving sales tax exemptions for construction material and equipment purchase was included in and pushed through at a hearing on Tuesday as part of the House Omnibus tax bill. The company will also be provided a $5 million forgivable loan.

At the local level, Brooklyn Park is offering about $1.5 million in property tax abatements. It works out to $4,000 to $8,000 in property tax rebates per new job created for the next ten years.

In the U.S., Baxter has around 19,000 employees across 80 facilities, which includes 13 manufacturing plants.

Their global headquarters and other locations in Illinois have more than 5,400 employees, with additional operations in Arkansas (800 employees), California (2,800), Florida (400), Indiana (1,000), Mississippi (650) and North Carolina (1,900).

Baxter has 50,800 employees around the world, and generated 2012 sales of $14.2 billion, of which $6.2 billion was in biosciences.

Apogee Selects Owatonna, MN for $30M Viracon Investment

Architectural glass fabricator Viracon, a subsidiary of Minneapolis-based Apogee Enterprises, Inc. (NASDAQ:APOG), announced that it has chosen Owatonna, Minnesota for a previously announced $30 million expansion.

Viracon

Viracon (photo – viracon.com)

Last month, Apogee had announced that it would be shuttering the Viracon plant in St. George, Utah for the next two years, and moving the Utah operations to one of its two existing plants in Owatonna, Minnesota and Statesboro, Georgia.

That set off a bidding war of incentives between Owatonna and Statesboro, with Viracon publicly announcing that it was negotiating for incentives with state and local officials in both states.

At first, Owatonna offered incentives through the Minnesota JOBZ program, along with a 15-year abatement on property taxes. However, Viracon balked at this proposal because the requirements of the JOBZ program (in terms of prevailing wage standards) would wipe out any benefits provided.

So Owatonna changed its package to offer a Tax Increment Financing (TIF) deal for nine years. It is expected that the TIF will be worth as much as $4.3 million for Viracon.

The City of Owatonna has also agreed to provide a $1.4 million infrastructure grant for changes at the site, including diversion of utility systems and the shutdown of a street which runs through Viracon’s complex of buildings.

No new jobs are being created, but the deal helps to retain existing jobs at the plant that would otherwise have been at risk of being relocated. Viracon has more than 2,100 employees, of which more than half are located in Owatonna.

The $30 million investment will be used to build a 100,000-sq-ft facility to produce a new coaster. Apogee said in a statement that support from the city, county and state was a pivotal factor in the site selection decision.

“Preserving the competitiveness of a key manufacturer, such as Viracon, whose high performance architectural glass products are sold all over the globe, is a priority for the State of Minnesota,” said MN Department of Employment and Economic Development (DEED) Commissioner Katie Clark Sieben. “We congratulate Viracon on their most recent expansion and thank them for making this key investment in Minnesota.”

The company also noted that it decided to install the new coating technology in Minnesota, because the Owatonna facility contains Viracon’s most extensive product capabilities and deepest team of technical talent, and it is centrally located for serving the company’s primary North American market.

“On behalf of our employees, I would like to thank the City of Owatonna, Steele County and the State of Minnesota for their help in making this investment in our largest location possible,” said Kelly Schuller, Viracon president.

The project is expected to get under way in April 2013, and production in the new facility is expected to begin in late summer 2014.

Jobless Rate Drops to 5.8 Percent In Minnesota

http://www.keyc.tv/

The jobless rate has dropped down to 5.8 percent in the state of Minnesota.

Nearly 5,900 jobs were added in September as the unemployment rate dropped. The national unemployment rate also dropped for the month of September. The exact number of jobs dropped from nearly 2,000 to 700. The jobs report is positive as the overall economy improved. The Department of Economic Development and Employment reported that the August job numbers were much less than expected. Houses that started up also increased to approximately 15 percent. The drop in the jobless rate is good news for the entire state of Minnesota. Retail sales were also very healthy for the month of September as the national unemployment rate fell below 8 percent.

There is also bad news for the entire state of Minnesota. The loan debt ranking is nearly the third highest in the United States. The average debt is approximately $30,000 for each student. The AP also reports that the drought conditions are working against Minnesota as the water resources are decreasing. Conservative measures are now urged as outdoor irrigation is stopped. Water use per resident is also increasing in the state of Minnesota. The jobless rate will also serve as a factor in the recent elections that are coming up.

The state of Minnesota also has many blue collar workers which mean that the state has a tendency to lean towards the Democrat candidate. The only complication is that the catholic population is very high which will lead to people leaning towards Mitt Romney who is the Republican candidate. Gasoline prices are also rising in a rapid manner which will lead to family’s budgets being squeezed. The majority of people have to drive to the local shopping center and to work.

