EDSR INFORMATION 08-14-2000 416
MEMORANDUM
4.%TO: Economic Development Authority +
FROM: Marc Nevinski, Assistant Director of
Economic Development
DATE: August 14, 2000
SUBJECT: Business & Industry Magazine
This article on Elk River recently appeared in the July 2000 issue of Business &
Industry Magazine.
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Elk 4River R i er ' . jam
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,,,:-4:_2,4,,,,'� wb In The Northive 7-37`
Oanything, it is a confluence of histories. ,, around 2,000, the same size it was just
rom Dakota and Ojibwe nation skirmishes - Twin Cjtl.'. . after the Civil War. Part of the reason for
in the late 1700s to industrial park develop- o " `.� : x the rapid growth,according to Nevinski, is
ments in the 1970s, Elk River is a veritable due to recreation.
time capsule of Americana.Nestled between "Elk River is on the wayto where people
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forested hardwoods and prairie along the �•_ go to relax,"he said."U.S.10 and U.S.169
Mississippi and Elk Rivers, the city, eight , carry a great deal of traffic.The city is on the
miles north of 194 and just minutes from } w " way to Brainerd and the cabins up north.And
Minneapolis, is a blend of both rural -y e � ,. la. i. itdoesn't hurt being just eight milesnorth of
America and commercial convenience. But 194,which links us to the Twin Cities.The
' much has changed since David Faribault commuting advantage of working in Elk River
1 built the first trading post on one of the } -; versus the Twin Cities is the`reverse'com-
town's bluffs in 1846. t „ -,v- mute.It's a much easier drive for commuters
"We're growing at a solid four percent a coming to Elk River than it is driving into the
year," said Marc Nevinski,the city's Assis- . Cities."
tant Director of Economic Development. •'-'''',.-....7,44• 11Of course the close proximity of the Twin
"We've seen a considerable amount of resi- 4Cites to Elk River is another reason why corn-
1 "We've
and commercial development in the a, 'i* j panies are flourishing in the historic town.
past decade or so.To balance that growth, Manufacturers can get supplies from metro
the council and EDA (Economic Develop- ..1.."!,,A-..w..,, , `°'; _. ', ''v '' vendors in same-or next-day deliveries to
ment Authority)have taken steps to increase reduce customer turnaround times. "Elk
industrial development in the city." River,"Nevinski said,"is fast becoming the light
Nevinski cites the zoning of over one hundred To St.Cloud c-L industrial hub in the northwest metro area.
and fifty acres as business park,the creation of a I "We did a business survey last year. One of
strategic economic development plan,and the es- the things that our businesses consistently noted
blishment of a location site process plan to was Elk River's excellent access to vendors and
Wetter serve the city's industrial clients. * services in the Minneapolis-St. Paul area.Addi-
"The goal,"Nevinski said, "is to make the de- Etk Rivertionally,we have a lot of those services right here
velopment process as smooth as and seamless %' in Elk River. Tool grinders, hardware stores, of-
as possible for businesses looking to locate here." '% fice supplies,printers and publishers,quality ven-
In 1872, the village of Elk River incorporated dors so that businesses here don't have to keep
and became the county seat. A little over 100 , running into the Twin Cities—we're getting a nice
years later, Elk River consolidated with the sur- "°' .- group of businesses that serve one another."
rounding township, creating a city of 44 square Elk River is located
onlythirtyminates as'�W--� {
miles—one of the largest in the state. The town from the Twin Cities witnessed some moderate growth in the 1970s, In the 1970s,the city developed the Elk River
but nothing like the influx of residents in the'80s. �; Industrial Park not far from the center of town,
"We have the residents and all the amenities— S`�`.ad C� a conglomeration of industries on sprawling,
Elk River M'S P u;'s' well-manicured lawns.Though the plan eventu-
the retail shops and restaurants—and now we're Minneapolis 9
looking to expand our industrial base.And that's S`_Paul '1' x ally called for the city to take over the park,the
been happening,"said Nevinski,who in addition w city had yet to establish an economic develop-
to Catherine Mehelich, the department's di- ment authority. Thus, the park was devel-
rector,comprises one half of the city economic oped by a local development corporation of
development staff. The city's staff also in- Marc Nevinskl anUGatfienne Me itch ' ` '" over 100 Elk River citizens. One of the ma-
cludes a financial director, a three-person (Econamic.Qeveiopmenttatfu; jor players in Elk River development has al-
planning department,a six person inspections i x .. x ways been First National Bank of Elk River
department and a public works staff. In addi- .' president and CEO Dick Gongoll.
1 tion, the city has a 30-member police force 4, y _ . "One of our goals as a community was
and a volunteer fire department that includes i t . 4' .` 1 to try and provide work here so people didn't
a full-time fire chief. -. , '. . ` . a have to commute," Gongoll said. "It's also
g
With a population of close to 18,000, Elk � - important in Minnesota to have a good com
i iver is projected to exceed 20,000 in 2002. mercial base because of the tax structure—
ehat's unprecedentedconsideringthat .•••. , .' we can better support our schools that way.
growth, Y
i in the 1970s the population of Elk River was
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We've been fortunate to have people — ----:. companies such as Elk River Machine
— 0 \ _1_r-- Company and Metal Craft Machine &our community who are aggressive in 3 i ,�� l \_
En-
those areas,and we got together with our ' gineering are strong representations of
friendly competitor,the Bank of Elk River, P7,,,.
