Where's the best place to do business in the United States? That's a tough question, but sometimes the perspective of an outsider is useful. For its first plant in North America, the German farm implement manufacturer Geringhoff conducted an exhaustive search of nine regions before finally deciding, in September 2012, on the ideal place: St. Cloud.
To understand how this one particular city in central Minnesota, on the banks of the Mississippi River about 60 miles northwest of the Twin Cities, could outshine others, pay a visit to the Greater St. Cloud Development Corporation (GSDC). Itself a sign of the area's strength, the group of about 70 community-driven private businesses formed in April 2011 to encourage the region's economic development.
Its CEO, John Kramer, points to one of the biggest draws of St. Cloud for business: a high concentration of small manufacturers that can supply parts, components, and materials, or provide services like industrial coating. "That is a huge asset for us," he notes.
Also working in St. Cloud's favor, says Kramer, is the pro-business attitude pervading the local communities: "Our people still have that strong work ethic, and it shows in our productivity and loyalty."
Nicknamed "the Granite City" because of the granite quarries that have operated in the area since the 1880s, St. Cloud began an economic transition in the late 1990s. The area had been dependent on a few key industries, such as forestry, printing, construction materials, and optics. The problem, notes Kramer, was that they weren't necessarily growth industries. Case in point: the recent closing of Verso Paper.
Now St. Cloud is more diverse and has more growth industries, including higher-end assembly operations like New Flyer, a sustainability-minded bus maker out of Winnipeg. For its part, Geringhoff plans to invest more than $20 million in its new manufacturing facility in St. Cloud, with the initial 100 or so jobs just the beginning.
There are additional advantages to the area. With numerous colleges and universities, it has the second-largest concentration of college students in the state, helping it to expand its business service sector. And being adjacent to the oil patch in North Dakota hasn't hurt, either, with construction companies and materials suppliers finding ready customers just to the west. It also helps that it's an hour from the Twin Cities — but costs much less in terms of real estate.
Downtown St. Cloud, meanwhile, is getting a revitalizing boost from projects like Fifth Avenue Live, a redevelopment connecting downtown and St. Cloud State University.
Below, a sampling of some interesting local companies and the reasons they like to call St. Cloud home.
In recent times microbiology has played an increasingly important role in a wide variety of industries, from food to medicine to pharmaceuticals. As companies seek to comply with safety regulations around the world, they need microorganism preparations for quality control purposes.
Microbiologics manufactures and distributes such preparations. Its products are sold in 140-plus countries, with more than 800 bacterial strains in more than a dozen formats.
The company recently redesigned and expanded its operation in St. Cloud, more than doubling its size, and it expects further growth will follow. "We anticipate another addition of similar size on the same site within four to five years," says CEO Brad Goskowicz.
The company has explored other potential locations for its headquarters, but it appreciates the support and cooperation it receives from the area's educational institutions, government entities, and private business groups, plus the availability of qualified, educated workers with a strong work ethic.
"St. Cloud offers a high quality of life and a strong sense of community," says Goskowicz.
In 1973, former IBM sales managers Gary Marsden and Dave Marquardt purchased The Typewriter Shop in St. Cloud, which had 12 employees and $500,000 in sales. That company, now called Marco, has evolved dramatically over the years. It now helps organizations manage their information by applying network expertise to voice, data, video, and print, and it has 620 employees at 35 locations throughout the Upper Midwest.
A 100-percent employee-owned company, Marco cites several factors behind deciding to keep its headquarters — now in a new 80,000-square-foot space — in St. Cloud. Among them are a good local economy, a qualified workforce, and a strong education system.
Over the years Marco has also received support from the city government, the school district, the GSDC, and other local institutions. Tax incentives encouraged it to base its new headquarters on I-94 as a professional gateway to south St. Cloud.
"There's more enthusiasm and momentum now toward continued growth in attracting and keeping new businesses in St. Cloud — and the infrastructure to support it — than I have felt in decades," says CEO Jeff Gau.
Update: In late March 2013, W3i changed its name to NativeX.
Started by three brothers in dorm rooms at St. Cloud State University, W3i helps developers of apps — like those on your smartphone — acquire more users and monetize their offerings. The premise of the business has not changed since it was founded in 2000. "Devices like the PC and smartphones make it easy to distribute free software and apps," says Deborah Manthei, director of marketing communications. "However, developers need a revenue model if they are to continue to produce high-quality products."
W3i opened an outpost in the former Grain Exchange building in Minneapolis, but it's chosen to keep its headquarters in the St. Cloud area for a number of reasons. Aside from a good communications infrastructure — essential to any tech company — a key to the area is the pool of talent generated by its schools. "SCSU as well as surrounding colleges provide a highly educated workforce," Manthei notes.
