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Shakopee city officials are negotiating with Shutterfly to build a manufacturing facility in the southwestern suburb. The Redwood City, Calif.-based company produces photo books and related merchandise via a web site and apps.

Tim Boyle, Bloomberg

Shakopee is working to land Shutterfly manufacturing facility

  • Article by: Janet Moore
  • Star Tribune
  • July 23, 2013 - 8:12 AM

 

The mayor of Shakopee said the city is negotiating with fast-growing Shutterfly Inc. to locate a new manufacturing facility in the southwestern suburb — an operation that could create up to 800 jobs.

A public hearing is scheduled during the Aug. 7 City Council meeting to discuss possible economic incentives to lure the Redwood City, Calif.-based manufacturer and digital retailer of personalized photo products and other services to Minnesota, according to Mayor Brad Tabke.

Shutterfly could invest about $60 million to invest in a 217,000-square-foot facility at Dean Lakes, an office-industrial park that is being developed by Minneapolis-based Ryan Cos. Tabke said Shutterfly would employ 300 to 350 people full time in “good-paying” jobs, and another 500 to 800 workers part time.

But Tabke cautioned that Shutterfly is by no means a done deal. “We are working on a deal, but still have a long way to go,” he said.

The city is contemplating a tax-abatement package for Shutterfly valued at $758,771 for up to nine years, as well as sewer access charge credits worth $174,600, said Samantha DiMaggio, Shakopee’s economic development coordinator. In addition, she said, Shutterfly is considering a Minnesota Investment Fund loan of about $1 million, which is typically used to finance equipment.

Shutterfly reported about $640 million in revenue last year — a figure expected to increase 15.5 percent to 16.5 percent this year, according to securities filings.

The company generates the majority of its revenue by producing and selling professionally bound photo books, greeting and stationery cards, personalized calendars and other photo-based merchandise. Most of the items are manufactured in Phoenix and Charlotte, although the North Carolina space will be phased out in favor of a larger facility in Fort Mill, S.C.

In the past year or so, Shakopee has worked to attract five new employers who have promised more than 1,000 jobs — but several of the deals have involved millions in tax subsidies.

Last month, for example, Rosemount Inc., a division of Emerson Process Management, confirmed that it plans to convert part of the abandoned ADC Telecommunications site into an engineering and manufacturing center. The $70 million project will create about 500 high-skilled jobs. A broader state and local financial package is part of a package that includes a city tax subsidy of almost $600,000.

And earlier this month, Minnetonka-based Datacard Group said it would relocate to Shakopee from Minnetonka, where global provider of secure identification cards has outgrown its space. Tabke says about 680 jobs will move with the firm, with the potential of more jobs in the future. The city is working on a possible tax abatement package for Datacard, as well.

 

Janet Moore • 612-673-7752

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