2008 State of the City Address
"Economic Opportunity in a City that Works"
Mayor R.T. Rybak
Wednesday, March 5, 2008
We have come together today in Minneapolis’ newest great cultural landmark: the MacPhail Center for Music. This extraordinary building, designed by Minneapolis architect James Dayton, joins the Walker, Institute of Arts, Guthrie Theater, Children’s Theater, Ritz Theater, Central Library and new community libraries around the city, in the greatest buildup of new cultural facilities in the history of Minneapolis. The Shubert, Orchestra Hall, the Planetarium, the Capri, the Hollywood and the Parkway Theater are yet ahead.
No other city in America has done what we have done in these last few years, largely through private funds, and it has allowed Minneapolis to take its rightful place as one of the world’s great cultural centers. On behalf of this generation, and generations to come, thank you to the civic and cultural leadership of our city for making this possible.
We also come together at MacPhail because it’s at the center of a remarkable renaissance on the Minneapolis riverfront. Many of us remember the days, not long ago, when this part of town was a forgotten and underused railroad yard. Today, land here is worth 13 times what it was in 1994. Over this time, more than 1,500 jobs have been created and 1,000 housing units have been built. Now we see great visions for Washington Boulevard, a transit hub connecting the Hiawatha Light Rail Line with the new Central Corridor to the University and Saint Paul, and expansions of the riverfront renaissance upriver into north and northeast Minneapolis.
Even more important, today we come together at this place, on the downtown riverfront, because it is where our city began. Minneapolis celebrates its Sesquicentennial this year: our 150 th birthday, which we will celebrate with a series of events during July’s Aquatennial Festival.
The history of our "city of waters" began only a few hundred yards from this spot at the only natural waterfall on the Mississippi River.
Raw materials came here from farms and forests, either down the Mississippi or across the Stone Arch Bridge on James J. Hill’s trains. Innovative businesses and energetic workers turned this into the Milling Capital of the World. When the market for those early goods became too competitive, business leaders innovated again and retrained their workers for higher skill jobs and built corporate giants that led to a more diverse, economy.
This story of our past provides a useful guide to our future. We didn’t get here by a single act, or by giving breaks to a few lucky people or companies. We got here with a long term, sustained commitment to innovation, training a diverse workforce, and remaining connected to our region and global economy. That’s how we got here and that’s how we’re going to move forward.
I disagree with the economic philosophy used too often in both Washington and Saint Paul. You don’t build a recession resistant economy that creates lasting prosperity with a one-time rebate check, or tax cuts for only the very wealthy. The sad state of the economy today is living proof that a tax cut to the wealthy without investments in people has been a failure.
Minneapolis has shown that you build common ground for a recession resistant economy by investing in people and investing in an environment where opportunity and innovation is fostered. You build common ground for a recession resistant economy when you make sustained, long term investments, not just quick fixes. When quality government invests in quality people you get quality results. When you don’t invest, there are consequences.
Minneapolis will weather this period of economic uncertainty. Our economy has a sound foundation and our city government has a sound economic strategy:
• We are the most literate city and a leading center of the knowledge and creative economy.
• No other city in America has a higher percentage of people between the ages of 25 and 34, which makes our workforce perfectly situated for creative and knowledge based businesses.
• Only one other region in America has more corporate headquarters per capita.
• Average wages in Minneapolis are up 3 percent from a year ago.
• Downtown office vacancy is down to 14 percent, one percent better than last year.
• We have the fifth highest income of the world’s metropolitan areas.
• Forbes named us America’s most affordable place to live.
• Marketwatch named this metro area America’s best place for business.
Our region is Americas 12 th largest exporter.
Although Minneapolis starts with a strong base, the fact is the state and national economies are heading into serious waters. The economy isn’t the only issue facing our city, but in this time of economic uncertainty, I believe that Minneapolis has in place a strategic, focused plan that is building economic opportunity in a city that works and that’s what I intend to address today.
The role of government is to provide the common ground where all people and businesses can prosper. Our ability to build and maintain a strong economy requires the effort of every single city department working together with a unified vision that says our economic plan is focused in two key areas:
• Investing in people, our number one asset, and
• Investing in the common ground, where we all prosper.
