My Concerns and Questions about the So-called Business Park Combined in One Post

I’ve been asked to combine my seven posts on the so-called “North Business Park” into a single post.  Apparently, it is believed that this reorganization will stimulate comments.

Over a dozen people have commented to me about the series and I don’t think that they will ever post comments on the internet.  They are, however, acting as the result of reading some of my statements, and I believe this to be perhaps an even more valuable response.

I started with my support for developing 120 acres of land for industrial use.  It was called “I Support Increasing the Land Available for Industrial Development in Northfield”.

My second post was a response to Jim Pokorney’s guest column about his high school friends not wanting to live in Hibbing.  It was called “Northfield is Not Hibbing”.

My next post was a request to Erica Zweifel for assistance in my search for principles of sustainability in the Master Plan.  It was called “It Doesn’t Look Green to Me”.

My fourth post was a questioning of Jody Gunderson’s vision Northfield’s economic future based on manufacturing.  It was called “If We Build It, Will They Come (and Pay for It)?”.

My fifth post was my contention to Rick Estenson that Northfielders don’t fear “fear itself” but rather fear making a bad investment of $30 million of taxpayer money.  It was called “Maybe if I were using Dutch Math“.

My sixth post was a challenge to Tracy Davis’ contention that regulations can save our industrial land from becoming a housing development and shopping center anchored by a Walmart.  It was called “Et tu, Davis?”.

My final post was my own suggestion on how Northfield might more quickly, affordably, and sustainably obtain 120 acres of land for industrial development.  It was called “So How Should We Increase the Supply of Land for Industrial Development?”.

A number of the people who have talked to me about my posts have trouble believing that some of our leaders are really suggesting that we spend $29.4 million to create a development for which Phase 1 of the plan calls for 570 units of housing, 87,000 square feet of retail, 708,000 of office space, 635,000 of light industrial and industrial space, and 120 hotel rooms. Phase 2 shows an additional 81,675 square feet of office space and 110,000 square feet of “civic” space.

Here is the document from which I got that information:

North Business Park Data

and here are some colorful drawings of the Master Plan:

North Business Park Maps

34 thoughts on “My Concerns and Questions about the So-called Business Park Combined in One Post”

  1. Ross,

    Why hasn’t the 120 acres that you want developed already been developed?
    Weren’t you on the EDA when it consultant came back with that recommendation. What happened?

  2. Thanks, Ross, for airing your concerns and questions about the northern Business Park. As I recall, the Council
    disregarded the Planning Commission recommendation when they voted to annex the whole 530 acres in Greenvale Twp a couple years ago. Things went downhill from there.

    Council candidates addressed these problems in this past election and some of them were elected. Maybe they will take a more realistic look at it.

  3. Brilliant series and a great summation of the single most important threat facing our community in general and the heart of our community – the downtown – in particular since its foundation in the mid 1800’s. Look at Mankato, Chaska, and any and all small to medium size community everywhere and you will see how this kind of development (houses and retail certainly, business maybe, industrial not likely) has gutted their downtowns. Does anyone truly believe that sometime in the foreseeable future those 500+ acres will be a thriving business and industrial park filled full with proper jobs and property tax payers?

    I recall attending a recent meeting at the library about funding a doubling and eventual tripling of the size of the library to meet anticipated demand over the next 25 years. The study was done in 2004 when there were two video stores, a downtown bookstore, no kindles, no google etc and it is not silly to say that in 25 years there will probably be no libraries. This rush to ‘build it and they will come’ Business Park was of that time…pre Crash of 2008, loads of money, unlimited growth.

    This is no longer the case. And there is no blame attached to realizing that now, of putting the $250k already spent down to experience, no shame in growing back to the drawing board, of thinking more creatively about our future. One in which it is not ridiculous to say ‘we don’t have $30m to speculate on future growth. In fact, there is no more money. Now what can we do?’

  4. Norm,

    Thank you for speaking out on this when others have not. I supported your run for Council, though I could not vote in Northfield.

