Project: I-94 / Opportunity Drive Interchange

1.0 Synopsis

In 2003, Minnesota DOT built a new highway interchange at the intersection of I-94 and Stearns County Road 75 (formally referred to as CSAH 75, or County State Aid Highway 75) in St. Cloud, MN.  There previously was a highway overpass at that site.  Now referred to the “Opportunity Drive Interchange,” it cost $7.85 million). The site is adjacent to a pre-existing industrial park.  Prior to the interchange construction, vehicles accessing the site had to use an interchange two miles north on I-94 and then traveled on county roads to reach the industrial park and other nearby destinations. The primary objective of the project was to attract new businesses and employment to the area.  It also reduced the costs and hazards associated with tractor-trailers traveling on existing secondary roads.

Prior to planning for the interchange, only one manufacturing facility had operations within the I-94 Business Park. The interchange was promised by MnDOT to enable Minnesota to compete and win a national competition for a large new bus factory, and it subsequently enabled the City to also attract several other major manufacturers to the region.  The net impact has been a gain of over 1,100 jobs to the region.

2.0 Background

2.1 Location & Transportation Connections

St. Cloud is the largest city in Central Minnesota and center of the St. Cloud metropolitan area, which is itself part of the Minneapolis-St. Paul Combined Statistical Area.  Interstate-94 is a key freight and multimodal corridor connecting Chicago and Seattle. The 70 mile segment between the Twin Cities and St. Cloud represents one of the fastest growing segments of the entire I-94 Corridor in terms of population and employment.

The Opportunity Drive Interchange is located 5 miles south of downtown St. Cloud at the southern edge of the City.  It was identified in the City’s 2003 Comprehensive Transportation Plan as a new “gateway node” for the City, representing the City’s closest interchange to the Twin Cities. CSAH 75 is a 2-lane highway that connects Clearwater to the south, and the St. Cloud central business district to the North. It is an important highway for the region, merging with Highway 23 in downtown St. Cloud. CSAH 75 links the core of downtown St. Cloud, with its many commercial and retail uses, to other residential and industrial areas in the region.

The project area is about 60 miles northwest of Minneapolis, within the St. Cloud MSA which is also part of the larger Minneapolis-St. Paul combined statistical area (CSA).  St. Cloud Regional Airport is 13.5 miles northeast, and Minneapolis-St. Paul International Airport is 72 miles east of the site. St. Cloud has a BNSF-owned rail station used by Amtrak for passenger service; while the closest freight rail facility is in the Minneapolis-St. Paul area.

2.2 Community Character & Project Context

The City of St. Cloud has a population of over 65,000 residents. The St. Cloud Metropolitan Area has over 190,000 residents, and has been rapidly growing.  Its population increased 13 percent from 2000 to 2010, or a rate of 1.2 percent per year. The economy grew as well. Overall GRP (gross regional product) grew 15.4 percent during the same period (1.5 percent annually); and employment remained relatively constant, growing 2.3 percent (0.2 percent annually). However, post-recession, employment has grown at a rate of 1.6 percent in 2011, and 2.0 percent in 2012, suggesting more recent gains in employment.

The St. Cloud I-94 Business Park is adjacent to the interchange.  It is a176 acre industrial park suited for manufacturing and related uses, zoned as “I-3 Industrial Zoning.”  It was built by the City of St. Cloud in conjunction with St. Cloud Opportunities, Inc. (a non-profit organization that acted as developer of the Business Park) and local utility companies. The siting of a new business park at this location was part of a larger effort to develop a new economic growth corridor at the fringe of the city that would be accessible to the Minneapolis-St. Paul area.  The interchange area was annexed into the City of St. Cloud in 2000. The area south and west of the interchange includes the City of St. Augusta. The Mississippi River, is 1.5 miles east of the interchange.

The area located at what is now the southernmost end of the city and is adjacent to agricultural land uses. Besides the business park, there is now a “Highway Commercial District” that is characterized by a small mix of service businesses, gas stations and franchise restaurants. Un-buffered parking lots and storage areas are also visible in the area.  Other non-residential land uses include a waste water treatment facility 1.2 miles northeast of the interchange. 

3.0 Project Description & Motives

The interchange is located near the edge of Stearns County in the City of St. Cloud at the location where the four lanes of I-94 passed over the two lane CSAH 75. The interchange project involved adding access and egress ramps between the two highways. The site is 3.2 km (2 miles) southeast of the existing CSAH75/I-94 interchange in St. Cloud, and 6.4 km (4 miles) northwest of Trunk Highway 24/I-94 interchange in Clearwater, MN.

The project was built to attract new manufacturing industry to the region and state, and was funded by an economic development arrangement in which the City of St. Cloud and Stearns County split half of the construction cost and the State of Minnesota covered the other half.  The project was seen by the City and County as enabling broader planned growth of a new industrial corridor at the South end of St. Cloud, which would be a new “gateway node” for the region.  It was further seen by the State as part of the I-94 Interregional Corridor Management Plan, which sought to encourage regional development and access management at specific areas along one of the state’s premier interregional corridors. And the project was most immediately motivated by the fact that St. Cloud, MN was a finalist (and Minnesota’s entry) in a national competition for the site of the planned new U.S. manufacturing plant of New Flyer Industries, a Winnipeg-based bus manufacturer. Improved highway access was required to successfully attract that factory. 

The project was seen as a critical support to enable growth of investment and employment at a recently built city-owned industrial park that was developed by the City in conjunction with the nonprofit “St. Cloud Opportunities” organization.  The industrial park was developed to enable regional job growth for St. Cloud by providing a premier quality industrial park facility that had amenities and location advantages to attract new business and economic development to the region. The location advantage was that it is not only along I-94, but also 15 minutes closer to Minneapolis-St. Paul than any other industrial site in the St. Cloud urban area.

