Greater MSP CEO Michael Langley and board Chairman Richard Davis, CEO at U.S. Bancorp, will listen carefully when they meet soon with Minneapolis City Council Member Lisa Goodman and others. Goodman led dissident council members who rejected all but $10,000 of the city’s $125,000 contribution to Greater MSP’s annual budget — in a surprise move on the final day of 2017 budget deliberations.
The 10-1 council vote could not be derailed by 11th-hour pleas from Greater MSP staff and supporters, or a chagrined Mayor Betsy Hodges, a Greater MSP board member and supporter, along with St. Paul Mayor Chris Coleman. Council members Goodman and Andrew Johnson, a one-time small business owner, resent that Langley’s research-networking-and-coordinating organization claims credit for so much development in Minneapolis, in the upticking economy of the last five years. Yet the group has little to do with much of the heavy lifting. Or at least they don’t see it.
“If Greater MSP was working on business relocation in Minneapolis to north Minneapolis, that might be something,” Goodman said. “But I reject Greater MSP claiming credit for things that had many hands, and that they offer subsidies to lure one company from one location to another.
“They don’t need our measly $125,000 to work with us,” Goodman said last week. “They are a big organization with a budget in the millions. I didn’t do it to be a brat. I’ll work with them if they really want to work with us.”
Langley, salaried at $515,000, leads a regional development business of 22 people with a $6 million budget, about 75 percent of which is paid by the private sector. Greater MSP evolved from a business-group conclusion several years ago that there was no cohesive plan to retain and attract business.
MSP’s critics know it as a profligate spender on travel and lavish annual meetings with open bars to schmooze local government, businesses and nonprofit executives. And they accuse Langley of claiming too much credit for deals like Wells Fargo’s decision to consolidate in two new buildings near the U.S. Bank Stadium in the expanding east end of the loop. That was more then-Mayor R.T. Rybak, along with developer Ryan Cos, and came after Wells Fargo, which employs thousands in Minneapolis, hinted it was looking around.
Council members also cite a disputed auction between two suburbs for a facility for Prime Therapeutics that critics said was conducted by Greater MSP. The organization declined to comment.
For better or worse, economic development sometimes boils down to a bake-off. And Minneapolis, the state and other municipalities long have played that game.
For example, last month, the Minnesota Department of Employment and Economic Development pledged a $605,000 grant from its job-creation fund to a fast-growing digital marketing firm in the North Loop that is moving from one building to another. It is contingent on Ovative investing $2.1 million in leasehold improvements and creating 100 jobs over time. Greater MSP said it played a role in the Ovative deal as well.
And this happens in a growing economy as downtown and North Loop are a magnet for the likes of Select Comfort, Arctic Cat and ECMC Group and Värde Partners. All came from suburbs and are getting little or no subsidy.
U.S. Bank, for another example, plans to build a $250 million data center in Chaska that will eventually employ 18 workers. It is eligible for about $900,000 in local and state incentives. Until governments quit competing among each other, this is how the game will be played.
Greater MSP coordinates regional development but doesn’t make new rules. It just plays the game.
Langley, 63, a larger-than-life character who once flew Navy jets, is more global networker than nuts-and-bolts developer. And Greater MSP draws praise from some local governments for data-gathering, marketing, pitching prospects and other assistance.
To be sure, Greater MSP helped the several-county Twin Cities area exceed the five-year goal of adding 100,000 jobs by nearly a third, and attracting $3.2 billion in capital investment from expanding and moving-in companies.
Greater MSP, Minneapolis, St. Paul and Hennepin and Ramsey counties and their respective chambers of commerce recently agreed to work together to accelerate investment and jobs in the core-city areas. Maybe this will help Minneapolis and Greater MSP find common ground.
Sunrise Banks receives development credits
Sunrise Banks last month was awarded $70 million in New Markets Tax Credit Authority — a key inner-city and small-town redevelopment tool from the U.S. Treasury’s Community Development Financial Institutions Fund. This is the largest allocation ever for a Minnesota financial institution.
“This allocation gives us a remarkable opportunity to maximize the effect that our lending can have in building our local communities with thriving businesses,” said David Reiling, CEO of the St. Paul-based bank.
Sunrise has deployed previous tax credits to key investors in 14 projects since 2010, including Twin Cities Habitat for Humanity headquarters and the Midway YMCA in St. Paul; and a key commercial project on W. Broadway Avenue on the north side.