  5. Betsey –

    Thank you.

    It was disappointing that the Northfield News did not discuss the cost of infrastructure. It is my understanding that both Dunbar and Associates and Northland Securities told us who would pay for it.

    It was a little surprising that the newspaper focused on the possible affordable housing component. Of the almost 600 units of housing, how many will be affordable units… 30? Personally, I know there are much lower cost and far quicker development concepts to produce 30 units of affordable housing in Northfield.

    David –

    I was never on the EDA. I was on the Planning Commission.

    As I believe I noted in one of my posts, the consultant acknowledged that we could probably assemble 120 acres for industrial development within City limits. However, I took Paul Smith’s advice and supported annexing 120 acres.

    If you look at a map of Northfield, I think it’s obvious that the land just over the borders from our existing industrial parks makes the most sense, at least to me. I would think that you would agree with me that it would seem to be a quicker and cheaper strategy to secure 120 acres for industrial development.

    Stephanie –

    Thank you.

    As I said in my introduction to this post, a number of people have told me that they read my posts. I am hoping that they are contacting their Councilors.

    Norman –

    Thank you.

    I, too, have trouble believing that creating 100,000 square feet of retail out on Highway 19, halfway between Northfield and 35, will be good for Downtown. However, I think it’s going to be much worse for Uptown. Downtown has the historic buildings, the Cannon River, and the great gathering spaces; Uptown does not possess these amenities.

    On the other hand, I believe that developing 120 acres for industrial use north of North Avenue or West of Armstrong Road would be good for both Downtown and Uptown. I hope you are talking with your Councilors.

    David –

    No, I am not going to lead this discussion. I am interested in hearing what readers of LoGroNo think about the Master Plan, so I am hoping that there will be a discussion to follow.

  6. Ross,

    I think the “Master Plan” is driven by the constraints of the Comp Plan. The basis premise of the Comp Plan is that we should have mixed, compact, and appealing development, which is what the Master Plan is trying to accomplish.

    I think that it would be better for the City to have no plan of its own for the 530 acres. In this economy, the City needs to consider any and all possible development plans on their own economic merits. Forget about Master Plans and other government planning attempts or restrictions.

    If a company wants to develop, let it figure out what to build, how to build it, and how to pay for it. For its part, the City can assess the tax benefits against the government expenditures and determine economic return. We no longer need to be concerned about runaway development. This is a completely different time from when the Comp Plan was written.

  7. Thanks for focusing things Ross. Speaking of fears, I have two of them:
    1) The city council will actually hitch up their collective belts and commit $30 million to develop this area, or
    2) The city council will dither around, not do anything to develop the land, but spend $3-5 million in consulting fees over the next 20 years….and lots of ink talking about developing it.

    Neither of these two options is sensible. Investing millions of dollars in land/utilities/plans and hope that ‘they will come’ is not wise for Northfield. And doing the typical Northfield thing of hiring dozens of consultants to make it look like you are actually going to do something is not wise either.

    Northfield needs to build on its strengths…education and arts. We have more to offer in these areas than almost any other city in Minnesota, and in fact most any in the upper Midwest. We need to capitalize on this.

    Northield cannot go head to head and compete for light manufacturing….we don’t have the workforce and we are not located on an interstate freeway. We cannot be a warehouse/trucking center as our real estate taxes are too high.

    What we do have is hundreds of well trained, highly educated young people entering the workforce each and every year. They need jobs and many of them would like to remain in the area. We also offer hundreds of fascinating courses, music events, sporting contests, art programs, etc. etc. each year. We are a draw for well educated active retirees.

    I would urge the city council to slow down on the idea of a business park and let private developers handle it. The city should focus their attention on streamlining their regulatory process so that when a private business/developer wants to do something in that area of the city, the city will not be an obstacle but rather will be a facilitator.

    I would also urge the city to review the Hoisington-Koesler (sp?) community reports that were developed. The people of this city know what they like, what they don’t like and where they believe the city should head. Just like the people of the city know what the shortcomings and good parts of our transportation system are…and how to improve it. We don’t need million dollar consultants to help us; we actually can do a good job on our own. (Remember, a consultant is simply someone that uses your watch to tell you what time it is.)

