Project 1 - UMore Park - University of Minnesota

UMORE PARK PROJECT
ECONOMIC ANALYSIS
By Bolormaa Jamiyansuren
August 2012
1
TABLE OF CONTENTS:
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
MARKET ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Demographic overview of the Region
Population
Educational attainment
Income
EMPLOYMENT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Employment and unemployment
RESIDENTIAL ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Household characteristics
Home ownership
CITY OF ROSEMOUNT ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTOR ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Fortune 500 companies in Minnesota
Retail
LAND ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
COMPARISON STUDY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
DEVELOPMENT OPPORTUNITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
REFERENCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
APPENDIX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2
INTRODUCTION
The University of Minnesota Outreach, Research and Education (UMore) Park is a 5,000acre site in Dakota County, Minnesota, earmarked by the University Board of Regents with
the vision of establishing a sustainable, modern, University-founded community of 20,000
to 30,000 people, developed over 25 to 30 years.
The objective of this report is to provide baseline comparison and analysis of various
socioeconomic indicators for the UMore Park area and surrounding localities in order to
support formulation of effective strategies to enhance local economy and equity, as
prescribed by the guiding principles set by the Board of Regents for the UMore Park
project.
In the first section, the report presents demographic and socioeconomic indicators for
Dakota County.
The data presented in this report underscores Dakota County’s strong standing in
economic vitality and potential relative to other counties within the state as well as
throughout the country.
Bolormaa Jamiyansuren
PhD student, University of Minnesota
Graduate Research assistant, UMore Development LLC
jamiy001@umn.edu
This work has been done as a research project for UMore Development LLC of the
University of Minnesota. Any views and errors are strictly that of the author.
3
MARKET ANALYSIS
UMore Park is located in Dakota County, which is the third most populous county in the
state of Minnesota and one of the fastest growing. It is one of the seven counties
comprising the Twin Cities metropolitan area.
The table below summarizes the population, its composition and education attainment
level for the seven county metro with data from the United States and state of Minnesota as
background information and comparison
Table 1. Demographic comparison by state, county and city
Category
Population, 2010
CAGR*
Population % Ch, 2000-2010
% pop 18 and under
% pop 65 and over
Home ownership rate, 2006-2010
High school grads (25 and over)
College grads (25 and over)
Category
Population, 2010
CAGR*
Population % Ch, 2000-2010
% pop 18 and under
% pop 65 and over
Home ownership rate
High school grads (25 and over)
College grads (25 and over)
Category
Population, 2010
CAGR*
Population % Ch, 2000-2010
% pop 18 and under
% pop 65 and over
Home ownership rate
High school grads (25 and over)
College grads (25 and over)
United States
308,745,538
0.93%
9.7%
24.0%
13.0%
66.6%
85.0%
27.9%
Anoka county
330,844
1.0%
11.0%
25.5%
10.2%
82.9%
92.8%
25.7%
Ramsey county
508,640
-0.05%
-0.47%
23.20%
12.20%
62.20%
89.90%
38.90%
Minnesota
5,303,925
0.76%
7.8%
24.2%
12.9%
74.2%
91.3%
31.4%
Carver county
91,042
1.0%
11%
29.5%
8.7%
83.6%
94.8%
42.7%
Minneapolis
382,578
0.0%
0.0%
20.2%
8.0%
50.8%
87.9%
43.6%
Dakota County
398,552
1.14%
12%
25.9%
10.4%
78.3%
94.4%
38.1%
Scott county
129,928
3.8%
45.2%
29.7%
8.0%
86.6%
93.4%
36.0%
St. Paul
285,068
-0.07%
-0.7%
25.1%
9.0%
53.8%
86.6%
45.1%
Hennepin County
1,152,425
0.32%
3.2%
22.6%
11.5%
65.2%
92.4%
44.0%
Washington county
238,136
1.7%
18.4%
26.1%
11.0%
84.4%
95.7%
40.0%
* cagr = compounded annual growth rate
Source: U.S census bureau
4
Population
Although the population growth has slowed compared to the previous decade, Dakota
County still has a higher compounded annual growth rate of population than both the
country and state level. Composition wise, Dakota County has a higher level of young
people and less older people, leaving the county with the highest number of working age
population.
Population growth in Dakota County will continue but at a slower rate than originally
expected. The seven-county metropolitan region is anticipated to increase by 37% between
2000 and 2030, to a total of 3.6 million residents2. As reported by the Metropolitan Council,
Dakota County will have an increase of about 520,000 people by the year of 2030. This
growth will generate demand for quality living space and community development..
CAGR of Population
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
1990-2000
2000-2010
0.0%
-1.0%
Compared to the previous decade (1990-2000) population growth fell both in the counties
studied and greater Minnesota as well as throughout the United States.. However, there is a
uniform increase in the population 65 and over throughout the country and decrease in the
young generation (18 and under).