Overall, the state of Minnesota will benefit immensely from the decrease in the jobless rate.

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In Wisconsin Marketing Campaign Targets Illinois, Minnesota Businesses

The Wisconsin Economic Development Corporation (WEDC) has unveiled a new marketing initiative to brand Wisconsin’s business climate and promote the benefits of starting, expanding or locating a business in Wisconsin.

inWisconsin

inWisconsin (Photo – WEDC)

The $500,000 marketing campaign is part of the launch of the “In Wisconsin” brand, and features five well-known Wisconsin companies. You can see the videos here.

“Our goal is to reinforce the commitment of in-state business owners within our borders and increase business and economic development activity in our state,” said Paul Jadin, secretary and chief executive officer of WEDC. “While it’s always our goal to attract new companies from outside our state, we also want businesses in Wisconsin to know we are here to support them with their growth and expansion strategies.”

“Over the past year we’ve enhanced Wisconsin’s business climate with regulatory changes and powerful incentives for businesses to grow their operations and expand their workforce,” said Gov. Scott Walker, who announced the initiative at a WEDC press conference in Madison. “The In Wisconsin marketing initiative takes the next step by actively promoting the state’s benefits to business leaders, both those already here and those considering a relocation or expansion in Wisconsin.”

Specifically, the paid ads will be targeting Illinois and Minnesota from next week through December, with continued visibility through 2013 and beyond. WEDC will devote $500,000 of its $2 million annual marketing budget to paid media to support the campaign. As part of the initiative, WEDC established inwisconsin.com as its new website to serve businesses looking to start, grow or locate in the state.

It’s no big surprise that some people in Illinois are not taking kindly to Wisconsin’s campaign.

“This isn’t the first time Walker has targeted Illinois businesses. In January 2011 he said Illinois tax hikes would be good for Wisconsin. That hasn’t worked out the way he planned. A report from the U.S. Bureau of Labor Statistics showed Wisconsin lost more private-sector jobs than any other state between March 2011 and March 2012, a total of 23,900,” says the Chicagoist.

Gov. Walker seems optimistic, though, and talked up the initiative in his weekly radio address titled “Promoting Wisconsin Job Growth.”

“Hopefully when employers from other states hear about positive experiences in our great state, we’ll be able to attract more good-paying, family supporting jobs to Wisconsin,” said Gov. Walker.

Software Company TCS Adds 150 Jobs in Bloomington, MN

India-based IT company Tata Consultancy Services (TCS) will be adding 150 high-tech jobs to expand its operations to a new office complex in Bloomington, Minnesota.

TCS

Photo – TCS_News@yfrog

The expansion comes as a result of an agreement with the Minnesota Department of Employment and Economic Development (DEED) which has awarded a $500,000 loan to TCS.

In return, the company will create 150 tech jobs paying an average wage of $27 per hour. Once all the promised jobs are created, half of the $500,000 loan will be forgiven.

“We are very excited and deeply grateful that Tata Consultancy Services has decided to expand its operations in Minnesota,” said MN Gov. Mark Dayton. “The company will become a very important employer inBloomington, and we look forward to assisting its continued success and growth in Minnesota.”

All put together, TCS will have 300 employees in their new location at the 8300 Tower of the Normandale Lake Office Park, where they are signing a long-term lease for 50,000 square feet of office space on the sixth and seventh floors.

The 300 strong workforce will include the new workers as well as employees who will move from offices elsewhere in the Twin Cities metropolitan area.

“TCS is a rapidly expanding information technology company that is an excellent fit for the Twin Cities market,” said DEED Commissioner Mark Phillips. “Many of the company’s corporate customers are already here, and the region has a strong technology workforce.”

“We are pleased that Tata is choosing to expand in the Greater MSP region. The decision to add 150 high-tech jobs in our region is recognition of our world-class workforce and the growing demand for Tata services by the major companies here,” said Michael Langley, CEO of the Greater MSP regional economic development group.

Tata Consultancy Services, which was established in 1968, has 243,000 employees in 42 countries, and generated a net profit of $2.2 billion last year on revenues totaling $10.17 billion. TCS has 18 offices in the U.S., including the one in Bloomington, Minnesota.

“The decision to open a new TCS facility in the Minneapolis region is part of our company’s on-going commitment to grow our presence in each and every market we serve,” said N Chandrasekaran, TCS’ CEO and managing director. “Over the past few years, Minnesota has put an emphasis on technological innovation that aligns with TCS’ breadth of industry expertise, innovative engineering strength and commitment to providing cutting-edge solutions, and will only enhance the scope and scale of our customer offerings in North America.”