    1. Ray, it’s good to focus on our strengths and to build on them.

      I might also suggest we examine the origin of most large employers in small towns. I don’t have data, but it would be my expectation that most anchor employers in small towns were small businesses that started in those towns and were successful. Their natural expansion wishes were close to their HQ.

      How many 3-10 employee companies do we have in Northfield? Does anyone have a catalog of these and their growth history? It seems logical for us to expect that Jody Gunderson knows every single one of these and is building relationships with them to ensure the City knows their 3-5 year plans. He could then help the City to map out expansion probabilities and any potential land usage shortfalls, funding needs, zoning changes, etc with plenty of time to co-plan the City’s resources to match those of the needs of the expanding business.

      St. Olaf started small. Carleton started small. Malt O’ Meal started small. Each employs hundreds locally now.

      If ten small local companies grow from five employees to fifteen, it’s the equivalent (maybe better) than recruiting a 100-person manufacturer.

      If two of those grow to 50-employee companies, we’ve done it again.

      If one grows to a 100+ employee company, we’ve done it again.

      My guess is that the cost of this kind of relationship building and 3-5 year planning would not be particularly expensive and would greatly increase the likelihood of a return on the City’s investment of our capital.

      Build on our strengths….arts, education and already growing small businesses.

    2. David K, your question, “How many 3-10 employee companies do we have in Northfield,” is a good one.

      I would add: another way to look at job growth is to consider how to encourage the development of an ecosystem of solo entrepreneurs and 1-3 person businesses.

      In the information economy, most of these businesses will never expand to 10 or 50 employees. But if the Northfield ecosystem collectively adds 50-100 ‘jobs’ per year, we’d be doing well.

  8. Bravo David L and Ray Cox. You both made excellent points. The city should not spend the money–the developer can do so–and every municipality needs to slow down the consultant money. I wonder how much Northfield could cut out of its budget if it just cut out consultants and let staff do their jobs.

  9. Today’s Nfld News: Biz park concerns stop council

    Further talks on a proposed business park plan, initially scheduled to come to the City Council next week for adoption, could be a month or more in the offing. Adoption of the plan, which details a proposed industrial park on the west side of town near Northfield Hospital was temporarily back-burnered Tuesday by the mayor after four councilor expressed an armload of concerns.

    Betsey Buckheit, who represents the Second Ward, said there are no tweaks to the plan that can allay her concerns about the size of the expected park, its distance from existing infrastructure and the city’s core and its noncomformance with compact development principles favored in the city’s Comprehensive Plan…

    Shaking his head at the announcement, Councilor Patrick Ganey pressed forward, questioning the wisdom of spending up to $12 million to install infrastructure in the first phase of the four-part park plan…

    But Councilor Suzie Nakasian, who previously served on the Planning Commission verbalized its concerns that housing and retail included in the proposal could come before industrial development.

    Zoning ordinances and regulations can assure development occurs in the fashion envisioned, said Economic Development Director Jody Gunderson, noting that the plan has a sizable chunk of industrial development coming in advance of retail and housing.

     

  10. This is all about political will, and what can, or cannot be controlled in the Biz/Pk development.

    But more importantly, it is about defining the community for the foreseeable future.

    Look past the detailed objections, and ask that the council answer the questions asked in agenda item #2 of last night’s work session, which were essentially: what is our economic development picture now, and what/where do we want to be in the future?

    These are the essential dilemmas which define the decisions being made now for the future ; the discussion MUST be had. Support the councilors that want to have that discussion, and have asked for it repeatedly, and have asked for months.

  11. Nfld Patch: Policy Time: Northfield Councilors Dig Into the City’s Economic Plans

    City Administrator Tim Madigan said that councilors will likely spend a few months on the business park plan before they make a decision on whether to use it as a policy-guiding document, a reference for a different plan in the future, or to disregard it entirely. “There’s a lot of fundamental issues that they want to talk about, review, and so forth,” he said. Those issues include the cost of the plan, its time frame, as well as the roles that planned retail and housing uses will hold in the mixed-use park.