Job #1: Invest in People, our number one asset
The heart of our economic plan begins with people. We start with people because if you have a talented workforce where people are trained and ready, innovation flourishes and companies can grow. When you make greater investment where there is greater need, you get greater results. Our people-focused strategy targets two areas of greatest need:
• under employment and
• future employment.
Every single demographic projection for Minneapolis says the same thing: There are more quality jobs in Minneapolis today than we have residents of employable age, and the gap is growing larger. There are many people who are unemployed and there are many people who are under employed because they aren’t trained and educated for the jobs we have. This under employment problem will only grow as baby boomers in the workforce continue to retire.
In 2004, we launched an effort to close the unemployment gap by providing more training to potential employees and placing more hard to employ people into good-paying jobs. Since then, the City of Minneapolis has invested nearly $7 million in our Close the Gap initiative, placing 14,000 hard to employ city residents into unsubsidized private sector jobs in addition to the 3,300 subsidized city jobs for previously unemployed residents. This is part of the reason that, for the first time since the 1980’s, Minneapolis has seen job growth for three straight years.
And these are good jobs. Adjusting for inflation, the average wages of people we placed into jobs in 2007 was $11.25, up from $10.51 in 2006. And the average wages for our dislocated worker program was $19.77, up from $18.25 last year.
One of these workers was a man who was laid off from his job as an auto mechanic. He enrolled in our Employment and Training Program’s Dislocated Worker Program. Through this program and the Creative Job Search workshop at the Minneapolis Work Force Center, he found a fleet mechanic job that paid more than the job he lost. A few months later he had prospects for a new job at another fleet mechanic job with an even higher salary and better health care.
The centerpiece of our employment strategy is in health care – Minneapolis’ most important industry. With more than 45,000 jobs last year, we believe Minneapolis has the largest concentration of health care jobs anywhere in Minnesota. More than 12 percent of the jobs in Minneapolis are in health care and it’s the fastest growing part of the Minneapolis economy, adding more than 2,300 jobs last year alone. This is a growth of nearly 5 ½ percent, and a larger growth rate than the metro area or state as a whole. And according to Brookings, our metro area accounts for 22 percent of the entire national output of biomedical devices.
The total investments being made in Minneapolis by Allina, Abbott Northwestern, Fairview University, Hennepin County Medical Center, Coloplast, and Children’s Hospital total one billion dollars.
To help us deepen Minneapolis’ role in health care, Minnesota State Colleges and Universities opened an office in our city’s Department of Community Planning and Economic Development to launch an initiative called HealthForce. Its purpose is to work with health care organizations to determine where they will need employees, and then fill the job pipeline with students from schools like the Roosevelt High School Health Careers Magnet and Minneapolis Community and Technical College.
Our work isnt just about helping people in need; its about making sure our economy has the educated workers it needs in the future. Major demographic shifts are occurring in this state and country that threaten our economic prosperity. Consider this:
• The number of high school graduates in Minnesota will decrease 10% over the next 10 years.
• Our fastest growing populations have the lowest high school graduation rates and college participation rates:
o While 67% of Minneapolis’ public high school students graduated last year, only 55% of African American, 43% of American Indian and 32% of Latino students graduated.
o Only 3% of African American, 3% of American Indian and 5% of Latino students will complete a bachelor’s degree before the age of 25.
This all adds up to two simple facts:
• We will not be producing enough graduates to replace retirees at a time when we need more educated workers, not less.
• Too many youth are unprepared and unsupported as they enter the world.
The challenges are clear, but we also need to understand the population of our schools creates opportunity. As the world becomes "flatter," as China and India educate far more engineers and other skilled workers, we have competitors and customers around the globe.
That’s where Minneapolis students come in. They speak more than one hundred languages, come from other countries or are used to people who do. They cross cultural barriers every day and, if we do this right, the students in Minneapolis schools could be our state’s greatest asset to compete in the global economy. That’s why we created The Minneapolis Promise.
