The Free Press, Mankato, MN

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December 19, 2011

Mankato economy bests outstate rivals’

MANKATO — At least as far as retail and service sales are concerned, a combined Mankato and North Mankato has joined Rochester, St. Cloud and Duluth to become among the largest trade centers in Greater Minnesota.

A report released Saturday by the University of Minnesota shows Mankato had $904 million in taxable retail and service sales in 2009. That’s about a tenth less than the third-highest outstate city, St. Cloud, at $1.02 billion.

But it’s more than double the fifth-place city of Brainerd, with $421 million.

The report, completed by the U’s Center for Urban and Regional Affairs, calls the cities in the area of $1 billion “Level 1” cities. And Mankato has joined that group.

Even more than all that, Mankato’s growth rate is “astounding,” according to Will Craig, the lead author of the study.

Sales have grown by 123 percent since 1990, nearly triple the next-highest rate of 42 percent, in St. Cloud.

One more piece of data favors Mankato: the average sales per person of $17,153 (the population of 52,703 includes North Mankato.)

That compares to average per-person spending of $10,668 in St. Cloud, Duluth and Rochester.

The report notes the disparity, but does not have a good explanation except to note that Mankato and North Mankato must do a good job attracting buyers from around the region.

For example, St. Peter has an average spending of only $3,179, and Waseca has a figure of $4,952. This suggests shoppers from these cities are spending their money in Mankato. New Ulm appears to be holding its own, for whatever reason, with a per-capita average of $9,629.

Why?

Is it planning or geography? Chance or effort? Nature or nurture?

The report has examples of both.

Owatonna, it says, became a retail destination by attracting a Cabela’s, and other stores followed.

Other cities get a boon from just being where they are.

Among the highest per-capita spending in the state comes from cities in cabin country, like Alexandria ($25,958) and Wadena ($19,569). The authors speculate these figures are driven by vacationers.

Absent a revolution in personal transportation (like skyrocketing gas prices), geography is likely to remain a factor.

But Craig is fascinated by the ways that local leaders have made their cities into retail and service havens.

“Your town leaders have done something and I sure wish I knew what it was,” he said.   

So, the question for the Mankato and North Mankato trade center sounds simple: Why are you so good?

“First of all, if we know what that secret is, do we want to give it away?” asks Jonathan Zierdt, President and CEO of Greater Mankato Growth, a combined economic development and chamber of commerce.

Perhaps he kept the secret to himself, but Zierdt said there may be a few reasons for Mankato’s relative success.

One is the strength of local manufacturing and agriculture.

“I think probably the most interesting thing is the way that our sectors drive one another,” Zierdt said. “If ag does well, services do well, then manufacturers can attract workers with the amenities here.”

He said the recognition is like the 2008 Metropolitan Statistical Area designation in that the area gets “put on new stages.”

“We’ve been clamoring for a couple of years that we deserve to be at the adult table.”

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