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2005

ANNUAL REPORT

BUILDING ECONOMIC VITALITY IN DOUGLAS COUNTY


D IRECTORS L ETTER T ABLE OF C ONTENTS
It is with great pleasure that I present to you our 2005 Annual Report sum- DIRECTOR’S LETTER I
marizing our economic development highlights and achievements for the
AAEDC. This year was a very successful year for the AAEDC, our partners, STAFF AND BOARD OF DIRECTORS I

businesses and communities. AAEDC MISSION, LAEDA MISSION 1


& CORE OBJECTIVES
With our strong partnerships, the AAEDC collaborated on a number of eco-
nomic development projects in 2005. Through the use of JOBZ, Tax Increment FUNDER ACKNOWLEDGEMENT 1
Financing, Revolving Loan Funds, and other municipal fi nancing resources,
the AAEDC assisted several local business start-ups and expansions, which JOBZ PROJECT HIGHLIGHTS 2-3
creates strong economic returns through jobs, wages and tax base for our
2004 PROJECT HIGHLIGHTS 4-5
communities and Douglas County. Through our innovative approaches and
community collaboration, the AAEDC continues to drive the economic vitality COMMUNITY INITIATIVE 6
for Douglas County.
BUSINESS INITIATIVE 7
Please enjoy this publication and we hope you see the value in our work as
RESOURCES INITIATIVE 8
we continue to strengthen the economic vitality of this county and our region.
EMERGENCE AS A REGIONAL CENTER 9
On behalf of the AAEDC Board of Directors and Staff, we wish you all a very
prosperous 2006.

Sincerely,

Jason Murray
Executive Director

STAFF & BOARD OF DIRECTORS

Jason Murray Kevin Kopischke Corliss Stark Patrick Kalina


AAEDC City of Alexandria City of Alexandria AAEDC

Jeff Fassett Terry Quist Rick Paulsen Mary New


Carlos Township LaGrand Township City of Alexandria Hudson Township

David Kjos Mark Grandgenett


Alexandria Township Lake Mary Township

I A LEXANDRIA A REA E CONOMIC D EVELOPMENT C OMMISSION


O UR M ISSION The mission of the Alexandria Area Economic Development Commission is to
drive the economic wealth and stability of our communities.

The mission of the Lakes Area Economic Development Authority is to support the mission of the Economic
Development Commission by providing fair and equitable resources. The authority, fully implemented in 2004, was
established to formalize the funding for economic development and to bring the political subdivisions together for a
unifi ed economic development effort.

Through a joint strategic planning process between the AAEDC and the LAEDA, core initiatives and strategies were
defi ned to develop a shared vision of the future and to identify goals and objectives against which progress toward
achieving that vision can be measured.

In 2005, the AAEDC focused on the following core initiatives and strategic objectives:

1. COMMUNITY – To collaborate on community efforts that strengthen our economy by creating & retaining
jobs and expanding tax base with respect to our area’s natural resources.

• Explore redevelopment opportunities


• Proactive advocacy efforts related to the business community agenda
• Partner in Workforce Development
• Community marketing initiatives that identify the area’s marketable assets &
competitive advantages
• Communication Role

2. BUSINESS – To maximize the area’s potential as a thriving regional hub for


businesses, jobs, and economic opportunity.

• Business Attraction & Economic Diversification


• Business Retention & Expansion
• Business Assistance & Development

3. RESOURCES – To maximize fi nancial and personal resources by


working to avoid duplication of efforts and to build new
revenue centers.

• Industrial Parks
• Revolving Loan Funds
• Municipal Financing Sources

4. ORGANIZATION – To be a creative, highly trained and


professional economic development organization that
serves as the lead entity for coordination and
implementation of the area economic development
effort.

• Funding
• Partnerships
• Leadership
• Growth

Funding provided by the Lakes Area Economic Development Authority (LAEDA) whose membership is comprised of the City
of Alexandria, City of Garfield, Alexandria Township, and LaGrand Township; with supporting annual appropriations from the
Townships of Carlos, Hudson, Lake Mary, and Douglas County.
2005 A NNUAL R EPORT 1
“AAEDC was a viable resource as we pursued our
Douglas County. AAEDC’s knowledge and insight
pursuing qualification for JOBZ Zone were imper
At the close of FY2003,
Governor Pawlenty unveiled the Kim R. Mulholland-Callaghan, VP of Sales & Mark
state’s newest rural economic The Aagard Group, LLC
development plan, the Minnesota
Job Opportunity Building Zones
(JOBZ). As the governor’s marquee economic development initiative, the goal of JOB Zones is
to stimulate economic development activity in rural Minnesota by providing local and state tax
exemptions. The program stresses the importance of using JOBZ to offer assistance to value-
added manufacturing and industrial, or high wage service type businesses. Retail and housing
projects are not eligible.

