Saint Paul: Economy

Saint Paul: Economy

Major Industries and Commercial Activity

The principal economic sectors in Saint Paul are services, wholesale and retail trade, manufacturing, and government. Along with Minneapolis, Saint Paul is the site of one of the largest concentrations of high-technology firms in the United States and ranks among the major commercial centers between Chicago and the West Coast. The city is also among the two or three largest livestock and meatpacking centers in the nation. Sixteen of the Fortune 500 largest U.S. corporations are headquartered in the Twin Cities. The area is also home to 30 Fortune 1000 companies and several of the world's largest private companies. Local companies are involved in the manufacture of super computers, electronics, medical instruments, milling, machine production, food processing, and graphic arts.

Items and goods produced: hoists and derricks, rugs, computers, food products, medical products, machinery, electronic materials, automobiles, appliances, chemicals, abrasives, beer, printed products

Incentive Programs—New and Existing Companies

Various programs are available for small business incentive and expansion; among them are the Small Business Development Loan Program, offering fixed-rate low-interest direct loans, and tax credits for corporations that assist small businesses.

Local programs

The City of Saint Paul's Department of Planning and Economic Development offers a variety of services to assist new or expanding businesses; services include small business financing and loan guarantees/direct loans.

State programs

State business tax incentives include research and development credits, foreign income deductions, and sales tax exemptions and reductions. In addition, the state of Minnesota offers, through a network of five job-training programs, assistance to businesses in locating and training employees.

Job training programs

The City of Saint Paul's Business Resource Center offers a variety of services including information, technical assistance, financing, site searches, and job training. Other programs are available through area colleges and universities.

Development Projects

Downtown Saint Paul has undergone extensive revitalization, with investment in development projects exceeding $1 billion.

Saint Paul continues to profit from the Neighborhood Development Program, a unique redevelopment initiative that has gained the city national recognition. Since 1997, the Saint Paul Port Authority has partnered with neighborhood organizations to select brownfield sites for redevelopment. Through creative use of public and private funding, it has completed several projects, replacing brownfields with light industrial manufacturing facilities and donating land for designated open spaces. Saint Paul funds its brownfield projects with a combination of general obligation bonds, tax increment financing, local sales tax revenues, municipal grants, loan guarantees, Economic Development Administration grants, Community Development Block Grants, Enterprise Community grants, and EPA Brownfields Pilot grants.

The Saint Paul Port Authority has several projects underway. The Great Northern project will clean up and develop 13 acres of brownfield formerly owned by the Great Northern Railroad Shops and the Saint Paul Foundry. Twenty-two acres are already completed; the resulting business center is expected to create more than 500 new jobs. Another twenty-two acres along the Mississippi River are part of the River Bend project; 10 acres of land have been cleaned up, and 120,000 square feet of space has been completed as of early 2005. The $120 million Westminster Junction project is focused on health care; facilities include a new home for Regions Hospital outpatient clinic.

The Phalen Corridor Initiative will bring jobs, housing, transit, workforce, and prosperity to Saint Paul's east side; investors have already invested $570 million in the green-space multi-use creation.

Economic Development Information: Saint Paul Port Authority, Suite 1900 Landmark Towers, 345 St. Peter St., Saint Paul, MN 55102

Commercial Shipping

Saint Paul is a Foreign Trade Zone with duty free facilities. The ports of Saint Paul and Minneapolis are served by nine barge lines operating on the Mississippi, Minnesota, and St. Croix rivers; together the ports handle more than 11 million tons of cargo annually. Considered one of the largest trucking centers in the United States, the Twin Cities are a hub for over 150 motor freight companies that provide overnight and four- to five-day delivery throughout the country. Six rail lines are integrated with both the United States and Canadian railway systems. Air transportation is available at Minneapolis-Saint Paul International Airport from 16 air cargo carriers and 37 air freight forwarders.

Labor Force and Employment Outlook

Local educational institutions assure employers of well-trained workers, particularly in high-technology areas, where engineers, scientists, researchers, and technicians are in demand. The highest growth is expected in the areas of healthcare, technical and social services, personal care, construction, and computer professional occupations. Current projections indicate that workforce participation in the Twin Cities areas should expand faster than population growth.

The following is a summary of data regarding the Minneapolis-Saint Paul metropolitan area labor, 2004 annual average:

Size of non-agricultural labor force: 1,738,000

Number of workers employed in . . .

mining and construction: 82,800

manufacturing: 202,700

transportation and utilities: 335,900

information: 43,000

financial activities: 140,500

professional and business services: 245,900

educational and health services: 216,100

leisure and hospitality: 154,500

other services: 75,800

government: 240,300

Average hourly earnings of production workers employed in manufacturing: $17.59

Unemployment rate: 4.2% (February 2005)

Largest employers (Twin Cities area)	Number of employees
State of Minnesota	55,294
U.S. Government	35,047
Target Corp	35,047
University of Minnesota	29,498
Mayo Clinic	23,378
Allina Health	22,454
Northwest Airlines	21,301
Fairview Health Services	18,700
3M Corporation	18,179
Wells Fargo	13,938

Cost of Living

The Twin Cities' region has one of the lowest costs of living among the 25 largest cities in the United States. The cost of living is reported as being near the national average; the cost of housing and food is below the national average.

The following is a summary of data regarding several key cost of living factors in the Saint Paul area.

2004 (3rd Quarter) ACCRA Average House Price: $296,846 (Minneapolis)

2004 (3rd Quarter) ACCRA Cost of Living Index: 109.3 (Minneapolis/St. Paul) (U.S. average = 100.0)

State income tax rate: Ranges from 5.35% to 7.85%

State sales tax rate: 6.5%

Local income tax rate: None

Local sales tax rate: None

Property tax rate: 17.0% of first $68,000 of market value; 27.0% over $68,000

Economic Information: Saint Paul Area Chamber of Commerce, 401 North Robert Street, Suite 150, Saint Paul, Minnesota 55101; telephone (651)223-5000; fax (651)223-5119