German Farm Equipment Maker Plows Into St. Cloud, MN

German farm implement maker Geringhoff Worldwide has selected St. Cloud, Minnesota as the site of a new $20 million manufacturing facility that will create 100 new jobs in the first phase.

Geringhoff plant announcement in St. Cloud, MN

Geringhoff plant announcement in St. Cloud, MN (Photo – MN DEED)

The 110,000 sq ft former Donlin Co. building that will house Geringhoff’s plant is located in the Airport Industrial Park in St. Cloud, and will be producing corn harvesting equipment and other farm equipment.

During the site selection process, Geringhoff looked at nine separate regions in North America and visited more than 40 factories.

St. Cloud’s proximity to local suppliers in fabricated metal, advanced plastics production, hydraulics and electronic componentry has been credited with winning them this project.

Geringhoff is getting an incentives package that includes a $500,000 forgivable loan from the Minnesota Investment Fund as well as tax incentives through the JOBZ program.

“The quality of the local workforce and enthusiasm and support of the regional government agencies were the primary factors that contributed to our decision to open the facility here. In the end, it was the people from Minnesota and the St. Cloud region that made the difference,” said Joseph Jandrisch, president of Geringhoff in North America.

Minnesota Governor Mark Dayton and the Minnesota Department of Employment and Economic Development (DEED) commissioner Mark Phillips were both on hand at the announcement event in St. Cloud.

“We’re thrilled that Geringhoff chose St. Cloud for its first investment in North America,” said DEED commissioner Mark Phillips. “The expansion underscores Minnesota’s ability to attract quality manufacturers, particularly in the growing farm implement sector.”

“We are very proud and deeply grateful that Geringhoff has chosen Minnesota to launch their U.S.operations,” said Gov. Dayton. “These new jobs are extremely important to St. Cloud and to Minnesota. We look forward to working with Geringhoff to encourage future growth in our state.”

This is Geringhoff’s first manufacturing plant in the U.S., and they expect to expand significantly and add more jobs in the future, with St. Cloud, Minnesota as their North American base.

“St. Cloud will be our foundation to create an even larger presence across North America as we introduce a significant number of new products which are currently under development,” said Geringhoff CEO Daniel Hansmeier.

Economic Development Agency in Minnesota Receives 90 Project Applications

ecd.dakotaelectric.com/

The Minnesota Economic Development agency has received approximately 90 applications for a variety of projects.

The development projects range from sewers, civic centers and light rail systems.

The officials have to look through the applications and determine which ones deserve the economic development funds.

The total requested funds add up to approximately $288 million dollars but the department of economic development can only approve and allocate $47.5 million dollars. The requested funds are nearly 6 times larger than the actual pool of funds. The person who will determine which projects to approve will be the point man named Mark Phillips.

Each project will be studied in great detail as certain factors will be analyzed such as:

  1. The creation of jobs
  2. Statewide and Regional Impact

Mark Phillips states that he is not happy with the task that was assigned to him by the legislature. Mark Phillips elaborates on how the economic development agency is in the same situation as the legislature as there will be many winners and losers when the dust finally settles. The legislature recently approved a bonding bill which ultimately created the economic development fund. The main goal of creating the development fund was to take the politics out of the entire process.

The development fund also shifted the lobbying process from the legislature to the Governor’s administration. The winners of the economic development funds will be officially announced in the later part of August. The economic development applications also vary in scope and size. The smallest project is $222,000 dollars for revitalizing the sewer infrastructure in Braham while the largest project totals approximately $27 million dollars for funding a ballpark in the St. Paul region. The Mayor of St. Paul states that the ballpark project is a priority for the governor.

Overall, some important decisions are going to have to be made in order to boost the economy in the state of Minnesota.

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Light Rail Project In St. Paul, Minnesota In Dire Need Of Development Funds

minnesota.publicradio.org/

Many planners for the light rail project in St. Paul, Minnesota are looking to acquire some economic development funds.

The local governor of St. Paul whose name is Mark Dayton states that the Southwest Transit project is on the top of his list as it is deemed a priority. The Legislature unfortunately had a meeting and decided to not allocate any money towards the project.

Therefore, many local planners are trying to keep the light rail project going by acquiring assistance from the Department of Economic Development.

There are also other projects which are trying to attain funds from the Department of Economic Development such as the construction of a baseball stadium.

