Last year, Daikin Applied launched a search for a new commercial HVAC manufacturing facility in North America. The company, owned by Osaka, Japan–based Daikin Industries, a global manufacturer of commercial and residential air conditioning equipment, already had one facility in Faribault, Minn., but needed another factory to handle its new Rebel Commercial Packaged Rooftop Systems.
After considering various locations across the U.S. and Mexico, Daikin chose Faribault—again.
“We looked at many, many options,” says general manager and vice president of operations Will Fort.
Comparing Faribault to cities around the country made Daikin realize what a good thing they already had going, Fort says. The city’s willingness to innovate, its welcoming attitude, a location that’s easy to access from major highways and is close to the Twin Cities, and the local talent base made it a surprisingly viable candidate. The best candidate, actually.
And Daikin isn’t alone in its thinking.
Faribault lies less than an hour south of the Twin Cities and an hour northwest of Rochester, and counts four international companies among its major employers. In addition to Daikin, there’s Sage Electrochromics, owned by France’s Saint-Gobain, Faribault Foods, acquired five years ago by La Costeña of Mexico City, and a warehouse for Germany–based Aldi.
Even though the town was largely put on the map by a historic woolen mill that has been churning out textiles the old-fashioned way for more than 150 years, the future is king. And while Faribault Woolen Mill Co. and the internationally acclaimed boarding school Shattuck-St. Mary’s just down the road keep Faribault strongly rooted to its past, there’s an innovative spirit and willingness to evolve that both companies and workers find appealing. Thanks to thoughtful planning and a tight-knit community, Faribault proves that it’s possible to grow while maintaining a small-town feel, which benefits employers, residents, and tourists alike.
Business owners throughout Faribault sing the town’s praises, recognizing the city’s accommodating approach to new and expanding businesses.
Owners of RARE Aircraft Ltd. agree. The company, which restores vintage planes (including one for actor Harrison Ford), moved from Owatonna to its current base at Faribault Municipal Airport almost a decade ago.
General manager Ben Redman describes the move as “ a natural choice.”
“The city folks just rolled out the red carpet for them,” says Mike Brown, president and CEO of Harry Brown’s Family Automotive in Faribault and nine-year member of the Faribault Airport Advisory Board.
Ryan and Jenny Ernster opened The 3 Ten Event Venue in downtown Faribault in April 2018.
“I can honestly say that without [the city staff], this never would’ve happened,” Ryan Ernster says. “They were übersupportive and helpful and gracious and just really opened their arms to welcome us into town well before we even bought the building.”
Will Fort of Daikin says Faribault staff were excellent to work with.
Stein Bruch, president of SteinAir, Inc., specializing in avionics and aircraft electrical components, credited the relative lack of bureaucratic hoops and the cooperative nature of Faribault for smoothing the company’s relocation from Farmington several months ago.
Faribault Foods vice president David Tieman agrees: “Not all communities are embracing manufacturing like Faribault.”
Absolute Air LLC, founded by five small Midwestern gas and welding companies who were tired of global gas giants, is breaking ground on its merchant air separation plant in Faribault this summer. It will produce oxygen, nitrogen, and argon for use in customer applications.
“We needed a good municipality that wanted to see development and growth,” chairman of Absolute Air and owner of affiliate Mississippi Welders Supply Co. Brad Peterson says. “And we found that in Faribault.”
There’s no denying that Faribault’s location helps it recruit businesses and employees.
It was Absolute Air’s other major reason for choosing Faribault: “It was critical that we be on a good interstate or have good transportation because we’re making trailer loads of liquid oxygen, nitrogen, and argon,” Peterson says.
Foreign Direct Investment:
Japan, France, Mexico, Germany
35% of the workforce works in manufacturing, distribution, or construction
Housing vacancy rate: <1%
Situated right off of Interstate 35, with Minnesota State Highways 3, 21, and 60 running through it, and with a municipal airport all its own, travel to and from Faribault is a breeze for product transporters, commuters, and tourists.
When German-owned Aldi was scouting locations for a Midwestern warehouse and distribution center, they chose Faribault because of its accessibility. Faribault has easy access to the Twin Cities, without the metro’s congestion or competition for talent.
