The Minnesota Chamber of Commerce, through its Grow Minnesota! program, works with Minnesota companies (200 in 2014) to help them stay and expand in our state. Why do we do this? Because almost every situation offers the opportunity to make everyone better off: the company, its employees, the community and our state. The current dispute between Graco and the Minneapolis Park and Recreation Board is no exception. Its resolution can and should make everyone better off.
We learned in Saturday’s Star Tribune that the Park Board is expected to vote on a motion to condemn a piece of privately owned property along the Mississippi River in northeast Minneapolis. The initiation of condemnation proceedings is unfortunate, costly and completely unnecessary, because the property’s owner, Graco Minnesota Inc., has said on numerous occasions that it is willing to provide an easement in order for the Park Board to expand the current trail system.
The roots of this proceeding date to 2000, when local manufacturer Graco applied for and received approximately $1.175 million of tax-increment financing (TIF) to expand its manufacturing and warehousing footprint on the northeast Minneapolis campus it has called home for decades.
At the time, Graco said that if all parties could reach mutually acceptable terms, it would provide the Park Board with an easement on its property. To this day, Graco stands ready to negotiate these mutually acceptable terms.
For whatever reason, negotiations between the Park Board and Graco in the early 2000s regarding the terms and conditions of an agreement for an easement were never completed.
All the while, Graco was busy building out its new manufacturing footprint and complying with every requirement stipulated in the TIF agreement. In fact, today, Graco’s Minneapolis campus provides approximately 765 high-paying manufacturing and office positions. The average salary of a factory employee is $55,000 before benefits. Add in the 34 percent of salary that Graco pays in benefits for its employees, and the total payroll of its Minneapolis campus is approximately $70 million.
The city has confirmed that Graco has met the requirements under the TIF. And the company stands ready to enter into an agreement today to provide the Park Board with an easement to expand the trail systems.
All Graco asks in return is the right to purchase at fair market value approximately two acres that lie adjacent to the company’s current production facility. As you will see below, that’s a net gain in more ways than one for Minneapolis parks, our city and state.
What does Graco want to do with its two acres? It wants the ability to build a new global corporate headquarters on that site.
The company has grown significantly, and it has faced this dilemma before. When it ran out of space in 1996, it built a new facility in Rogers. In 2006, it expanded its footprint in Anoka. Just last year, it again expanded in Rogers with a new warehouse/distribution center. And yet, it still wants the flexibility to expand in Minneapolis.
When was the last time a major business said that it not only wants to keep its headquarters in a central city, but also expand to its presence?
Graco understands that its new building must be in keeping with the surrounding parkland and the great river on its perimeter. That means a new facility that could have space for retail on the first floor. But this is getting ahead of things. First, the Park Board and Graco must make a deal. Both parties must focus on the greater good of the entire river — which includes economics as well as park aesthetics — and negotiate accordingly.
There is a win/win waiting in the weeds on the shores of our great river. But it is up to the Park Board to meet Graco halfway.
Bill Blazar is interim president of the Minnesota Chamber of Commerce.