• Part 1 is Achieve Minneapolis College and Career Centers, now in every Minneapolis High School. In just three years 2,700 students have used these centers to learn about college and careers, and get the advice they need to accomplish their goals.
• Part 2 is the STEP-UP summer jobs program, which gives students high quality summer jobs at some of Minneapolis’ best companies and institutions. Last year STEP-UP placed 1,244 youth in summer jobs, bringing our total youth employment last year to 2,011 jobs. It’s also important to add that 90 percent of our STEP-UP youth graduated from high school, which is 30 percent higher than the school district average.
• Part 3 is Free College Tuition. This includes The Power of You at Minneapolis Community and Technical College, and the University of Minnesota’s Founders Free Tuition Program. The Power of You helped 480 Minneapolis high school graduates enroll at MCTC, with 75 percent of them being students of color. MCTC has gained almost 1,000 students in its yearly enrollment from Minneapolis public high schools and about one-quarter are Power of You students. Meanwhile, the Founders Free Tuition Program has helped 320 Minneapolis graduates enrolled at the University of Minnesota.
• This means that 723 public high school graduates have seen the financial obstacles to college disappear. That’s The Minneapolis Promise.
Taken together, these three parts of The Minneapolis Promise tell our young people: if you go to school, if you work hard, if you develop a life plan, and if you graduate, we will support you. We have to say things teenagers don’t hear enough: You are valuable. We need you. And you have a responsibility.
The faces of the Minneapolis Promise are young people like Miles Swammi and Faith Xiong:
• Miles is a senior at Patrick Henry High School who spent his summer working in Thrivent’s Strategic Marketing department where he coordinated and compiled materials for training seminars. This fall he’ll be attending the University of Minnesota as the recipient of the Maroon and Gold Scholarship at the Carlson School.
• Faith is a junior at Patrick Henry who spent her summer working at Oak Park coordinating youth enrichment programs, where she worked with and learned from youth development professionals. She plans to go to college and study Psychology.
Already, The Minneapolis Promise is being seen around the country as a model for community engagement to support our future workforce and prepare for our future economy. But we have so much more work to do. Each part of the Minneapolis Promise is privately supported and we still have more kids who want jobs than we have jobs to offer, and we have too few kids not yet getting the message of the importance of going to college.
With the Minneapolis Promise, we are doing what we can to galvanize this community to surround our youth and prepare them for their future. But at the center of our circle of support lies a school system with great potential, and great need.
I have not always been confident that Minneapolis schools were headed in the right direction. But I am today. We have a Superintendent, a staff and a school board who have a visionary plan for school reform and they have proven they have the guts to make it happen.
The first phase of this strategic plan was the North Side Initiative, which proposed some tough medicine. With enrollment dropping, this Initiative plan said we could only provide the enrichment programs we know will close the learning gap if we closed some schools and focused on making fewer schools better. No one wants to see their school closed, and there was controversy, but the leaders of our schools held their ground because they knew the change would help our kids, especially those with the greatest learning gap. And a year later we are beginning to see the positive results. Each Northside elementary school now has:
• Pre-K in all Northside schools,
• Full-Day kindergarten,
• Smaller class sizes in grades K-3, and the
• Attendance and achievement are higher.
The next phase of Minneapolis School Reform is to redesign our high schools. The goal of this effort is to make sure every Minneapolis High School has:
• Advanced Placement, College in the Schools and International Baccalaureate courses,
• Career and Technical Education,
• Expanded safety and security programs, and
• Increased professional development so we have even better teachers.
Most importantly, a key part of this plan is the goal of having every single student graduating from Minneapolis high schools ready for college with no exceptions. I applaud the Superintendent and school board for raising the bar for students, for teachers, for administrators, and for all of us.
