The Free Press, Mankato, MN

October 21, 2013

Greater Mankato Growth spurns N. Mankato's offer

Joining cooperative effort has been among city's goals

By Dan Linehan
dlinehan@mankatofreepress.com

---- — NORTH MANKATO — On Thursday, Greater Mankato Growth told North Mankato that it was withdrawing its invitation for the city to join its regional economic development group.

The deal that city staff had been negotiating to join the group, which formed in 2009, seemed dead, at least for now. North Mankato had withdrawn in 2008 from an earlier version of the economic development group, and re-joining a cooperative effort was among the city’s goals.

Despite this setback, the City Council voted 4-1 Monday to allow its city administrator to negotiate a deal with Greater Mankato Growth based on five conditions and an entry fee of about $30,000.

Those conditions and that spending level are both unacceptable, GMG President and CEO Jonathan Zierdt said Monday. It appears, in other words, that North Mankato will not join the economic development group unless one of the sides “blinks first,” as Councilman Kim Spears put it.

There are both philosophical and financial differences between the city and Greater Mankato Growth, but the dollars and cents are more straightforward.

When North Mankato left Greater Mankato Growth in 2008, it was paying about $34,000 a year, Harrenstein said. To simply join the newer group, called the Regional Economic Development Alliance, the city could have paid a similar amount.

But one of those five conditions is that North Mankato get a seat on Greater Mankato Growth’s board of directors.

The economic development group is comprised of seven cities and counties. The city of Mankato is the only one with a permanent board seat, and the other six members share two seats.

But, in recognition of the fact that it is likely to get the most benefits, Mankato pays twice as much, per-capita, as the other members.

So if North Mankato wants to join at Mankato’s level (with a board seat), it would have to pay at Mankato’s prices, Zierdt said, or else the deal would be unfair to the other members.

“Instead of tailoring them (the rules) to their liking, they need to be able to subscribe to what’s already in place,” Zierdt said.

And while the city has budgeted about $30,000 to join the group, it would be “very difficult” to muster up twice that amount in the 2014 budget, Harrenstein said.

Mayor Mark Dehen, who said he is still hopeful that a deal can be reached, didn’t argue that point.

“We have to live within our means,” he said.

Harrenstein said there has been disagreement among the council between those who think that regional collaboration threatens the city’s independence and those who think the go-it-alone mentality is the bigger threat. The five conditions, and the price tag, are the politically and financially feasible offer, he said.

Though Councilman Billy Steiner voted against the offer, it seemed to have the support of the rest of the councilors.

“I don’t think I want to deviate from that,” Councilman Kim Spears said. “I don’t think I would accept any less. We’re a major player.”

“Absolutely,” Steiner said, while Councilwoman Diane Norland nodded.

One of the five conditions would require Greater Mankato Growth to report to North Mankato quarterly on the marketing of Northport Industrial Park.

That attitude is an example of why North Mankato isn’t ready to join the Regional Economic Development Alliance, Zierdt said.

“Our focus is to make sure we showcase all the assets at the same time,” he said. “We don’t operate with a zipcode mentality.”

In a letter to the city sent on Monday, Zierdt said the communities looking to join the economic development group realize collaboration is important to their success.

“It is apparent to us such an environment does not yet exist among some city of North Mankato leaders,” it reads.

In a related issue, the city took its own steps on Monday to market its industrial park. Councilman Bob Freyberg suggested looking for a Realtor to market the land. The resolution passed unanimously.