In 2004, the cities of St. Paul and Minneapolis locked horns in a vigorous competition for the headquarters of Allina Health Systems, which was looking to move from Minnetonka.
Both cities desperately wanted those 2,000 jobs. St. Paul offered the Midway site, formerly Montgomery Ward. Minneapolis offered the Sears Tower on Chicago Avenue and Lake Street — a site then vacant and home to urban wildlife. The Allina board voted to move the state’s second largest nonprofit to Minneapolis, and today the Midtown Exchange, in the Phillips neighborhood, is a thriving hub for a rebounding neighborhood.
It was a moment of triumph and a symbol of renaissance for a community once characterized as “Murderapolis” (in a New York Times article in 1996, during a spike in homicides). Yet, the most important economic development work had just begun. Our city’s leaders wisely understood that simply landing the deal was not enough for the neighborhood.
For Minneapolis, capturing the full value of the Midtown Exchange meant delivering new jobs and income into the surrounding households. The Midtown Exchange model, greatly praised, represents only a start on a problem our next mayor will have to face every day — how to raise up the lowest-income urban populations in a prosperous city. That is the Minneapolis workforce challenge right now, and it won’t be solved by a hot real-estate market alone.
So what are the key elements of a delivery system that responds to this challenge? In a commentary on these pages in June, Dane Smith of the think tank Growth & Justice outlined some of those ingredients, beginning with development agreements tied firmly to workforce training. In Minneapolis, such agreements have brought several workforce breakthroughs in the last decade, including:
• The Midtown Exchange itself: In 2004, Ryan Development became the first Minneapolis developer to embrace geographic hiring. It asked labor to support the hiring of union members from the Phillips neighborhood ZIP code as a way to raise incomes in this challenged neighborhood. It worked to employ 27 unemployed workers from the neighborhood.
• The Target Center green roof: Summit Academy trained a workforce composed of more than 80 percent people of color for the project; they earned $27 to $42 an hour. The green roof earned national acclaim, and the contractor hired many of these workers full time.
• The Riverside Plaza rehab: The city granted developer George Sherman $1.9 million in exchange for taking local hiring to a new level, employing 90 residents for the buildings.
• Hospital projects and partnerships: Three hospital projects (Children’s, Abbott Northwestern and Fairview-University) occurred in two of the city’s most challenged neighborhoods. Builders exceeded local and minority hiring goals on these projects.
All of these agreements seized opportunities from these projects for local residents. It was necessary, but not at all sufficient, to close a minority unemployment rate nearly triple that of the city’s rate, which is the lowest of all the nation’s big cities. Broader strategies will help produce a workforce delivery system that will make Minneapolis a national model for economic development that serves the common good.
• Cradle-to-career strategies: No college has shown the ability to systematically raise up students who, despite graduating from high school, can perform only at eighth-grade math and reading levels. That can change through earlier educational interventions. The Northside Achievement Zone and its partners are showing the way in the Jordan neighborhood. Ascension, Harvest Prep/Seed Academy, Hiawatha Academy, Christo Rey, De La Salle and Patrick Henry all have figured out how to deliver graduates who perform at grade level. For those students, colleges can deliver.
• Work and study, high school: Mayor R.T. Rybak defines his greatest achievement as Step Up. Cochaired by Rybak and U.S. Bank CEO Richard Davis since 2003, it has opened career paths for 18,000 youths in Minneapolis. Rybak and Davis have built a system with almost 200 employers that give youths their first big break into the market.
• Pathways into college: At the same time, Minneapolis Community and Technical College (MCTC) and St. Paul College (SPC) launched Power of You to knock down the financial hurdle of college in those cities. More than 2,000 youths have gone to college tuition-free, and college participation has jumped by 25 percent from the Minneapolis public schools. Power of You students succeed at a rate far above the norm. They are lighting a path for their classmates.
• Work and study, college: 75 percent of MCTC students work — only a fraction of those in their field of study. Student retention is higher in programs with internships. Internships convert to permanent employment at a rate of 63 percent. Like Step Up, college internships might just be the solution for students coming from challenged neighborhoods. The presidents of MCTC and SPC have announced partnerships across health careers and construction trades to grow hundreds of employment opportunities for students.
• Closing the gap with a system: A unified delivery system featuring colleges, the private sector and nonprofit job training agencies could close the unemployment gap. It’s happened before. Minneapolis, through its Workforce Council, worked with the Minneapolis Chamber, General Mills, U.S. Bank and Wells Fargo to close the city’s historic unemployment gap, starting in 2003. The delivery system included 20 job-training agencies. On average, the city’s unemployment rate has been at or below the metro rate since 2006. The unemployment gap experienced by metro populations of color can be similarly closed.
• Public leadership: Government is clearly leading the way. Minneapolis is fortunate to have city and county governments that enforce minority hiring. Gov. Mark Dayton has raised state contracting goals for minority and women to 38 percent. If somehow all these measures combined to employ 34,000 people of color in Minneapolis and St. Paul, the unemployment gap would close. SPC and MCTC enroll 13,584 students of color. If these two colleges could graduate all these students at current placement rates, we would close the gap within three years. That’s a lofty goal, but it not out of the realm for a city that does big things well.
• Community college partnerships: Minneapolis has 92,000 jobs across health and human services, government, and administrative professional jobs. The State Department of Employment and Economic Development has granted Project for Pride in Living and Hennepin County leadership $99,000 to fast-track a new human-service career path to draw more candidates of color. The Minnesota Business Partnership is growing administrative professional internships downtown. Hennepin County Commissioner Peter McLaughlin leads a Health Careers Partnership that has credentialed 2,564 workers in the Phillips neighborhood. With these partnership efforts, more of these 92,000 jobs will go to work on closing the city’s minority unemployment gap.
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The next mayor must apply the lessons learned from a decade of urban renaissance to these opportunities. A delivery system that prepares Minneapolis citizens for the workforce can close the unemployment gap for good.
Mike Christenson heads workforce development at Minneapolis Community and Technical College. He is also a senior policy fellow at the think tank Growth & Justice.