< Previous56 MI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D Einnesota’s overall energy profi le is something that catches the eye of high-profi le companies with sustainability and strategic growth in mind.As business energy consumption goes, Minnesota’s costs, like its people, are common-sensed and reasonable: around the middle of the pack for electrical power, and 13th lowest in the nation for natural gas.Where the state really rises to the top is in what might be called the “grid of the future.” Like the power itself, energy-use initiatives cross boundaries between enterprises, citizens and government. All parties are feeding into this future goal, as the state aims to reduce its greenhouse gas emissions by 30 percent by 2025.Take electric vehicles, for example: A 2018 study commissioned by the Natural Resources Defense Council, Charge Up Midwest and Fresh Energy found that even under a moderate scenario for adoption of plug-in EVs, net benefi ts to the state could total $4.6 billion by 2050. Minnesotans could save $171 annually on electric bills through increased utility revenue and managed off-peak charging of vehicles. Among the organizations promoting use of EN ER GY AN D U T I L I T I E Sby AD A M B R U NSMFUTURE IN MINDEVs and development of charging infrastructure through the Drive Electric Minnesota effort from the Great Plains Institute are major utilities Connexus, Great River Energy, Otter Tail Power, Dakota Electric Association, Minnesota Power and Xcel Energy, among others. The state has been in the top 10 for two years running in Site Selection magazine’s annual Sustainability Rankings, and just moved up from No. 9 to No. 8 in the 2018 State Energy Effi ciency Scorecard report from the American Council for an Energy-Effi cient Economy, released in October 2018. Among the fi ndings, the ACEEE said Minnesota was one of only a few states with plans to create a “utility of the future” via modernized grid infrastructure, better leveraging of data and deployment of more distributed energy resources.Better broadband deployment is part of that modernized grid. “The state has invested $85.6 million in broadband projects over the last fi ve years and attracted another $110.6 million in private and local matching capital,” says Danna MacKenzie, executive director, Offi ce of Broadband Development, at the Minnesota Department of Employment and Economic Development (DEED). “The investments that have been made in robust broadband connectivity have been directly cited as a contributing factor to the location of a new aqua farming operation that is bringing 200 new jobs and $60 million in economic impact to a rural corner of our state. This is not a business that one would typically consider as broadband-intensive, but it is just one example of how traditional businesses, as well as those that are more technically oriented, are dependent upon the presence of robust networks for daily operations.”Minnesota and its targeted incentives are attracting a rapidly growing family of data center investors — and yes, cool temperatures are an added attraction. But so is the energy production footprint of the state. As of 2018, 25 percent of the electricity produced in Minnesota came from renewable sources, with 18 percent of the state’s electricity generated by wind power — Minnesota is No. 7 in the nation for wind energy as a share of total electricity generation. Meanwhile, as solar jobs contracted nationally, solar employment in Minnesota grew 48 percent in 2017 to nearly 4,300. Such statistics are meaningful for a growing host of energy- and environmentally-conscious companies, as well as for sectors such as data centers, whose occupiers often look to power their facilities with renewables. Great River Energy, a 28-member generation and transmission electric cooperative, met Minnesota’s renewable energy standard of 25 percent renewable energy eight years early, in 2017. Great River Energy also was the fi rst in the state to launch a data center site certifi cation program in 2014. Minnesota Power has expertise in serving some of the nation’s largest 24x7x365 electric customers. It projects a 44 percent renewable supply portfolio by 2025 and will have the capacity to serve data centers with up to 100-percent competitively-priced renewable energy.Xcel Energy has been the nation’s No. 1 utility wind provider for more than a decade, with wind energy supplying nearly 20 percent of its power. The company’s Minnesota utility is one of four in the Xcel family that supply energy to customers in eight states, with a portfolio of power generation capable of producing more than 17,000 MI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D E 57megawatts (MW) of electricity. But like other utilities in the state, its team members connect business to a whole lot more than electrons.I recently asked Xcel Energy Managing Director of Strategic Revenue Initiatives/Corporate Economic Development Robert J. Osborn to describe some of the ways this leading Minnesota utility is