A major division of Emerson Electric Co. said Monday that it will convert part of the former ADC Telecommunications site in Shakopee into an engineering and manufacturing center, creating about 500 high-skilled jobs over the next five years.
Rosemount Inc. will invest about $70 million to complete and equip ADC's abandoned building, which spans 500,000 square feet. It also will develop parking, roads and green space on 60 acres around the facility.
The plan is welcome news to the city of Shakopee, which has been trying to redevelop the industrial campus for years. The site has been vacant since 2000, when ADC pulled out of the complex near Hwys. 169 and 101, leaving behind the building and curbs for sidewalks, parking and roads that never materialized.
"I am ecstatic with the way this whole thing worked out," Shakopee Mayor Brad Tabke said. "Part of the reason this building sat empty for so long is that it was built so specifically for ADC's manufacturing needs. And after the tech bubble burst in 2000, there was not a lot of need for that kind of manufacturing."
Officials from Rosemount, a unit of the $24 billion Emerson Electric Co. in St. Louis, said the incoming jobs will pay an average of about $65,000. Workers will manufacture instruments that measure pressure, temperature and flow rates for oil, gas, refining and petrochemical plants.
The project will take five years to complete and will benefit from more than $6 million in state and local subsidies.
The new facility will serve as global headquarters for Emerson's measurement technologies division and is part of a 10-year growth strategy. The division's roots can be traced to Emerson's 1976 acquisition of Minnesota-based instrument and control manufacturer Rosemount, which is now part of a business unit called Emerson Process Management.
Rosemount has operations in Chanhassen and Eden Prairie, but growing energy markets have pushed the company to deepen its presence in the state, said Steve Sonnenberg, president of Emerson Process Management.
"We are delighted to expand our operations here in Minnesota, which not only offers a quality workforce and excellent business climate, but also already serves as a major hub for Emerson in North America," Sonnenberg said.
For Shakopee, the project brings immediate momentum to a large, undeveloped site that has languished despite its promising location. At one point, city officials pitched it as a site for the new Minnesota Vikings stadium, although the proposal didn't gain political momentum. The city also tried to turn the site into an international mall, but that plan fizzled, too.
"The fact that this is a 500,000-square-foot facility means it is a tough space to fill, so this new project is a perfect project for that spot," said Samantha DiMaggio, Shakopee's economic development coordinator.
The property received a chance for a second life as a manufacturing hub in October, when Opus Development Corporation's senior vice president, Dave Menke, confirmed that Opus had bought the property. Soon after, discussions began with the city, state and an economic development partnership.
As a manufacturing hub, the property is expected to deliver an economic boost for Shakopee, which has more than 37,000 residents. Greater MSP, a regional economic development partnership, calculated that the project would mean $200 million in new construction and employee wages, as well as more than $10 million in state income taxes over five years.
Road construction should begin before October.
City officials are excited about the new job creation, and they are also optimistic about the potential for "spin off jobs," as the project attracts more people to move, shop and eat nearby, DiMaggio said.
But Art Rolnick, an economist and former research director of the Federal Reserve Bank of Minneapolis, questioned whether state subsidies are needed for such a venture.
"I am thinking this will be a good investment for the city, but you can't tell me this [state subsidy] will be a good investment for the state because Emerson was going to expand here anyway," said Rolnick, now a senior fellow at the University of Minnesota's Humphrey School of Public Affairs.
Still, the deal drew praise from leaders across the state, including Gov. Mark Dayton.
More than $3 million in state assistance includes worker training aid, a sales tax exemption on equipment and construction supply purchases, and road building costs. Local aid includes property tax abatements and other help.
Michael Langley, CEO of Greater MSP, said the subsidies will be repaid in five years through taxes generated by the business and the new workers.
"It's all gravy after that," he said. "That is good news."