The JOB Zones cover 10 geographic regions throughout Minnesota, with the exception of
the seven-county Minneapolis-St. Paul metropolitan area. The West Central Region Zone includes Douglas County, from which
six hundred ten (610) acres of land has been given this special designation. Participating entities include the Cities of Alexandria,
Brandon, Garfi eld, and Osakis; and the Townships of Carlos and LaGrand. Designated industrial sites in these areas offer growing
and expanding businesses the opportunity to substantially benefi t from tax exemptions for a maximum duration of a twelve (12) year
period, commencing January 1, 2004 and ending December 31, 2015.

The type of tax exemptions include: corporate franchise tax; income tax for operators and investors, including capital gains tax; sales
tax on goods and services used in the zone if the goods and services were purchased during the duration of the zone; property tax on
commercial and industrial improvements but not on land; wind energy production tax, and; employment tax credit for high paying
jobs.

Tax exemptions apply only to qualifi ed businesses. Businesses will become qualifi ed for JOBZ through the execution of a local
Business Subsidy Agreement (BSA). The BSA is an agreement between the local unit of government and the business. The agreement
sets the number of jobs created and the amount of wages and benefi ts paid by the company in order to qualify for JOBZ benefi ts. On
an annual basis the company must report to the local unit of government their progress in creating jobs and wages.

JOBZ POPULATION SIGNS:

In an effort in to increase awareness of JOBZ building zones throughout Minnesota,


each city that contains a JOBZ area has been given the opportunity to post a JOBZ sign
with their population signs. This advertisement is easy and effective, and gives notice to
individuals entering the communities that there are economic incentives to building or
relocating to the area. (Pictured: The Garfi eld population sign with JOBZ attachment).

COMPANY: Aagard Group, LLC


PARTICIPATING ENTITY: City of Alexandria
PROJECT TYPE: Expansion
SQUARE FEET: 36,000
BUSINESS DESCRIPTION: Designs and manufactures
automated handling and packaging machinery
HOURLY AVERAGE WAGE & BENEFITS: $10.00 - $20.00
ESTIMATED PROJECT COST: $1,300,000
JOBS RETAINED: 40
1
JOBS CREATED: 10

2 A LEXANDRIA A REA E CONOMIC D EVELOPMENT C OMMISSION


r future business plan of continued growth in
tfulness as we evaluated the pros and cons of
J OB Z M INNESOTA
rative in our decision making process.“

keting

COMPANY: Steussy Diesel Inc.


PARTICIPATING ENTITY: City of Alexandria
PROJECT TYPE: Relocation
SQUARE FEET: 28,000
BUSINESS DESCRIPTION: Office, parts, and service/repair area
with 10 large drive-in bays to accommodate service work
HOURLY AVERAGE WAGE & BENEFITS: $12.00 - $15.00
ESTIMATED PROJECT COST: $2.4 million
JOBS RETAINED: 10
1
JOBS CREATED: 3

COMPANY: Donnelly Custom Manufacturing


PARTICIPATING ENTITY: City of Alexandria
PROJECT TYPE: Expansion
SQUARE FEET: 10,200
BUSINESS DESCRIPTION: Value added engineering and highly
customized manufacturing in the custom injection-molding
marketplace.
HOURLY AVERAGE WAGE & BENEFITS: $12.00 - $15.00
ESTIMATED PROJECT COST: $580,000
JOBS RETAINED: 217
1
JOBS CREATED: 13

COMPANY: West Central Bearing


PARTICIPATING ENTITY: City of Alexandria
PROJECT TYPE: Relocation
SQUARE FEET: 12,000
BUSINESS DESCRIPTION: Distributor of bearing and power
transmission products and industrial products
HOURLY AVERAGE WAGE & BENEFITS: $12.27
ESTIMATED PROJECT COST: $725,000
JOBS RETAINED: 13
1
JOBS CREATED: 2

1Jobs created fi gure confi rmed in BSA agreement totaling full-time and full-time equivalent projections within 1-5 years. Job numbers
reported in BSA agreements are usually minimums and actual numbers may be much higher.

