NORTH MANKATO — The two cities haven’t yet said “I do,” but there was no sign of dissent between a quartet of council members from Mankato and North Mankato on the prospect of marrying the economic development operations of the two sometimes-rival cities Wednesday night.
Discussions, held by the Intergovernmental Committee, are at the preliminary stage and neither council has gone beyond authorizing an exploration of the idea. But if it moves forward to the extent considered Wednesday night, the change could result in the closest coordination between North Mankato and Mankato in a long history of attempted partnerships and ensuing break-ups.
Among the possibilities is the establishment of unified policies on the use of taxpayer-subsidized incentives to businesses — ending the ability of companies to pit Mankato against North Mankato when seeking assistance to build or expand a facility locally. A joint economic development authority could be created, possibly through special legislation passed by the Minnesota Legislature, with equal representation by each city.
“It only seems reasonable that we explore an organizational approach where you’d be a one-stop shop,” said North Mankato Councilman Bob Freyberg, a former Mankato councilman before he moved across the Minnesota River.
A joint economic development authority would end duplication and also end disparities between the cities in policies governing when a business is provided low-interest loans, tax-increment financing and other subsidies, Freyberg said.
“Now’s the time,” he said. “I think the time is right.”
Freyberg, North Mankato Mayor Mark Dehen and Mankato Mayor Eric Anderson — the members of the Intergovernmental Committee with Mankato Councilman Mark Frost — were instrumental in creating the committee last year after disputes between the cities had left them with no regularly scheduled conversations between elected officials on each side of the river.
The North Mankato Council also largely removed itself from a previous economic development partnership between the cities and the local chamber of commerce known as Greater Mankato Growth.
On Wednesday night, the Intergovernmental Committee meeting also included Mankato City Manager Pat Hentges, Mankato City Planner Paul Vogel, North Mankato interim City Administrator and City Planner Mike Fischer, North Mankato City Attorney Mike Kennedy and Chad Surprenant, a member of the GMG executive committee.
Suprenant, president of I&S Group, said that the current situation has appeal as a business owner. A company looking to expand or build in the Mankato area can play one city against the other by offering new jobs and an expanded tax base to the one that provides the biggest subsidy.
“The way it’s set up, that’s going to happen,” Surprenant said. “... In the end, I think the taxpayer kind of loses.”
In most cases of economic development, particularly local companies looking to expand, business owners have already decided to build in the Mankato area due to factors ranging from the vibrant economy to the quality of the workforce, he said.
“They want to be here,” Surprenant said. “They won the lottery in the sense that there’s two communities (willing to compete with subsidy offers).”
But North Mankato officials have a deep-seated independent streak, and some city leaders are fierce advocates for the city’s 24-year-old Port Authority — a semi-autonomous body of appointed officials that could essentially cease to exist as North Mankato’s economic development arm.
Councilwoman Diane Norland has already stated her opposition to any partnership with Mankato that would end the Port Authority’s role, saying the organization has done exceptional work in generating job growth and redevelopment in the city.
Dehen offered largely favorable comments about the idea of unifying the two cities’ economic development efforts, suggesting that there’s support from at least two members of the five-member North Mankato City Council. The two remaining seats on the council are on the ballot on Nov. 6 with Councilman Billy Steiner running for re-election and Councilman Bill Schindle not seeking another term.
“North Mankato, after the election is done, will have to find out if they have three votes to do anything,” Kennedy said.
Beyond that basic political fact, there’s nothing preventing a marriage of the two cities’ economic development operations that can’t be worked out through actions by the councils and possibly the Legislature, Kennedy said. There are, however, tactical and emotional issues that could make it difficult if the cities have different development priorities or if the disparity in populations (13,400 vs. 39,300) leaves North Mankatoans concerned that their interests will be overshadowed.
“You can’t get away from the fact that one of these towns is three times bigger,” Kennedy said.
At the same time, Hentges and the elected officials at the meeting praised the cooperative relationship in place between the two city planners — Vogel and Fischer — and said Mankato-North Mankato is poised for success if it’s smart about its future. They talked about the relatively booming local economy, the higher education institutions and the recent upgrades in area highways that will make the area increasingly attractive to prospective new employers.
“We really want to be in a position to take advantage of that,” Dehen said.
Frost praised Freyberg and Dehen for bringing the cities back together to a point that the discussion could even take place. And Anderson implied he liked Freyberg’s proposal, particularly if it results in an economic development approach that relies more on the region’s inherent strengths to attract new business rather than taxpayer-backed incentives.
“We call ourselves ‘Greater Mankato’ for a reason,” Anderson said.
The Intergovernmental Committee agreed to continue its discussion at its next meeting on Nov. 7, and city staff will be exploring in the interim some of the logistical issues required if the councils would choose to move forward.
Hentges suggested the two cities could have equal representation on any joint economic development authority, despite the differences in population, with the authority also including business owners and a representative of GMG.
“I think all those little issues can be worked out,” Hentges said.
First, though, a majority of both councils will need to be willing to take the plunge.
“The elected officials have to kind of guide where this goes,” he said.