In Thief River Falls, jobs boom brings problems, too

  • Article by: ADAM BELZ , Star Tribune
  • Updated: May 28, 2013 - 8:57 AM

Two big employers have made the city an oasis of job growth. Now housing and schools are trying to catch up.

– Fifty miles northeast of Grand Forks, N.D., where the wind screams in off the Red River Valley, a town known for building snowmobiles is leading a jobs recovery in a corner of Minnesota where work otherwise has been drying up.

With the rise of a quiet giant called Digi-Key Corp. and a recent lift from the resilient Arctic Cat, Thief River Falls, population 8,500, has become a little fount of economic growth.

Employment in Pennington County — which includes Thief River and the villages of Goodridge and St. Hilaire — has grown four times as quickly as the population since 2000, adding 1,857 jobs but only 490 people.

“It’s a little success story in rural America, and we’re just chugging along,” said James Retka, dean of workforce and economic development at Northland Community & Technical College. “The dilemma of this city is, does it want to grow? It’s a good problem to have, but like any good problem, there’s issues.”

Employment in the county rose 20.7 percent from 2000 to 2011, the second-fastest rate in the state. Every neighboring county lost jobs except Beltrami, where the gain was 2.2 percent.

Among the results is a housing shortage that the city and its two dominant corporate citizens have yet to solve.

“You can’t rent a shoe box,” said Maryel Anderson, owner of Anderson Realty. “You can’t rent storage for your things even if you can find a place to bunk.”

That has prevented more rapid growth in the workforce; both companies are expanding in other places — such as Fargo, N.D., and St. Cloud.

School district voters narrowly approved a $54 million bond referendum in 2011 for a new elementary school and renovations to the high school to help attract more families, and Digi-Key plans to bus in workers from Crookston, more than 40 miles to the southwest.

“We almost, as a community, have been too successful in creating jobs,” said Mark Larson, president of Digi-Key.

Thief River Falls straddles the Red Lake River where the Thief River joins it from the north. The surrounding farmland is too far east for the sugar beets that dominate the Red River Valley and too far west for the forest that stretches from Bemidji to Lake Superior. Farmers there grow mostly wheat, soybeans, hay and oats.

Each May, people hang the blue cross of Norway on flagpoles next to the Stars and Stripes in honor of Norwegian independence.

Arctic Cat occupies a long metal factory on the southwest edge of town. Digi-Key is next door, in a concrete box of a building that used to be Arctic’s “head shed,” before a 1981 bankruptcy.

Most of the new jobs are at Digi-Key, which sells electronic parts for things such as smartphones, electric cars, LED lights and medical devices. With 840,000 parts in a packed warehouse snaked with conveyor belts, the firm can turn an Internet order into a cardboard box on a FedEx truck in as few as 17 minutes.

Twenty years ago, the company sold mostly to design engineers and hobbyists. Sales have surged since it jumped on e-commerce in the mid-1990s, then started selling to manufacturers who want to make limited runs of a product.

“It’s got lots of parts, maybe 400 different parts,” said Larson, who has managed Digi-Key since 1976. “They can come to us and say, ‘I need 40,000 of each of these parts,’ and we can deliver it pretty much off the shelf.”

Ten years ago, 1,247 people worked there. Today, the number is 2,600. The starting wage in the warehouse or on the phones is $13.68 per hour and the health benefits are remarkably good — no premiums and minimal co-pays and deductibles for singles and a nominal premium for families.

UPS and FedEx both charter nightly flights from Thief River’s tiny airport to hubs in Louisville, Ky., and Memphis, and trucks roll back and forth to Fargo and the Twin Cities, carrying cables, switches, transistors, capacitors, sensors, resistors.

Jim Hagert, a pilot who commutes about 275 miles to Thief River from Olivia, Minn., has made the flight to Louisville with a plane full of boxes so many times he’s memorized the landscape from 39,000 feet. On clear nights, he can see Grand Rapids across Lake Michigan, pick out the black ribbon of the Mississippi River or the lights of Lambeau Field. “I’ve never seen Detroit,” he admitted. “You can see St. Louis, you can see Des Moines.”

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    Two manufacturing companies have made Thief River Falls an oasis of job growth.

  • Arctic Cat employee Norman Olson prepared an engine for assembly in the XF 800 Arctic Cat snowmobile. The plant employs about 1,300.

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