In the media, a large city is usually symbolized as a skyline — a compact mass of tall buildings, filling dozens of vertical miles. But glance out an airplane window as you fly over Wisconsin’s St. Croix Valley, and you’ll not only see the city centers of New Richmond, Hudson and River Falls, among others, but you’ll also see fields of residential and commercial neighborhoods dotted with sections of new development — a testimony to this community’s continued growth, even during a time of economic uncertainty.
While unemployment rates still haunt this region, the continuing development and expansion of St. Croix County is playing a role in commercial real estate and land planning throughout the region. And it’s even a bigger role in the economic strength and vitality of the community at large.

ECONOMIC DEVELOPMENT
According to Bill Rubin, executive director of The St. Croix Economic Development Corporation (EDC), the fortunes of St. Croix County, and the fortunes of the St. Croix Valley, are tied to the vitality of the Minneapolis-St. Paul metro area. The Hudson-based St. Croix EDC is a private non-profit organization, which operates exclusively for the economic development of St. Croix County. The organization actively promotes and solicits the location of industry and business to St. Croix County and works to foster the expansion of existing companies and the successful start-up of newly formed ones.

“Both St. Croix and Pierce counties are included in the federal definition of the 13-county Twin Cities metro area,” Rubin says. “Throughout 2010, several news bureaus, including MSNBC and Moody’s, tracked the Twin Cities as being in a recession. For St. Croix County, this translated into higher than normal unemployment rates, a slowing of our population gains, and a time-out in the housing market.”

According to the Wisconsin Department of Workforce Development, St. Croix County’s unemployment rate, estimated at 6.1 percent for November 2010, rose for the second consecutive month. In September, St. Croix’s rate was 5.4 percent and the October rate was announced at 5.7 percent. Despite the increases, it’s still better than a year ago when St. Croix’s unemployment rate was estimated at 7.3 percent.

Fourteen counties had unemployment rates lower than St. Croix in November. Dane County recorded the lowest rate at 4.7 percent, followed by Buffalo, at 4.9 percent, and Dunn at 5.2 percent. Menominee County had the highest rate in November at 13 percent and Bayfield County was at 10.5 percent.

“Unemployment rates usually tick upward at this time of year due to the seasonal nature of some businesses,” Rubin says. “All counties aligned with the Momentum West region have unemployment rates that are lower than one year ago. While this is encouraging, employers have a long way to go to achieve consistent rates below five percent. Just five years ago, the November 2005 unemployment rate in St. Croix County was 3.8 percent and Wisconsin’s rate was 4.7 percent.”

According to Logan Kelly, director of the Center for Economic Research at the University of Wisconsin-River Falls, the job market news at the national level is mediocre at best. In December, 103,000 jobs were added, but these jobs were mostly in the health care and leisure and hospitality sectors. Health care has mostly high-skilled, high paying jobs. Leisure and hospitality has mostly low-skilled, low paying jobs, with few mid-level jobs. Unfortunately, leisure and hospitality is precisely the sectors where many St. Croix jobs lie.

“Tourism is a draw within St. Croix County,” Kelly says. “Several of the communities in the St. Croix Valley have vibrant tourism industries. Unfortunately, many of the jobs generated from the tourism industry are low-skill, low-pay positions. While this industry is a source of employment, I do not see tourism as a significant source of growth.”

GROWTH IN NUMBERS
St. Croix County is one of Wisconsin’s fastest-growing counties with town and cities growing by leaps and bounds from 2000 to 2010. According to the St. Croix EDC, by numeric increase, the City of Hudson added an estimated 3,125 people from 2000 to 2010, followed by Hudson (up 1,732 additional residents), New Richmond (up 1,697 residents) and Richmond (up 1,336 people).

As an outlying county in the Twin Cities metro area, St. Croix communities have experienced large population gains that go back to the 1970s and 1980s, Rubin says. “Balancing population gains with additional demands on community services like public safety, infrastructure and school expansions can be a difficult task for local officials. The communities in St. Croix have retained their small-town charm even with the population gains.”

Population gains have helped to increase sales tax revenue. The Wisconsin Department of Revenue recently posted January to December 2010 sales tax distributions to counties that have enacted the 0.5 percent local sales tax. The Department of Revenue summary shows $4,884,055.57 was distributed to St. Croix County in 2010 compared to 2009 distributions of $4,778,627.75, for a one-year increase of $105,428 or 2.2 percent.

St. Croix, Polk and Pierce counties comprise Wisconsin’s St. Croix Valley. According to the Department of Revenue, like St. Croix County, sales tax distributions to Polk and Pierce were up in 2010. Polk County had an increase of $63,339 (up 2.85 percent from 2009) and Pierce collected $104,666, or 7.35 percent, more than in 2009.

