Construction boom part of 'year of wow'
River Falls' recent "State of the City" video looking back at 2016 declared it "The Year of Wow." The city especially had a "banner year" when it came to economic development, according to City Administrator Scot Simpson.
"It's a good indication for the health of the local economy that there's people making capital investments," Simpson said. "I think what that means is we're doing something right as a community."
What constitutes a "banner year?"
River Falls had $47,595,221 of construction in 2016 — that's according to building permits issued in 2016.
By comparison, the city had a total of $15,163,861 in construction in 2015.
Most of that increase, Simpson said, was due to commercial construction. The city went from $4,610,505 in commercial construction in 2015 to $35,844,796 in 2016.
Simpson and Community Development Director Buddy Lucero said that commercial construction can be further broken down into new construction and additions or alterations to existing buildings.
What drove that development?
"You can't underestimate the overall national economy getting better and the regional economy," Simpson said.
He said the River Falls area also has a strong "entrepreneurial spirit."
A lot of that $47,595,221 in 2016 development — $31,488,311 in fact — is due to new buildings going up around the city.
Several of those are multi-million dollar projects, including:
• A $16 million building — one of the largest projects of 2016 — going into Sterling Ponds Corporate Park along Highway 35, belonging to Winfield Solutions, a subsidiary of Land O'Lakes. Winfield does research and development for Land O'Lakes and already had a facility in Whitetail Ridge Corporate Park, across the road from Sterling Ponds Corporate Park. The company also has an existing relationship with UW-River Falls, according to Eric Spandl, with Winfield.
According to the UWRF website, Winfield is the crop and seed division of Land O'Lakes, and produces crop treatments and has worked with the Mann Valley Farm for years.
Spandl said construction on the new building in Sterling Ponds is going very well. The facility is expected to be operational in August.
Spandl said Winfield chose River Falls for many reasons.
"The existing relations that we had with the University of Wisconsin-River Falls, and we already had a lot of research activities going on," Spandl said. "It's somewhat of, I guess, a three-way relationship between the need to do field-related activities and be reasonably close to the corporate office, and staff that had both field and lab and office responsibilities, so it was a really good fit for us to continue that relationship."
Spandl said that Winfield built in 2016 because the business was ready to grow.
"There was no magic to 2016," he said. "We came to a point in time where there were issues in the business where we were deficient on space, plus we were looking at planned growth, part of our long term strategy. It all came together as part of our planning process and that's when we were able to pull the trigger."
He said Winfield has been very pleased with the city employees and representatives the company has worked with so far.
• A $4.2 million facility in the Mann Valley area, belonging to Winfield. This facility is strategically located near the UW-River Falls Lab Farm, also in Mann Valley.
• A $5 million building going up in Sterling Pond Corporate Park, belonging to TW Equities LLC. The building is set to house Turnkey Corrections and Three Square Market. According to a news release upon the building's groundbreaking, the 115,000-square-foot building will hold 150 employees, and the businesses are planning to increase their workforces at the new location. The building was set to be operational in early 2017.
TW Enterprises owns many companies, Simpson said, including Turnkey Corrections. Turnkey Corrections provides services to inmates, including kiosks in public areas of correctional facilities. These allow family and friends to deposit money for inmates, provides messaging for them and more.
Turnkey Corrections COO Patrick McMullan said the company chose to build in River Falls because the city showed the most interest in working with the company and bringing it to the community.
"River Falls provided the best opportunity regarding topography of the location and increased draw of being in a brand-new business park," McMullan said. "The package and incentives the city gave us for choosing them — it was no-brainer."
McMullan said progress on the building continues. The second floor is still being completed, but McMullan said most of the company's employees are already working from the facility on the main floor.
The building is expected to be completed soon with a grand opening planned for spring.
The company expects to add between 75-100 employees over the next two to three years and continue hiring as time goes on.
"River Falls has been exceptional to work with," McMullan said. "They are very active in contributing and connecting us to other partners within the city. They didn't just provide us a deal to a location but have truly been a partner throughout the entire process."
• A $3,751,307 new wastewater treatment facility for the city. Utility Director Kevin Westhuis said the new facility was a much-needed upgrade. He said the new facility went online in November 2016 and it increased the facility's energy efficiency and cut down on the truckloads of waste the city hauls to a larger facility in Ellsworth for disposal. And, Westhuis said, the new facility is a safer environment for wastewater workers.
Westhuis said the wastewater facility upgrade was planned awhile ago.
"It may have coincided and looked like it was related to development going on, but that was more a coincidence than planned around any new development," Westhuis aid. "With that said, it's always good to have an updated facility to be able to handle potential development projects."
• Allina Health River Falls Clinic, a new $6.8 million medical clinic belonging to Allina Health, adjacent to the River Falls Area Hospital. The under-construction 13,500-square-foot clinic will provide space for primary and specialty care providers. Hospital representatives said market research indicated there was a need for more medical care services in River Falls.