5
Percentage of Population 65 and over
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
1990-2000
2000-2010
0.0%
According to the 2010 U.S. Census, 13% of the U.S. population was over 65 years old. This
is about a 0.6% increase compared to the previous Census and is expected to increase in
the coming years. Although Dakota County has one of the lowest percentages of population
65 and over, its growth rate was one of the highest after Washington and Anoka counties
with at 40%.
Percentage of Population: 18 and under
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
1990-2000
2000-2010
5.0%
0.0%
Throughout the country, there has been a decline in the population under 18 years of age
compared to the previous decade (1990-2000). This overall decline may be related to the
fertility rate decline and households choice to have fewer children.
6
The decline in population under 18 is 1.7% in the United States and 2% in the state of
Minnesota. Dakota County is highest along with Anoka and Washington in terms of decline
in young population. However, Dakota County still ranks higher than average with its 26%
of population being under the age of 18. This population group is important given that
UMore Park has plans to be developed in the coming decade and this high level of working
age population would likely benefit from future development of the property.
Table 2. Poverty level by jurisdiction
Jurisdiction
United States
Minnesota
Persons below poverty level
13.8%
10.6%
Dakota County
Hennepin County
Anoka county
Carver county
Scott county
Washington county
Ramsey county
Minneapolis
St. Paul
5.6%
12.1%
6.4%
4.7%
4.7%
5.2%
15.8%
22.7%
22.0%
Source: U.S census Bureau 2006-2010
From the perspective of property development, it is of utmost importance to see positive
characteristics in the existing population. Dakota County has one of the lowest levels of
people below the poverty level, at 5.6%. Given the fact that Dakota County is the third most
populous county in the State, this is an outstanding performance. Typically, in counties
similar to Dakota County in terms of size have 2-3% higher level of people below the
poverty level. The only two other counties that are more populous than Dakota County are
Hennepin and Ramsey counties, having 12.1% and 15.8% of their population under
poverty respectively.
Education attainment
The number of both high school and college graduates increased throughout the country.
Minnesota is one of the states that has significantly higher educational attainment than the
national average. Dakota County has always had one of the highest percentages of high
school graduates in the state as well as the country with its 94.4% achievement which
increased by 1.2% over the last decade. In terms of college graduates, Dakota County is
10% and 6.7% higher than the national and state average respectively. Dakota County fell
7
in its previously ranked second highest percentage of population with a college degree in
the 2000 Census. However, Dakota County still ranks close to other counties studied..
Educational attainment
120.0%
100.0%
80.0%
60.0%
High school grads
40.0%
College grads
20.0%
0.0%
Income and home ownership
According to the U.S. Census Bureau’s American Community Survey using 5-year estimates
(2006-2010) median household income of Dakota County was $72,850, which is higher
than U.S. national average and Minnesota average by 20 and 15 thousand dollars
respectively. Median income has been rising for Dakota County for the last decade.
Median household income
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
$72,850
8
In the United States, median home value was $188,400 (2006-2010) whereas in Minnesota
it was $206,200. All seven counties surrounding the metro area have higher value than the
state median value.
Median value of owner-occupied housing units
$350,000
$300,000
$250,000
$243,700
$200,000
$150,000
$100,000
$50,000
$0
Home ownership rate
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
78.3%
A decade ago, Minnesota had a home ownership rate of almost 80%. In 2010, using the five
year estimate, it dropped to 74.2%. In general, all counties had a decline in home
ownership compared to 2000. Urban areas such as Saint Paul and Minneapolis have lower
rate of home ownership, but higher rate of rental properties.
9
II. EMPLOYMENT ANALYSIS
Following the economic downturn in 2007, employment has significantly dropped in the
United States. Regional data shown below is for non-metropolitan areas in Minnesota. In
general, the state of Minnesota has a higher mean and median wage comparing to the
national average.
Table 3. Employment and Wage information
Jurisdiction
USA
Minnesota
Northwest MN
Northeast MN
Southwest MN
Southeast MN
Employment
Hourly mean
wage
Annual mean
wage
Hourly median
wage
Annual median
wage
128,278,550
21.74
45,230
16.57
34,460
2,595,450
22.19
46,150
17.54
36,470
178,000
17.74
36,900
14.71
30,600
51,670
17.17
35,720
14.17
29,470
121,210
17.20
35,770
14.08
29,280
172,110
18.11
37,680
15.05
31,310
Source: Bureau of Labor statistics, May 2011
Until the recession of 2007, Dakota and Carver counties had very high level of increase in
total employment. Dakota County is one of the counties that was hit hard by the recession
and experienced a decline of 2.8% in employment.
