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Washington County: Open For Business

Washington County: Open For Business

A special report from the growing East Metro county.

Editor's Note: While this section was paid for with advertising support from parties within Washington County, it was independently produced by the editorial staff at TCB.

Chances are you’ve spent some quality time in one of its attractive, historic cities, including Afton, Stillwater and Marine on St. Croix. Or perhaps you’ve picked apples at Pine Tree Apple Orchards, drifted down the St. Croix River past Bayport, or met with friends for dinner at one of Woodbury’s excellent restaurants. And you likely never thought, “Wow—this is Washington County?”

Leaders from the county as well as 33 of its cities have come together to change that—particularly when it comes to business leaders, commercial real estate developers, business-site selection firms and others who strive to find the right fit for their businesses and the people they employ.

Histroric Washington County Courthouse located in Stillwater.

“From a diversity of options perspective, it’s all right here—in more than one way,” says Chris Eng, economic development director of the Washington County Community Development Agency. “When it comes to property, no matter what you’re looking for, we have it. You can’t find large parcels of land this close to the downtowns and the airports anywhere else [in the greater Twin Cities nine-county metro area].”

Washington County also has numerous health care businesses, manufacturers, and logistics and transportation companies, plus several craft breweries and apple orchards. There is an intriguing mix of niche businesses, including a maker of steel horseshoes and two venues offering old-fashioned barn weddings.

The county is also remarkably varied in terms of terrain. Its 423 square miles encompass 468 lakes of 10 acres or more. There are farm fields in the north, ski hills in the south, riverside settings along the St. Croix River and the wooded settings of Scandia and May townships. “At 4:30 p.m., you can be on the slopes, on the water, hiking, mountain biking or enjoying some of the best parks in the world. It’s fantastic for attracting talent,” Eng says.

Despite its diverse appeal, there’s one thing that the county hasn’t been good at: marketing itself. In June 2016, the Washington County Community Development Agency was launched by the county’s Housing and Redevelopment Authority to do just that. The agency hired Eng, who served as executive director of the Duluth Economic Development Authority from 2012 to 2015, to take charge.

In July, Eng’s agency rolled out a program called Open to Business. It’s designed to help entrepreneurs with their financials and business plans before they seek financing from banks or investors. The program also can provide direct loans to early-stage businesses. “If we can help our 18,000 non-employer businesses add just one job, that’s potentially 18,000 new jobs,” Eng says. And smaller businesses in particular are flourishing in Washington County: 86 percent of its businesses employ 20 or fewer people.

Most of the county’s communities have their own economic development director or city administrator to help businesses settle there and grow. Their approaches typically reflect their distinctive character. Woodbury is the county’s bustling suburban center for health care and retail. Afton is small and bucolic. Stillwater has its picturesque downtown and vigorous retail activity. Newport, St. Paul Park, Hugo and Forest Lake have numerous industrial businesses along with a small-town feel.

Washington County is rated fifth-best in Minnesota for overall quality of life by Pittsburgh-based neighborhood ratings website

“We’ve worked hard to identify common goals while respecting the rights of communities to be themselves,” Eng says of the countywide agency. “There’s real strength in our diversity, and we’d lose that if we set out with the goal of creating 33 similar communities.”

In addition, “there’s a shared recognition that when one community wins, we all win,” Eng says. “A business that chooses to locate in Oakdale might hire an employee who buys a house in Lake Elmo and does most of their shopping in Woodbury. There isn’t one winner and two losers there. There are three winners.”
 

Washington County’s Great Outdoors

Afton State Park

Located along the St. Croix, the popular metro-area state park provides camping, fishing and challenging hiking opportunities that wind through remnant oak forests, savanna and prairie.

Belwin Conservancy

This nonprofit organization protects and restores more than 1,400 acres of land in West Lakeland and Afton townships, just south of Interstate 94. It also hosts youth sports and provides nature-based learning opportunities to more than 10,000 students each year.

Big Marine Park Reserve

Just west of Marine on St. Croix is Big Marine Lake, one of the county’s largest lakes. The park reserve at the lake’s southern end provides a large playground, swimming beach, picnicking areas, a boat launch and fishing pier.

Cottage Grove Ravine Regional Park

Once the current renovations are completed next spring, this 520-acre park will provide paved and soft-surface hiking trails through an oak woodland.