2005 A NNUAL R EPORT 3


2005 P ROJECT H IGHLIGHTS “The Alexandria Area Economic Development Com
new businesses to locate in our area. They are a w
data to make their business location decisions. We
represent us and to have them coordinate the new
COMPANY: BIO CORPORATION
H. Dan Ness, Mayor of Alexandria

Bio Corporation has recently begun construction on a 24,000 square


foot warehouse in the Alexandria Airport Industrial Park. This project
began in April and is scheduled to be completed by December 2005.
The estimated construction cost is $400,000, and replaces the need for
rental storage that Bio Corporation had been experiencing. The project is
expected to create 10 new jobs within 5 years.

COMPANY: LIND-RITE PRECISION, INC.

Lind-Rite Precision, Inc. is currently expanding and moving the entire


business to their Osakis Industrial Park site. The expansion calls for the
building of a 12,100 square foot addition estimated at costing $566,000,
to their present building which measures 9,600 square feet. The reasons
for the addition include an improved production fl ow and to accom-
modate growth. Lind-Rite plans on increasing its employment from 33
FTE’s to 38 FTE’s with this expansion. The AAEDC assisted Lind-Rite in
securing a $28,000 loan through GAIN and a $50,000 loan through the
Developer’s Revolving Loan Fund.

COMPANY: NOKOMIS SQUARE/NANEEK PROPERTIES, LLC

Naneek Properties, LLC has begun construction on Nokomis Square


which contains commercial retail and offi ce space for lease on the 300
block of North Nokomis Street in Alexandria. Naneek Properties has
removed two existing buildings while constructing a 13,611 square foot
new structure. The estimated cost of the construction/renovation is esti-
mated at $385,000 for sight improvements and $1,043,040 for building
construction. This construction will increase the Estimated Market Value
from $519,000 to $1,447,100. Construction is currently underway with
hopes that the fi rst renter will be operational by the Holidays, and the
remaining tenant-work reaching completion in the spring of 2006.

COMPANY: MADAJAX BOOM TRUCK SERVICE (LIFT TRUCK LOAN)

Madajax Boom Truck Service has received approval from the West Cen-
tral Initiative Revolving Loan Fund for a business loan totaling $22,250
to assist in the purchase of a boom truck and equipment necessary in
operating a boom truck service company. The AAEDC assisted in secur-
ing the RLF fi nancing as well as working cooperatively with Bremer Bank
on securing additional fi nancing. The company is specializing in hauling
building materials for contractors and businesses and using the crane to
unload materials and heavy equipment to heights of 70 feet. Madajax
began operation on August 1, 2005.

4 A LEXANDRIA A REA E CONOMIC D EVELOPMENT C OMMISSION


mmission serves our entire area to encourage
wonderful resource to those that need economic 2005 P ROJECT H IGHLIGHTS
e are fortunate to have this organization
w businesses in our area.”
COMPANY: WEST CENTRAL TOOL & GRINDING

West Central Tool & Grinding received assistance from the AAEDC in se-
curing a $20,000 loan from the West Central Initiative for the purchase of
a Walters Helitronic Power CNC Tool Grinder. The machine will enable
West Central Tool & Grinding to increase business operations and will
also increase their employment by 1 full-time position. The total cost
of purchasing the new machinery is $209,000 with additional fi nancing
through Neighborhood National Bank.

COMPANY: LAKES AREA GRAPHIX AND SIGN WORX

Lakes Area GraphiX and Sign WorX, a printing and graphics company,
has recently completed construction of a new facility in Kensington. The
new facility includes 6,500 square feet of offi ce space and production
area and will increase the area tax base while creating 9 full-time posi-
tions within the company. Added benefi ts of this construction are that it
will attract additional businesses to the area and increase the tax base of
Kensington. The AAEDC assisted the company in applying to the City of
Kensington for $65,000 in tax increment assistance.

COMPANY: MENTAL HEALTHCARE FACILITY

Blue Eye Development received approval from the City of Alexandria to


construct a 16 bed mental health facility in the Windbreak Addition of
8th Ave East in Alexandria. This facility will provide treatment of adults
in acute psychiatric status in a safe, secure environment close to home.
The AAEDC assisted Blue Eye Development in securing Economic Devel-
opment Tax Abatement from Douglas County and the City of Alexandria
to offset the costs of property and infrastructure. The completion of this
mental healthcare facility will create 30 FTE’s and provide close-to-home
services for individuals in need of care. Estimated costs of this project
are $1.5 million and will create a 12,000 square foot facility.

