Nancy Edmonds Hanson

It’s been a good year for industrial development in Moorhead. The new year? Even better.
“The vacancy rate for commercial and industrial properties here in Moorhead is 0.7%. That’s almost unbelievable,” says economic development consultant Derrick LaPoint. “Businesses have been facing a lot of challenges in the last few years, between inflation and interest rates, but they’re still looking to expand or relocate.
“This has been a good year – you could almost say ‘unprecedented,’” he continues. In the past 12 months, eight projects have been approved for city incentives, including property tax exemptions for their first three or five years after completion. The projects’ total value, when finished, is officially projected to exceed $14 million, with 150,000 square feet of new or renovated space. “And I think those numbers are low,” he adds. He predicts the final numbers will be closer to 200,000 square feet and $20 million.
Two of the year’s highlights are the announced relocation of two successful businesses to the area. MinKo Construction, a commercial general contractor, plans to move its headquarters from Fargo. The firm that performs demolition work, rough carpentry, finish carpentry and some structural steel erection. Their clients include public school districts, universities, churches, rental facilities and office complexes.
At year’s end, Leister Custom Manufacturing announced it was consolidating its present facilities in Horace, North Dakota, and Hawley, Minnesota, in a new headquarters in the park. The firm manufactures precision-machined parts using computer-aided machining software, CNC milling, precision and 3D machining, short productions runs, prototypes, and CAD to CAM. Its products are sold to several industries including agriculture, pharmaceutical packaging and aerospace.
Both projects were approved for five-year property tax exemptions under the city’s program for commercial and industrial builds. To qualify, projects must increase the property’s value by at least a quarter million dollars and meet minimum job goals. “For the city, it’s a minimal investment at the beginning,” he points out, “with substantial long-term gain through building tax value.”
Three shop-condo developments received exemptions last year, adding a total of 39 of the highly popular individual units. Two are in the old industrial park bounded by 20th Street, I-94 and Southeast Main (Highway 52); the third is just off Highway 10. Other projects approved for property tax exemptions in 2023 include Hedgemasters’ shop building, also in the old industrial park; Moorhead Vision Associates’ new multi-unit facility at the Azool Shopping Center on Eighth Street South; and the Armory Annex next to the Armory Event Center downtown.
What is making Moorhead so attractive to growing businesses in 2023? LaPoint says the answer is straightforward: “We have the land available. Of all the metro area, Moorhead has building-ready sites available. Much of it is owned by the city. It’s priced appropriately, and many of the sites are shovel-ready.” (That is, the infrastructure – streets, utilities and stormwater structures – is already in place.)
The MCCARA Industrial Park includes the largest expanse of build-ready sites in Minnesota, totaling 157 acres. More than a dozen building lots there are being aggressively marketed by Property Resources Group, LaPoint notes, including eight added this year that were funded by a $2 million grant from the Minnesota Department of Employment and Economic Development’s public infrastructure program. Two additional lots have access to a rail spur operated by the Ottertail Valley Railroad. Additional as-yet-unimproved lots also await development.
“Navigating these times is complex. The economic climate is unpredictable,” LaPoint observes. “But we are getting a lot of inquiries from regional and national companies looking at traffic counts and other factors.” Moorhead is also part of the Greater Fargo-Moorhead Economic Development Corporation’s business retention and expansion program. It surveys primary-sector businesses annually about expansion plans, concentrating on those that can locate and sell their products anywhere.
Looking toward the next 12 months, LaPoint – who heads Downtown Moorhead Inc. and has worked as the city’s economic development consultant for the past five years – predicts the strong growth trend will continue, probably accelerating as interest rate increases abate and the economy continues to grow.
As for the long-standing competition with North Dakota, he points to Minnesota’s Border City Enterprise Zone, which provides tax credits to offset the cost of workers compensation insurance along with other specific programs, along with incentive programs Moorhead itself has crafted to close the gap.
“We are incredibly grateful for those businesses that take the time to look at the differences between the two states,” he told the Clay County Commission last month, “but also take advantage of the incentives and opportunities our state is providing.”