Rock Solid Foundations

Mankato, Minnesota

Jonathan Zierdt, President and CEO of Greater Mankato Growth, Inc., and Amy Linde, Marketing and Communications Director, reflect that, “Our challenge is to continue to raise our visibility.”

This unique Metropolitan Statistical Area, with its population of 98,600, boasts the highest GDP growth in the state of Minnesota, some of the best job numbers in the state and the fifth lowest cost of doing business in the Upper Midwest. It is known for its Kasota limestone, widely used as a building material.

“The rock is so impenetrable that the water couldn’t make its way through,” explains Mr. Zierdt. “It kept glancing off until it caused a path that found its way to the Mississippi. That rock is in part what helped found the community.” Ever since Mankato was first settled, its quarries have been famed as the best in the Midwest.

This particular limestone’s high dolomite and magnesium content make it resistant to weathering, ideal for constructing buildings and bridges. It is a beautiful architectural grade of limestone that is used across the globe. The new Minnesota Twins baseball stadium was made from rock quarried in Mankato, and the National Museum of the Native American in Washington, DC was also made from the same limestone.

Greater Mankato is successful in part because of the talent produced by its five institutions of higher education. Minnesota State University, Mankato is the second largest public university in the state. There is also a community / technical college and two private colleges, one of which, Gustavus Adolphus College, is quite well known. Finally, there is a private business college called Rasmussen College. Each year, 25,000 students attend these five schools and 4,500 graduate. Last fall, a nearly $70 million bond was approved for k-12 education facilities, and during the week of this interview, a location was announced for the new $55 million middle school.

“That’s a great opportunity for any community that has talent graduating from its institutions that can potentially be available to you in the marketplace. We have been able to retain about 20 percent of those, but this number is increasing,” says Ms. Linde.

The advantage that these graduates have is that Mankato is a city that boasts four key areas of industry and business. The first is in the area of business management, finance and administration; approximately 1,500 graduate every year in this field. Engineering and manufacturing is another big category with a sizable number of graduates. Health science technology is growing rapidly in part due to a $30 million bond just awarded to Minnesota State University to build a new clinical health sciences building. There are also human services which cover areas ranging from education to community and social services. “It’s really interesting to be in the backyard of these institutions and have this kind of talent base that comes into our marketplace every year. Of course, we have to be a liveable community that’s attractive enough to keep them here.”

And Mankato certainly is a very liveable community, its quality of life enticing graduates to keep it as their home. Mr. Zierdt espouses the ability to simply wake up and, regardless of where one is, be at the centre of the city within fifteen minutes. Granted, the city of Makato does currently have a lot of construction going on due to its growing economy, but this is but a minor nuisance.

“Everything you need is right here,” he shares. “Whatever you need to survive or to enjoy life is here, from retail and shopping, to food, dining and entertainment, outdoor recreational activities. We actually have a ski hill (Mount Kato) that has the highest ratio of downhill runs to chairlifts than any other hill in the Upper Midwest. There are running activities and outdoor recreation twelve months out of the year.”

Mankato is located in a scenic area within a river valley. There are bike trails and wonderful roads for motorcycle enthusiasts. For fans of football, hockey, basketball or baseball, downtown Minneapolis is only a one hour drive away and, in the summer, Mankato plays host to the Minnesota Vikings training camp.

In addition to its attractive location, there is also an affordable cost of living and a good mix of retail. “I like to say that we have this sweet spot that we sit in in South Minnesota. We have the feel of the big city services and amenities; we have franchises and small local businesses with the charm of the surrounding towns, agricultural charm, and yet we have this metropolitan feel as well.”

Recent research cited the top reasons why people migrate to places like Mankato as opposed to larger metropolitan centres: a desire for a simple life, the safety and security of the community, affordable housing, an abundance of outdoor recreation and quality schools. “It’s interesting that none of the top five criteria includes jobs! It all has to do with the livability of the community. We focus a lot on trying to link talent in the community to becoming a part of the community.”

Another way it is supporting talent in the community is through a very robust young professionals program for ages twenty-one to thirty-nine. “It’s an opportunity to take people new to the workforce – and Mankato – in that age range, help introduce them to a social group and activities in the community along with professional development, a couple times per month.” The results of this initiative are proof that it works; employee retention after three years is at eighty percent. That is of huge economic value because when a new employee is hired and lost within the first year, it equates to a loss of approximately $50,000 for that business.

Mankato has a burgeoning economy and the secret to its prosperity is business diversity. The biggest driving economic forces generating new incomes and revenues revolve around manufacturing and financing, followed by the service economy, followed by retail. One in five jobs are related to manufacturing, but that activity is not confined to a single industry and ranges from metal manufacturing and fabrication to electronics manufacturing and renewable energy.

There is also a heavy presence in the printing industry and facilities for warehousing distribution and logistics have found their way into Mankato. Power generation has a number of players and a host of smaller businesses (such as original equipment manufacturers) provide supply product inputs for larger ones. Eighteen percent of the economy is involved in manufacturing.

Health care is available with three major providers and it is also only one and a half hour’s drive from the world renowned Mayo Clinic – a regional Mayo Clinic Health System is also located right in Mankato. In addition, there is also, “the state’s largest privately held physician clinic called the Mankato Clinic. There is an Orthopaedic & Fracture Clinic with multiple locations. One of our surrounding larger surrounding communities has a health care centre clinical hospital called River’s Edge (River’s Edge Hospital and Clinic) in St. Peter.”

Adding to the parade of different business sectors is agribusiness with everything from dairy production to food processing and from livestock to crop farming. Some of the world’s biggest soybean processors (Archer Daniels Midland Company and CHS Inc.) are in Mankato. On any given day, more soybeans are crushed and processed in Mankato than anywhere else in North America. “This diversification is what we are about. We want to make sure that we don’t get lost in any single sector in terms of growing just one. We strive to keep them all healthy in a balanced way.”

There are some really significant business developments and investment currently underway. Mankato is likely to break records this year in terms of capital construction spending, beating the previous record of $120 million set in the early 2000s. It is interesting to note that it comes from all sectors. Large projects under construction include a 183,600 square foot fleet farm; a national distribution centre for Wal-Mart at 400,000 square feet; and a 100,000 square foot distribution centre for which FedEx is breaking ground. New strip malls are opening up in the retail district of Madison Avenue. In the city centre, close to an entire city block has been levelled to make way for two office towers. In excess of $97 million of construction is currently underway.

A number of transportation projects and major road redevelopments are underway in order to handle the increasing volume of traffic that flows into the community every day. A flurry of single family home construction is also underway to go along with high density housing and town home construction.

“Our diversity can be seen even in the construction activity and that is part of the secret of this economy. We are not a boom town, but rather akin to a galloping horse that keeps moving forward and not back. Job growth is steady at a two to three percent gain per year to go along with population growth at around one to two percent per year. This enables the infrastructure to keep up.”

One other factor that lends to the success of Mankato can be seen in its public / private partnerships. An example of this can be seen when eight partners formed a regional development alliance to service the entire Metropolitan Statistical Area (MSA), pooling funds for business and economic development. “We created this cooperation in the marketplace that makes it easy to get information and answers in order to be able to do business here. Businesses find it refreshing how things fit together in that easy, systematic way. That’s a characteristic that does not exist everywhere.

“We think we are ideally positioned as a community to be the kind of destination that is a good fit for the convergence of talent and business collectively.” Mr. Zierdt and Ms. Linde point out that this is a place where businesses will want to set up shop – but also a place where the necessary talent wants to live.

July 17, 2018, 7:29 AM EDT

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