CLIENT ECONOMIC IMPACT REPORT

Estimated Project Costs: In excess of $4.4 million


New Construction Square Feet: 68,211 sq. ft.
1
Jobs Retained: 66
2
Jobs Created: 55

Jobs retained figure totals full-time and full-time equivalent positions.


1

Jobs created figure totals full-time and full-time equivalent projections within 1-5 years.
2

2005 A NNUAL R EPORT 5


C OMMUNITY I NITIATIVE
STRATEGIC OBJECTIVE #1: EXPLORE REDEVELOPMENT OPPORTUNITIES

• Nokomis Square project – renovation and reconstruction on


existing site
• Identify sites and research federal and state funding sources for
Brownfi eld clean-up and Greenfi eld reuse projects – Cleanup and
redevelopment of sites

STRATEGIC OBJECTIVE #2: PROACTIVE ADVOCACY EFFORTS RELATED TO THE


BUSINESS COMMUNITY AGENDA

• Douglas County Jail Project Committee


• Participated at Douglas County’s request assisting with sight review and selection.
• Regional Airport Taskforce Committee
• Coordinated participation of local governmental units.

2 005
D OUG LA S C OUN T Y

M ANUFACTURERS
STRATEGIC OBJECTIVE #3: PARTNER IN “I do want to take this opportunity to thank you f
& WORKFORCE DEVELOPMENT community. Your constant leadership in the area
S UPPORT I NDUSTRIES
D IRECTORY enhancement is most impressive.”
• Business and Employer Council
• 1st Annual Greater Alexandria Job Fair
planning board - 40 Employers and Dr. Ric Dressen, District 206 Superintendent
over 1,200 Job Seekers in attendance.
• Daycare Discussion Group
• West Central SHRM – 2005 Wage &
Benefi ts Survey

STRATEGIC OBJECTIVE #4: COMMUNITY MARKETING INITIATIVES THAT IDENTIFY THE


AREA’S MARKETABLE ASSETS AND COMPETITIVE ADVANTAGES

• Alexandria Fact Book


• ALEXMN.org website
• Douglas County Manufacturer’s and Support Industries Directory
• MNPRO Community Profi le & Commercial Properties Database

STRATEGIC OBJECTIVE #5: COMMUNICATION ROLE

• Annual Funder’s Meeting


• Annual Report
• Regional & statewide economic development organizations
• Community presentations
• Manufacturers and Support Industries Directory

6 A LEXANDRIA A REA E CONOMIC D EVELOPMENT C OMMISSION


B USINESS I NITIATIVE
STRATEGIC OBJECTIVE #1: BUSINESS ATTRACTION AND ECONOMIC
DIVERSIFICATION

• Responded to more than 300 inquiries, which was an increase of


5% since 2004, for business start-up and expansion assistance that
included: site selection, fi nancial packaging, business planning,
technical, wage and demographic information
• Worked with site selection consultants, state and regional
economic development agencies to attract new business and
industry to the greater Alexandria area
• Continued to work with all business sectors to ensure economic
diversifi cation through the use of Property Profi le Site Selections and
Financial Initiatives

STRATEGIC OBJECTIVE #2: BUSINESS RETENTION AND EXPANSION

• Three completed JOBZ projects in 2005, with one


additional JOBZ project already underway for 2006
• Conducted Business Retention and Expansion Program
for the many ways you positively impact our with the Leadership Team Meeting in December of 2005
of economic development and community with the offi cial start to the program in 2006
• Utilized JOBZ applications, TIF applications, fi nancial
packaging, and product development to promote
opportunities for 14 local business expansions
• Continued business recognition events including:
Aagard Group, LLC groundbreaking, distributed 51
Governor Certifi cates of Commendation during MN
Manufacturing Week, co-sponsored the Annual Business
Industrial Appreciation Day (BIAD) event honoring
Cowing Robards

STRATEGIC OBJECTIVE #3: BUSINESS ASSISTANCE AND DEVELOPMENT

• Continued to provide and develop training opportunities for


local entrepreneurs and existing businesses to encourage
leveraging of local resources, expertise, and economic
development partners featuring a Retail Trade Analysis
presented to local business owners
• Evaluated entrepreneurs as an economic development
stimulus, focusing on: spin-off ventures, the Import
Substitution model, and niche business

Cowing Robards officials and family were honored as the 2005 Business & Industrial Appreciation Day (BAID) recipient.