Job #2: Invest in the common ground, where we all prosper
All of these actions I’ve discussed are critical because economic opportunity in a city that works begins and ends with people. But we also need to build the common ground where innovative people can come together and where all people can move freely and safely. This means:
1. Building the public realm to support innovation
2. Supporting small business along commercial corridors
3. Expanding transportation alternatives
4. Implementing Wireless Minneapolis
5. Making Minneapolis a safe place to call home
1. Building the public realm to support innovation
A new report by the Brookings Institution says that cities use only 12 percent of the nation’s land, but produce 75 percent of the nation’s gross domestic product, 76 percent of the knowledge jobs, and 78 percent of patents. What this means is that when you bring people together – physically together – they can exchange ideas, grow companies and produce more.
We see this every day in downtown Minneapolis, where 165,000 people from the region’s most significant companies come together to make their experience more livable. We need to support this by passing a downtown improvement district this year.
Minneapolis proves Brookings right every day, especially in our largest industry, medical and life sciences. This is why we have invested so heavily in the creation of the Minneapolis Lifesciences Corridor along Chicago Avenue that now has:
• 10 medical institutions and 61 research labs
• 2,300 physicians
• 12,000 employees.
• 250 researchers
• $25 million received in research funds
Each decision by one institution to invest led another to invest as well. Abbot Northwestern’s decision to build a new heart hospital helped convince Phillips Eye Institute to expand its campus, which helped convince a cluster of promising emerging businesses to locate in the Elliot Park Lifesciences Institute, which helped convince Allina to move 1,500 jobs to the Midtown Exchange, which helped convince Children’s Hospital to break ground on its new facility, which helped convince Hennepin County Medical Center to plan it’s own expansion, which helped convince the BioBusiness Alliance of Minnesota to move to Chicago Avenue a new center to help Minnesota bioscience companies develop partnerships around the globe.
The city has been a partner in this work, in part by selling about $640 million in revenue bonds, but most of this effort has taken place without direct public subsidy, and that’s the way it should stay. The city’s role should to be to continue building the physical environment that brings these talented professionals together to support innovation and give them the confidence that their investments will be matched with a high quality of life and access to an educated workforce.
That’s why the new Chicago Avenue streetscape plan is so important. It isn’t enough to have the Lifesciences Corridor be the greatest concentration of health care professionals in the Upper Midwest. We need a public realm with physical gathering places where researchers can come together, where interaction leads to innovation. That streetscape plan, and Children’s Hospital’s decision to focus its expansion around Chicago Avenue, can create a real town square for the Lifesciences Corridor. This space, and the Global Marketplace just up the street, are gathering places where talented Lifesciences professionals meet, exchange ideas and help keep Minneapolis at the forefront of these rapidly evolving industries.
Most of the investment I just talked about is happening because Minneapolis is one of the country’s leading lifescience centers. The more momentum we have, the more we will create. But these industries are deeply dependent on cutting edge research. This combination of existing Lifesciences industries and cutting edge research is a major reason why Coloplast just broke ground on the North American headquarters on the Mississippi River in north Minneapolis.
And bringing together lifescience businesses and lifescience researchers is why we are redeveloping the public realm around the University of Minnesota. The cities of Minneapolis and Saint Paul and the University want the industrial area next to the University to become University Research Park. The Center for Translational Research and University Enterprise Laboratories are already located here, helping the brainpower of the University turn research into jobs and businesses. If we do this right and make sure there is common ground for researchers to interact, University Research Park can create the jobs of the future, just like the research parks around M.I.T., Stanford and other great research institutions. The Legislature and Governor need to fund the University’s request for University Research Park in this year’s bonding bill.
We used to talk about University Research Park being about only the lifesciences. But in the past two years we have broadened our scope, and see it can now also be a center for businesses that grow out of the University’s research in the new green economy. The economy is in rapid flux and the old ways of doing things are literally running out of gas. This poses a serious challenge but also a great opportunity now being embraced by the U’s brainpower as researches explore alternative energy sources and products that will help us live in better harmony with the planet. Won’t it be great when the billions we spend on oil from hostile foreign governments will go instead to build green businesses in University Research Park?
Mayor Coleman and I share this vision that links our cities. We are also working together on the Mayors’ Initiative on Green Manufacturing, which brings together the Sierra Club and the United Steel Workers to develop strategies that grow green collar jobs in every part of Minneapolis Saint Paul.
