Agenda - Council - 05/12/1981 - Laserfiche WebLink

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PORT AUTHORITY OF THE CITY OF SAINT PAUL "The Port Authority of the City of St. Paul has had a 'significant impact' on the city's em. ployment and economic growth in the past 15 years. " That's the conclusion of a report issued recently by the Midwest Research Institute's Center for Economic Studies. In its detailed report to the Port Board of Commis- sioners, the research firm studied the employment and econo- mic growth of all firms placed or financed in St. Paul by the Port Authority since 1965. It then compared those figures to the overall city numbers for Minneapolis, St. Paul and Duluth to determine what impact the Port Authority has had on the growth of St. Paul. The report also shows that St. Paul has '"ared considerably better than the state's two other first class cities in terms of job retention and growth, and overall econo- - mic growth. "Port Authority projects have directly affected 16,640 current jobs since 1965, or 9% of all St. Paul jobs," the report also says. "This represents 63% of St. Paul's job growth from 1965 to 1980." The report goes on to say that when you consider "the secondary jobs, the effective impact of the Port Authority since 1965 ranges from 18,719 to 22,473 jobs. The share of St. Paul employment ranges from 10% to 12% and the share of growth from 72% to 86%." In analyzing the "maximum impact" the report shows Port Authority "involvement" in a total of 31,426 jobs. The MRI report states, "This represents 17% of all St. Paul jobs in 1980 and 121 % of the growth since 1965." All three of Minnesota's first class cities showed declines in manufacturing employment since 1965. However, St. Paul manufacturing jobs ieclined by only 4% in that period while Minneapolis lost 26% md Duluth lost 29%. "St. Paul Port Authority activities," the ..-: report on employment concludes, " have essentially made the 'difference in manufacturing jobs." ,. In terms of capital expenditures the report shows St. Paul's growth to be well above either Minneapolis or Duluth. The average annual growth rate of St. Paul manufac- turing firms rose 8.3% from 1967 to 1977, while Duluth's rose 6.7% and Minneapolis only 2.8%; An MRI survey of Port Authority firms established since 1965 shows total capital expenditures of $523 million, or 24% of the $839 million invested by all St. Paul firms in that period of time. The Port Authority firms' contributions to St. Paul's sales and value added totals from 1967 to 1977 also enabled St. Paul to lead both Minneapolis and Duluth in those growth categories. The MRI report estimates St. Paul's total gross sales to have been $ 8.6 million in 1980. Of that total, the report says, Port Authority projects generated an estimated $1.6 billion, or 19% of all St. Paul sales. St. Paul not only led Minneapolis and Duluth in the growth of value of shipments by manufacturing firms (1967~ 77), but also led Des Moines, Kansas City, Milwaukee anQ>Omaha, the report shows. In the "value added" category, St. Paul's total figure for 1980 is estimated at $4.8 billion by MRI. "Of this amount," .. ~~-==.~-,+--,..;..-="""",~..,.,~.~~.,... MRI says, "Port Authority projects contributed an r.:;timated $ 833 million, or 18% of the total." Comparing St. Paul in value added, the report shows St. Paul's rate of growth from 1967 to 1977 to be 6% per year, Minneapolis 4.5%, and Duluth 5.4%. The report also shows that firms assisted by the Port Authority paid $4.7 million in property taxes to local gov- ernment in 1980. This represents 10% of the $47 million in taxes paid by all St. Paul firms. "The St. Paul commercial-industrial tax base grew more rapidly than that of other Minne- sota central cities during the 1970's," the report concluded in an assessed evaluation. The report also noted that "St. Paul used tax incre- ment financing much less than in either Minneapolis or Du- luth, where a greater share of the increase was needed to retire tax increment bonds." MRI attributes Port Authority successes on its ability to "integrate property and fmancial management to have maximum impact on St. Paul's economic development" and on using "its financial resources to make the industrial revenue bond a more effective tool." MRI explains, "The Port Author- ity uses accumulated funds from land leasing, sales and interest on investments as a reserve against revenue bond defaults. This approach has allowed the Port Authority to obtain an 'A' rating for revenue bonds issued by the Port Authority. The 'A' rating makes the bonds more saleable and allows the Port Authority to obtain a more favorable interest rate for its clients. Furthermore, there is no financial risk to St. Paul tax- payers." (Revenue bonds do not pledge the full faith and credit of a city as do general obligation bonds.) In its final conclusion, the MRI report says that the "Port Authority should continue to focus its efforts on attraction and retention of industrial jobs." "It is important that the Port Authority con. tinue to have access to its current development tools if it is to have an impact on St. Paul's economy in the 1980's." Ge<<;>rge W. Winter, President of the Port Authority Board of Commissioners, said of the report, "It shows that the maximum impact of the Port Authority on all sales in S1. Paul in 1980 was $2.5 billion or 29% of the total. That's virtually $1 out of every $ 3 . . . and proves that Port Authority indus- trial development activities are absolutely vital to the economy of S1. Paul." St. Paul Mayor, George Latimer, was similarly impressed with the employment statistics. "Jobs are the real key to our future," said St. Paul's Mayor Latimer. "When you consider that Port Authority projects directly contri. buted 63% of St. Paul's jobs growth from 1965 to 1980, there is no question that the Port Authority is the key to our future success in that regard." Midwest Research Institute, a Kansas City-based firm, produced the 91-page report through its North Star Labora- tories in Minnetonka. It took four months to complete the study. EDITORS NOTE: For further information on this study, contact William E. McGivern at 224-5686. -,... -.,-.-:"-:;:~:.~': ~-:::'77-,:.s:::,,'.~~-"':":'::":~,~'~;"':'_:~'_..~ . _~;_ -=-'~;:; '":" :-:7;.;__;--:.,'.~::,:::..:. ~"~~.::.;~~:+;~~~ 2:: :~,;;.::..:..;:..~ ;~~..._;;;:.'.!:::,:::,;:~_ -_~.