(l to r back): Mark Nelson (Decorating Center), Mike Rooney (Owner), Donna Hoeper (Decorating Center), Dan Rooney (Owner),
Colleen Rooney (Administration)
(l to r front): Ed Rooney (CEO), Deb Rooney (Trophies), Toniya Nelson (Natural Expressions), Nita Wittmer (Framing), Diane Hanson
(Blind Factory), Duane Carlson (Personnel/Marketing)

2005 A NNUAL R EPORT 7


R ESOURCES I NITIATIVE
STRATEGIC OBJECTIVE #1: INDUSTRIAL PARKS

• JOBZ City Population Signage


• JOBZ Property Profi les & GIS images entered onto MNPRO
• Collaborated with City of Alexandria and private developers on
the development of the Heritage Industrial Park
• Continued to collaborate with City of Alexandria on
infrastructure development of industrial parks

STRATEGIC OBJECTIVE #2: REVOLVING LOAN FUNDS

• Continued to focus on re-capitalization of


community revolving loan funds including the
GAIN loan, Developer loan, and City funds
• Examined and changed fi nancing policies for the
GAIN loan and Developers Loan to meet the
needs of local businesses

STRATEGIC OBJECTIVE #3 MUNICIPAL FINANCING SOURCES

• Assist with Tax Abatement application for start-up and


expansion projects
• Assist with TIF applications for economic development
projects to City/County
• Coordinate JOBZ applications for local units of government
served by the AAEDC/LAEDA
• Cooperate with local units of government on review of
company wage levels to meet JOBZ business subsidy
goals/requirements
• Explore alternative fi scal incentives to attract new industries
to Alexandria

8 A LEXANDRIA A REA E CONOMIC D EVELOPMENT C OMMISSION


EMERGENCE AS A REGIONAL CENTER
To illustrate the vibrant regional-center economic climate in the greater Alexandria Area, a sampling
of the 2005 commercial investments in the public and private sectors with an estimated project cost
minimum of $80,000 included:

ESTIMATED PROJECT COST SQUARE FOOTAGE TYPE OF PROJECT(S)

RETAIL
Wal-mart $15.35 million 212,931 sf Commercial New
PROFESSIONAL/SERVICE
Century Center, Inc $175,000 Commercial Alteration
Midway Mall $250,000 Commercial Alteration
Tastefully Simple, Inc $225,000 600 sf Commercial Alteration
Broadway Professional Suites $84,088 4,590 sf Commercial Alteration
Nokomis Square Development $952,326 13,611 sf Commercial New & Alteration
Twin Plaza 1.17 million 16,234 sf Commercial New
Easton Place $80,393 4,159 sf Commercial Alteration
North Branch Business Plaza LLC $341,238 7,920 sf Commercial Alteration
White Oak Investments $1.03 million 24,633 sf Commercial Alteration
Hens & Merten Corp $1.07 million 6,602 sf Commercial Addition
Tires Plus/Jeseritz Automotive $289,656 5,387 sf Commercial New
Alexandria’s Animal Doctor $360,000 2,640 sf Commercial New
RingTK LLC $100,000 1,855 sf Commercial Alteration
WHOLESALE DISTRIBUTION
Henry’s Foods $120,000 Commercial Alteration
AMUSEMENTS
Arrowood $250,000 Commercial Alteration
Minnesota Lakes Maritime Museum $1.35 million Commercial Addition & Alteration
DINING
Pizza Ranch $280,546 Commercial Alteration
Weston Station $93,772 788 sf Commercial Addition
CONSTRUCTION
Lakes Area Paving & Striping, Inc $87,280 2,000 sf Commercial New
INDUSTRIAL
Bio Corporation $1.4 million 24,333 sf Commercial New
Crusin Eagle Properties LLC $200,000 30,000 sf Commercial New
Crusin Eagle Properties LLC $2.09 million 31,000 sf Commercial New
Aagard Group LLC $2.89 million 36,000 sf Commercial New
Donnelly Custom Molding Co $1.01 million 17,000 sf Commercial Addition
HEALTHCARE FACILITIES
Blue Eye Development LLC $3.4 million 16,625 sf Commercial New
INFRASTRUCTURE
City of Alexandria $1.35 million 24,925 sf Commercial New

Source: 2005 public record commercial building permit activity – City of Alexandria.

2005 A NNUAL R EPORT 9


610 Filmore St. Suite 1 • Alexandria, MN 56308
Phone: (320) 763-4545 • Toll Free: (866) 296-4545 • Fax: (320) 763-4457
E-Mail: aaedc@rea-alp.com • Web: www.alexmn.org