Carpenter Nature Center

A nonprofit organization protects 725 acres of wildlife habitat along the St. Croix River and provides hands-on, nature-centered learning to more than 20,000 K-12 youths each year. It’s also home to the Flint Hills Trailside Lodge and Conference Center, which offers space for off-site business meetings.

Gateway and Browns Creek state trails

The 18-mile Gateway State Trail follows a former Soo Line Railroad right-of-way from downtown St. Paul to Pine Point Regional Park, north of Stillwater. This popular biking trail connects with the Browns Creek State Trail, which runs nearly 6 miles before terminating in downtown Stillwater. Both trails offer attractive views blending open space and urban vistas.

Lake Elmo Park Reserve

The reserve is home to 20 miles of rolling trails that wind through 2,200 acres of oak forests, prairie, wetlands and lakes. Other recreational opportunities include camping, swimming, playgrounds, boating, fishing and picnicking.

William O’Brien State Park

The state park, located just north of Marine on St. Croix, offers 12 miles of hiking and skiing trails, camping, swimming and fishing, including the self-guided Riverside Trail along the St. Croix.

Square Lake County Park

Located north of Stillwater, this publicly accessible lake is popular for its swimming beach, scuba diving, picnicking and fishing.

 

So what makes the east metro fertile ground for growing business? For one, the county has “a strong, well-educated pool of labor here to help businesses grow,” says Marc Cove, founder and president of Oakdale-based Platinum Bank. There’s also plenty of space to expand and room to park, and it’s easier to work with local government.

“You don’t view the city and the county as an adversary—they’re partners. They’ve done a very good job building a regional economic framework to allow you access to services, access to space, access to talent,” says Cove. Government officials “want us to be successful,” he adds. “They’re always asking, ‘What can we do to make business better?’ ”
 

Still, Washington County has its challenges. Approximately 100,000 people commute outside of the county’s boundaries to work each weekday. While that’s not necessarily a bad thing—one of the county’s selling points is its quick access to both Twin Cities downtowns—Eng and the communities want to create more employment opportunities within its borders to make life easier for those individuals, while allowing the county and its various cities to generate more tax revenue.

Even though the county has plenty of highway access to interstates and major highways like Minnesota 36 and U.S. 61 and 10, county residents’ biggest concern is the lack of public transportation. Workers and residents would like to rely less on their own cars to get to and from work and to St. Paul and Minneapolis.

Washington County has three proposed bus and rail transit corridors: the Rush Line Corridor, the Gateway Corridor and the Red Rock Corridor. There’s an opportunity to promote and participate in transit and transportation corridor planning efforts and to advocate for state and federal transportation and transit investments in the east metro, according to Eng.

Another challenge the county is facing is maintaining a sense of community for the increasing percentage of people over 65 years of age, while attracting employers and young talent who will work, live and stay there. Then there’s the struggle of how to keep small-community values, charm and appeal while growing their economies. That’s a challenge Eng considers when he provides a point of contact for site selectors and developers. “With one call, a site selector can call me, and I can unlock the opportunities that exist within 30 different communities here,” he says.

It’s those types of efforts that has companies giving Washington County a close look.

Woodbury

We’re sort of the economic hub of the east metro,” says Janelle Schmitz, assistant community development director for the City of Woodbury. It might sound as though she’s bragging. But she can back up her assertion.

This year, Woodbury is celebrating the 50th anniversary of its incorporation, and its population already exceeds 70,000 people. It’s not by accident. Early Woodbury leaders saw the potential for a thriving community that included residential, commercial and industrial opportunities.

Its commitment to long term and strategic planning has laid the foundation for remarkable business development. As of the first quarter of 2017, Woodbury was home to about 27 percent of the county’s nearly 80,000 jobs. Many of those positions are in the city’s 190-plus health care-related businesses, including clinics and several new orthopedics facilities. HealthEast, anchored by its Woodwinds Health Campus, has about 900 employees in Woodbury, making it the city’s largest private employer. Schmitz believes that the opening of HealthEast’s campus in 2000 set the stage for the city’s continued health care growth.