Table 4. Total employment change
1990
118,793,000
2,289,665
159,828
138,098
27,136
590,188
260,231
Change
‘90-‘95
5.1%
10.7%
19.4%
17.8%
27.8%
6.8%
4.3%
Change
‘95-‘00
9.6%
7.8%
10.9%
7.0%
15.4%
2.8%
2.4%
Change
‘00-‘05
3.5%
1.2%
3.6%
4.5%
15.8%
-3.2%
-6.4%
Change
’05-‘10
-1.9%
-0.3%
-2.8%
-4.4%
0.4%
-3.7%
-3.8%
Change
2010-‘11
0.6%
1.9%
2.3%
2.3%
2.3%
2.3%
2.3%
Scott
31,929
26.0%
31.4%
27.2%
1.5%
2.3%
Washington
79,691
27.9%
12.9%
5.2%
1.1%
2.3%
USA
Minnesota
Dakota
Anoka
Carver
Hennepin
Ramsey
2011
139,869,000
2,810,789
218,093
177,897
47,583
618,156
255,975
69,751
125,083
Source: U.S Census
10
About 70% of all the employees in Dakota County work for private companies. According to
the Current Population Survey conducted by the Bureau of Labor Statistics, there were
9,452 private establishments and 150,631 private sector employees in Dakota County,
which is an increase of about 2% than in 2010.
According to the Minnesota Department of Employment and Economics Development
(DEED) Dakota County has the lowest amount of employment concentration (%
employment in 10 industries) of any of the 87 counties. There are 16 industries in the
county with 1% or more total employment. This means Dakota County has a more diverse
industry base than any other county3.
Dakota County
250,000
8.0
7.0
200,000
6.0
5.0
150,000
4.0
100,000
3.0
Labor force
Employment
Unemp. rate
2.0
50,000
1.0
-
0.0
1990
1995
2000
2005
2010
The above graph shows the total labor force, total employment and unemployment rate
over the last 20 years for Dakota County. As we can see from above, the labor force has
been increasing for Dakota County. Employment was increasing steadily until the
recession, but is now overcoming the downturn faster than other counties.
Correspondingly, the unemployment rate is on a steady decline which is a good sign to the
county.
11
Table 5. Dakota county employment by city
Jurisdiction
Rosemount
Farmington
Eagan
Burnsville
Apple valley
Lakeville
St. Paul
2000
6,086
3,999
39,272
37,496
28,061
24,717
148,306
2010
Change
% change
6,665
579
9.5%
4,423
424
10.6%
35,928
(3,344)
-8.5%
34,058
(3,438)
-9.2%
27,228
(833)
-3.0%
28,810
4,093
16.6%
133,508
(14,798) -10.0%
Looking at the employment information for past Census years, we can see that the City of
Rosemount had an increase in total employment by 9.5% when other major cities such as
St. Paul, Burnsville and Apple Valley had experienced a decline.
Mean travel time to work (minutes)
30
25
27.2
25.2
22.4
23.8
22.3
25.4
26.3
25.4
22
22.1
21.7
20
15
10
5
0
U.S census. Workers 16+. 2006-2010
In terms of mean travel time, counties with major metropolitan areas have the least travel
time to work given the residents do not have to travel out of the county as much as the
residents of counties with no major metropolitan areas. Ramsey County has the least mean
travel time of 22 minutes and one of its major cities St. Paul has a mean travel time of 21.7
minutes. Another example would be Hennepin County, with its 22.3 minutes, which is just
under the state average. The major metropolitan area andemployment center is
Minneapolis and its travel time is 22.1 minutesIn comparison, Dakota County has a higher
mean travel time than the state average.
12
Table 6. Dakota county residents’ place of work
Dakota
Hennepin
Ramsey
Scott
Washington
Anoka
Carver
90,629
62,901
28,014
4,647
3,787
1,172
979
42.8%
29.7%
13.2%
2.2%
1.8%
0.6%
0.5%
U.S Census
This table shows that Dakota County residents work in their own county the most, followed
by Hennepin and Ramsey, the two major employment centers.
Table 7. Place of residence for Dakota County Employees
Dakota Co. MN
Hennepin Co. MN
Ramsey Co. MN
Washington Co. MN
Scott Co. MN
Rice Co. MN
Anoka Co. MN
Goodhue Co. MN
Carver Co. MN
90,629
17,485
14,204
8,380
8,025
2,817
2,659
1,750
740
42.5%
8.2%
6.6%
3.9%
3.8%
1.3%
1.2%
0.8%
0.3%
According to the data compiled by the U.S. Census 2000, 70% of Dakota County employees
have declared their residence in Minnesota and the remaining 30% are from other states.
Table 7 shows that manyDakota County employees come from a variety of other counties,
no county is represented significantly higher than the other. In short, about half of the
employees working in Dakota County live in Dakota County.
Unemployment
Minnesota has been one the states with the lowest unemployment levels. As can be seen
from the picture, Minnesota is in the lower range of unemployment rate compared to other
states using the 2011 annual averages, with its 5.7% unemployment rate. It is slightly
higher than the best practice of 4-5% unemployment rate (also known as the natural rate
of unemployment) but lower than the national level of 8.9%.
13
In the wake of the most recent recession, a mismatch in the skills of workers and jobs,
extended unemployment benefits, and a rise in long-term joblessness may have raised the
“normal” rate of unemployment above the 5% level that was thought to be typical before
the downturn. In that case, Minnesota is coping with the economic downturn much better
than any other state.