    Running through its points, Erica Zweifel said that she joined her council colleagues in approval of the 2008 plan. “I think consensus was that we all agree this is a really good framework,” she said, but adding that, “it’s been the implementation and prioritization of the items that has been an issue for me.”

  12. “…Economic Development Director Jody Gunderson (noted) that the plan has a sizable chunk of industrial development coming in advance of retail and housing…” (comment 13).
    What might that be then?

  13. Councilor Betsy Buckheit has a new blog post: The Council talks business park

    If looks could kill, I wouldn’t be blogging today. Tuesday’s worksession was devoted to economic development…

    Rick Estenson and Jody Gunderson were staring daggers at me, but still failed to address my fundamental concerns about how the short and long-term costs of such a project will reduce or eliminate the stated benefit.  Simply repeating “we need to increase our tax base and create jobs” in the face of opposition is not an answer, it’s a dodge.

    My position remains the same – until the EDA can answer questions about who will pay for the initial infrastructure improvements and how the maintenance of that much additional infrastructure will cost the city, and how much of those costs is projected to be offset by increased property taxes (including when the city will break even on its expenditure), there is no “tweak” possible which will get me to consider giving my support to this plan.

    1. Griff, Ross and Betsy (if she’s tuning in),

      Is the request from the City the equivalent of the EDA requesting a loan from a bank by presenting a well-developed business concept, but with no current revenues or customers, no high-likelihood prospects and no budget that shows when the business will be profitable?

      If so, I know what the bank’s answer would be.

      If you were getting daggers, Betsy, I would imagine it is because those who have worked on the concept feel that they have done enough to satisfy themselves that the project is worthy and you are saying they have not done enough work to satisfy “the bank”.

      A good venture capitalist, bank or angel investor still demands a full business plan with clear evidence of what differentiates the proposal from competitors, how it will defend its competitive advantage, its projected budgets (baseline, optimistic and pessimistic), customer analysis and accounting of other impacts.

      No entrepreneur has a right to expect funding. I can tell you that in the market these days, the thresholds for successful funding are substantially higher than a few years ago. So, Betsy, you would not be out of line with the market in asking for a higher threshold to be met by this project. You certainly would not be out of line having basic expectations that a full and complete business plan is submitted. You should also require that it has a chance to achieve highly substantial returns to the City in exchange for the risk (and our scare capital).

      1. Thanks, David. I appreciate your thoughtful response. I do read all the comments here, but believe I’ve probably said enough over on my blog, so I don’t comment much here.

        For all of you who are concerned, I urge you to contact the Mayor and other Councilmembers to express your thoughts.

        Update: 2/17

        Here are the related posts:

        Most recent post on the business park discussion

        Economic gardening: Your comment made me think of what I’d written here, David.

        Another economic development link: Post on a Strong Towns post about planning for “the new economy” I’m working on having the Strong Towns guys come give one of their Curbside Chats here in Northfield

        Plus a couple of posts on an economically healthy Northfield: Related to our current policy documents,

      2. David,

        I’ve edited Betsy’s comment above to include the links to the relevant posts on her blog. She tried to add a comment here with the links but the spam filter swallowed them up.

  14. Thank you, Betsy, for persisting with your questions. Leads us back to the old cost/benefit analysis that never seems to get done.

    One of the questions for Council candidates at the LWV forum last October before the election was on the northern business park. All but Rhonda Pownell had reservations. I wrote a letter, naming those I thought had the best responses but missed deadline by one day.

    Last week I saw that NNews had published a short letter by Bruce Roberts endorsing Pownell. I checked with NNews about possibility of publishing my old unpublished letter as well. Nope, the Roberts letter was just a fluke. Hmmm….

