A good direction
A planned expansion of Great Plains Energy Park and heightened interest by more companies in Minot’s agricultural complex has 2014 shaping up to be a good year for industrial development in the city.
Jerry Chavez, president of Minot Area Development Corp., said construction is to begin this spring on the 250-acre Great Plains Energy Park 2 in east Minot. The existing 130-acre energy park is fully occupied, and Chavez said demand for more space is expected to be particularly strong from oil-field manufacturing and service companies.
“The Great Plains Energy Park is an effort to provide shovel-ready property for companies that are looking to expand to Minot. We, as a city, want to have these sites available, because if we don’t, these companies will go elsewhere,” Chavez said.
Chavez noted that the money borrowed from the MAGIC Fund to develop the first Great Plains Energy Park was paid back in full.
“The benefit to the city is we were able to extend public infrastructure in east Minot in an area of town that needed it,” he said.
MADC does not plan to finance the second energy park using the same method, though.
“The idea is not to go through the MAGIC Fund but use other financing mechanisms,” Chavez said.
He also foresees two to three agribusinesses on the way to claiming spots in the ag complex, while existing companies in the park continue their expansion.
With the help of $156,336 in interest buy-down from Minot’s MAGIC Fund on a state PACE loan, United Pulse Trading opened in the ag park with 45 employees last summer. United Pulse Trading acquired the former MG Grain facilities. The company processes peas, lentils, chick peas and dry edible beans.
In December, United Pulse Trading announced a $4 million expansion that is expected to double production when it becomes operational early this year. The capacity of the facility will increase to 70,000 metric tons a year. A third production line could be added in the future, adding another 35,000 metric tons, according to a company news release.
United Poly Systems also is expected to begin construction in the ag complex this spring. The company was awarded a $400,000 grant and $400,000 forgiveable loan from the MAGIC Fund in 2013.
United Poly Systems was established in 2011 in Springfield, Mo., to produce high-density polyethylene pipe. The pipe is widely used in various industries, including telecommunications, power and utility, electrical and oil and gas.
MADC reports that more than 57 oil companies operate out of Minot, and the oil and gas industry employs more than 6 percent of the city’s workforce.
The activity occurring with the oil boom hasn’t changed the need for the work of MADC or the organization’s mission, Chavez said. However, some tasks have changed, particularly the increased emphasis on MADC’s role as an information resource for businesses and investors. Queries might come from housing and retail developers as well as oil-related companies.
“Within the last year, we have been contacted on a variety of different projects that we normally wouldn’t get involved in. They usually approach us from the standpoint of trying to understand what the local economy is doing. They ask for information relative to housing. They ask for information relative to demographics,” Chavez said.
The oil industry has led to inquiries from investors from Russia, Germany, France and Puerto Rico. MADC accepted speaking engagements that connected Minot with investment markets in places such as San Francisco, Dallas, Houston and New York.
“We participated with Williston and Dickinson to try to let investment groups within those regions understand what the investment opportunities are,” Chavez said. “That generated a lot of activity once we came back.”
This past year, MADC arranged site visits for 20 companies.
“Some people think economic development happens on its own, and it doesn’t,” said Kathy Aas, MADC board chairwoman. “These companies are coming to look at our community to see what’s their best fit, and they have other options.”
Chavez said Minot is a good fit for companies now looking to capitalize on the state’s growing natural gas production. Gas-processing plants tend to be built near the gas source, but there are other opportunities in the gas distribution market that could take advantage of the ag complex and intermodal facility at the Port of North Dakota, he said.
Along with agriculture and energy, MADC has previously identified technology as a target industries for recruitment. The closure of Info-Tech in the summer of 2012 and the dormancy of Heliplane after paying off its MAGIC Fund obligations has stalled activity on that front. Chavez said technology remains a focus, but because that market needs to mature further, MADC hasn’t expended as much effort in that area. He said projects under way to remake downtown Minot eventually should spark interest from technology-related businesses.
Along with recruitment, MADC remains involved in helping retain and expand existing businesses. MADC is working with the McHenry County Job Development Authority to re-open a livestock auction in the area.
“My hope is that by next fall, we will have a working sale barn,” Chavez said.
MADC’s other activities include administering a state job-training grant program and conducting a workforce development program. This past year, the workforce development program recruited four skilled workers from out of state for companies with jobs in hard-to-fill fields. The program currently is working with four job applicants in the health-care field.
Starting July 1, the share of the city sales tax going to economic development will drop from 40 percent of a 1-cent tax to 15 percent. Even so, city funding for MADC for marketing and workforce development will increase from $441,000 in 2013 to $470,000 in 2014.
MADC had supported a change in sales tax distribution to shift money to flood control, but only because it believes revenue will remain adequate to support a healthy MAGIC Fund.
“You don’t want to deplete it, because it’s an important tool in our toolbox,” Aas said.
The MAGIC Fund had assets of just over $5 million at the end of November, although that money was obligated to a variety of projects. The largest commitments yet unclaimed are the grant and loan to United Poly Systems and $3.4 million approved last year to expand rail at the ag complex. Midwest Milling also had $350,000 in grant and loan assistance approved in 2012 but not yet requested at the end of last year. The only companies with loans that they are continuing to pay off are Pure Energy and Minot Sash & Door.
MADC’s biggest challenge in promoting growth is not funding but the shortage of affordable housing. If the community can work together to solve that problem, it will ease the cost of doing business for many companies and make Minot more attractive as a permanent residence, Chavez said.
“It’s positioning Minot as a community of choices for families and not just a suitcase community,” he said. “I think companies want to be here becuase of our quality of life.”
Quality of life has been a relocation factor for Mike Harrison, who dropped by the MADC office recently. Harrison was drawn by the oil activity from Tulsa, Okla., about two years ago to start a manufactured home-sale business in Minot and operate a housing community west of town.
“I didn’t want to be right in the middle of things but wanted to be on the fringe,” he said. “This has just been a wonderful place for us to operate.”