“We’re here because there really weren’t any opportunities left for us in the Cities,” says Bruch of SteinAir. “We’ve had far more success here finding potential [hires] than in the Cities, because [there] we’re competing with much larger companies.”
But when businesses need to find talent beyond city limits, they’re close enough to draw commuters. In fact, more than 7,100 people commute to Faribault for work, and 6,300 Faribault residents commute outside of the city to work elsewhere.
“It has the benefit of being right off the highway, with access to the Twin Cities, access to airports, access to reasonable labor costs, a very business-friendly government, and available land,” says Nick Stoneman, president of Faribault–based Shattuck-St. Mary’s School. “So really, it’s kind of a perfect storm of all these different elements that have really allowed for companies to come in and … build off of what’s here and expand it with their own expertise and capital. In some respects, it’s a case of local folks making things happen, and then broader interest coming from international investors seeing the potential and wanting to be a part of it.”
Ultimately, the workforce is what can make an area stand out as an industrial hub. Faribault’s deep roots in manufacturing give it a steady supply of employees today, when the tight job market is a problem almost everywhere.
“We’ve got a great base of employees in Faribault and Owatonna, and there’s also a lot of other manufacturing that has been going on in Faribault, so southern Minnesota seems, in our estimation, to be a hotbed for highly skilled manufacturing,” says Susan Kaufman, vice president of strategic marketing for Daikin Applied.
While a manufacturing base has existed in some capacity in Faribault for many decades, largely thanks to Faribault Woolen Mill and other early industries, the growth and evolution in manufacturing skills is largely thanks to a concerted effort by South Central College (SCC) in Faribault. Many in the community credit SCC president Dr. Annette Parker with transforming the school from a general vocational college to a leading driver of skilled manufacturing jobs in the region today.
Under Parker, SCC focuses on manufacturing, agriculture, and health science—sectors, she says, “that we know are core to our regional economy.” Parker says that not everyone needs a four-year degree to be successful, especially in a community with as many blue-collar jobs as Faribault.
SCC serves around 5,000 students in credit-based programs on its Faribault and Mankato campuses, as well as another 12,000 students through its Center for Business & Industry’s corporate training and continuing education courses.
SCC is also part of a pilot grant program from the U.S. Department of Education, called Second Chance Pell, to provide postsecondary educational and training programs to people who are incarcerated. The college has been participating in the program for about two and a half years.
“We know that offenders who don’t have really serious offenses or violent offenses can get a job,” Parker says. “So, we’re doing carpentry out there. We’re doing advanced manufacturing in areas where we know there’s a workforce shortage in Minnesota and have high potential for them to get jobs.” That not only means more opportunities for released offenders, but more opportunities for businesses as well.
Parker also led the development of SCC’s apprenticeship program, matching students and companies for on-site training. Daikin Applied, SageGlass, and Faribault Foods all participate in the program.
Faribault got its start as a manufacturing town largely thanks to Faribault Woolen Mill Co., the iconic textile company that’s been operating for more than a century.
Founded in 1865, the original mill operated as a wool carding factory, turning local wool into wool batting. By 1872, the mill started churning out its famed blankets.
Twenty years later, the mill was devastated by a fire, so a new mill—the one still running today—was built on the banks of the Cannon River. In 1917, the mill supplied more than 100,000 olive-drab Army blankets to U.S. troops fighting in World War I and it has remained a military supplier ever since.
The mill thrived and grew until the 1990s, when it started to struggle as the textile industry began experimenting with offshore production and attendant lower labor costs. The declining mill was finally bought by North American Heritage Brands, but the company went bankrupt in 2009, forcing the mill to close its doors.
Until 2011, that is, when brothers Chuck and Paul Mooty bought the old mill with all the equipment still inside. With a lot of hard work and capital, the brothers brought the Faribault Woolen Mill back to life, garnering national press for the revival of an American heritage brand. In 2017, they brought on Tom Kileen as CEO, who admits now that none of them had any idea how to run a woolen mill in their early days.
