Jul. 17—Albert Lea community leaders emphasized the critical need for more housing in the community on Wednesday during an economic overview of the city with the new Southern Minnesota Initiative Foundation president and her predecessor.
As part of a five-day tour of the region, SMIF President and CEO Benya Kraus and former SMIF President Tim Penny stopped at the Albert Lea Economic Development Agency office in Albert Lea and had also expected to travel to Austin, along with Faribault and Northfield, among other cities.
Penny said in driving into Albert Lea Wednesday morning, he purposely made the decision to come in on the south side and showed Kraus the successes happening in the Jobs Industrial Park. He referenced businesses like Schipp’s Pro Power Wash and Infinite Recycling, Design Ready Controls, Vortex Cold Storage and others.
ALEDA Executive Director Phillip Johnson noted Vortex Cold Storage is in its third phase of expansion and also spoke of the Green Acres Milling oat processing company that is being constructed across from the cold storage plant, with the plan to be on line by spring.
While it’s an exciting time for a lot of projects in the community, Johnson said the one thing that has been holding the area back for a long time is housing. Albert Lea has a vacancy rate of 1.5% and has had considerably lower rent prices than neighboring communities, which makes it difficult to recruit developers who are willing to build new using traditional financing and are looking for comparables in the community that will be similar in rent price.
He estimated about 14 groups that have come forward in the last year and a half with pro formas, but so far a developer has not been able to come in with traditional financing and have a project be feasible. He hoped that would change in the near future.
Johnson said several local businesses have voiced to him that they are running significantly fewer employees than they would like to have because there is not enough housing in the community for them to bring in more. Currently about 30% of the city’s workforce commutes to the city from other communities.
Kraus asked if any of the businesses have put any funding into housing, and Johnson said many businesses have been financially supporting the recruitment of new health care options, but he anticipated some might be open in the future.
City Manager Ian Rigg said he has talked to people who say they love the community but do not live here and he has asked these people if they would consider moving to the city. Many say they tried to do that first but were not able to find a place to live.
Johnson and Rigg said the many years of holding rents down and not growing has harmed the city now, as well as its employers because they can’t fill open positions because of a lack of housing options for their potential employees.
Johnson said while most of the interest since he has been in Albert Lea has been on market rate apartments, there is a need for other types of housing as well, including permanent housing, and especially $200,000 to $250,000 homes.
When asked about the local real estate fund, which has raised about $2 million, Johnson said the group recently invested in the new oat mill and was slated to meet this week about ideas for development on the 300 block of Broadway. The group, together with Northfield-based firm Revocity, had previously proposed a 60-unit apartment complex for the 300 block but did not receive grant funding to make the project a reality. He said there are 32 local investors as part of that fund, ranging from $25,000 to $500,000 for investments.
Albert Lea Mayor Rich Murray said he feels good about the community and noted that for the first time in the 40 years he has lived here, he feels like the community is moving forward. He noted they have 50 to 60 projects they are working on at any given time and talked about the importance of working on all the different fronts, whether it’s housing, jobs, child care issues, education issues, or talking with youth about jobs in the community.
“There’s a lot of good things going on in this community,” Murray said. “I think we’re growing as a community right now, which can’t be said for a lot of places out in rural Minnesota.”
Kraus asked the community leaders what they thought was being done now to bring about the success, which may have been different from the past.
Rigg said he thinks the city has had more success recently because the city and ALEDA are removing barriers on potential businesses and they have broadened their net for the types of incentives they can offer to businesses.
They also talked about working on multiple projects at once and putting more money into investing in the future or preparing for potential businesses.
Rigg gave an example with the investment the city, ALEDA and others put into selling and renovating the former Hobby Shop downtown, which is now Ignite Nutrition.
He also said in the past he thinks they were focused more on the “home run” instead of focusing on the “base hits.”
Murray said he thinks one of the things Southern Minnesota Initiative Foundation can continue to help with is bringing in or growing the smaller businesses in the community.
Kraus asked the community leaders what is being done to prepare the next generation of business owners and to make sure a generation of businesses don’t leave without retirement plans in place.
Johnson said that issue is definitely something on their minds, though he did note the city has had success with a lot of people 30 years old and older moving back to the city.
Kim Nelson, dean of academic affairs who works with the construction trades, transportation and manufacturing at Riverland Community College, said the college has identified the need to add an entrepreneurial element to all of the different pathways as well.
Kraus, who called home a mix of Waseca and Thailand, said she was inspired by the visit and said she could feel what she described as “sense of tenacity” from those present in identifying challenges and being able to work on so many projects. She talked about incorporating an integrated approach.
Penny said as they look at the future of southern Minnesota, there will not be a future if they don’t have young people investing.