Community Development Digest update – Redefining Development: Saint Paul’s Urban Farming Experiment 06/28/13

Urban farming is a new and booming industry. Industrial cities like Chicago, Cleveland, and Saint Paul are inspiring entrepreneurs to launch new farming ventures in old, industrial spaces or in large greenhouses on vacant land or brownfield sites.

Thanks to a city initiative, one such company in Saint Paul has created more than 130 new jobs with a recent expansion. What’s more, businesses in the city are poised to continue creating urban farming jobs. What’s not as clear is whether the city can keep up with the pace of the industry’s growth, particularly regarding repurposing older buildings with zoning codes unrelated to farming.

At stake for Saint Paul — besides an expanded tax base and new jobs — is a rebound following decades of disinvestment and post-manufacturing decline.

The Continuing Growth of Urban Farming

It should come as no surprise that urban farms are targets for development financing; farming gets at many of the core ideas of community development. For example, farming is largely viewed as a healthy activity that provides nutritious food options in areas described by officials in municipalities as “food deserts,” or those places that lack healthy food options. Farming also embodies the ideals of self-sufficiency and selfreliance, which mirrors many business development and self-help housing programs launched in historically disinvested areas. Proponents of urban farming also maintain that farms can create jobs in communities.

This is not to say that urban farming can create or replace the number of jobs lost in cities as a result of a declining manufacturing industry and/or jobs being move overseas. Even so, officials in many cities appear optimistic about the possibilities afforded by urban farming. While it remains unclear how many jobs might be produced through urban farming ventures, one company in Saint Paul appears to be a model for how local businesses and government can work cooperatively to expand community job-creation while keeping a lucrative company on the tax rolls.

Established Produce Distributor Expands into Farming

J&J Distributing, a fresh food and produce distribution company established in the city in 1978, recently underwent an extensive expansion and environmental remodel that allows it to grow produce on-site and then distribute it to area grocers. The four-phase project involved the company’s purchase of its building, the installation of a rain garden and more energy efficient refrigeration, a 20,000-square-food addition, and creation of a hydroponic greenhouse for crop production.

J&J Distributing was a major project of Rebuild Saint Paul, a $15 million city initiative designed to leverage $100 million in additional investments and to jumpstart development projects in the city that had stalled as a result of the recession. Rebuild Saint Paul used bonding, city, state and federal funds as well as private partnerships for financing.

The city’s Department of Planning and Economic Development learned of J&J’s renovation project through a local community bank. “They wanted to purchase the property they’d been leasing and were looking to move outside the city, but they decided to remain because 70% to 75% of their employees live in the local neighborhood,” city Project Manager Dave Gontarek tells CDD.

J&J Distributing will partner with the city and BrightFarms LLC of New York to use the 38,000-square-foot facility to annually produce some 350,000 pounds of lettuce and tomatoes. The facility will create a sustainable alternative for obtaining produce from sources other than California, Florida and Mexico.

The project has several layers of financing, including an SBA 504 loan, stimulus funding, energy efficiency financing through a Saint Paul Port Authority program, and the city’s Neighborhood STAR Program. The STAR Program awards grants and loans for capital improvement projects in the city through sales tax funding.

Gontarek recalls how the project continued gaining momentum as one opportunity led to another. “It’s unusual with community development, but part of it is the approach,” he says. “We had a really good relationship with J&J. The owner is very forward-thinking. He wants to expand and be an asset to Saint Paul.”

Do Your Homework Before Partnerships

For other communities seeking to boost an existing business, Gontarek suggests ensuring that the business is financially sound before making any commitments. “Nothing works if it doesn’t make financial sense,” he says. “Get that relationship set up and it goes into the next one.”

Building a good relationship with community bankers is also crucial. “A bank can do a lot of your work for you. They can screen a company and determine whether it’s financially feasible,” Gontarek says. A major issue still remaining is that state building codes don’t recognize urban farming. Gontarek says a lot of work on building codes still needs to be done in order to help developers avoid spending money to make buildings suitable for unnecessary functions.

Meanwhile, Saint Paul has another major urban farming project in the works — one that will convert an old brewery building into a site for growing leafy greens.

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Reprinted from Community Development Digest. To download a free copy of Community Development Digest, go to our website.

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Bazzo 06/28/13

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