SUNDAY, SEPTEMBER 27, 2009
by Dan RafterMinnesota |
| New construction in Carlton County, Minn. |
Whether it's the northeastern portion of the state or the heart of the Twin Cities, the story is the same: Commercial construction activity in Minnesota, as in the rest of the country, is down thanks to the impact of the recession.
But there are still commercial projects rising in Minnesota. And in many ways, this Midwest state is faring better than others during these tough economic times.
Just ask Pat Oman, economic development director with Carlton County, Minn., northeast of Minneapolis and near the cities of Duluth and Superior. The way he sees it, his region of the state is poised to survive the economic slump for several reasons.
"The three major manufacturing firms we have here have held steady for us. They have only had a very small amount of job loss," Oman said. "The people who live in and surround our region are also very locally minded. They come to the county to do their shopping, so that has helped our retail sector. We have good tourism, too. As people are zooming up to Duluth, they'll swing by our area for an extended stay. We're pretty happy with the way our economy is performing right now."
Oman isn't alone. Officials in other sections of the state say that their regions, too, while not thriving are certainly surviving the economic slump.
Part of this optimism has to do with unemployment. The unemployment rate in the state fell to 8 percent in August. That makes two straight months in which the unemployment rate here has fallen.
That rate of 8 percent is also well below the national unemployment rate of 9.7 percent.
Of course, all is not rosy in the state. New commercial construction projects are still on hold in most parts of Minnesota. Office vacancy rates are rising, and a growing number of retail stores are going out of business.
But overall, state economic pros are pleased that they're plying their trade in Minnesota and not a state such as California or Arizona, where the country's economic woes have hit the hardest.
"I'm not an expert in other markets, so I can't do comparisons, but I think Apple Valley is doing well," said Bruce Nordquist, community development director for the city of Apple Valley, Minn., located about 15 miles from Minneapolis/St. Paul. "In our existing storefronts, we have seen some vacancy and change. But we are also seeing new tenants coming in. That doesn't mean we don't have vacancies, but they aren't longstanding empty spaces."
@SUB:Holding its own
@BODY:Carlton County in northeast Minnesota is home to three main manufacturers that provide a significant number of jobs in the area: Jarden Home Brands, Sappi Paper and USG Interiors, Inc., all in the country's city of Cloquet. These manufacturers, though they have laid off some, have not experienced the mass layoffs that other big manufacturers throughout the county have faced.
One of the manufacturers, Sappi, is actually looking to expand in the near future, Oman said.
Of course, getting financing has been a major hurdle for all developers. Carlton County, though, has created its own multi-million-dollar revolving loan fund. The dollars in it can be used for retail and manufacturing projects.
"We can use this fund for primary and gap financing," Oman said. "If banks and credit unions are not willing to loan, we can take their place."
The county recently helped finance the new Shoppes of Cloquet, a strip development in the city of Cloquet that officially opened in late 2008. The shops, which cover about 40,000 square feet of retail space, already include a maurices clothing store, a pizza parlor, cell phone retailer, beauty salon and a dollar store.
The Walmart in Cloquet also just completed its own expansion. And the county is now working on a significant retail project that, as of yet, has no official name. The county features about 175 to 200 acres of land between the intersection of Highways 35 and 33. Oman says that the area, if developed properly, could become a major shopping destination point, and envisions a day when medium- to big-box retail shops fill this space.
County engineers are currently taking on wetland delineation work on the site, while economic analysts are conducting a retail trade analysis to determine the size and nature of the population that might come to the area to shop.
Oman says major traffic already runs up both highways.
"We think there is a real opportunity to build a wonderful shopping facility here," Oman said. "Because of the traffic volume, we think this would be a final piece of our retail puzzle in this area."
@SUB:Surviving near the capital
@BODY:About 15 miles from the state capital of St. Paul, the city of Apple Valley, Minn., boasts a population, according to Census figures, over 45,000. It also boasts some significant development, according to Nordquist, the city's community development director.
The city's downtown is already thriving, Nordquist says, with several retailers doing big business. The city hopes to give the area an extra boost, though, with a new rapid transit bus system that is slated to go into operation by the end of 2009.
"That's a big project for us," Nordquist said. "With that comes the investment infrastructure that often occurs with a partnership with public agencies."
In this case, the partnership between the city and federal, state, regional and local agencies will result in a 750-car park-and-ride facility. It will also include bus station platforms to serve the transit system's four express and local routes that will originate from locations in downtown Apple Valley.
At the same time, Apple Valley is home to a Walmar that is currently engaged in a 60,000-square-foot expansion project. The city also benefits from Kohl's and Sam's Club stores that are both in the midst of interior and exterior remodeling projects.
There has been change, too, in the city. Nordquist points to the local Boston Market fast-food restaurant that left Apple Valley. The storefront won't remain vacant for long, as a White Castle restaurant will replace it.
"That goes along with the theme here," Nordquist said. "We aren't having a lot of long-term vacancy."
What are the reasons for Apple Valley's relative stability? Nordquist points to its location and the mix of its retailers.
"The particular mix of retailers continues to be successful," Nordquist said. "Our retail areas don't include the type of national stores that are either leaving the marketplace or downsizing significantly. There is some luck to that. But we don't have a Circuit City or Wolf Camera that is going out of business. We don't have the type of users that are either going out of business or are really pulling back."
Nordquist does have some concerns, though. He points to the fact that office development in the city has slowed to a halt.
Outside of Apple Valley, while construction may have slowed, there are still significant commercial construction projects. For instance, architecture firm Mohagen/Hansen and general contractor RJM Construction have been working together since this spring on a 75,000-square-foot orthopedic center in the Minnesota city of Edina. Twin Cities Orthopedics hasn't let the dismal economy slow its plans for its Orthopedic Center of Excellence.
Mark Hansen, co-owner of Mohagen/Hansen Architectural Group, said that commercial construction in the Twin Cities regional market remains fairly strong when compared to other markets across the country.
"It's pretty good here," Hansen said. "Our volumes compared to last year are very similar. We are getting a lot of requests to do work."
More Articles