fostering economic development:Minnesota is known for leadership in energy efficiency, sustainability and renewable power generation and use. Describe the role Xcel Energy plays across these areas, and what that means to multinationals with sustainability mandates from their boards.Robert J. Osborn: Xcel Energy is the national utility leader in wind energy, with the ability to provide up to 100 percent renewable energy to our business customers through some of the programs we offer, such as Windsource or Renewable*Connect. We have cut carbon emissions 35 percent from 2005 levels and are on track to achieve our ambitious goal of reducing carbon emissions 60 percent by 2030. This is one of the most aggressive carbon-reduction goals in the nation. We have already surpassed the U.S. commitment under the Paris Climate Accord in 2016, which called for a 26 to 28 percent reduction in carbon emissions by 2025. Xcel Energy plans to continue reducing our environmental footprint with an energy mix that is projected to be 60 percent carbon-free by 2022. Much of the energy will come from wind power, as we will more than double our wind generation with 12 new wind farms in seven states. These new energy sources are complemented by two key elements: our broad array of advanced customer energy efficiency programs and the continued efficient operation of our carbon-free nuclear plants in the Upper Midwest.Name a recent example of your team’s contribution helping to cement a new corporate facility investment or improve operations in Minnesota.Robert J. Osborn, Managing Director, Strategic Revenue Initiatives/Corporate Economic Development, Xcel EnergyMI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D E 59Osborn: Recently, it was announced that Northern Metal Recycling would be building a state-of-the-art metal recycling facility in the City of Becker. Xcel Energy was contacted in 2015 to assist the City of Becker with a proposed relocation of Northern Metals operations, which had been located in North Minneapolis and wanted to move their shredding operations to a more appropriate industrial location. Northern Metals settled on a 75-acre parcel that was part of Xcel Energy’s certified site program. This project will bring more than 85 jobs and over $40 million dollars in capital investment.Xcel Energy saved the Bishop H. Whipple Federal Building (which serves military veterans) nearly $500,000 annually in energy costs through heating and cooling upgrades. Level 3 Communications will save nearly $250,000 at its Minnetonka data center thanks to Xcel Energy efficiency programs and rebates.Describe how Xcel’s site certification program has grown.Osborn: We recognized that in order to be successful at helping our communities grow jobs and capital investment, we would need a strategy that focused on three key elements: Research, Relationships and Real Estate. We work with Schneider Strategy Consulting to assist in our site certification process. They helped us customize our certified site program, which we launched in Minnesota in 2016 with a handful of sites across the Twin Cities metro region. We have expanded the program to six of our eight states and are on track to have 40 certified sites developed by late 2018. We’ve also worked with them to launch our Partner Site and Partner Building programs, which offer additional options for our communities to work with us to bring additional jobs and capital investment to their areas.Most importantly, we’re helping business grow within our communities, via our real estate programs …. We understand that several entities are involved in growing jobs and capital investment within our communities and while energy is an important factor in overall equation, we are just one of the critical factors that make up that equation. We’re only as strong as our communities, and are grateful for those partnerships that allow us to help keep Minnesota thriving. 60 MI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D Einnesota prides itself on having a broad range of strong industries, but at the beating heart of its economic vitality are its life sciences: health care, medical technology and bioscience.“Medical Alley” is the term used to describe this innovation hot spot. It refers to the more than 1,000 health care and medical technology companies that run from Rochester — with its famed Mayo Clinic — through the Twin Cities, all the way to Duluth. But it also refers to the ecosystem of collaboration, experimentation and problem solving that has ungirded these industries’ success for decades.Earl Bakken (who passed away in October at the age of 94) got the ball rolling when he developed the world’s first battery-powered pacemaker in the 1950s. Today, Bakken’s company — Medtronic — has grown from a Minneapolis garage to become the largest pure-play medical device company in the world, with nearly $30 billion in sales and more than 86,000 employees. Minnesota is its operational headquarters and it employs 10,000 people in the state.Minnesota’s medical