The economic downturn created challenges for many residents of Dakota County. Dakota
County has been largely in line with the state and national unemployment trends while
maintaining lower unemployment rates than the state and national average. At the end of
2010, Dakota County’s unemployment was
7% and in 2011 had lowered to 5.7%.
(Please refer to the Unemployment Data
table in the appendix for more details).
Since 2010 the unemployment rate is
going down although still significantly
higher than before the recession
period..
14
III. RESIDENTIAL ANALYSIS
Household characteristics
Table 8. Total number of households
Geography
United States
Minnesota
Anoka County
Carver County
Dakota County
Hennepin County, Minnesota
Ramsey County
Scott County
Washington County
2000
105,480,101
1,895,127
106,428
24,356
131,151
456,129
201,236
30,692
71,462
2010
% change
116,716,292
10.7%
2,087,227
10.1%
121,227
13.9%
32,891
35.0%
152,060
15.9%
475,913
4.3%
202,691
0.7%
45,108
47.0%
87,859
22.9%
U.S Census
As the population increases, total number of households increase. Number of households
and their characteristics define not only the housing market but also how communities will
develop.
Table 8 shows that the number of households has been increasing throughout the country.
Smaller and newer communities have the highest rate of growth, such as Carver and Scott
Counties. Being the third largest county in the state, Dakota County had a high growth in
number of households with an almost 16% increase.
Table 9. Housing units
Geography
United States
Minnesota
Dakota County, Minnesota
Apple Valley city
Burnsville city
Empire township
Farmington city
Inver Grove Heights city
Lakeville city
Rosemount city
Vermillion township
2000
115,904,641
2,065,946
133,750
16,536
24,261
524
4,233
11,457
13,799
4,845
403
2010
% change 2000-2010
131,704,730
13.6%
2,347,201
13.6%
159,598
19.3%
19,600
18.5%
25,759
6.2%
826
57.6%
7,412
75.1%
14,062
22.7%
19,456
41.0%
7,853
62.1%
463
14.9%
Source: U.S census
15
Again, given the increase in population, number of housing units also increased every year.
Dakota County had an increase of 25,848 units over the last 10 years. One of the trends we
can see from above is that smaller and newer communities are on the rise, such as Empire
Township,Farmington and Rosemount.
CITY OF ROSEMOUNT:
Table 10. Total number of households
Geography
Minnesota
Apple Valley city
Burnsville city
Empire township
Farmington city
Inver Grove Heights city
Lakeville city
Rosemount city
Vermillion township
2000
1,895,127
16,344
23,687
515
4,169
11,257
13,609
4,742
395
2010
% change
2,087,227
10.1%
18,875
15.5%
24,283
2.5%
792
53.8%
7,066
69.5%
13,476
19.7%
18,683
37.3%
7,587
60.0%
424
7.3%
In line with Table 9, cities that had the highest increase in housing units had the highest
level of increase in number of households. Rosemount had 60% increase in number of
households. Given the close proximity of Rosemount to the UMore Park property, this
growth is a very good sign.
Table 11. Rosemount city employment by industry
Industry
Manufacturing
Trade, transportation
Professional services
Education & health
Leisure & hospitality
Public administration
Other services
2000
1254
870
429
1936
319
137
126
2010
1403
1648
239
1533
573
361
210
Change
149
778
-190
-403
254
224
84
% change
11.9%
89.4%
-44.3%
-20.8%
79.6%
163.5%
66.7%
Source: Minnesota Department of Employment and Economic Development, total employment
As Rosemount is growing, public administration industry has become of the major
employers as well as trade, transportation and leisure.
16
IV. SECTOR ANALYSIS
There are 19 companies from Minnesota in the Fortune 500 company list as of 2012, with
the full listing available in the appendix. Of the 19 companies, 13 of them are located in
Hennepin County, 4 in Ramsey, 1 in Mower and 1 in Dakota County.
FORTUNE 500 COMPANIES OF MINNESOTA, RANKING
2012
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
2011
1
2
3
4
6
5
7
8
9
10
11
12
13
16
15
14
17
18
19
20
2010
1
2
3
4
5
6
7
9
8
10
12
13
14
11
15
16
17
19
18
20
21
2009
1
2
3
4
5
6
7
9
8
10
11
14
13
12
15
17
16
20
19
21
18
2008
1
2
4
3
8
6
7
11
10
13
12
14
15
18
16
17
19
22
20
23
21
Company
United Health Group
Target
Best Buy
Supervalu
CHS
3M
U.S. Bancorp
Medtronic
General Mills
Land O'Lakes
Xcel Energy
Ameriprise Financial
C.H. Robinson
Mosaic
Hormel Foods
Thrivent Financial
Ecolab
St.Jude Medical
Nash-Finch
Alliant Techsystems
PepsiAmericas
City
Minnetonka
Minneapolis
Richfield
Eden prairie
Inner grove
St. Paul
Minneapolis
Minneapolis
Minneapolis
Arden hills
Minneapolis
Minneapolis
Eden prairie
Plymouth
Austin
Minneapolis
St. Paul
St. Paul
Minneapolis
Minneapolis
Minneapolis
County
Hennepin
Hennepin
Hennepin
Hennepin
Dakota
Ramsey
Hennepin
Hennepin
Hennepin
Ramsey
Hennepin
Hennepin
Hennepin
Hennepin
Mower
Hennepin
Ramsey
Ramsey
Hennepin
Hennepin
Hennepin
17
The number of Fortune 500 companies in Minnesota has been decreasing since 2008. It
conveniently coincides with the recession time, but our analysis found that the decline has
no relationship to the economic downturn.