This along with St. Cloud's relatively low cost of living and high-quality lifestyle have led many of W3i's employees to maintain their roots in central Minnesota and commit themselves to the success of the company.
Founded in 1995, Geo-Comm is a public safety communications company that specializes in uniting geographic information systems (GIS) with state-of-the-art communications networks. It currently serves a customer base of more than 650 public safety communications centers in 43 U.S. states, and it recently launched an international initiative.
Last year Geo-Comm received the GSDC's inaugural iAward, which recognizes innovation. The company was named the Central Minnesota Business of the Year in 2006, and its founders received the National SBA's Minnesota State Entrepreneurs of the Year Award in 2007.
So what has kept Geo-Comm in St. Cloud for nearly 20 years? Besides a business-friendly environment overall, Janet Grones, vice president of operations, gives a nod to the good quality of life, the highly educated and renewable workforce, and the relatively low cost of operations.
Anderson Trucking Service
Anderson Trucking Service (ATS) was founded in 1955 as a granite carrier. It started in St. Cloud because of the proximity to the Cold Spring Granite Company, which remains a top customer. Through its network of business units, ATS is now able to transport nearly any freight from any point in the world to any point in the world.
ATS is made up of 11 subsidiaries and three affiliates. In combination, these units serve general and niche markets in North America and around the world. Each unit has a specific market on which to focus. "We are unique in our composition and in the service we provide," says CEO Rollie Anderson. "No other transportation organization in the world is able to provide the array of transportation services that ATS can provide."
To the burgeoning wind energy market, for instance, it offers trucks and trailers specially designed to handle blades, generators, and tower sections.
Anderson says several factors have influenced the company's decision to remain in the St. Cloud area. Among them are its education, health care, and work ethic, as well as opportunities related to the manufacturing sector.
"St. Cloud is a regional manufacturing center," he notes, "supplying both products for ATS to transport, as well as adding to the economic environment."
Array Services Group
Array Services Group is a professional services outsourcing enterprise with more than 500 employees across three companies: CareCall, ProSource, and J.C. Christensen & Associates. CareCall provides outsourced telephony services. ProSource offers revenue cycle management services to health care providers. J.C. Christensen & Associates (JCC) is a third-party accounts receivable management company.
The group started off in 1977 with the purchase of a small collection agency, and over the years CareCall and ProSource were added. In 2003, Array Services Group was established to bring the three companies under one umbrella to streamline business processes and share services.
The group remains committed to the St. Cloud area, the strength of which is the people, says Matt Isaacson, senior vice president of corporate sales and marketing. "Array has enjoyed a strong employment pool to draw from that has helped fuel our growth through the years," he says. "We believe that the work ethic and commitment to excellence and success by the people of the St. Cloud area is the key to our success at Array."
Granite Equity Partners
Granite Equity Partners is a private investment firm that invests in established companies in or near Greater Minnesota when their owners are gradually moving toward retirement. It then governs and grows the companies over the long term.
"Succession planning and governance are our core services," says managing partner Rick Bauerly. "Private equity capital, and the debt capital that it attracts, is our core product."
The firm was started in St. Cloud in 2002, when 12 family business owners committed the first capital to their first in a series of equity funds. Today, Granite Equity Partners owns a portfolio of nine operating companies that to date have consistently outperformed the public company indices.
"We hope to grow this portfolio to 15 or 20 companies over the next decade," Bauerly says.
He sees the greater St. Cloud area as an exceptional region to start, grow, and innovate a business. "The long tradition and broad base of privately held and family-owned businesses is a critical distinctive advantage," he notes.
Bauerly says the firm has no intention of setting up shop elsewhere. "We remain in and committed to St. Cloud because of the strong regional economy, and because of the vibrant community of talented people that choose to live, work, pray, play, and raise families here."
Coworking spaces are usually associated with bigger cities, but St. Cloud recently got its own. In February 2012, two entrepreneurs opened Cloud Coworking, a collaborative work environment that offers all the usual office amenities (coffee, Internet, meeting rooms, commercial printing, and so on) starting at $35 a month.
The idea for Cloud Coworking came to communications specialist Dawn Zimmerman about four years ago when she was looking for office space and did not want to work alone. "I asked some colleagues if they wanted to share some space," she says. "It really grew from there."
Zimmerman and Jon Ruprecht, owner of nock Design Group, a graphic design and creative agency, opened Cloud Coworking in the old Davidson Opera House.
"We offer ultra-flexibility and help organizations keep their overhead low with plans by the day, hour, and month," says Zimmerman. "We've learned that we do not need leases and strings to have loyalty."
The coworking space has been welcomed by the area's business community. Says Zimmerman: "The St. Cloud area has long been rich in small businesses, and leaders really recognize the need to support these small businesses and startups to increase the vitality of the local economy."