“When [Chuck and Paul] started looking for people to work here, the people that had worked here previously came back in droves,” Kileen says. “And so we benefited from people that had decades of experience that came back in and had a passion for the business [and] that wanted to see it succeed. They came back and helped get this place back on its feet.”
Even today, Kileen estimates that up to 50 percent of the mill’s current employees have some connection to the mill before its shutdown. Generations of families have worked in the mill, and it’s a passion project for many on its floors.
Passion for the mill is also part of what pays the bills, Kileen says. “These days, people usually learn about the story of our brand first and then look for a product that fits them.”
But is loyalty enough to help an old woolen mill make a 21st-century comeback in an industry that’s struggling across the nation?
“I think we recognize what we are and what we’re not,” Kileen says. “We’re not a commodity blanket producer. We’re not going to win the contest on the lowest-cost blanket. But if people are buying based on value and saying, ‘I want a blanket that I can use for my lifetime,’ ” they will turn to Faribault Woolen Mill, he says.
The company’s two main goals now are to thoughtfully expand its customer base and product portfolio. After years of highlighting the heritage story, Faribault is now marketing its blankets as great gifts for life events like weddings, the birth of a child, or the purchase of a home. Following the success of Faribault Woolen Mill scarves, the mill recently expanded its accessories category to include coasters, luggage tags, and log carriers. But Kileen says it’s vital that Faribault Woolen Mill remember its roots.
“Growth for growth’s sake is an unhealthy thing,” Kileen says. Respecting history while steering innovation—it’s a story echoed often throughout Faribault.
Down the road from Faribault Woolen Mill sits another institution that helped put Faribault on the map in the 1800s.
Shattuck-St. Mary’s School was founded in 1858, just a couple decades after the founding of the town itself. Started as an all-boys Episcopal mission school and seminary, it later expanded to include Shattuck Military Academy, St. Mary’s Hall for girls, and St. James School for younger boys. In 1972, the three schools combined to create the Shattuck-St. Mary’s that exists today, a coeducational boarding school serving grades six through 12.
While Faribault has a number of schools offering special opportunities in the area, such as the Minnesota State Academies for the Deaf and the Blind, Shattuck-St. Mary’s School stands out for both its longevity and prestige. It’s recognized worldwide for its programs in engineering, bioscience, pre-conservatory music, and vocal performance, as well as hockey, soccer, figure skating, and golf.
Today, the school has enrolled more than 500 students—up from 280 in 2003—and has 200 faculty members and employees.
Nearly 70 percent of students board, while the rest live in Faribault and surrounding commuter communities. More than 20 percent of Shattuck-St. Mary’s students are international, representing almost 30 countries.
Students aren’t the only ones who move to Faribault to attend the school—often it’s the whole family. Shattuck-St. Mary’s president Nick Stoneman estimates nearly 40 families currently live in Faribault to be near their students. From sports to summer programs, the school offers events that draw hundreds more to town throughout the year, Stoneman points out. “They fill up restaurants, fill up the hotels, so it has an economic impact, in that sense.”
Shattuck-St. Mary’s is perhaps best known for producing National Hockey League drafts including Erik Haula, Jack Johnson, and Sidney Crosby, and hockey Olympians Amanda Kessel and Jocelyne Lamoureux-Davidson. Other notable alumni include William Benton, publisher of the Encyclopædia Britannica; award-winning National Geographic photographer and Academy Award-winning film director Jimmy Chin; and many other athletes, musicians, engineers, and political leaders.
But Shattuck doesn’t only bring Faribault national recognition, it also serves as a vital resource for the community and area businesses. For example, Shattuck offers a program called ScholarShift, which allows juniors and seniors to attend traditional classes on Tuesdays and Thursdays and do their coursework online the rest of the week to afford them time for work internships. Students in this program have worked “all over the place,” Stoneman says, from the local Paradise Center for the Arts to veterinary clinics, political campaigns, health services, and nonprofits.
Shattuck-St. Mary’s also organizes Hands Across Faribault, an annual event in which every student can participate in an off-campus day of service across more than 40 locations in the community.
Plus, the school hosts a number of programs and events open to the public, including Christmas festivities, ropes courses, soccer programs, and learn-to-skate programs. They also open their indoor soccer facility for community walking every morning.