Nearby Maplewood-based 3M Co. is another large employer, with about 500 employees in its Woodbury offices. Harvey Vogel Manufacturing Co., which produces custom metal assemblies for military, medical and technology customers, employs nearly 200. One of Woodbury’s newest businesses is Self Esteem Brands, which owns Anytime Fitness. The company moved its headquarters to Woodbury last year, and has big expansion plans (see “Making the Move to Woodbury”).

That business-sector diversity is just the way Woodbury likes it. “We have consistently worked to build and nurture relationships with our business community, and the result is the vibrant community you see today,” says Schmitz.

Woodbury’s location on interstates 494 and 94 has also positioned the city for further growth, allowing it to serve as a conduit between the Twin Cities and Wisconsin. "Our geographic advantage has contributed to our economic success," says Schmitz. "We now have 23,000 jobs, and we're still growing."

Making the Move to Woodbury

Self Esteem Brands LLC, whose best-known division is the Anytime Fitness chain, was based in Hastings for several years before moving to a more spacious site in Woodbury in 2016.

Despite its convenient location at the corner of interstates 94 and 494/694, the property had been for sale for at least a decade before the company purchased it. That might have been because the land had only 9 buildable acres—the rest is mostly wetlands. But those wetlands were part of the attraction for CEO Chuck Runyon and his business partner, company president Dave Mortensen. “It was perfect for us, though I don’t know how perfect it would be for other employers,” Runyon says.

For Self Esteem, the property is more than a place to build an 80,000-square-foot building. It reflects the company’s brand, which Runyon summarizes as inside and outside activity. The 40-acre site provides a 1-mile walking and jogging path for the more than 200 employees who work there.

“Our ability to attract talent is much better now,” Runyon says. Drive times to the new HQ from other parts of the metro are far better than they were in Hastings. The Woodbury location also is more convenient for visitors, particularly the franchisees who come to Self Esteem Brands' headquarters for two-week training sessions. Trips to and from the airport are quicker, and there are plenty of hotels both near the airport and in Woodbury, as well as restaurants and shopping.

Today, there are more than 3,600 Anytime locations in all 50 states and nearly 30 countries, and the company has plans to open 400 annually for the next five years.

Chuck Runyon, CEO, Anytime Fitness

Cottage Grove, Newport and St. Paul Park

In Washington County, it’s called “the Loop”—the circle of interstates whose eastern edges are 494 and 694. To be in the Loop, or at least on just the outside, is considered prime corporate real estate. While these three cities are a little outside the Loop, they are still home to numerous thriving and distinctive businesses.

“There is an advantage to being outside [the Loop]”, says Christine Costello, Cottage Grove’s economic development director. There’s less congestion, and land prices are generally more affordable.

Cottage Grove is the largest of the three cities, with a population of more than 35,000. Among the city’s large employers is 3M Co., which has a signage, R&D and manufacturing facility in the southeastern end of town. Bayport-based Andersen Corp. also has a manufacturing facility in Cottage Grove.

“We feel we have a strong manufacturing base, and we want to expand it,” city administrator Charlene Stevens says. The city also is working to expand retail—a new Hy-Vee supermarket will soon open at 80th Street and Pt. Douglas Road.

Cottage Grove is also home to a variety of distinctive businesses, including American Business Group, a distributor of livestock feed and pet food that also supplies logistics and warehousing services. Up North Plastics manufactures trash bags, shrink film and related products in its 400,000-square-foot Cottage Grove plant. Remarkably, the city also is home to two venues for “barn weddings” and other festive events. Both the John P. Furber Farm and the Hope Glen Farm “take advantage of our natural scenic landscape,” Stevens says.

Still, Stevens and Costello want to attract more companies. Cottage Grove recently updated its strategic plan to focus more intensely on business retention and expansion. According to Costello, city government wants to help ease the permitting and approval processes for business. The city recently partnered with the University of Minnesota to interview 40 businesses in Cottage Grove to find out what their needs are and how the city can better work with them. (The report is expected to be released in the fall.) The city also is working to develop shovel-ready sites, ranging from 3 to 50 acres, in its business park.

Cottage Grove’s smaller neighbors, Newport and St. Paul Park, both hug the shores of the Mississippi. Like Cottage Grove, both emphasize their hometown atmosphere.