INDUSTRY GROWTH
Most business sectors seem to suggest that the worst of the recession may be in the rearview mirror. As Rubin points out, Wisconsin’s Village of Baldwin was successful in recruiting J&C Trucking from Forest Lake, Minnesota, to its new I-94 Business Park last August. The Wisconsin Department of Commerce assisted with a tax credit award worth almost $100,000 and the state’s transportation agency awarded Baldwin a nice $250,000 infrastructure grant to offset the cost of constructing a couple of streets in the park, all tied to J&C’s project. Meanwhile, Duro Bag Manufacturing Co., based in Kentucky, announced the closure of its production facility in the town of Hudson. This impacted 65 jobs.

“St. Croix is not dominated by one or two large industries and that’s a good thing,” Rubin says. “Home builders, general contractors, and the trades sector have all been slowed. The county and the St. Croix Valley are home to several plastic injection molding companies. Most of them are aligned to medical product or scientific companies. Business for them seemed to be brisk in 2010.”

The region is celebrating an expansion of its health care industry with the new Cancer Center of Western Wisconsin. “This new facility is being constructed in New Richmond and is a joint effort of the hospitals in Amery, Baldwin, Hudson, Osceola, St. Croix Falls and New Richmond,” says Thomas Schumacher, an attorney at Bakke Norman in New Richmond and a board of director for the St. Croix Economic Development Corporation. “The facility, which began construction last summer, will be open for business in May or June of this year. It will enable cancer patients in this part of the state to have access to treatment without having to drive into the Twin Cities or over to Eau Claire.”

As is often the case when the economy is doing poorly, the first signs of recovery come from the smaller entrepreneurial business ventures. “Engineered Propulsion Systems located in New Richmond has recently received a Wisconsin Community Development Block Grant (CDBG) and raised an additional $800,000 on a new design for a general aviation engine,” Schumacher says.

In fact, on November 17, 2010, Gov. Jim Doyle announced a CDBG loan to Engineered Propulsion Systems to assist with its development of an innovative aircraft engine. As a pass-through conduit, the county agreed to loan the funds to the company, subject to the terms and conditions outlined by the state Department of Commerce. Engineered Propulsion Systems is required to match the block grant loan with private funds. This was accomplished through a group of “angel” investors from the New Richmond area, as well as the Chippewa Valley Angel Investors Network and a group of angel investors from the North Shore region of Minnesota.

In December 2010, Kohlberg & Company LLC, a private equity firm in Mount Kisco, New York, acquired Phillips Plastics Corporation. The company is a leading manufacturer of highly engineered injection-molded plastic and metal products with annual sales over $250 million. Phillips employs 1,300 people in 14 locations throughout the United States, including Hudson and New Richmond in St. Croix County.

According to the St. Croix EDC, it is expected that the acquisition will accelerate Phillips’ ability to serve its customers on a global basis. According to the news release, Kohlberg plans to maintain current operations, allowing Phillips’ long-standing tradition of design, development and manufacturing excellence to continue unimpeded.

Brad Wucherpfenning, Phillips’ current chief executive officer, will continue to lead the company and the entire management team will remain in place.

On the downside, two plant closings at Polaris in Osceola and Clopay in Baldwin have resulted in the loss of over 500 jobs. On the flip side, Federal Foam Technologies and Phillips Plastics Corporation are in the process of completing or planning expansions.

Tourism also continues to play a strong role in the region’s economy. With St. Croix’s close proximity to the Twin Cities, several St. Croix valley communities, including Hudson, cater to “day trippers,” who may spend part of a day in the St. Croix Valley, but return to their residences rather than spend money on lodging.

“From a tourism perspective, the St. Croix Valley along the St. Croix River between Wisconsin and Minnesota is heavily used by people from the Twin Cities and Wisconsin,” Schumacher says. This area also serves as the gateway for travelers to the Spooner, Hayward and Cable areas.

“Historically, businesses from the Twin Cities have filled the business and industrial parks in Hudson, River Falls, Hammond, Baldwin and New Richmond. In more recent years the relocations have slowed,” Schumacher says. “It will be interesting to see how the change in Governors in the two states will affect the border business climate.”

ON THE HORIZON
So what does the future hold for Wisconsin’s fastest growing county? “All of us are interested in tracking the early successes of Gov. Scott Walker,” Rubin says. “His mantra is akin to ‘Wisconsin is Open for Business.’ Legislation has been introduced on several fronts aimed at getting Wisconsin residents back to work. And one of the proposed bills creates the Wisconsin Economic Development Corporation, which will privatize the economic development functions housed in the Department of Commerce.”

According to Schumacher, the St. Croix Economic Development Corporation continues to play a significant role in both the retention of existing businesses and connecting new businesses with local EDCs and the resources from the Department of Commerce and other government agencies.

“St. Croix County has for several years been the fastest growing county in the state on a percentage basis, again because of the influence of the Twin Cities area,” Schumacher says. “This part of the state is closer to a larger metropolitan than any other location in Wisconsin. As a result it is a prime spot for growth as the economy begins to recover.”

By Maura Keller

Maura Keller is a freelance writer originally from Wisconsin.

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