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Continued: In Thief River Falls, jobs boom brings problems, too

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

Digi-Key needs to hire up to 400 people this year, while Arctic Cat is hiring 75. Minnesota companies to the north such as Marvin Windows in Warroad, Polaris in Roseau, Central Boiler in Greenbush and Mattracks in Karlstad all have signaled that they need to hire people, which is good for a struggling region but doesn’t help with labor scarcity.

“Not just on the plant side, but even on the management side, whether it’s IT or finance, right across the board, there are only so many people up here,” said Claude Jordan, CEO of Arctic Cat.

Arctic Cat’s employment in Thief River has grown from 1,100 to 1,300 in the past five years. But recruitment is the reason the company’s headquarters are in Plymouth. It also now has an engine factory in St. Cloud.

“As we continue to grow and stress the capabilities we have here, there’s no doubt that we’ll have to look at are we able to meet all the needs of the business,” Jordan said. “I don’t see us moving to Mexico, I can tell you that.”

Demand for housing

Employees hired from out of town have trouble finding homes, and the city has struggled both to attract developers and approve development that residents won’t oppose.

Financing apartment projects got more difficult after the financial crisis, said Mike Moore, the city’s community development director. Also, Digi-Key lacks Arctic Cat’s name recognition, while Arctic Cat lacks Digi-Key’s record of stability, he said. That combination has been troubling to potential investors.

A deal for 41 apartments on the south side of town is moving forward, but several projects have died in planning. Because the city would prefer not to raise property taxes to extend sewer lines and roads, the apartments that have been proposed are close to existing homes, said Moore.

Petitions against such projects have been successful, and one deal is stalled because a landowner who wants a single-family home development sued the city to stop it from rezoning nearby land for apartments.

Shane Zutz, principal of Lincoln High School, knows the number for the switchboard at Digi-Key by heart. The company now provides one-fourth of the jobs in the county, so plenty of parents work there.

He sees the school’s bonding-funded improvements as a workforce strategy. The high school and middle school are being overhauled. Next year, every student in the district will have a school-issued tablet or laptop.

“Our facilities now are being upgraded, and they really needed it,” Zutz said.

The city has two global companies, but it’s remote, and small. Better schools can help attract the necessary talent, he said.

Still, there are questions about whether the community can adapt quickly enough. Already, Digi-Key is expanding a fulfillment center in Fargo, a choice the company attributed to rising income taxes in Minnesota as well as the need for nearby housing.

That scares Anderson, the real estate agent.

“I think it’s a sign that we’re past reacting to this housing thing. We kind of missed the boat,” Anderson said. “If you know anybody who wants to build housing, send them our way.”


Adam Belz • 612-673-4405 Twitter: @adambelz

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