In 2008, Minnesota had 23 Fortune 500 companies, making Minnesota the state with the
highest number of Fortune 500 companies per capita and the 3rd in having most number of
Fortune 500 companies per city and 6th state in the country for the most number of
Fortune 500 companies.
By 2012, Fortune 500 companies declined to 19, as Northwest Airlines, former Dakota
County based company that ranked 9th in the state was sold to Delta airlines and
PepsiAmericas, the Hennepin County based beverage company, was sold to PepsiCo,
located in Texas.
Apart from the mergers and acquisitions, Traveler’s Cos, formerly ranked at 5th in
Minnesota or 93rd place in Fortune 500 list in 2008, moved to New York. This major
insurance and property business company still has a great impact on the economy of the
state, but its 26 billion dollar revenue will not be reported to Minnesota.
Another major move was by Alliant Techsystems, Minneapolis based aerospace and
defense company ranked 20th in Minnesota or 472nd in Fortune 500 list in 2010 moved to
Arlington, Virginia. This company generated 3.5 billion dollars in 2010.
Minnesota’s standing
Today, Minnesota ranks at 10th place for its 19 fortune 500 companies (see Appendix for
more details) There are 12 states that have no fortune 500 companies in their jurisdiction.
Rank
1
2
3
4
5
6
7
8
9
10
City
New York
Houston
Dallas
Atlanta
Minneapolis
Chicago
St. Louis
San Francisco
Charlotte
Cincinnati
State
Population 2010 Companies
New York
8,175,133
45
Texas
2,099,451
22
Texas
1,197,816
10
Georgia
420,003
10
Minnesota
382,578
9
Illinois
2,695,598
8
Missouri
319,294
8
California
805,235
8
North Carolina
731,424
7
Ohio
296,943
6
Per capita
181,669.6
95,429.6
119,781.6
42,000.3
42,508.7
336,949.8
39,911.8
100,654.4
104,489.1
49,490.5
18
Of the 13 Fortune 500 companies located in Hennepin County, 9 of them are located in
Minneapolis. Due to this concentration, Minneapolis ranks at 5th in the country.
Based on the industries that Minnesotan Fortune 500 companies are in, the following are
the major sectors in Minnesota:
o Health care, insurance, medical products and equipments
o Food, consumer products, merchandise
o Chemicals
Minnesota: Earnings by industry, 2010
(Source: BEA)
Government
14%
Other
32%
Manufacturing
13%
Health care
13%
Retail trade
5%
Wholesale trade
7%
Professional
services
8%
Finance &
Insurance
8%
The graph above shows the Earnings composition by industry. The state of Minnesota
brings in the most income by ‘government’ related income sources, while
manufacturing,health care, finance and insuranceare very much in line with the industries
of Fortune 500 companies. ‘Other’ constitutes almost 32%, which dwarfs government and
other industries, but keep in mind that it includes all other industries that each accounts for
less than 5%.
19
From the following graph you can see that Dakota County has very similar composition of
earnings with the state of Minnesota. Health care industry accounts for 8%, which is 13%
for the State, apart from that revenue source by industry is in line with that of the State.
Dakota County: Earnings by industry in 2010
(Source: BEA)
Government
13%
Other
36%
Manufacturing
13%
Finance & insurance
8%
Wholesale trade
8%
Retail trade
7%
Health care
7%
Professional
services
8%
RETAIL SECTOR:
In this section, we study the major shopping malls/centers that are operating in Minnesota.
(Full list of major shopping centers operating in Minnesota are listed in the Appendix.).
Of the 17 shopping centers we studied, 8 are located in Hennepin County, 2 in Ramsey, 2 in
Stearns and 1 in each of the flowing 5 counties: Dakota, Olmstead, Stearns, Washington and
Anoka. All these major malls have a management company that is not from Minnesota.
General Growth Properties of Illinois and Simon Property Group from Indiana own 8 of the
17 malls.
20
In terms of the year of establishment, Hennepin County’s Knollwood Mall and Southdale
Center were the earliest major malls with its opening in 1955 and 1956 respectively. Given
that Ramsey County has been the second largest county in the state, next two malls were in
Ramsey namely the Har Mar Mall and Rosedale Center; followed by 6 more malls opening
in the 1970s. Gavidae Mall and Mall of America are the newest among the list with its 1989
and 1992 openings.
Those major malls generally have 2-5 anchor tenants. As for the number of stores, Mall of
America is the largest with its around 520 stores and 4.2 million square feet retail floor.
