Completed Southeastern Minnesota Economic Study Released

Article by: Chris Giesen

On October 9th, 2018 the Southeastern Minnesota League of Municipalities (SEMLM) and CEDA released a study with an updated economic forecast for southeast Minnesota which included options for several major policy shifts to accommodate population and employment growth over the next 25 years. Among the policy options and recommendations are zoning changes to support greater housing production, expanded transportation networks, a regional tourism strategy, immigrant support resources, and programs to increase access to childcare – all designed to grow the region’s economic development potential.

The study – the first of its kind in the region – forecasts long-range population, employment, and economic activity in the entire Southeastern Minnesota region, on a county-by-county basis. The region, comprised of Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted, Wabasha, and Winona counties, encompasses 77 municipalities, with more than 368,000 residents and 190,000 employees.

“If you want to manage growth effectively, you have to have that information,” says Brenda Johnson, Executive Director of SEMLM.

The SEMLM asked CEDA to assist with the project by acting as a fiscal agent, project administration, and technical expertise.  In 2017, the legislature appropriating $275,000 to CEDA.  SEMLM and CEDA then solicited consulting firms in a search that drew international interest that could provide the expertise and tools to make this project happen.  Receiving proposals for 9 firms, CEDA assisted in the proposal review and ultimate selection of the consultant group HR&A Advisors, Inc. of New York.  Working closely with SEMLM and HR&A throughout the course of the project CEDA also completed all of the required state paperwork and reporting that is tied to legislative appropriations such as this.

“CEDA is very proud to have partnered with the Southeast Minnesota League of Municipalities on this important project for this Region.  Not very often does an opportunity come along to complete the in-depth research that the Legislature authorized to be analyzed.  The Legislature saw the vision that this information can provide. This information will be a valuable resource for municipalities and counties, regardless of size, to help guide their future decision-making processes.  We look forward to continuing to make SE Minnesota a great place to live, work, recreate and do business!” said CEDA President/CEO Ron Zeigler.

“Southeast Minnesota is lucky to have the leadership of SEMLM.  Their members saw a need for this study and will be able to utilize this information in their local and regional planning efforts.   This type of project has never been done before in our region but in order to plan wisely for growth, especially with all of the current economic activity, access to data is critical” added CEDA Vice President Chris Giesen who along with Zeigler made up the CEDA project team.

Among the study’s key findings and related recommendations are:

The population of Southeastern Minnesota is projected to grow by more than 50,000 over the next 25 years. To support this population growth, the region will require an additional 14,000 housing units above the current pace of housing production. A combination of policy changes – including allowing for accessory dwelling units and more density in key downtowns – can be enacted at the municipal-, county-, or state-levels to meet this need. Local officials will determine which solutions make sense for their communities, allowing each community to determine their own course of action.

Regional employment is forecasted to grow by 44,000 by 2040. With 10,000 existing unfilled jobs, the study proposes a series of initiatives to support the region’s existing and growing employment base. By expanding regional transit improvements, there is an opportunity to better match people to jobs throughout Southeastern Minnesota, connecting residential areas to job centers and distributing residential growth throughout the region. The study also proposes that increased access to childcare can improve access to jobs. Entities throughout the region can support the development and operation of childcare centers, and employers can be encouraged to offer services to support families with children. Finally, by supporting the region’s growing immigrant population, which grew from 4.2% in 2009 to 6.4% in 2016, the region can increase labor supply and opportunities for innovation. Southeastern Minnesota can continue to support international migrants with the formalization of existing immigrant services.

Tourism is growing in the region. Supplementing specific employment growth opportunities, the study considers additional initiatives and economic development circumstances facing the region. Given Minnesota’s growing tourism industry, with annual sales at tourism-related businesses growing by 41% between 2005 and 2015, and the strength of the industry in the region, supporting more than 16,000 jobs today, the study proposes that Southeastern Minnesota develop a regional tourism strategy to grow economic opportunities in the industry.

The region’s high health care premiums, relative to elsewhere in the state, may have economic development implications, impacting the region’s ability to competitively attract and retain businesses. The study also reflects on shifting trends in the region’s major industries, including agriculture and manufacturing. By solving for other challenges facing the region described above, however, the study postulates that the region can solve for these challenges.

The full study and data outputs can be found on the SEMLM’s website at www.semlm.org.