“We really are committed to not just being ‘the school on the hill,’ but rather the school within Faribault.” —Nick Stoneman, president of Shattuck-St. Mary’s School
“We really are committed to not just being ‘the school on the hill,’ but rather the school within Faribault,” Stoneman says. “That means a lot to us.”
The school recently invested $10 million in a sports complex expansion, and about $8 million for a new student center called The Hub, scheduled to open by the start of the school year in 2020.
Shattuck-St. Mary’s is also expanding internationally. A campus in Forest City, Malaysia, that opened last fall is expected to grow to 2,500 students within the next seven to 10 years. Within that time, Shattuck plans to open eight to 10 other campuses around the world. Stoneman says the Faribault campus will serve as the “mothership” as Shattuck-St. Mary’s grows its international footprint. Students and faculty will be able to attend or teach at any of the campuses.
Shattuck-St. Mary’s School and Faribault Woolen Mill have drawn people to Faribault for more than a century. And where you have people, you have to have something for them to do, says Dr. Michael Richie, a practicing ophthalmologist and owner of Richie Eye Clinic in Faribault, and decade-long member of the Faribault Chamber of Commerce.
As the town has grown, so has the importance of recreational activities and ancillary small businesses to accommodate the residents and the visitors who come to town to tour the mill, visit Shattuck, take a cycling trip, or attend a destination wedding.
“It’s a small enough town to have a small-town feel, but it’s big enough to have all the opportunity I could ever imagine.”—Dr. Michael Richie, owner, Richie Eye Clinic
There are 11 lakes within 15 minutes of Faribault. That’s not just a perk for people living in the area; it’s also great for tourism from the Twin Cities and even Iowa, says Tim Murray, Faribault’s city administrator: Why drive hours up north from Minneapolis when you can drive less than an hour south?
“In southern Minnesota, we’re in this area where there’s a concentration of lakes, and you just don’t see that normally,” Murray says.
Nearby Roberds Lake, in Rice County, is home to two destination resorts, says Nort Johnson, president and CEO of Faribault Area Chamber of Commerce and Tourism. A short distance away are Kelly and Dudley Lakes, he notes, both great fishing lakes, with backwaters for duck hunting.
Faribault boasts 39 parks and miles of trails. The Sakatah Singing Hills State Trail features 39 miles of new trail right through lake country. A state grant is also helping to connect that trail system with a bridge to the River Bend Nature Center, which touts another 12 miles of hiking and biking trails.
Faribault’s scenic riverfront and charming downtown make it a picturesque location for a wedding—an industry that is growing since The 3 Ten Event Venue opened last year, attracting destination weddings that draw waves of visitors to Faribault most weekends.
Jenny and Ryan Ernster opened The 3 Ten after 13 years of running their successful events rental company, Sitting Pretty Décor. While they live in Prior Lake now, they spent a previous six years living in Faribault, and they knew that Faribault would be the perfect place to open a venue.
“We just love ... everything it has to offer,” Ryan Ernster says.
The couple used their own money and an SBA loan to carefully restore an 1895 two-story brick building on Central Avenue. The space now features tin ceilings, a handcrafted bar, original maple hardwood floors, reclaimed barnwood shiplap walls, crystal chandeliers, exposed brick, and tons of natural light. The City of Faribault helped secure funding for a sprinkler system and renovation of the front facade.
The 3 Ten hosted nearly 50 weddings in its first year of business, and the couple thinks it can surpass 70 this year. They estimate 75 percent of their bookings come from the Twin Cities metro.
The traffic is inspiring other small business startups, like 10,000 Drops Craft Distillers, a small-batch craft distillery and cocktail room, which opened nearby a few months ago.
As they continue to look forward, Faribault’s city and business leaders are assessing its existing needs, focusing particularly on four key areas: downtown revitalization, parks and recreation, housing, and filling a new industrial park.
In 2015, the city began the process by hiring a consulting firm, putting together committees and focus groups, meeting with community representatives, and working to craft the 25-page Community Vision 2040—a document aiming to position the city to thrive. What really sets Faribault apart from many other communities that have similar long-term plans, Richie says, is how hard they’ve worked to ensure that the plan is implemented.