Excluding Mall of America, a typical mall would have 45-160 stores and ranges from 400
thousand to 1.3 million square feet in retail floors. Considering the current population, we
do not suspect any major malls will open in the near future.
Population and its median income have a high correlation with the location of the malls
today.
The City of Rosemount has retail sales per capita of $3,507 versus state level retail sales per
capita of $13,751. It is due to the close approximate of shopping areas and major centers in
the neighboring city of Apple Valley. Although it is convenient for the residents of
Rosemount and future residents of the UMore Park property, it will not generate income
for the City of Rosemount, which in return will be drag to promote and protect the city and
its development.
21
V. LAND ANALYSIS
This part is to study the value of land in given jurisdiction and try to estimate the future
trend as well as to determine what factors matter most to increase or decrease the land
value.
Agricultural land value per acre
$80,000
$70,000
$60,000
Apple valley
$50,000
Eagan
$40,000
Farmington
Inner grove
$30,000
Rosemount
$20,000
Empire township
$10,000
$0
1993
1998
2003
2008
The UMore Park property is very close to the City of Rosemount. Both Empire Township
and Rosemount land has been increasing steadily but with a very slow rate. Compared to
that, bigger cities in Dakota County such as Apple Valley, Eagan and Inner grove
experienced much faster growth in land value per acre.
90,000
80,000
70,000
Apple valley
60,000
Eagan
50,000
Farmington
40,000
Inner grove
30,000
Rosemount
20,000
Empire township
10,000
2009
2010
2011
2012
22
Starting 20097, the definition of green land, agricultural land and others have been
changed. (Refer to the supplement file for details).
We can see the land value after 2009 from the above graph. Following the recession, land
value decreased every following year. Rosemount,Empire Township, and Farmington did
not experience much decline in value and stayed steady while bigger cities that enjoyed a
high land value pre-recession lost value. This shows a positive sign as it is best to have less
fluctuation in land value for the properties surrounding the UMore Park property.
However, note that bigger cities such as Apple Valley may have gone through huge decline
in land value; but it is still triple the value of Rosemount city land value.
We can see from above that Dakota County is in part of the state where the farmland price
per acre is the highest, with its over $4,000 per acre value.
23
$91,000
Green land market value per acre
$81,000
$71,000
Eagan
$61,000
Apple valley
$51,000
Farmington
$41,000
Inner grove
$31,000
Rosemount
Empire
$21,000
$11,000
$1,000
1993
1998
2003
2008
A very similar scenario can be seen for the green land with agricultural land. Cities with the
most population and establishments grow in land value faster than those that are not.
$120,000
Green land market value per acre
$100,000
Apple valley
$80,000
Eagan
Farmington
$60,000
Inner grove
Rosemount
$40,000
Empire
$20,000
$0
2009
2010
2011
2012
Again, following the recession, significant drop in land value is seen for all the major cities
of Dakota County. The City of Rosemount and Empire Townships are sustaining their value
much better than any other city.
Please refer to the separate Stata file for Regression analysis of land value
24
VI. COMPARISON STUDY
Based on the study of comparable developments to UMore Park (refer to Martin Kohn’s
study for details about the development), I have chosen Fort Devens as the case to compare
in this section, mostly due to its comparable size of land (4,400 acres). Fort Devens is
located in Middlesex County in the State of Massachusetts.
In this part of the report, I will compare the annual income of the residents, number of
establishments and number of employees working for the private sector in the Middlesex
County to Dakota County and state of Massachusetts to the State of Minnesota in order to
understand the possibility of developing the UMore Park property for similar purposes.
Average Annual pay
Industries
Total, all industries
MA
Growth rate
2009-2010
MN
Growth rate
2009-2010
Middlesex
Growth rate
2009-2010
Dakota
Growth rate
2009-2010
3.00
3.83
4.95
2.02
6.34
3.83
7.73
3.14
Natural resources and mining
2.39
9.26
(1.93)
(0.22)
Construction
0.50
-0.75
(1.29)
(2.18)
Manufacturing
8.57
5.08
10.30
5.86
Service providing
2.46
3.95
4.54
1.96
Trade, transportation, and utilities
0.83
2.52
(0.61)
2.33
Information
8.70
3.43
12.50
3.28
Financial activities
4.29
4.04
10.22
7.71
Professional and business services
3.19
6.06
2.64
1.89
Education and health services
2.95
2.56
5.09
(1.36)
Leisure and hospitality
1.30
4.37
0.06
1.69
(2.14)
-1.02
(0.68)
2.42
Goods producing
Other services
Source: BLS
25
The above table shows the average annual pay for all establishment sizes obtained from
Quarterly Census of Employment and Wages data series5. (Full data is in the attachment)
Average annual pay for all industries in the State of Massachusetts is $11,406 higher than
the State of Minnesota. No matter which industry we look at, annual average pay is higher
in Massachusetts.
However, if we look at the growth rate of the average annual pay by the industries,
Minnesota has higher growth rate when we account for all industries. Some industries in
Minnesota are growing their pay much faster than their Massachusetts counterparts, such
as natural resources and mining, trade, professional services and leisure and hospitability.