Newport is the home of Bailey Nurseries Inc., one of the country's largest wholesale tree, shrub and flower businesses. Bailey Nurseries operates growing facilities in several counties in the state, and has sizable operations across the country, notably Oregon and Illinois, to extend its growing season. While most of its business is in the Midwest, it sells plants throughout the country and also has overseas customers.

Bailey remains firmly rooted in Washington County because it continues to flourish there, thanks in large part to the strong workforce that it can draw from. “We have a lot of connection to this area,” says company president Terri McEnaney, whose family’s original home, built in 1902, still stands on her company’s grounds as its headquarters. Of the company’s roughly 500 full-time employees, about 300 work in Minnesota.

Several niche businesses are also well established in Newport. One is Newport-St. Paul Cold Storage, whose facility includes 4.45 million cubic feet of space for storing frozen and refrigerated food.

“We deal with both Fortune 500 and privately owned food producers in the region—local food manufacturing companies, mostly in Minnesota, Wisconsin and Iowa,” company president and CEO Drew Greenberg says. Clients tap Newport Cold, founded in 1959, to warehouse their inventory and to export products to their customers via truck or rail. Like other businesses in the area, Newport Cold uses the BNSF and Union Pacific rail lines that operate in Newport and St. Paul Park.

“We ship out in excess of 360 million pounds a year,” Greenberg says. “And as our customers grow, we have to grow.” This year, Newport Cold is adding nearly 54,000 square feet to its facility. When the work is completed this month, the facility will cover 280,000 square feet.

Other niche Newport businesses include Ten-E Packaging, which specializes in packaging for hazardous materials; Warehouse Shell Sales, founded in 1939, which distributes oyster shells used in poultry feed; and Metropolitan Gravel, a trucking and truck-maintenance company that transports aggregates to road builders, as well as moving other heavy goods and commodities.

While Newport is fairly built out, according to city administrator Deb Hill, several new residential and commercial construction projects are proposed or underway. Projects include an 83,000-square-foot office/warehouse structure in the southern part of town, which is scheduled to be completed by the end of the year, and a 42-unit workforce apartment project that opened in August. The Red Rock Village project, which would comprise 126 homes, a supermarket, a restaurant and an underground parking garage, is in the conceptual stage.

Like Newport, St. Paul Park is essentially built out, with little room to grow, so most of its opportunities will have to come from redevelopment, says city administrator Kevin Walsh.

Success in Cottage Grove

Ten years ago, Werner Electric was bursting at the seams of its Minneapolis headquarters. Needing a new location, company president Ben Granley “interviewed” 10 cities. Most turned the company down because it has trucks coming in and out all day, starting early in the morning. Cottage Grove was different. “Not only did Cottage Grove want us, but they went out of their way to broker the deal to help get us to come here,” Granley says.

Founded in the 1920s, Werner is a distributor of electrical and energy equipment and components to electrical contractors and OEMs, among others. In the past seven years, most of its growth has come from industrial automation. Over 50 percent of its business is in industrial automation for customers in the packaging, food processing, oil and gas, and medical device industries.

Relatively low land costs made it cost-effective for Werner Electric to build its own building, and the city allowed the company to put up its own wind-power turbine, which doubles as an energy source and a brand identification. The city also provided tax-increment financing and tax-abatement incentives when the company moved. Currently, 210 of Werner Electric’s 340 employees work in its 185,000-square-foot headquarters in Cottage Grove. “There was a real business value to moving down here,” Granley says. “The tools in [the city’s] toolbox have helped point us in the right direction.”

 

St. Paul Park’s largest private employer is an oil refinery that’s been in the city since 1939, making it the state’s oldest. El Paso, Texas-based Western Refining, which owned the facility, was acquired last year by San Antonio-based Tesoro Corp. The St. Paul Park refinery will help make Tesoro, which is changing its name to Andeavor, the fifth-largest refiner in the U.S. The sale includes the SuperAmerica fuel and convenience store chain, which St. Paul Park supplies gasoline to.

Several other longtime businesses continue to thrive here, such as Total Mechanical, a mechanical and HVAC construction and service company that operates in a five-state area. Most of its client base is in the central to east metro area, and includes Metropolitan Council-owned wastewater plants. It also specializes in ice-rink construction, a business that is nationwide.