When the plan was completed in 2017, the city turned to crafting the Journey to 2040, a set of guidelines for how they would achieve the goals laid out in Vision 2040. The Journey to 2040 has three main planning projects: the Comprehensive Plan Update (an update to a 2003 plan), the Downtown Master Plan, and the Parks, Trails, and Open Space Master Plan. Each of these projects is now in the planning stages.
The Comprehensive Plan Update takes a look at the quality of life in Faribault and blueprints the ways the city can support its patrons in their life, work, and play.
The thesis of the Downtown Master Plan is that Faribault has changed and grown significantly over the past century, and to survive, it must adapt. To its benefit, Faribault has one of the largest historic districts in Minnesota, second only to that of St. Paul.
“The downtown is a source of pride, it’s a source of [the local] economy, and certainly a source of our uniqueness in Faribault.” —Nort Johnson, president and CEO of Faribault Area Chamber of Commerce and Tourism
“We have world-class business in Faribault, and a short distance away, we’ve got this fantastic historic district with top-notch dining and a growing, quaint business showing,” Johnson says. “The downtown is a source of pride, it’s a source of [the local] economy, and certainly a source of our uniqueness in Faribault.”
But it’s no secret that success in a small downtown, particularly in today’s retail climate, is challenging. The Downtown Master Plan addresses building vacancies, retail changes, residential matters, existing and projected economic and market conditions, parking and access, connections to recreation and nature, and enhancement of historic character, among other things.
The idea, Richie says, is to think of the downtown much like a shopping mall, with anchors and small businesses.
Anchor tenants often invest in projects and businesses close by to aid their own success. Richie credits 100-year-old State Bank of Faribault with helping engineer the redevelopment of the entire city block that surrounds it.
But downtown Faribault still needs more anchor tenants, stakeholders say.
The city’s community and economic development director Deanna Kuennen and community development coordinator Kim Clausen began seeking anchors to fill that void after the Downtown Master Plan was established. One of the people they reached out to was Mac Hamilton, founder of Rochester–based Hamilton Real Estate.
“[Deanna and Kim] presented the demographics of the community and showed it to be aggressively growth-oriented and a desirable place,” Hamilton says. Hamilton Real Estate now has plans for a 44-unit multifamily housing project on the southern edge of downtown, right across the street from the newly opened Mill City Senior Living (invested in by Richie) and the public library.
“The building will really be a great addition to that area of the community,” Clausen says of the project. “It’ll revitalize the vacant and blighted area in the downtown and hopefully provide some additional population to patronize the businesses in our downtown.”
Hamilton is optimistic about the possibilities in Faribault.
“Faribault looks to be a community that has its arms open to welcome people looking to make investments in the community,” Hamilton says.
The city is especially interested in new businesses that don’t rely on foot traffic alone.
“You need to have tenants that have a back-door business,” Richie says, “whether that’s an online presence or a wholesale business.”
Johnson agrees. “We’re finding that some of the most successful businesses that we have in the district are those individuals who are able to create multiple revenue streams in their small businesses.”
They both point to two bakeries in downtown Faribault, Bluebird Cakery and Crack of Dawn Bakehouse & Market. Both do strong wholesale business so they can thrive even when front-door traffic is slow.
“We’re proud of that kind of hard work and ingenuity around keeping viable businesses in the district,” Johnson says.
The chamber also operates an Economic Development Association-funded downtown micro-grant program, with grants ranging from $500 to $5,000 to assist businesses looking to move into the area. Applicants attend business counseling ahead of the judging process to help them establish solid business plans and ensure they are a viable fit for Faribault’s downtown.
Much like its sister plans, the Parks, Trails, and Open Space Master Plan looks to build on an existing foundation—the system of parks, trails, shelters, community events, fitness programs, and sports and recreation activities—over the next two decades. But unlike the other two, this plan is the first of its kind in Faribault.
Paul Peanasky, director of parks and recreation, says the top priorities are revitalizing the parks and sports areas, and expanding some of their trail systems. Projects are set to begin early this summer.