The only sector that is not growing its pay in Minnesota is construction. Although it did not
decrease from year 2009 to 2010, construction is one industry that has the lowest growth
rate in pay for Massachusetts. In short, both Massachusetts and Minnesota have similar
patterns in the growth rate of pay although in monetary value wise, Massachusetts pays
much higher than Minnesota.
Middlesex County compared to Dakota County in terms of average annual pay is much
more severe than the comparison of the states. In 2010, average annual pay for all
industries in Middlesex was $24,555 more than Dakota County’s. The biggest difference is
in Information sector, which is the strong sector for the State of Massachusetts as well as
the Middlesex County with its $45,940. This shows that working in a same industry in
Dakota County, one will be paid about $70,751 on average whereas in Middlesex it will be
$116,691. The closest industry in terms of average annual pay is Leisure and Hospitability
industry with its $6,000 difference. It is the closest among the list of industries, but it is a
significant difference as it is equal to 42% of the annual pay in Leisure industry in Dakota
County.
In the State of Minnesota, mining industry was one of the fastest growing in annual pay
industry, but same is not true in Dakota County. Apart from mining, construction and
education sectors had decline in average annual pay in Dakota County.
Number of establishments
In order to understand the significant difference in pay, I am going to look at the number of
establishments present in each counties and states. (Full list in appendix)
Massachusetts and Minnesota are a good sample to compare as their total population is
quite close to one another than many other states. Massachusetts has 1.2 million more
people than Minnesota.
26
Number of establishments
MA
MN
Middlesex
Dakota
Industries
Growth rate Growth rate Growth rate Growth rate
2009-2010
2009-2010 2009-2010
2009-2010
Total, all industries
3.35%
-1.06%
2.94%
-3.04%
Goods producing
1.05%
-3.02%
0.57%
-6.54%
Natural resources and mining
3.96%
4.22%
5.75%
1.96%
Construction
1.76%
-3.00%
1.38%
-7.55%
Manufacturing
-1.18%
-4.95%
-1.61%
-5.39%
Service providing
3.71%
-0.63%
3.33%
-2.36%
Trade, transportation, utilities
1.19%
-1.75%
1.45%
-3.10%
Information
2.02%
-0.75%
2.57%
-1.83%
Financial activities
0.16%
-3.77%
0.22%
-3.94%
Professional, business
services
3.00%
-0.06%
3.17%
-2.32%
Education and health services
2.37%
2.94%
1.69%
0.82%
Leisure and hospitality
3.49%
-0.39%
4.31%
-1.85%
Other services
9.88%
0.37%
8.20%
-1.84%
Source: BLS
In terms of number of establishments, Massachusetts has about 59 thousand more
establishments than Minnesota. Manufacturing is the only industry in which Minnesota has
more establishments, which is in line with section of this report on sector analysis.
Service providing industry is the strongest in Massachusetts, especially due to its high
number of professional and business service providers and education industry. Minnesota
experienced mostly negative growth from 2009 to 2010 in most of its industries whereas
Massachusetts had a slight increase in number of establishments.
Very similar patterns can be seen when comparing the counties. There are 38,000more
establishments in Middlesex compared to Dakota County. In general, Middlesex County is
more comparable to Hennepin County of Minnesota with its establishments and total
population.
Unlike average annual pay indicator, number of establishments and its growth patterns are
very similar in the counties to its respective states. Natural resources and mining and
education, health services are the only two sectors that had growth in establishment in
Dakota county. Almost all sectors in Middlesex County increased within the time period
studied.
27
Number of Employees in private sector
Now that we have looked at the number of establishments, it is crucial to look into the
number of employees working in each industry for the jurisdictions studied.
Number of employees in private sector
Industries
Total, all industries
Goods producing
Natural resources & mining
Construction
Manufacturing
Service providing
Trade, transportation, utilities
Information
Financial activities
Professional, business services
Education and health services
Leisure and hospitality
Other services
MA
MN
Middlesex
Dakota
Growth rate Growth rate Growth rate Growth rate
2009-2010 2009-2010
2009-2010
2009-2010
0.46%
-0.53%
0.87%
-0.83%
-2.26%
-3.06%
-3.07%
-4.13%
0.99%
-3.78%
-1.71%
0.90%
0.40%
0.59%
-2.44%
0.38%
1.65%
2.40%
3.53%
5.41%
-6.29%
-2.69%
0.06%
-1.20%
-1.45%
-0.64%
2.42%
1.09%
-1.21%
-0.75%
-7.72%
-2.56%
-3.14%
1.58%
-1.45%
6.29%
-0.16%
4.22%
-0.45%
3.38%
2.20%
1.94%
-10.02%
-1.85%
-0.10%
1.37%
-6.43%
-0.84%
-2.45%
1.50%
1.12%
-0.70%
Given that state of Massachusetts has more population than Minnesota, naturally the
number of employees is higher by 548,970 people. In 2010, there were 37 thousand more
people working in manufacturing and 15 thousand more in natural resources and mining
in Minnesota, which makes Minnesota having 33 thousand more people being employed in
production industry compared to the state of Massachusetts. However, Massachusetts has
significant advantage in service providing industry by employing 582,000more people than
Minnesota.