 The interchange would enable businesses there to have direct access to the interstate highway, as well as improve safety conditions for trucks by reducing turns and usage of local roads, and also improve safety conditions of local roads by reducing truck usage on them.

Yet another motivation for the project was to accommodate future local and regional traffic growth on I-94, CSAH 75 and TH 24. This was consistent with local planning that designated this area for industrial growth. City plans called from the conversion of land near the interchange from primarily agricultural to primarily commercial and industrial by 2020.  

The new interchange was initially referred to as the New Flyer Interchange (because it had been built to enable a new manufacturing plant of New Flyer Industries), but it was renamed in 2003 when the City of St. Cloud conducted a naming contest and the name “Opportunity Drive” was selected (in recognition of the role of St. Cloud Opportunities).  

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

The St. Cloud I-94 Business Park is alongside the intersection of I-94 and CSAH 75.  It was developed starting in in 1996 and opened in 1997 with its first tenant, Menasha Packaging Corp. (which subsequently moved out).  There was no further action until 1999, when a concerted effort was made to attract the new US bus manufacturing facility of New Flyer Industries. The attraction of that business, which grew from an initial 400 to now have 600 employees, was facilitated by the promise of MnDOT that a new I-94 interchange would be built adjacent to the site. There were also tax increment financing and tax abatement programs offered.

With plans for the new interchange announced, Creative Memories (a manufacturer of photo and scrap books) built a manufacturing facility in the business park in 2002 that subsequently employed 107 workers.  That facility closed in 2013 when the Ohio parent company (Antioch) filed for bankruptcy. Once the new highway interchange was finished in 2003 and opened in 2004, there was renewed interest in the industrial park.  Subsequently, new buildings were constructed in 2005 for Anderson Trucking Services (with 360 jobs), in 2006 for Arctic Cat’s ATV engine manufacturing plant (with 43 jobs), in 2006 for Gold Leaf Plastics, now called Aubright (with 100 jobs), and in 2007 for FedEx Ground (unknown number of jobs). 

Currently, over 1,100 employees work at the park – all of them associated with businesses that moved in either after completion of the interchange (500 jobs) or moved in beforehand but with the promise of the interchange coming soon (600 jobs). Many of the jobs generated at this industrial park are solid middle-class jobs, with firms reporting wages in the range from $16 to $22 per hour, some managerial staff making over $60,000 per year, and executives making over $100,000 per year. All of the businesses except FedEx are manufacturers serving national markets, meaning that they could have invested in locations outside of the region or state, but chose this site for its workforce access, delivery access and utility advantages. FedEx Ground required a distribution site in Central Minnesota near the vicinity of St. Cloud. 

Most of the firms were originally based outside of St. Cloud, initially expanded by siting new employees in St. Cloud and later further expanded operations.  For instance, Arctic Cat was based in Thief River Falls, MN. Gold Leaf Plastics was based in Waite Park, MN and started with 65 workers, later expanding to 100.  Anderson Trucking Services was already based in St. Cloud, started by relocating 250 jobs to the site and subsequently expanded to 360.  New Flyer Industries was based in Winnepeg, Canada and started with 400 jobs at the site, later expanding 600 jobs. 

The finding of local impacts is reflected in empirical analysis of employment data (Iacono, 2013; see link at end of case study).  The analysis showed that the City of St. Cloud experienced positive employment growth at a rate exceeding the state average during the years 2005 – 2007, which is precisely the same period as when the new industries moved into and expanded at the industrial park following opening of the highway interchange.  The study also found business openings and expansions in the City of St. Cloud jumped during that very same 2005-2007 period– a trend not reflected at the statewide level.  The positive trends during that period are in contrast to negative job growth that occurred during both the period before opening of the interchange (2003 and earlier) and the subsequent national recession starting in 2008 (which wiped out the earlier employment gains at the citywide level), though those outcomes more correctly reflect broader patterns not related to the interchange project.  The study also found no local impact on retail or wholesale employment, not surprising since the interchange area was zoned industrial and all attracted new business was either manufacturing or transportation services.  

5.0 Non-Transportation Factors

The Opportunity Drive Interchange was a major investment by that was promoted by the State of Minnesota economic development office for the purposes of attracting and retaining business to the new I-94 Business Park. This, in turn, allows the areas zoned as industrial to continue to grow – and the county reports certain agricultural plots re-zoned for industrial uses in this area. Additionally, the county was able to develop other utilities to the industrial park, and provide adequate electrical, water, sewer, and internet/telecommunication services. These infrastructure services, in turn, can be used to further enhance what is primarily agricultural use around the site. 

6.0 Resources

6.1 Citations

1. City of St. Cloud Target Area Plans. http://www.ci.stcloud.mn.us/DocumentCenter/Home/View/859
2. Minneapolis/St. Paul Business Journal, August 20, 2006.
3. http://www.bizjournals.com/twincities/stories/2006/08/21/focus3.html
4. Iacono, Michael. Case Studies of Transportation Investment to Identify the Impacts on the Local and State Economy, MnDOT Research Services, 2013.
5. http://www.cts.umn.edu/Publications/ResearchReports/pdfdownload.pl?id=2236
6. Minnesota DOT (2002), Environmental Assessment: CSAH 75/I-94 Interchange 

6.2 Interviews

Organization

Anderson Trucking

New Flyer

Five Star Transportation (Contractor for FEDEX)

Gold Leaf Plastics

Minnesota DOT District 3

City of St. Cloud Economic Development Authority

Footnotes

Case Study Developed by EDR Group