Downtown St. Paul reinvents itself as business hub

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CEO Paul Lapadat, center, of Flagstone Foods cut the ribbon at Flagstone’s new St. Paul headquarters with St. Paul Mayor Chris Coleman and St. Paul Chamber of Commerce President Matt Kramer, far left, in 2012.

Photo: Flagstone Foods,

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New business comes in small doses for downtown St. Paul, known more as a government and arts center than as a business center.

However, Matt Kramer, the veteran businessman and former commissioner of the Minnesota Department of Employment and Economic Development, is focusing with city officials on retaining and attracting more small to medium sized businesses in the job-hungry loop.

And there’s recent evidence of more traction.

Kramer worked with North Dakota-based engineering-services firm KLJ to site a new office that should employ about 25 by the end of the year.

Tom Sorel, engineer and onetime boss at the Minnesota Department of Transportation, is head of the new Twin Cities office. It’s ironic, because many Minnesota engineering firms have made millions in the North Dakota energy fields and on related development. However, Sorel said in an interview that this is a smart diversification move for the Bismarck-based firm.

Sorel, who left AAA Minneapolis after a year to quietly join KLJ Twin Cities this year, said 900-employee KLJ chose Lowertown St. Paul, a burgeoning transit-commerce-culture hub, because the engineering firm needs to be close to the Metropolitan Council, the State Capitol, and Ramsey County, the big sticks of transportation planning and finance.

“We came to the Twin Cities, not just to be a competitor but to be a collaborator,” said Sorel, who was hired by Minnesota from the Federal Highway Administration after coordinating award-winning work: the rebuilding in 2007-08 that followed the I-35W bridge collapse. “We don’t have any Twin Cities projects yet, but we’ve got bids on some and we’re working with partners. We’ve done a lot of work in the Dakotas and northern Minnesota. The company [engineers] everything but our focus will be transportation.”

Meanwhile, accounting firm HLB Tautges Redpath of White Bear Lake plans to change its name to Redpath and Co. and move its headquarters to downtown St. Paul in September, bringing 45 of its 125 employees downtown, as reported in the Star Tribune last week. Kramer, who had a role in recruiting both firms, said we’ll see more of this.

Kramer is also a myth buster, noting that health care (20 percent of workers), not government (13.5 percent), is the leading employer in downtown St. Paul. You can walk to six hospitals in the loop within 30 minutes, the athletic Kramer claims. And downtown also is home to big Securian Financial and Bremer Financial.

Hopeful Hints About Future of Flagstone Foods

St. Paul Chamber President Matt Kramer and many others are hopeful about downtown-based Flagstone Foods, which in June announced it was being acquired by Illinois-based TreeHouse Foods for $860 million in cash. Flagstone Foods’ trail mix and dried-fruit snack business grew 24 percent last year to $697 million.

It has several hundred Twin Cities workers, including 45 at its downtown St. Paul headquarters. TreeHouse brass have expressed confidence in CEO Paul Lapadat, who is expected to remain.

Kramer is waiting to hear further news from the company, which has yet to announce local growth plans.

More On the Accellos-HighJump Merger

The headquarters of the merged HighJump software will be in Colorado Springs, Colo., home of Accellos Software, which is acquiring the Bloomington-based pioneer of warehouse-management and distribution software. However, Chad Collins, chief marketing officer of Accellos, and a 10-year HighJump veteran before that, said no job cuts are planned and expansion is the plan.

CEO Russell Fleischer of HighJump, who signed on in 2010, has left the company in the wake of last week’s announced merger.

The owner of Accellos, Silicon Valley private-equity investor Accel-KKR, is merging smaller Accellos with HighJump, which serves larger customers, to create an integrated “omnichannel” company that can serve the entire market and better compete with the likes of Minneapolis-based SPS Commerce, Manhattan Associates, as well as software titans Oracle and SAP, Collins said.

“It goes to product fulfillment,” Collins said. “Customers want the same level of service. We think we can serve the market better on a combined basis. This will enable a software platform in the combined company that will focus on large and small customers.

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