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Emerson looks at Shakopee for 500-job expansion

  • Article by: SUSAN FEYDER
  • Star Tribune
  • December 11, 2012 - 4:10 PM

Shakopee officials plan to spend the next few weeks examining the city's inventory of economic development tools as they stay in the hunt for a new and very large factory that could bring 500 high-paying jobs to the community.

Emerson Process Management Rosemount already has about 1,500 people at facilities in Chanhassen. But the business, a division of St. Louis-based Emerson Electric Inc., has been scouting the Twin Cities market for other sites where it would manufacture energy-related products.

The search has included a Shakopee site once planned as a complex for ADC Telecommunications, which abandoned its building plans amidst a sharp downturn in sales. Taken back by lenders, the site has just one partially completed building on it.

City Administrator Mark McNeill said Emerson approached the city about the property. "The fact that we have the ADC building here is well-known. It's not surprising that it would be one of those items that crossed their radar," he said.

After news surfaced last week that Emerson was eyeing Shakopee, the company promptly issued a statement saying it still hadn't chosen a site and was looking at multiple Twin Cities locations. A plan to brief the City Council on discussions with Emerson got pushed back and probably won't resurface until January, McNeill said.

Mayor Brad Tabke originally went on Twitter with news of Emerson's interest in Shakopee. In an interview a day later, he said the city needed more time to analyze its role in making the deal.

"We simply didn't have all the numbers and analysis done that we needed to have in order to make good decisions and be careful about spending public money," Tabke said. "We weren't completely ready to talk about things like tax abatement."

Initial reports of economic assistance included a package of $6 million in subsidies from the city, Scott County and the state of Minnesota. That included an unspecified amount of tax abatement and funds from a city revolving loan fund that currently has a balance of $247,000. McNeill said it would be the first time the city has tapped the fund, which has existed for several years.

McNeill agreed with Tabke that the city needs more time to determine the amount and makeup of financial incentives it can offer. "We're trying to resolve what we might may able to do to make it work for Emerson to come," McNeill said.

The addition of 500 jobs could help Shakopee top its pre-recession, privately employed workforce of just over 16,800, according to figures from the Minnesota Department of Employment and Economic Development. Employment has been climbing since 2009, and through the first half of this year totaled about 16,500.

Despite that rebound, Tabke said the climate for adding jobs remains challenging and that cities are in fierce competition to attract employers, especially those as large as Emerson.

Earlier this year the City Council unanimously approved economic incentives to attract two other large companies: Issaquah, Wash.-based SanMar Corp. received $2 million in tax-increment financing to build a 580,000-square-foot distribution center, and Faribault-based Trystar Inc. got a $1 million tax abatement for an office and manufacturing facility.

One other new employer, My Pillow Inc., did not request or receive public financing, but it moved its manufacturing operations from Carver partly because the company's founder was dissatisfied with that city's support for the business. Mike Lindell said his company had run into problems on a conditional use permit for its leased space in Carver.

Headquartered in Chanhassen, the business now has about 250 employees in a 55,000-square-foot building in Shakopee making 15,000 pillows a day, he said.

Susan Feyder • 952-746-3282

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