  15. I would like to encourage readers to think in a large picture mode, i.e., what is a guiding picture for Northfield’s future…
    The Annexation and Business Park Master Plans do encourage that kind of thinking… what would be a good, productive, in NF character, use of all that annexed acreage?

    The Comprehensive Plan does that to a large extent, but it would be helpful to visualize the community 30- 50 years from now; what do you think Northfield WILL be like? What would you HOPE for it to be?

    If you won’t be around 30-50 years from now, and I won’t ( Damn, and I do so like to know how things come out! ) … But think of the model you would like to see; be a bit realistic, but don’t let that stifle the process.

    Consider the social and economic realities and look for the best , in your opinion, Model for the NF of the future.

  16. Ray Cox’s letter to the editor in the Nfld News: Go slow on biz park

    I want to thank the four City Councilors that are slowing down and ‘re-thinking’ the creation of a city business park. This is something that I do not believe the city should be involved with at all. Land development traditionally has wisely been a function of the private sector and that is where it should remain. There is a reason Northfield does not have a vast supply of vacant commercial land…the economics do not work. Because private development of vacant land has slowed is no reason to burden the taxpayers with land development.

    As far as I can determine the city does not have a purchase agreement for the land and has not even established a purchase price for the land. The land is owned by multiple owners. The city has spent hundreds of thousands of dollars preparing preliminary site plans for land that it doesn’t own, doesn’t even know how much the land will cost, and doesn’t really know if it can be purchased. And to top it off, the city is actually considering spending millions of dollars to install roads and utilities in the area. This has to stop now.

    Business development is important for any community. I would urge our city to focus on the strengths of this community, namely education, medicine and the arts. Those areas have sustained Northfield for years and are areas we should continue to nurture and support. We cannot compete for warehousing or low level manufacturing industries. Let private land developers meet the needs of commercial expansion. The city can best support our businesses by focusing on and creating a lean city budget in an effort to mitigate the ever increasing commercial property tax burden. Spending millions of dollars on an “if we build it they will come plan” is not something Northfield should be doing.

  17. The Teppen/Estenson/Pokorney letter does not defend the thousands of dollars already spent on the park but is disparaging towards opposition. One jem is the statement that filling empty spots in downtown Northfield won’t help the city since those taxpayers are having to pay taxes with or without tenants. Which then begs the question as to how long that will continue if building owners cannot afford to continue. There is no concern for the economic viability of downtown.

    In addition, even though it is suggested in the Business Park 101 article that developers or business owners or land purchasers will pay for some of the development cost, it does not lay out how much Northfield city taxpayers will be at risk for–since the estimated cost of extending services is $29 million, it is unlikely that the first company in will foot the whole bill. (Which can work in some developments, where the 1st occupant will cover the costs of extending services and then be reimbursed by subsequent occupants.)

    Back to the Teppen/Estenson/Pokorney letter–they accuse opposition of wanting Northfield to stagnate when that has not been the focus of opposition at all–opposition has centered on the excessive cost of extending services and the Northfield track-record of having the taxpayers foot the bill rather than the developers.

    1. Jane –

      I was really surprised that Jim Pokorney signed a letter that accuses Councilors Buckheit, Ganey, Nakasian, and Zweifel of wanting Northfield to “remain a timeless gem, frozen in the amber of its past”, being “lost in the policy clouds”, and pursuing “personal agendas”. After serving nine years on the City Council, I would have thought that Jim believes that these Councilors are working for what they think is the best for our community, seeking to implement policies which are guided by the values and priorities of our citizens, and pursuing agendas that are most likely to achieve the objectives that are envisioned by their policies.

      I won’t even comment on the belief of Teppen, Estenson, and Pokorney that the continued growth of the size and cost of municipal government is inevitable. I will say that at the Public Hearing on the General Fund Budget and the two Candidate Forums last year I heard over a dozen of citizen-generated solutions to the City’s financial crisis that didn’t include taking on $30 million in debt to pay for the infrastructure of a new business park.