Five years ago, Total Mechanical added on to its current location, which now comprises 6,500 square feet. “The whole area is thriving right now, and has been for a while,” says Total Mechanical president Bruce Pylkas, who is a former president of the Cottage Grove Area Chamber of Commerce. Even with the three communities’ historically high occupancy rates, he adds, there’s still more developable space available.

Forest Lake and Hugo

Located on the northern edge of the county, Forest Lake has prospered in a location that serves as something of a gateway between the metro and northern Minnesota. Since 2000, its population has boomed, from a shade over 14,000 to more than 20,000 today.

What’s helping drive the growth is its close proximity to the junction of interstates 35E and 35W, which provides easy access to both major downtowns, as well as to employees living both north and south of the city. Plus, Forest Lake has numerous lakes, nature preserves and trails. “We still maintain a small-town feel [with a] traditional downtown area,” says Dan Undem, assistant to Forest Lake’s city administrator.

Forest Lake has some of the most distinctive manufacturing businesses in the Twin Cities metro area, with companies like Themed Concepts, which makes whimsical playground equipment and glass fiber-reinforced concrete constructions for zoos, amusement parks, resorts and other venues. There’s GearGrid Corp., which manufactures custom steel lockers and storage for the athletic, military and firefighting markets, among others. WDI Inc. crafts stylish wooden packaging and promotional items, including humidors, food containers and displays. And St. Croix Forge Inc. produces steel horseshoes for the riding and racing markets.

One of the city’s largest private employers is Teamvantage, a custom manufacturer and injection molder for the medical and aerospace industries, among many others. In 2013, Teamvantage moved into a new 111,000-square-foot facility that is triple the size of its previous Forest Lake plant. Its sister company is Forest Lake-based Custom Mold & Design.

As the city grows, Forest Lake is looking to add more businesses to its stable and help facilitate and streamline the permitting process, Undem says.

Like Forest Lake, the city of Hugo is full of natural resources and environmental amenities, says city administrator Bryan Bear, who describes his city as “an urbanizing landscape in a rural setting.” Along with manufacturing and distribution businesses, there are several row-crop, dairy and horse farms within the city limits. There also are hunting preserves and a hunt club, partly or wholly within the city limits.

“There are a tremendous number of [business] success stories in Hugo,” Bear says. One of the city’s newest—and oldest—is Glamos Wire Products Co., which makes plant supports, basket extensions and landscape staples for the lawn and garden industry, as well as custom wire forms for the concrete and industrial markets, and bale tires used for bailing recycled boxes, paper, plastics and metal. Its market is mostly local, though it has a national presence. The company has expanded twice in the past 10 years; its current facility is now 64,000 square feet.

Founded in 1899, Glamos Wire is one of the county’s older businesses. But as company president Paul Glamos notes, it’s lucky to still be in business. In 2011, Glamos Wire had a fire that nearly wiped the company out. With help from its employees, vendors and customers, Glamos Wire has risen from the ashes, with revenue rising and its employee count growing. Glamos says that his firm’s location has helped. “We can reach any place in North America quickly,” which has allowed his firm to compete with imports.

Another growing business is Loadmaster Lubricants LLC, which manufactures specialty lubricants, primarily for mining equipment, that it ships worldwide. It employs 20 in Hugo and is growing by double-digit percentages. Rick Stewart, the managing member of the partnership that owns the company, expects Loadmaster’s headcount to be close to 35 within a year or two. Loadmaster is now planning to add up to 35,000 square feet of space to its current 80,000-square-foot facility.

Much of the company’s optimism is the allocation in the 2017 legislative session of $1.5 million to repair St. Paul-based Minnesota Commercial Railway’s Hugo Line, which connects Hugo to the big railyards in the Twin Cities. Loadmaster Lubricants and several other businesses in Hugo depend on that short line for shipping.

Between 2000 and 2015, Hugo’s population grew from 6,363 to more than 14,000, which has meant more opportunities for service entrepreneurs seeking to open restaurants or day care centers. “We try to make sure that the regulatory environment here is attractive,” says Bear, who notes that his city has no business license fees. “If you come to City Hall, we’re going to try to help you figure out a way to make your expansion plan work, or find a site for you.” Though the city occasionally offers incentives, Bear says that his hope is that the city has created an environment that will allow a business to thrive on its own.