device industry employs about 30,000 people and includes large players such as Boston Scientific, Abbott (formerly St. Jude Medical), Smiths Medical and 3M Health Care. But the state’s bio and health economy goes way beyond medical devices. It encompasses personalized M E D I C A L T E C H N OL O G Y & B I O S C I E NC EMinnesota’s life sciences are the lifeblood of the state’s economy.by AD A M B R U NSMInnovation EngineMayo Clinic and Pontiac Land Group are investing in a rapid expansion of the Rochester campus’s iconic Gonda Building that will incorporate a new 11-story hotel in addition to 200,000 more square feet of clinical space to accommodate demand. Image courtesy of Mayo ClinicMI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D E 61medicine, bioinformatics, proteomics, microbiome, regenerative medicine, pharmacogenomics, stem cell research, telemedicine and 3-D printed biomaterials, among other specialties.It also includes companies and organizations that provide a broad range of health-related services, from UnitedHealth Group — the world’s largest private health insurer — to Be the Match, the national marrow donor program.And it comes full circle at internationally connected clinical and research leaders such as Mayo Clinic and the University of Minnesota, forming a layered ecosystem ripe for academic-corporate collaboration and entrepreneurial support. Some rankings and statistics worth noting:• For three consecutive years, Mayo Clinic has been ranked as the No. 1 hospital in the nation by U.S. News & World Report, 2016-17; 2017-18; 2018-19.• Per capita, Minnesota ranks 1st in medical device patents and 2nd in bioscience-related patents, based on the most recent U.S. Patent Office data available as of October 2018.• The University of Minnesota ranks 4th among U.S. tech transfer offices in executing license deals and 6th among U.S. public tech transfer offices overall, according to a 2017 Milken Institute study.• Minnesota’s share of total venture capital investment leaped from 28th in 2016 to 15th in 2017, with investment in Medical Alley companies doubling over five years to reach more than $750 million in 2017, according to the Medical Alley Association, which represents health care companies of all types in Minnesota.Journey and DestinationIn Mayo Clinic’s hometown of Rochester, Minn., a 20-year, $5.6-billion initiative known as Destination Medical Center (DMC) is underway, upgrading the entire Mayo complex and beyond to offer the globe a fresh welcome to a world-leading innovation center. In 2012, Rochester voters reauthorized $20 million in sales taxes toward DMC development. In May 2013, the Minnesota Legislature passed a tax bill that included the finance tools necessary to fund the public infrastructure for DMC.The bill provides for $585 million in public investment over the next 20 years to help cultivate up to $6 billion of private investment over that same time period. DMC will comprise six districts spread across about 550 acres, supporting mixed-use programming that complements Mayo Clinic’s expansion plans.Mayo Clinic and Singapore-based Pontiac Land Group announced plans in September 2018 to expand the Gonda Building on Mayo’s Rochester campus to support the growing need for additional clinical space and to offer patients and visitors a premier hospitality experience. The Gonda Building is the centerpiece of Mayo Clinic’s system of integrated care.The 11-floor expansion includes four floors for new clinical space and seven floors for a hotel. Mayo Clinic plans to invest $190 million into the clinical expansion and use the additional space for expansion to the Mayo Clinic Cancer Center and Outpatient Procedure Center. Destination Medical Center’s Discovery Square will be located steps from Mayo Clinic’s iconic Gonda Building and Mayo Medical School in Rochester, Minnesota. Image courtesy of Perkins EastmanMinnesota ranked No. 1 per capita in medical device patentsMinnesota ranked No. 2 per capita in bioscience-related patentsSource: U.S. Patent Office, most recent data available as of October 2018id you know that one out of every eight jobs in Minnesota is tied to manufacturing? Advanced manufacturing is the state’s second largest industry with 319,000 employees and more than 8,000 manufacturers across the state. Among the key clusters are medical devices, agriculture and farm equipment, aerospace and aeronautics, sensors, semiconductors and robotics, glass, window and door manufacturing, HVAC technologies and equipment, and packaging. Several manufacturing giants have a presence in the state including Cargill, 3M, Medtronic, General Mills, Ecolab Inc., Hormel Foods, Polaris Industries, Pentair, Toro, Donaldson Co., BAE Systems, Honeywell, Benchmark Electronics, General Dynamics, Fastenal, Thermo Manufacturers find quality workers and attractive incentives in Minnesota. by S AVAN NAH K I N GDM A NUF A C T UR I NGAll the Right Parts62 MI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D EMI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D