How Will States Manufacturing’s Expansion Impact Dayton’s Economy?

October 29, 2024

States Manufacturing is embarking on a major expansion plan by developing a significant portion of a new industrial building in Dayton, Minnesota. This initiative is set to occupy half of a 1 million-square-foot facility known as The Cubes at French Lake, bringing in high-paying jobs and enormous economic potential to the region. The facility is strategically located, offering logistical advantages that are likely to boost its success. With the expansion representing a substantial $23 million investment, States Manufacturing plans to inject these funds into equipment and site improvements, significantly enhancing the local economic landscape.

Strategic Investment and Job Creation

The expansion represents a major investment, with States Manufacturing planning to inject around $23 million into equipment and site improvements. City documents reveal that the company aims to start occupying the building’s eastern half in 2025. Initiated as a speculative venture, the facility’s leasing was managed by CBRE, and its completion was announced in January this year. Securing this expansion is not an overnight endeavor, as States Manufacturing is also seeking $2.8 million in financial assistance from the state, which will be routed through the Minnesota Department of Employment and Economic Development (DEED). This funding aims to support essential equipment acquisition and necessary building improvements for the project.

The assistance package includes a $1.45 million forgivable loan from the Minnesota Investment Fund and a $1.35 million subsidy from DEED’s Job Creation Fund. These funds are crucial to ensure that the expansion proceeds as planned, preventing the risk of the project relocating outside of Minnesota and jeopardizing local job creation and economic growth. The Minnesota Investment Fund and the Job Creation Fund are both designed to help companies meet specific job creation and capital investment targets, offering financial mechanisms to foster business growth in the state. The city of Dayton aims to leverage this opportunity to attract more suppliers to the area, setting the stage for the development of a major manufacturing hub along the I-94 corridor.

Financial Support from State

The financial assistance package includes a $1.45 million forgivable loan from the Minnesota Investment Fund and a $1.35 million subsidy from DEED’s Job Creation Fund. These funds are crucial to ensure the expansion proceeds as planned and without this support, the project might relocate outside of Minnesota, jeopardizing local job creation and economic growth. The Minnesota Investment Fund and the Job Creation Fund are designed to help businesses meet job creation and capital investment targets. The city of Dayton aims to leverage this opportunity to attract more suppliers to the area and turn it into a manufacturing hub along the I-94 corridor. Jon Sevald, Dayton’s community development director, noted that States Manufacturing does not need additional city approvals other than a building permit, streamlining the expansion process.

The primary role of DEED in this project cannot be overstated. By funneling financial assistance through the city to States Manufacturing, it ensures a smoother logistical process and keeps the project on track for its 2025 timeline. The significant financial commitments reflect a thorough vetting process and underscore the pivotal role of state support in ensuring the expansion’s success. The goal, according to city staff reports, is not just to support the current project but to make Dayton a more attractive destination for other manufacturing companies. This broader vision looks to the future, hoping that the success of this project will create a ripple effect, encouraging further business investments in the region.

Job Growth Estimates and Economic Impact

Currently, States Manufacturing operates a 95,000-square-foot plant in Champlin, employing 130 people. The new Dayton facility is projected to create 340 jobs over the next few years. The job growth is expected to be phased: 68 new positions by 2025, 136 by 2026, and another 136 by 2027. Ultimately, the facility will employ about 400 people, operating 24/7 and significantly contributing to the local economy. The wages for these new positions also range from $66,300 to $84,800 annually, with median wages estimated at $114,400 per year. This wage level is expected to attract skilled labor, boosting the local economy through increased spending and enhanced living standards.

As the facility shifts from being merely a distribution center to a manufacturing hub, the potential for high-wage jobs becomes more feasible, bringing modified benefits to the Dayton community. The transformation invites more significant economic activity and promises a considerable upgrade in local living standards through both direct and indirect job creation. The overall job market and economic landscape in Dayton will be enhanced as the new manufacturing jobs draw skilled workers from the surrounding areas and possibly even from out-of-state, improving overall employment rates and economic prosperity in the region.

Transformation of The Cubes at French Lake

Initially intended to serve as a distribution center, The Cubes at French Lake will now facilitate manufacturing, adding more value to the local economy than initially anticipated. Developed by CRG, this facility marks CRG’s inaugural super-bulk inventory distribution project in Minnesota and stands as the largest speculative industrial venture ever undertaken in the state. The design, overseen by Lamar Johnson Collaborative and constructed by Clayco, was executed to provide flexibility for various industrial needs. This flexibility is expected to attract a wide range of industrial users, driving local economic growth and job creation. Susan Bergdoll from CRG expressed optimism about the facility’s potential to meet the essential demands of e-commerce, logistics, and manufacturing sectors.

The adaptability of The Cubes at French Lake is a pivotal selling point for potential tenants, including States Manufacturing. Its robust design offers the ability to address multiple industrial needs, making it a versatile solution for various types of industrial operations. The transformation from a distribution center to a manufacturing facility is projected to create more job opportunities and stimulate local economic growth in ways initially unforeseen. The flexibility of the facility means that it can also evolve to meet future industrial demands, ensuring its long-term viability and effectiveness in contributing to Dayton’s economy.

Implications for Dayton’s Economy

States Manufacturing is gearing up for a sizable expansion by developing a significant part of a new industrial complex in Dayton, Minnesota. This ambitious project will occupy half of a sprawling 1 million-square-foot area, part of the facility known as The Cubes at French Lake. This initiative promises to create high-paying jobs and inject substantial economic potential into the region. The location is strategically chosen, offering logistical advantages that are poised to amplify the project’s success.

With an impressive $23 million earmarked for this expansion, States Manufacturing plans to channel these funds into new equipment and site enhancements. This investment underscores the company’s commitment to boosting the local economy, transforming the area into a buzzing hub of industrial activity. The development is not just a corporate endeavor; it’s a substantial contribution to the community that will likely yield long-term benefits. Such an initiative represents a forward-thinking approach to growth, ensuring a promising future for both the company and the region.

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