7 what the city is trying to bring to its Indus
z x' nr ,z r �_.�for some of the financing. We wanted totrial base.
make Elk River a shopping area, a desti- Workforce issues are a concern for all
nation area as opposed to a drive-through businesses in today's economy. However,
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the Elk River area appears to have a high
town."Mission accomplished. Gongoll and er ` ,,. concentration of skilled labor. "We seem
-' to have a large pool ofpeople in the area
others got their growth, and then some. � p p
"I believe the growth happened a little with trade skills," Nevinski said. He also
faster than we projected,"Gongoll said."Our �� _ 'mall >�t 4'44 r4 noted that Elk River firms pull people from
residential growth has precipitated our retailR the Twin Cites, St. Cloud, and even from
sector,and now we're working on stimulat- more rural areas of the state.
ing our industrial base.But overall, I'm very The breakdown of the city's industrial
pleased with our strong and vibrant econ- base bears this out.The number of Industrial
omy." machinery-related companies has reached
Besides his bank duties,Gongoll is one of 18 while the mineral and rubber-plastic in-
five governors of the Elk River Investment '' dustries take a distant second with four com-
Club,an LLC of 22 members.One of the chief _ 1 panies each.The industrial-machinery cat-
goals of the club is to work with the City of Elk ,,,\t yi ! f egory also leads in the employee category
'`'4" with28 ercent of the industrial workforce,
River in getting new companies into the city's1111 '
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incubator program. = `,, followed by the fabricated metal and elec
$ { III " tropic equipment sectors with 22 percent
"We try to coordinate,"Gongoll said,"our
efforts with the city to help emerging busi -' each.Mineral employment accounts for 15
Wsses get out of the garage, so to speak, 1 ` percent of the workforce while rubber-plastic
d into the incubator program.Currently the employs nine percent.
club is working with four or five businesses °'" °G x. .. ._,,,,„!:,,,,,:::,-::: -,;:',,,,,,-;:,.,:lit
` � � "A But those numbers will soon turn old.T.o
at this time. Our club gets a commitment balance residential and retail growth,the city.
from the proprietor that his or her business created two new industrial parks,appropri-
will remain in the incubator or at some loca- k}<
t --; ately dubbed the East and West Business
tion in Elk River.It's venture capital that's for „ " < Parks. Phase I of the East Park, a 40-acre
businesses looking to grow in Elk River." r v,
tract that will include a 5.0 0-square-foot
When the city did take over the business !t multi-tenant building,will have access to a I,
park,there were approximately half a dozen � _ - a" four-lane industrial grade road.The park is
1_ - '' 14 ' also bordered by U.S.169 and the Burlington
lots still available.That park was fully built- � �, � �� �
out in 1999 and is home to companies such7:7 Northern Railway.Adjacent to the 40 acres
as the Tescom Corporation(high purity and ,`°" �. lies another 90 acres which will be Phase
industrial controls),Alltool Manufacturing II of the East Business Park. Just to the
(metal fabrication),E&OTool&Plastics(pias � south of Phase II, across 173rd Street, is '
tics)and the Custom Conveyor Corporation the site of the proposed North Star Corri-
(conveyor equipment).And there's the Cretex
LI
dor Station,a depotthat will run from Rice
Companies Incorporated,makers of concrete (north of St.Cloud)all the way into the Twin
girders for bridges and culverts, a com- { Cities.
pang that has stayed in Elk River and hase.i "The commuter line will connect with the
thrived, and a variety of other industries. light rail system in the Twin Cities,"
East on U.S.10is the Horizon Thermoform „1/4 . --._...__ Nevinski said, "and run down to the air
Plastics Company that moved to Elk River "eJ port,eventually going into St.Paul and the
in August of 1998: In two years it has ex- 1 ',;%'' \' outlying suburbs. Right now we have a
panded its workforce to 30 and projected ,,\ ` via
, double track that runs through town that
ales are at two million dollars. Horizon is / —� averages 50 to 60 trains a day.We do have
tional in scope,serving customers from r Ir• a rail spur downtown, and some busi-
� " � nesses have taken advantage of that.”
oast to coast. Horizon Thermoform and ���-- �'lay4:4, g
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East,Bus� ss;Pjai Elk River
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The West Park features adjacent 20 4 s> ,•: bills by 30 percent in Ohio and West Vir-
and 22-acre sites that run parallel to U.S. - �{ -'f}ya , ginia.We can also heat a swimming pool
10. These sites, which stretch west to F{ z*` y _ , . ; 4 for around ten dollars a month, as op-
•the Sherburne County Government Cen- ,_ §k k E� posed to$300 a month for natural gas."