E 63King Corp., and Ball Corp. among others. In fact, of the 19 Fortune 500 companies headquartered in Minnesota, eight are manufacturers. Minnesota is also home to the largest private company in the country, Cargill.3M, a global innovation company formerly known as the Minnesota Mining and Manufacturing Company, operates five facilities in the state and has its headquarters in Maplewood, Minn. The company’s history of more than a century here speaks volumes about the Minnesota’s business climate. Smaller companies also have found great success in the state with access to venture capital, incentives and other financing, a skilled workforce and favorable business climate. In fact, of the 174 business expansions projects tracked by the Minnesota Department of Employment and Economic Development (DEED) in 2017, 69 came out of the manufacturing industry, many of which were able to take advantage of state incentives. Emerson, a global technology and engineering company, is investing $15 million into a renovation of its Chanhassen manufacturing facility. The company will convert 30,000 sq. ft. of offices into manufacturing space and create 80 new manufacturing and support jobs over the next three years. The project was supported with an $850,000 grant from the Minnesota Job Creation Fund and a $450,000 forgivable loan from the Minnesota Investment Fund. The Job Creation Fund and the Investment Fund are incentives that reward Minnesota companies for reaching investment and hiring goals. Since the Job Creation Fund was launched in 2014, DEED has awarded $41.4 million to 91 businesses which committed to creating 5,588 full-time jobs. In FY 2018, the Minnesota Investment Fund awarded $11.2 million in loans to 19 businesses, which in turn have created more than 1,200 jobs and $372 million in private investment.Alabama-based Altec Inc. has chosen to expand its manufacturing facilities in Duluth, Minnesota, where it currently employs about 230 people. Altec Inc. manufactures aerial devices, cable handlers, chippers cranes and digger derricks for various industries. The nearly $8.5 million expansion will create 100 new jobs 3M headquartersPhoto by Shay La’Veeand was supported with a $550,000 forgivable loan from the Minnesota Investment Fund. The loan will be forgiven if the company meets its hiring and investment goals. “The Minnesota Investment Fund is one of the state’s most successful economic development tools,” said DEED Commissioner Shawntera Hardy. “Since the fund was created in 1985, Minnesota companies like Altec have created thousands of jobs and invested millions of dollars in expansion projects.”In 2017, Geringhoff Corp., a farm equipment manufacturing company in St. Cloud, announced it would expand its North American manufacturing facility at the St. Cloud Airport Business Park. The company opened the facility in 2013 and will add a second factory assembly line with the latest $520,000 expansion. Geringhoff chose the St. Cloud location for its quality local workers and support from the community. “Geringhoff is diversifying into a new line of harvesting equipment at a time when U.S. farm production is at or near record levels for corn and soybeans. This is a smart investment that will help the company meet growing demand in the agricultural sector,” said Hardy. Across the state, companies are benefi tting from workforce training grants provided by the Minnesota Job Skills Partnership. Through the partnership, educational institutions and businesses work together to ensure employees have the skills businesses need to be successful. Several companies have trained their employees through the program, including Alexandria Industries, which has received almost $2 million in training grants from the MJSP program. Alexandria Industries partnered with Alexandria Technical and Community College to develop the training courses focused on leadership, foundational business skills and manufacturing and technical skills. Companies that receive grants through the partnership must agree to match the funds provided. Uponor, in conjunction with Dakota County Technical College, also received a grant in the amount of $298,000 from MJSP for a two-year training and educational development program for employees. The grant will help fi ll three targeted areas of training and development for the supplier of plumbing, fi re safety and radiant heating and cooling systems, including fi re safety certifi cation, online learning and web development and lean business processes to reduce waste and improve effi ciencies. “This is a phenomenal opportunity to provide additional training around specifi c needs that we have,” said Eric Fiedler, learning and organization development manager, human resources, at Uponor. “With our long-standing partnership with Dakota County Technical College, we can advance our development offerings in key areas of business.” One out of every eight jobs in Minnesota is tied to manufacturing.64 MI NNE SO T A E C O N O MI C D E V E L O P ME N T G U I D ENext >