St. Paul last week, in effect, got word of a twofer that secures the downtown presence of a duo of the region’s corporate leaders.
In a town that aspires to be “open for business,” the developments are worth particular note:
— Ecolab, the water, hygiene and energy technology company with a long history here, has agreed to buy the Travelers tower, the distinctive, pyramid-topped fixture on the downtown landscape.
— Travelers, which is consolidating its 2,100- employee workforce into its adjacent smaller building, has said it has no plans to pull out of downtown St. Paul, the Pioneer Press’ reported.
Ecolab’s decision, which will involve relocating all of its 1,500 downtown employees within the next few years, is “extremely noteworthy,” observes Cecile Bedor, a former St. Paul director of Planning and Economic Development, now with Greater MSP, the regional development partnership: “Investment at this level by a Fortune 500 company is only made if the business case to do so is solid, and firmly grounded in strong economic analytics.”
2014 Ramsey County property records put the value of the Travelers building at $36.8 million and the accompanying land at $6.7 million, according to the Pioneer Press’ report.
The decision suggests “that Ecolab is going to be in St. Paul for a long, long time,” Louis Jambois, president of the St. Paul Port Authority, told us.
For observers who’ve been around downtown for decades, such developments are fresh confirmation of St. Paul’s overall momentum. It’s been a long time coming, “but it’s here,” Jambois said.
“We have a product people want,” and that product is downtown St. Paul, he told us. Rather than simply envying Minneapolis, “St. Paul is finally getting comfortable in its own skin,” and people in the real estate and development marketplace are sensing that.
St. Paul is proud of what it has to offer that is distinctly different, “and that’s our competitive advantage,” Jambois said, describing a modern downtown with old-world charm and riverfront connections in a compact, accessible setting.
Joe Spartz, president of the Greater St. Paul Building Owners and Managers Association, told us there is a “pretty positive sense” among his organization’s members about the direction downtown.
Residential growth “really is a very positive trend for the downtown area,” he said. Attracting more people to the city’s core “creates a greater vibrancy, which then folds over into retail,” which then impacts commercial office space.
“It doesn’t happen in one day, and the office space tends to be more on the tail end of feeling the impact,” but commercial-space gains do follow, as the residential population continues to increase, Spartz said.
With the positive trends comes a note of caution to consider as we strive to keep and grow a strong business base in the downtown of the future: Commercial property taxes tend to be high relative to peer downtown areas across the nation, Spartz told us.
With taxes typically passed on to the tenants, that creates a situation with “additional cost for the tenant and their operation,” he said, and “we don’t want them thinking about where else” they might relocate to reduce their overall expenses.
When it comes to “barriers like that in terms of what it costs them to operate a business in downtown St. Paul,” Spartz said, there’s cause for attention to “bringing those down as much as we possibly can.”
In a town working hard to market its distinct advantages and keep its precious momentum, that’s attention worth paying.
