New Prague rides natural gas bandwagon

  • Article by: SUSAN FEYDER , Star Tribune
  • Updated: November 6, 2012 - 4:23 PM

A $23.1 million expansion at Chart Industries, the city's largest employer, could inject new life into the economy.

The shale gas boom is fueling growth at New Prague's largest employer, and city officials believe the benefits could help their community bounce back from the recession.

Chart Industries Inc. recently broke ground on an ambitious expansion of its manufacturing operations in New Prague, a $23.1 million project that is the largest in the city's history.

The new facility is being built on land that was partly vacant except for some houses, a capital investment that will give a boost to the city's tax base, said City Administrator Michael Johnson.

"Economic development opportunities don't come along every day, and we could do a whole bunch of small ones over many years and not have them add up to the size and scope of this one," he said.

The addition will add 80 jobs in the next two years to Chart's workforce in New Prague, where it now has about 470 employees. Ohio-based Chart, whose roots in New Prague go back almost 50 years, has long been a significant presence in the city, accounting for more than 20 percent of its private sector jobs.

Mayor Chuck Nickolai, who grew up in New Prague, remembers working at Chart during summers when he was a student at the University of St. Thomas.

"It was good experience and paid pretty well," he said. "I'm sure the company helped put a lot of people here through school."

Chart's presence also has helped support other smaller businesses in New Prague, such as Lutgen Technologies Inc. The company makes storage canisters and racks used in mechanical and liquid nitrogen freezers. Chart's New Prague operations make equipment to store and transport different types of gases and is Lutgen's largest customer, said owner Mike Lutgen.

The new jobs at Chart, mostly welding positions, will come on top of about 130 workers the company has added in the past 18 months. Rising demand for natural gas -- extracted from shale as a low-cost alternative to oil-based fuel -- is the main reason the market for Chart's products has taken off.

"Any industry or company that burns a lot of fuel is looking at how can they convert from oil-based fuel to natural gas-based fuel," said Bill Haukoos, vice president of Chart's global liquid natural gas (LNG) business. The company's storage and transport equipment includes tanks for LNG like those being installed at service stations and truck stops to supply new fuel pumps for vehicles that previously have used diesel.

Johnson said the influx of new workers at Chart could help revive New Prague's housing market, which wilted during the recession. Building permits fell from 100-plus totals in the mid-2000s to just six in 2008. Only five homes were built in 2011, the lowest total in more than a decade. Nineteen permits have been pulled so far this year.

The city's research has found that almost 50 percent of Chart's employees live in New Prague, Montgomery and Lonsdale zip codes, Johnson said.

"That's pretty significant, and that's critical long term as we look at where housing has gone in recent years," he said.

Despite a widespread shortage of skilled manufacturing workers, including welders, Chart doesn't expect to have trouble finding new employees who live in the New Prague area, said Bruce Lyman, vice president of operations. The company has an in-house training program with three full-time instructors who teach newcomers and provide advanced training for employees, he said.

Public financing for the project includes a $500,000 forgivable loan and a $313,000 grant from the state, Lyman said. Another $400,000 in state funds is available but has not yet been granted, he said.

City funding includes $500,000 from excess tax-increment financing district funds, a five-year tax abatement on Chart's existing facilities and a 10-year tax abatement on the new building, Lyman said.

In addition to financing, Lyman said the city helped Chart assemble the land parcels for the 24.5-acre project site, which is large enough to accommodate more expansion.

Haukoos said the New Prague project isn't the only instance of Chart's growing footprint in the south metro area. The company also plans to add about 20 engineers in a new office it will open early next year in Burnsville.

Susan Feyder • 952-746-3282

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