2. Support small businesses along commercial corridors
Research will continue to power our most important industries but small business will continue to rejuvenate our commercial corridors. Thats the thinking behind the Great Streets Neighborhood Business District program, which focuses our investment to help small business on corridors like Lake, Franklin, 38 th Street, Central, Lowry and West Broadway.
Our success on Franklin Avenue and Lake Street demonstrates that a middle class will grow from a transformed commercial corridor. That’s what we now aim to accomplish on West Broadway, Central, and other critical corridors by providing $2 million this year for the Great Streets program. Take a look at what’s happening on Penn Avenue alone. Penn and Lowry are now home to a new Aldi’s grocery and Resource, Inc., and North End Hardware is expanding.
We will continue to support these and other small businesses with almost $5 million dollars of business financing tools that provide:
• market-rate loans for job creation,
• low-interest loans to purchase equipment or make building improvements,
• loans to purchase and rehabilitate small commercial and industrial properties, and
• alternative financing loans with no interest to business owners whose religious beliefs restrict them from receiving traditional interest-based financing.
3. Expanding transportation alternatives
The city’s role is not only to support common ground where we come together, but to make sure we can move freely around the city. Over these past three years our Access Minneapolis initiative has laid out the most comprehensive transportation vision in our history.
Because of Access Minneapolis, when the I-35W Bridge collapsed we were ready to make the case for light rail transit capacity on the bridge and ready to redesign new freeway access from the east side of downtown to 35W northbound.
Because of Access Minneapolis we built a broad-based, bi-partisan coalition of mayors and legislators from throughout the 35W corridor for bus rapid transit. This helped us win a $133 million federal Urban Partnership Agreement. If the Legislature and Governor fund their share of this Agreement this year we will have bus rapid transit from Lakeville into downtown Minneapolis and we will completely rebuild Marquette and Second Avenues into commuter transit malls.
Because of Access Minneapolis, and the $22 million we invested in bike trails and amenities in the last five years, Minneapolis was the only major city in America to get $7 million through a new federal program to move people from cars onto bikes and foot. We will use these funds to make Minneapolis the best biking and walking city in America.
Because of Access Minneapolis, we are ready to take the next great step forward for Minneapolis transportation: modern streetcars on high frequency transit corridors. As part of the Streetcar Feasibility Study, we are developing design standards for streetcar-ready streets so that as sections of these streets are rebuilt, they are rebuilt to a high standard of transit amenities: a streetcar standard. We are determined to build public private partnerships to build our first streetcar line.
And today we can be proud of our legislative leaders. Choosing leadership over partisanship, the Legislature stood strong for a statewide transportation solution that will strengthen our economy and grow needed jobs in our state. We applaud their leadership, especially Speaker Margaret Anderson Kelliher, Senator Scott Dibble and Representative Frank Hornstein. Now we need the Legislature to fully fund the Urban Partnership Agreement and make Central Corridor a reality.
4. Implementing Wireless Minneapolis
In just a few weeks, Minneapolis will be one of the first and only cities in the country to design and implement a prototype high-speed, wireless internet network. Becoming the first American city to go wireless helps our police officers, fire fighters, housing inspectors and scores of other city staff work more effectively and efficiently. In the process, we found a better way to bridge the digital divide in our city and help more people access their city government and we found a new and better way to respond to emergency disasters that is being studied around the world. Becoming the country’s wireless internet leader also sends a clear message that Minneapolis is a cutting-edge place to locate and grow a business, a place where innovators don’t need to be hard-wired to their office but can move seamlessly throughout town.
With such as gigantic undertaking, there are always hiccups and hang ups along the way – some anticipated and some not. We know that complications with getting access to light poles and power has been more difficult that anticipated. We understand that certain areas of the city, especially parts of Loring Park and Lowry Hill neighborhoods, won’t have full access right away. And we are confident that US Internet will push hard with building owners for better solutions to provide wireless access to apartment and office towers.