The housing vacancy rate in Faribault is at a shocking low of less than 1 percent. And without housing, it’s almost impossible to attract new businesses or expand current businesses.
“We need every kind of housing, from affordable housing all the way up to more market-rate units, but we particularly have a need for workforce housing with all of the expansions that are happening with Faribault Foods, Daikin, Aldi, Sage Electrochromics, and some other new businesses that are planning on coming to town,” says Clausen, the community development coordinator. “We just don’t have the housing for the expanded workforce.”
Daikin alone needs more than 300 employees for its new factory. “We need housing for them,” Fort says.
Daikin’s new manufacturing facility is located on property owned by Met-Con Cos., a family of commercial construction companies based just north of Faribault.
“Our goal had always been to develop this into a business park, fully serviced by water and utilities and sewer,” Met-Con CFO Troy Zabinski says. The Daikin project had enough scale and scope, Zabinski says, that they were able to extend utilities to the industrial park and annex the property into the city limits of Faribault. The industrial park is seeking large-scale business to fill its remaining shovel-ready 100 acres.
Once housing is addressed, Clausen says it will be easier to attract new business.
Beyond preserving the city’s heritage and enhancing its recreational assets, Mayor Kevin Voracek says Faribault’s No. 1 goal for the coming years is the continued growth of a widespread tax base, so that Faribault businesses can help Faribault residents thrive.
Owner: Daikin Industries Ltd.
Employees in Faribault: 900-plus (600 current + 300 incoming jobs)
What they do: Provider of energy-efficient applied commercial HVAC solutions
How they got here: In 1933, McQuay Inc. in Minneapolis found early success thanks to its creation of the first classroom unit ventilator and first hermetic compressor for air conditioning use. As demand for commercial air conditioning increased, McQuay moved to Faribault, becoming a multinational corporation in the 1960s and licensing operations in Canada, England, Scotland, and Australia. Its product lines continued to develop rapidly, with more focus on applied commercial HVAC and large-capacity equipment, leading to its acquisition by Snyder General in 1984.
The company later caught the attention of Daikin Industries, which acquired McQuay in 2006, dropping the original name in 2013 in favor of Daikin Applied.
In 2018, Daikin purchased a pre-existing warehouse in Faribault and is currently renovating it into a $40 million state-of-the-art manufacturing facility.
Owner: La Costeña
Employees in Faribault: 300-plus
What they do: Produce and supply beans, soups, pastas, fruits, and vegetables; provide branded, private-label, and contract manufacturing services and co-packing services
How they got here: Beginning as a fairly modest canning operation in 1888 funded by Faribault investors, Faribault Foods grew into an extensive food manufacturing operation based in Faribault, with operations in greater Minnesota, Arizona, and California.
Throughout its history, the company has changed ownership several times, and steadily acquired a number of other companies and product lines around the country. (It was also commissioned as a German prisoner-of-war camp by the U.S. government during World War II.)
In 1979, a new Faribault plant made year-round production possible for the first time. The company expanded again in 1990 with a new warehouse and packaging and distribution center in Faribault.
In 2014, Faribault Foods was acquired by Mexico City–based food canning and production company La Costeña, becoming part of La Costeña USA, along with Arizona Canning Co. La Costeña kept the Faribault Foods name due to its long history and wide reach.
Employees in Faribault: 300-plus
What they do: Produce electrochromatic “smart” glass that tints automatically in response to the sun
How they got here: John Van Dine came to Faribault in 1998, bringing with him the technology that would eventually become SAGE Electrochromics, more commonly known as SageGlass. Having worked in laboratories in New York and New Jersey, Van Dine chose Faribault for the pilot production and testing of SageGlass’ first commercial product because of the other glass manufacturers in the area. He was able to collaborate with them and use their space to build his prototype.
By 2005, SageGlass had established its official headquarters and own manufacturing facility in Faribault, and commercially launched its first-generation SageGlass product. After five years of growth and development, SageGlass was partially acquired by Saint-Gobain, a French glass and building materials company that has been in the industry for more than 350 years, with plans to collaborate on technology and research and development efforts. In 2012, Saint-Gobain acquired 100 percent of SageGlass.
Tess Allen is TCB’s associate editor.