Downtown St. Paul reinvents itself as business hub

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."

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.

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.

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.

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.

"High Jump has the 30 years of experience and enhancements to the product that allows HighJump to serve larger companies. It would have taken Accellos some time to develop its own software to meet needs of large [commercial] customers."

The combined company is expected to have revenue of about $150 million this year. Battery Ventures, a Boston-based venture capital firm, has been the owner since 2008 of HighJump, which has nearly 500 employees around the globe.

• For the tenth year, Xcel Energy has been named the country's top wind-energy provider by the American Wind Energy Association. Xcel will celebrate at an All-Star Game-related event on Tuesday at 11 a.m. at Xcel Plaza downtown. It will include regulators and Xcel's Windsource partners, including Amherst Wilder Foundation, Aveda, Trane, the University of St. Thomas, Target Printing and REI. Wind, which provides 15 percent of Xcel's energy supply, will be more than 20 percent by 2020.

• Apple Valley-based Uponor North America has been chosen as a Eco Leader, alongside GE, Panasonic and DuPont, by national trade magazine GreenBuilder. The July 2014 issue features its annual Eco Leaders list, which recognizes companies living the '"triple-bottom-line" approach to business of people, planet and profit.