Blending the Old With the New

Manomin Resawn Timbers, based in Hugo, is a 19-year-old company that reclaims wood from old barns, houses and factories—“primarily barns right now, because that’s where the trend is,” Manomin owner Sarah Londerville says. Manomin mills the old wood, removes the nails, treats it to remove any insect infestation, then converts it into flooring, paneling and related products that are stylish and full of character. “Right now, reclaimed wood is all the rage,” Londerville says, adding that the company’s 2016 revenue was 22 percent over 2015.

Most of Manomin’s barn wood comes from the Midwest; the Appalachians are another abundant source. The company’s 20 full-time employees (it hires additional help during the summer) work in a 28,000-square-foot facility in a Hugo industrial park, where it has been located for 12 years. “We’re close to the Twin Cities, but far enough away so that the costs of our operations are maybe a little less” than they would be in St. Paul or Minneapolis, Londerville says. The location also makes it easy for the several trucks that come in and out each day.

Manomin’s customers include homeowners, builders, remodelers and restaurants. While most are located in Minnesota and Wisconsin, it also has significant sales nationally. Manomin-milled wood graces Ralph Lauren’s New York City store, for instance. “The urban loft look is really hot right now,” Londerville says. ”Old wood goes with that look.”

Stillwater, Oak Park Heights, Bayport

Stillwater is, of course, renowned for its charming downtown. The Highway 36 corridor is a retail center, and will likely become more prominent with the recent completion of the St. Croix Crossing bridge. The new bridge should make downtown Stillwater an even more appealing destination, as it will reduce the sometimes glacial traffic flow caused by the old downtown lift bridge.

Stillwater has a business park that includes a brewery and health care service providers, but city administrator Tom McCarty makes it clear other opportunities exist for companies to establish themselves here. There are other pockets in the city that are available as business campuses for research facilities or health care organizations, McCarty says.

One distinctive health care business already making its mark in Stillwater is DiaSorin Inc. Last summer, the U.S. Department of Health and Human Services awarded the company a $2.6 million contract to develop a test for more quickly diagnosing the Zika virus. The virus is transmitted primarily by mosquitoes, and it’s particularly dangerous to pregnant women since it can cause birth defects. It’s endemic in the Caribbean and Latin America, but there have been a few cases in the U.S. DiaSorin SpA has its headquarters in Italy, but opened its American outpost in Stillwater.

South of Stillwater, the communities of Oak Park Heights and Bayport are anchored by Andersen Corp. Andersen's corporate administrative office is in Oak Park Heights, while its plant-producing windows and doors manufacturing facility and R&D center are located in Bayport. The company currently employs approximatley 3,000 people in Washington County.

Sara Hayden’s Famous Tipsy Pies

Washington County is home to numerous businesses founded decades ago. But it also has proven fertile ground for entrepreneurs creating distinctive, even surprising, products and services.

Take Sara Hayden, for instance. About a decade ago, she was looking to earn some money for her family’s household—and have something that she could do that was her own. “I never thought in my wildest dreams I would run a business,” Hayden says.

Hayden incorporated Rustic Pies of Stillwater LLC in 2012. But to her growing coterie of fans both locally and nationally, her wares are much better known under the name Sara’s Tipsy Pies. What makes them “tipsy” are the small quantities of Minnesota-made alcoholic beverages she adds to her recipes. They
won’t actually make you unsteady, but they do have flavors not found in other pies.

Pie-lady.jpg
The idea came to Hayden about seven years ago. Looking for a way to give her pies “a local flavor” and support other small businesses in the area, she hit upon craft breweries. She contacted Lift Bridge Brewing Co. in Stillwater about putting its beer in her pies, and the brewer enthusiastically replied. She created apple pies flavored with Lift Bridge beers, mastered the recipes, then branched out with other local companies that make craft alcohol.

Last October, after operating out of other businesses’ kitchens for several years, Hayden was able to get her own space, just off Highway 36 in Stillwater. The space has been “completely worth it because of the added revenue and the interest of people stopping by,” says Hayden. To help pay rent, Hayden is sharing her kitchen with two startups: a baker of German-style breads and North Mallow, which produces artisan marshmallows in a variety of flavors.