One major indicator is that in Minnesota, number of employees is decreasing by 0.5% in
2010 compared to a year ago.
28
In Dakota County, construction and information sectors have declined in employment
while the information industry in Middlesex County is having the highest rate of growth in
number of employees.
This shows that comparative advantage and specialization are very different in these two
counties and correspondingly in the two states. In terms of property development, Fort
Devens has significant advantage in location compared to the UMore park property due to
its high number of establishments, employees in each sector and most importantly being
located in high pay region.
VII. DEVELOPMENT OPPORTUNITIES
The main advantages of the UMore Park property are:

Central location
UMore Park has 5,000 acres located in close proximity to all the major cities within
30 minute distance. As shown below, 25 miles radius from the UMore Park property
are theCity of St. Paul, Minneapolis and other metropolitan areas. It is at the heart of
the ever growing Greater Minneapolis region.

Tax system
Dakota County maintains the lowest property tax rate in the State of Minnesota. That
means that for each unit of value for a property, property owners in Dakota County pay the
least amount2.

Large, educated labor force
From top corporate executives to skilled manufacturing workers, world class researchers,
human resource in the area is very dynamic and diverse. Many nationally recognized
research faculties and educational programs are in the area.

Educational resources of top universities, colleges and vocational schools
As with its tie with the University of Minnesota, UMore Park is supported by those highly
skilled workers. Also, Dakota County Technical College is located right next door, which can
provide skilled, directly targeted specialists for the companies and organizations.
29

Size of property
UMore Park is one of the biggest properties dedicated for
master planned community development.

Transportation (easy access to airports)
The property is located under 30 minute driving distance
from the Minneapolis- Saint Paul International airport and
close to major cities and generally well connected to the
state’s economy.

Advanced manufacturing
Having been the number one state for having many Fortune 500 companies per capita and
a home town for the biggest privately owned company, the Cargill, manufacturing is one of
the strongest suits of the state as well as the county. Dakota County maintains the lowest
property tax rate in the State of Minnesota. Each unit of value for a property, property
owners in Dakota County pay the least amount in tax, which is very rewarding for the firms
to grow and develop further.

Excellent medical facilities
Residents will have access to array of outstanding health care services and providers,
including the nation’s best clinics such as Mayo clinic are located less than 40 miles
distance from the property.

Booming market
Biggest cities in Minnesota such as Minneapolis and St. Paul have exhausted its population
growth and as seen from the part one of the report, they are having negative growth, which
means there are increasingly high needs for communities near major metropolitan areas as
to accommodate the ever increasing population of Minnesota.

Nature
UMore Park is located right next to Vermillion Highlands, recreation and wildlife
management area.
.
30
VIII. REFERENCES
1. United States Census Bureau http://www.census.gov
2. Dakota County Comprehensive Annual Financial Report, last three years
http://www.co.dakota.mn.us/CountyGovernment/BudgetFinance/FinanceReportsC
AFR.htm
3. Minnesota Department of Employment and Economics Development (DEED)
http://www.positivelyminnesota.com/
4. State and local policy program
http://www.hhh.umn.edu/centers/slp/economic_development/data_development_
resources/index.html
5. Bureau of labor statistics http://www.bls.gov
6. Center for economic and policy research http://www.cepr.net/
7. Minnesota Department of revenue http://www.revenue.state.mn.us
31
IX. APPENDIX
All the data is from U.S census unless otherwise noted.
Total Unemployment
1990
US
7,047,000
MN
123,193
Dakota
6,015
Anoka
6,523
Carver
1,024
Hennepin
24,451
Ramsey
10,754
Scott
1,498
Washington
3,090
Unemployment rate (%)
1990
US
5.6
MN
5.1
Dakota
3.6
Anoka
4.5
Carver
3.6
Hennepin
4.0
Ramsey
4.0
Scott
4.5
Washington
3.7
1995
7,404,000
99,385
4,924
5,176
854
18,399
8,220
1,261
2,749
1995
5.6
3.8
2.5
3.1
2.4
2.8
2.9
3.0
2.6
2000
5,692,000
93,966
5,215
4,805
981
17,718
8,102
1,406
2,879
2000
4.0
3.3
2.4
2.7
2.4
2.7
2.8
2.6
2.4
2005
7,591,000
122,782
8,417
7,515
1,678
24,648
10,896
2,545
4,500
2005
5.1
4.2
3.7
4.0
3.5
3.8
4.0
3.6
3.6
2010
14,825,000
206,142
16,216
14,870
3,467
45,176
20,045
5,188
9,045
2010
9.6
7.0
7.1
7.9
6.9
7.0
7.4
7.1
6.9
2011
13,747,000
170,965
13,938
12,601
2,842
39,604
18,048
4,394
8,089
2011
8.9
5.7
6.0
6.6
5.6
6.0
6.6
5.9
6.1
32