ter,have been rough graded and the utili- ! i;1.;f ,
ties—gas,water and electric-are already a�£ s i NU/444a 9.44t,
in place. k .`'g West Business Park Yet the average cost of industrial
On the other side of the Government '�� y'� �"""°° �'°
— square footage in Elk River will hardly
Center is an 83-acre tract scheduled to detour a company from setting up shop.
be ready for development in September "The price of industrial land here,"
of this year. Both the East and West Nevinski said, "is quite reasonable. From$1 to$1.20 per square foot,
Parks sit on major transportation corridors, highways and rails that which includes the improvements. In some nearby areas, that price
link the parks to the rest of the state and beyond.
goes up anywhere from $2 to$3 dollars per squareuar
foot." Yet, there
"These areas are zoned 'business park'
and are ideal locations for
are other incentives forprospective
businesses.
campus environments,"Nevski said."The design requirements are a bit
Financially, Elk River is competitive with other communities in the
higher than the more established industrial parks we have, but trails, state,offering tax increment financing,tax abatement and sub-prime loans
ponds and other amenities will be incorporated into the parks as they vamongother tools.
develop." «l o
�I We can also provide assistance to both new and existing businesses
that qualify,"Nevinski said,"but we're careful not to overburden our tax-
1 'ti payers.Keeping taxes low is a priority of the council."
Even though the city is looking more toward embracing the industrial
company to take root and grow within its corporate limits, its arms 61.4,4„, C''x'!'
have and will spread wider. Another drawing card for the city is its"Energy City"designation by a
"Though we've leaned toward more of the machining,metals and com- state organization called Energy Alley.Conservation,innovation and de-
1,
e1 puter electronics companies,"Nevinski said,"we're looking for viable cades worth of just saying no to pollution has polished Minnesota's emer-
companies who are looking to stay in the area once they become estab- ald city as it strives to keep"green."
lished.Companies who will create good wages and make capital invest- In 1998,the Environmental Protection Agency awarded Elk River its
ments—we're certainly open to meeting with them in the hopes of inviting Project of the Year for the city's flame that burns off methane that forms
i .hem in."Sometimes that means helping companies establish themselves,
nonbankable companies who are looking to go public.Candidates for the inside landfill berms;and city environmental-energy leaders meet monthly
with state energy leaders in discussing energy matters since the city is
ii city's incubator program are chosen by the Economic Development Au- the state focal point for new energy technology and services.These"en-
thority. ergy talks"often produce award-worthy innovations such as"energy
"We're not necessarily targeting new manufacturing companies for the houses"that feature a dozen or so energy technologies in each house.
incubator," Nevinski said, "but companies offering high-tech prod- Energy House I,for example,uses a geothermal pump for heating and
ucts or services."The EDA leases the incubator building at a low per-
square-foot cost.The space has been improved and divided into various coolingtheinterior
frost line.the home,using the constant temperature of the
earthhbelow th
suites.A company can pay a portion of its rent in cash,and the remainder The city is also set to receive one of the largest wind generators in
of rent is bartered for stock. the world.With a height of nearly 200 feet and blades with a diameter
One company currently in the Elk River incubator is SolarAttic,a corn- of close to 180 feet, the wind turbine will generate enough power to
pany that developed the technology to recycle the heat that gets trapped in run 250 homes.
attics. "Environmentally,"said Stephen Rohlf,the city's building and zoning
"We can take attic heat,"said company founder Ed Palmer,"and put it administrator,"Elk River has a reputation of being tough but fair.There's a
back into the house to reduce heating costs. Or we can use it to heat lot of mineral mining going on just north of town.When a mineral contrac-
swimming pools or hot water.And when you take heat out of the attic,you tor was asked,in an environmental context,what the toughest city was
won't have to run the air conditioner as much in the summer."While he'd ever worked in,he said Elk River.And when he was asked what his
developing his energy-saving technology,Palmer worked out of his ga- favorite city to work in was,his answer was the same—Elk River.That's
rage for years,slowly refining the idea since June of 1984. In August one of the more honest compliments on our city that I can remember."
of '86 Palmer began working full time on his concept, and now he's Minutes from the Twin Cities yet far enough away to have maintained
taken it a step further by working out of the city's incubator. its small-town character,Elk River still offers both industrial and high-tech
Ed Palmer on the Elk River Incubator:"It's been extremely helpful—it got opportunities to companies looking to expand or establish themselves.
us out of the garage.The incubator gave us a commercial opportunity
where customers and investors can come out and see our products and f
our small manufacturing facility. People are a little weary about driv- �;,Y of�,
ng out to someone's garage in a residential area. It's given us a big Elk River
Woost in driving us forward."
SolarAttic pool systems are currently used in 33 states, and the 13065 Orono Parkway Elk River, Minnesota 55330
•• attic units in 16. TDD & Phone: 763-441-7420• Fax: 763-441-7425
"The attic unit has proved," Palmer said, "to cut annual heating www.elk-river.mn.us
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