There is nearly $47.5 million dollars in money that will be given out to a wide variety of projects. In a couple of weeks, the final decision will be made towards which projects will receive the funds. A Council Spokesperson whose name is Laura Baenen elaborates on the uncertainty of who would receive the funds but states that the light rail project cannot be delayed any further. If the rail project is delayed than it will lead to construction costs that are much higher and would negatively affect the corridor community.

The light rail route goes from the region of Downtown Minneapolis to the southwest suburbs. The light rail project has funding of approximately $47 million dollars from a variety of local funds but $14 more million dollars is needed to begin the preliminary engineering process. A member of the Chamber of Commerce of Twin West states that many businesses are making investments and hopes to provide a little certainty. There are also nearly 200,000 jobs along the metro route while another projected 60,000 jobs are expected in 18 more years.

Overall, the light rail project in St. Paul is in dire need of economic funds so that the project can continue.

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Aircraft Maintenance Takes Off in Duluth

The Duluth Economic Development Authority (DEDA) has managed to lease out a former Northwest Airlines base to AAR Aircraft Services. The deal brings about 225 new jobs to Duluth, Minnesota.

AAR Aircraft Services

Photo - AAR Aircraft Services

AAR Aircraft Services will be using the facility for their MRO division (Maintenance, Repair and Overhaul). Simply put, they open up an entire plane and put it back together again.

AAR is very good at it too, being the largest independent MRO service provider in North America. AAR Corp. has revenues of approximately $2 billion with 6,200 employees in 17 countries.

This deal has been in the works for over a year now, and comes after a coordinated effort by local and state agencies. After they were asked by the company to demonstrate the availability of an existing skilled labor pool, a single-employer job and career fair was scheduled for Aug 2011.

Apart from DEDA, officials from the City of Duluth were also involved, not to mention the Minnesota Department of Employment and Economic Development (DEED), the Duluth Airport Authority (DAA), and APEX, a private-sector led business development engine for northeast Minnesota and northwest Wisconsin.

About 314 persons attended and 260 submitted resumes by e-mail. As per DEDA, over half were skilled A&P (airframe and powerplant) mechanics that AAR needs.

The agencies involved also teamed up to provide a fat incentives package that works out to about $5 million, including a $500,000 forgivable loan. DEED is providing a million dollars from the Minnesota Investment Fund.

“AAR is a world-class organization, this is an important day in Duluth’s history,” said Mayor Don Ness. “This was a true team effort and our partners worked tirelessly to achieve this important announcement. I want to give special recognition to [DEDA executive director] Brian Hanson for his tremendous effort – his determination and his commitment to the success of AAR in Duluth was the catalyst to bring their operations to Duluth.”

“We are making a commitment to Duluth and today’s signing is a major step in establishing a presence here and increasing the value we provide to MRO customers,” said Dany Kleiman, group vice president, over all AAR’s Maintenance, Repair and Overhaul operations. “We want to thank Mayor Ness and the team at the Duluth Economic Development Authority for their hard work and support. We hope to be become an integral part of the Duluth business community in the coming months.”

Which carrier’s planes will be opened up here in Duluth remains to be seen. AAR has said they will find a customer for the Duluth facility later this summer, and hiring is also expected to start around the same time.

Development Authority Sets Goals For Faribault, Minnesota

en.wikipedia.org/

The region of Faribault, Minnesota and the Economic Development Authority has set important priorities to advance the community in 2012. The committee had an hour and a half meeting in which 4 priorities were pinpointed.

Developing a business incubator was also a possible priority for the committee but it was not discussed. A member of the Economic Development Authority stated that the business incubator was an important issue but not a priority to the community in Faribault.

The 4 important priorities that were discussed at the meeting include:

  1. Funding and Organization
  2. Developing the commercial industry which is in close proximity to the transportation corridors
  3. Building developer and business relationships
  4. Locating redevelopment opportunities

Many of the members of the Economic Development Authority also discussed bringing in individuals and a staff that can focus solely on economic development projects for the community of Faribault. The development department only has 3 employees that work hard to come up with development projects for the entire community. EDA member Todd Marksman does not believe additional staff would assist the community as many businesses have to rely on one employee in order to cut costs.

The creation of a summit was also discussed at the local meeting. Many of the members saw the benefits of creating a summit which consisted of leaders in corporations, county and the local chamber. Collaborating with many of the leaders is essential to the members as they make up much of the economic development in the region of Faribault. Financing was also an essential topic which was discussed as a tax levy of approximately $250,000 dollars was going to be utilized. The uses of the tax levy can also change as development plans are discussed.

Overall, the meeting of the EDA was a positive step forward in economic development for the community of Faribault, Minnesota.

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