St. Paul Port Authority to buy 3M's East Side land

With the backdrop of a landmark tower with a red "3M" on it, St. Paul officials on Thursday announced a deal to make yet another change to the East Side's landscape.

The St. Paul Port Authority will buy 3M Company's land along Phalen Boulevard, which at one time served as its headquarters.

"The East Side is a good place to do business," said Ken Johnson, Port Authority president.

The port will pay about $3.5 million for 35 acres of the 45-acre complex. It has an option to purchase the remaining 10 acres by 2011. A price has not been set for that parcel.

Meantime, 3M will keep about 1,000 employees -- mostly engineers and office workers -- in offices on the 10-acre spot.

The boards of both parties must still sign off on the deal to make it official. Closing is set for mid-December.

"Selling the property to the St. Paul Port Authority ensures that plans to redevelop the site will be consistent with the city's revitalization efforts," said Skip Gjersdal, vice president of 3M Real Estate.

In a neighborhood that has seen its share of shuttered factories, vacant buildings and polluted land, the prospect of losing another major employer is tempered by the hope of bringing in new companies.

The industrial property, which sits next to the redeveloped Phalen Corridor, served as 3M's headquarters from 1910 to 1962. It was later used to make industrial and flexible printing tapes. A number of the buildings are empty now.

The port will raze the buildings, which have no market value, and make sure the land is ready for construction, said Bill Morin, the Port Authority's director of real estate. It will take about three to four years to finish.

So far, no pollution has been found, 3M officials say. The Port Authority is still working on its own environmental assessment. A mixture of funds will be used to buy the land, Morin said, but the budget hasn't been completed. The Port Authority gets much of its redevelopment money from the state and Metropolitan Council, and it can issue revenue bonds.

No tenants have signed on to the project yet, but the agency and city would like to bring in so-called green manufacturers and a mix of other light-industrial and office buildings.

Housing and retail won't be part of the redevelopment, Morin said.

"We believe there will be a lot of interest," he said.

Ramsey County is likely to take up some office space when things are built.

The Port Authority also owns the nearby former Globe asphalt and shingle factory and Griffin Wheel Works. Combined with the 3M land, the agency is confident it can attract $60 million of new investment and more than 1,300 new jobs to the area.

Companies that do come will need to sign a contract with the Port Authority to provide a certain number of jobs, as well as a solid wage.

Big announcement

The company announced in 2006 that it would sell most of its East Side real estate. Last January, 3M said it would sell all of its land.

The East Side complex is "under-utilized" and there's room in the Maplewood facility, so it makes sense to sell, said Doyle Shea, who works in the company's real estate division.

The decades have not always been kind to East Side workers. First, 3M moved its headquarters to Maplewood. Then Whirlpool's refrigerator plant closed about 20 years ago. The Stroh brewery shut down in 1997. In 2003, during the heart of the most recent manufacturing slump, 3M announced it would eliminate 500 production and maintenance jobs at its East Side complex.

In August 2007, about 100 tape and fabrication jobs were cut from the site when 3M relocated equipment to its plants in Springfield, Mo., and Knoxville, Iowa.

The number of vacant buildings -- both houses and businesses -- continues to grow because of the foreclosure crisis.

But there are bright spots. The completion of the Phalen Corridor in 2006 showed off a $600 million face-lift. A 2.6-mile stretch of polluted railroad lines turned into new pavement. New businesses, new jobs and new homes sprouted. There's a new YMCA. A grocery store-starved area of the city is about to get a Cub Foods.

The boulevard, running from the Bureau of Criminal Apprehension in the east to Interstate 35E in the west, took about a decade to complete and is a direct link to the interstate.

That freeway access will be a big selling point, said Council Member Dan Bostrom. His father worked at the 3M complex for more than two decades. "3M has been a major player here for many years," he said. "This is an opportunity to move forward with a development that ultimately could be as successful as 3M."

Chris Havens • 651-298-1542