That overall total of $47,595,221 in construction does not include additional ongoing projects that were started (and issued permits) before 2016.
For example, this number doesn't include the value of the Falcon Center — UWRF's new athletic facility, which broke ground in 2014.
Many local businesses decided to make larger additions or renovations in 2016. Simpson and Lucero speculated that some of the first renovations may have created a snowball effect.
Much of the renovation was in the Main Street area.
Additions and alterations permits totaled $4,189,035 in 2016. Individual projects ran from $500 to over $2 million.
Some of the larger projects ($150,000 or more) included:
• First National Bank of River Falls spent about $2,200,000 on a large addition/renovation. Planning for the project was actually started in 2012, said FNBRF president Jeff Johnson.
"We had definitely outgrown our footprint about five to six years ago, thus we needed to start planning for the future," Johnson said. "We looked at several different options and eventually settled a 6,500-square-foot expansion out into our parking lot."
"Substantial completion" of the project is planned by the end of the first quarter of the year.
• Allina Health Systems completed various renovations including expansion and renovation of the surgery suites, an upgraded CT scanner, remodeling the special care unit, and a storage expansion. Allina spent $1.2 million on the surgery suites, $1 million on a new CT scan, $900,000 on a storage expansion, and $345,000 on renovating the special care units.
That may seem like a lot of construction for one year, but River Falls Area Hospital Director of Operations Bruce Craven said the hospital makes a practice of making improvements and renovations every year to improve patients' experience at the hospital.
"I think Allina Health does invest quite a bit every year, it just happens that this year is probably a little bit more apparent from the outside," Craven said. "Allina Health has high standards to ensure we at River Falls Area Hospital are keeping up with the latest technology, which leads to excellent quality care right here at home."
Craven said that these projects are designed to improve patient care, whether they'll be visible to patients or not.
"Our patients aren't going to be aware of their surroundings right when they're in surgery," he said.
Craven said the hospital expects more specialty surgeons to rotate through the hospital once the new clinic opens, to allow more procedures one on a timely basis.
"We just continue to want to meet the health care needs of keeping care close to home — that's important to Allina Health," Craven said.
• The River Falls Youth Hockey Association spent $150,000 on adding new locker rooms to the Wildcat Centre on Cemetery Road. The building is now up to nine locker rooms. Those include a locker room for the River Falls Renegades, a junior hockey team for men ages 16-20, aimed at helping them develop their hockey skills; a locker room for the St. Croix Fusion girls' hockey team; the high school boys varsity and junior varsity teams; and five locker rooms used by other hockey programs. Linn said the RFYHA needed the new locker rooms because the association had expanded, and to accommodate the River Falls Renegades. The team is a new addition to the RFYHA. The team started in October of 2016 in River Falls, and the season continues, with playoffs coming up.
"They've been good ambassadors to hockey," Linn said. "They've represented the association well."
He said the RFYHA plans to extend the team's contract with the association.
The association's other hockey teams have also been doing very well. Linn said growth has been driven by some learn-to-skate programs that provides equipment and coaching time to kids for free, giving 60 kids (30 boys, 30 girls) a chance to learn to skate.
"We've experienced steady growth, I'd say, over the last four years," Hockey Association President Frank Linn said, "And we anticipate that growth moving forward as well."
Meanwhile, the 2016 development will increase the city's property tax revenue over the next couple of years, according to Assistant City Administrator Julie Bergstrom.
"Property tax revenue is generally a year or possibly two years behind the construction of the improvements," Bergstrom said. "Construction started 2016 would generally be taxed on the partial construction value as of 1/1/2017 for payment in 2018, and full value on 1/1/2018 for payment in 2019.
"My estimate of city property tax revenue for fully taxed properties constructed in 2016 would be $231,181, but this revenue probably won't be fully realized until 2019. "
She said property tax revenue received in 2017 increased by about $65,000 over the last year, due to pre-2016 projects.
A more immediate impact local residents will see is more job opportunities.
"These business and property owners that are investing, they're invested in the community, which means they're more likely to participate in the fabric of our life here," Simpson said. "That's a benefit to everybody...They want the community to succeed, so they in one sense, the more they invest into their property and their business here, that's going to give them more incentive to invest in the company's success, too."
Simpson said the city doesn't expect another $47 million in economic development next year, but the city is hoping at least for another robust year.
"We don't have a number in mind," Simpson said.
He added that River Falls is looking for "any and all projects that fit with the character and the vision of the community going forward."
The St. Croix Valley Business Incubator is planned to start in 2017. NCCM Company has announced a significant addition to its manufacturing facility in Whitetail Ridge corporate Park.
Simpson and Lucero said they also expect continued residential growth in 2017.