But I pledge that we will finish the job and remind everyone that this ground-breaking effort didn’t cost the city a single additional dollar to provide much more benefit to our city workers, our residents and our businesses. We are proud to have already been awarded the Wireless Internet Institute’s international Digital Cities Best Practices Award and expect much more deserved recognition for this Herculean effort.
5. A Safe Place to Call Home
No other part of our common ground is more important to our economic growth than public safety. Making Minneapolis a safe place to call home has been our highest priority and will continue to be. We can’t rest until it’s safe for any person to walk down any street in our city.
Both Police Chief Tim Dolan and CPED Director Mike Christenson often say that economic development leads to crime reduction and crime reduction leads to economic development.
We have waged our attack on crime on many fronts. Our budget this year funds 18 more sworn officers and the civilian support that they need to be more effective. With these new officers, we will have 880 budgeted sworn officers, more any year since 2002.
We’ve also put more eyes in our neighborhoods with an extensive web of security cameras in north and south Minneapolis and downtown; we’ve prosecuted more criminals by putting city attorneys in police precincts; and we’ve cracked down on repeat offenders and problem properties with targeted, proactive, smart policing strategies.
The results of our efforts are clear:
In 2007, violent crime was down 13 percent citywide compared to 2006. The number of homicides was down 21 percent from last year. The number of robberies was down 18 percent, aggravated assaults were down 10 percent, and juvenile crime was down 15 percent. Violent crime fell in every Minneapolis police precinct, down 16 percent in north Minneapolis alone.
The downward push of crime continues as we start a new year, keeping us on track for a second straight year of declining crime rates. Although any murder is unacceptable, the five homicides so far this year compare to nine by this time last year and ten in 2006. So far this year, violent crime is 5 percent lower than 2007, aggravated assaults are 21 percent lower, property crimes are 42 percent lower and burglaries are 29 percent lower than at this point last year. Our crime rate is dropping, but it’s still too high and we will not let up in our fight to make every street in Minneapolis a safe place to call home. We are making progress but we have a long way to go.
Our 4 th Precinct officers and Violent Offender Task Force made huge strides this year as they focused on getting the worst violent offenders and gang members off the streets. A single investigation resulted in the arrest and federal indictment of 14 members of the Tre Tre Crips gang – among the most violent street gangs in the metro. Along with our local, state and federal partners, last year the Violent Offender Task Force investigations resulted in the arrest of more than 30 of Minneapolis’ most serious violent offenders and gang leaders.
We’ve met tough challenges with tough enforcement, but enforcement alone isn’t enough. We need to attack the root causes of crime. That’s why we launched our Blueprint for Action to Prevent Youth Violence with 32 action items intended to foster a community that helps our young people develop the skills and values they need to forge a positive path. While we are proud of the great strides we have made in this effort, we recognize that there is much more work to be done and we are dedicated to that work.
In closing, let’s honestly acknowledge that we face serious economic challenges ahead. We aren’t certain what will happen and every factor is not in our control. But let’s also remember that this isn’t the first challenge or the hardest challenge Minneapolis has faced in the past year.
When the bridge collapsed last August, every arm of city government had to move decisively. Split second decisions were made and each had serious consequences. But we could only make those urgent decisions because they were based on years of investment, planning and strategy.
We are proud that yesterday Minneapolis’ 9-1-1 call center received the Emergency 9-1-1 Institute’s 2008 "9-1-1 Outstanding Call Center Award" for its work during the I-35W Bridge collapse as further proof that our investments and planning paid off.
We need to remember this lesson from that disaster as we take on these impending economic challenges. When people are unemployed or worried about losing their jobs, they need to know that their government will act, and act decisively. We will. But in Minneapolis our citizens can also know that our immediate response to the economic challenges grows out of years of work.
We didn’t get here by a single act, or by giving breaks to a few lucky people or companies. We got here with a long term, sustained commitment to innovation, training a diverse workforce, and remaining connected to our regional and global economy.
We come back to the birthplace of Minneapolis, the downtown riverfront, and find that the values that launched our city 150 years ago are still alive today. In good times and in bad, the single best investment we can make is a long term commitment to the people of Minneapolis.
Last updated Sep. 27, 2011