      With empty spaces in downtown and uptown working to attract professional service firms, it doesn’t make sense to create 789,675 more square feet of office space. It really doesn’t make sense to put millions of dollars of additional financial burdens on the owners of existing office space to pay for this new office space.

      Northfield needs a couple of thirty acre sites and a sixty acre site zoned for Industrial Use to round out our inventory of offerings for potential businesses. We’ve spent three years and hundreds of thousands of dollars, supposedly in pursuit of providing this land. We don’t have a single additional acre ready for industrial use, but we do have a quarter-million dollar Master Plan.

      Teppen, Estenson and Pokorney advise against conducting a cost-benefit analysis at this time. In fact, perhaps the “frozen in amber”, “lost in the clouds”, and “pursuing personal agenda” Councilors have already conducted their own cost-benefit analysis. Perhaps they’ve decided that spending $29,449,800 on infrastructure investments, in the hope…that someday…if everything goes according to plan…we…might…get $2,775,382 in annual taxes, is not in the best interests of the community.

      Or maybe these four Councilors just think that trying to turn farmland located 3.5 from highways 3 and 19 and 3.5 miles from highway 35 into a few’s fantasy of manufacturing and office space, with almost 600 units of housing (also known, apparently, as a “dollop”) and almost 100,000 square feet of retail (some call it a “bit”), is a plan that is less than masterful.

  18. I’d really like some of our local legal eagles to check into the whole legality of what the city is doing. Essentially they have been spending taxpayer dollars on land they do not own, control, or have under purchase agreement. They have been working on preparing preliminary concept plans for land, which their own ordinances require the land developer to do. So they have spent hundreds of thousands of dollars in consulting contracts and staff time for the single and sole benefit of a couple of individuals. Is there any difference between this action and the city deciding to fix up someone’s property for them because they think it will improve the image of downtown? In each case the individual landowner receives the benefit of taxpayer dollars.

    And Jane, I agree with you that the triumvirate letter does disparage people that disagree with them. I don’t think that is very productive. I enjoy vigorous discussion about ideas and plans….I just do not support spending one dime of scarce taxpayer dollars improving land someone else owns.

  19. Guest commentary in today’s Nfld News by former Northfield community development director Joel West: Creating employment opportunities a priority

    Total employment in Rice County did increase by 89 or 0.47 percent from 2001 to 2007, but in terms of businesses considered to be basic sectors, there was a decline. This trend continued into 2009 with a 1.6 percent decline in the total employed in the county with a steeper 1.9 percent decline in the number of basic sector employees.

    Some practical strategies to address business growth include meeting with local companies to determine the reasons for the decline in the number of employees, and if there are any factors the community can influence to arrest the decline and hopefully increase the number of jobs. Perhaps targeting incentives to new or expanding, basic sector, businesses or creating an actual or virtual business incubator would be beneficial. There is no single solution to any set of circumstances, but the point is to understand the employment dynamics in the community and maintain a continued dialog with the businesses to search for and implement solutions that have the best chance to achieve the desired outcome.

  20. Nfld Patch: Northfield Councilors Consider Direction for Business Park

    Northfield city councilors on Tuesday discussed how to phase in development of a planned “mixed-use” park in the city’s northwest that would include residential and retail businesses in addition to the traditional industrial areas.

    But a suggestion from Councilor Patrick Ganey that the park focus solely on industry was received well by Councilor Betsey Buckheit, who has been critical of the park’s estimated cost of $14 million, and broadened the discussion to the fundamental purpose of the park. The initial master plan of the park was finished in January.

  21. My understanding is that the only reason the “park” was planned for mixed use is because the owners were required to submit a concept plan that had a mixed use.

  22. Councilor Betsey Buckheit blog post: Another business park

    Today’s Strib Business Section: A long wait for biobusiness park at Elk Run: a story about Pine Island’s Elk Run bio-business park…

    What makes us think Northfield will do any better with its proposed business park?

    My questions remain. Before the Council approves a master plan for a business park, we need better answers to: Who pays, how will the project be managed, and what happens if the great plans don’t materialize?

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