An in-depth report on Mankato’s economy in Sunday’s Free Press showed the region has many bright spots mostly driven by the private sector, but also faces threats to growth, mostly from state and federal governments.
Opportunities include Mankato’s somewhat unfettered growth in residential and commercial development. Roadblocks include state highway funding, costly water quality rules imposed on cities and a federal government seemingly unable to accomplish immigration reform or health care reform.
Mankato City Manager Pat Hentges pointed to at least four major residential/commercial developments on Mankato’s east side in the year ahead which will require about $7 million in road, sewer and water infrastructure. The extension of Adams Street to Blue Earth County Road 12 will open up vast areas for what Hentges calls “job creating” developments.
The City Center of Mankato-North Mankato continues to grow as an entertainment destination with plans for a new seven story office building, restaurant and event center at the corner of Second and Main streets by developers Tony Frentz and Rob Else. Developer Mike Brennan is very near launching his Bridge Plaza building a block or so away at the gateway to Old Town.
North Mankato is on the rise as well. City Administrator John Harrenstein said the city will reach about $28 million in new construction in 2017, including a significant memory care facility on the old Tschohl property. Developers built 70 multi-family housing units in the last year, more than the previous five years combined. The city also sold 25 acres in its industrial park and has another 50 ready for development.
But just as the region faces opportunities, there remain threats to growth. While the Mayo Clinic System in Mankato has launched a $65 million surgical suite expansion, the organization exists in a federal health care environment that remains unsettled at best and potentially chaotic at worst.
And all the Mankato and North Mankato development may face stricter water quality rules as the Minnesota Pollution Control Agency sets new standards that many cities are already planning to challenge in court. Stricter phosphorus standards could drive up Mankato’s water treatment costs by $10 million. All of these new rules are driven by water quality deterioration in the Minnesota and Mississippi rivers and Lake Pepin.
Transportation funding or the lack thereof at the state and federal levels will continue to be a millstone around the neck of regional growth. While strides have been made in the last few years to upgrade Highway 14 across Minnesota to a four-lane, key gaps exist near Owatonna and New Ulm. Stricter rules on the Corridors of Commerce funding may threaten completion of Highway 14 as a four-lane.
While many Mankato businesses will likely benefit from federal tax reform, the cloud over health care funding and its costs may dampen business enthusiasm for investment. Federal subsidies to the fragile insurance markets have already dried up. The removal of the individual mandate in Obamacare has led many analysts to believe a sicker insurance pool will cause health insurance price increases for everyone.
Health care facilities and providers may once again see their losses from “uncompensated care” skyrocket as federal requirements for emergency rooms to treat uninsured people have not gone away.
The Mankato-North Mankato community has been successful at controlling those things in its control. That bodes well for the future.
But the challenge remains for this relatively small community to have influence at the state and federal level in order to get help controlling those things that may be controlled by others who are elected but not yet successful in solving problems in a bipartisan way.