Continuing to build a base

Manufacturing, ag, stellar college power

Watertown economy

BY KRIS BEVILL

Afew years ago, the effects of the Great Recession were a little more apparent in Watertown, S.D., than in other communities throughout the region. Manufacturing is one of two primary industries in South Dakota’s fifth largest city (population: about 21,500) and local manufacturers took a bit of a hit during the worldwide economic downturn. Thankfully agriculture continued to be a strong performer throughout the recession and the local economy actually continued to grow throughout the recession, despite registering some job loss in the manufacturing sector. Now, as the worldwide economy continues to recover, lesser affected communities such as Watertown have already bounced back and are on the increase, provided they can attract enough workers to fill demand.

“The good news is that within a matter of about 24 months we were able to replace all of the job loss that we had during the recession and we’re now back up above pre-recession levels,” says Craig Atkins, president of the Watertown Development Co. “There’s just a really positive vibe right now in terms of where our economy is compared to where it was.”

Watertown’s economy is doing so well, in fact, that there were more than 850 job openings in August and the town’s current unemployment rate is sitting at 3 percent, compared to an average of 3.2 percent to 3.5 percent during previous strong economic times, Atkins says. The WDC has responded to the labor shortage by working aggressively to recruit out-of-state workers to the area. For the past two years the group has focused on attracting potential new residents from similar-sized communities in Minnesota and Iowa with advertising campaigns that tout South Dakota as not only a place with ample job opportunities, but also a place where every dollar earned stretches farther, thanks to no state income tax.

Several advanced manufacturers are established members of the business community in Watertown, including metal fabricator Angus-Palm and work truck manufacturer Dakota Bodies Inc. In April, Metrix, a custom fabrication and powder coating company, which had previously been sharing space with Dakota Bodies, entered into a purchase agreement to buy a 40,000-square-foot spec building built by the WDC in order to further expand the town’s manufacturing sector. The sale was complete in June and the company plans to move in within the next six months, adding 50 new jobs to the community as a result of its expansion, Atkins says.

The spec building that will become Metrix’s new home was the first spec building the WDC had built in a decade. The $860,000 investment was so successful that Atkins says plans are already in the works to build a similar spec building in the industrial park that could entice another business expansion or attract a new business. Construction on that facility could begin this fall.

The Watertown area is also making an effort to attract entrepreneurs and support emerging startups. In May, the WDC and the South Dakota Enterprise Institute launched Kampeska Capital LLC, an angel fund devoted to providing initial phase funding to small businesses. Sixteen local investor groups have supplied $850,000 to the fund and have begun reviewing applications from businesses ranging from traditional manufacturing to tech-based startups, all seeking a start in Watertown. Atkins says the goal of the fund is to identify entrepreneurial business opportunities that could

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result in new sector growth in the community. “This fund fills a void and allows us to help small businesses that we were not able to help before,” he says.

While private industry is currently strong and growing in the Watertown area, the community’s gem remains to be Lake Area Technical Institute. The two-year college was named one of the 2013 Top 4 two-year colleges in the nation by the Aspen Insitute and has experienced a solid decade of record enrollment numbers. This year, about 1,590 students are enrolled at the school, a 5.6 percent increase over last year. In the past 10 years, enrollment has grown by more than 60 percent. The annual economic impact of the school is significant, totaling nearly $50 million last year, according to LATI. The school projects that between 2011 and 2021, the economic impact of the school will total $3.66 billion.

Luann Straight, director of insititutional relations at LATI, says the college’s enviable enrollment growth can be attributed to a 99 percent placement rate, national recognition as being one of the nation’s best two-year colleges and a willingness to add new programs as needed. In fact, the college just completed a five-year, $20 million expansion project that included several new buildings to house new programs such as energy operations and energy technology, and provide more space for some of the college’s largest programs including diesel technology and agriculture.

“We’re very happy with what [LATI] continues to do and we think that they offer us, and our local industries, a great opportunity to continue to take advantage of the new workforce,” Atkins says. Likewise, Straight says the college is proud to call Watertown home. “We’re very fortunate that our homebase is in Watertown,” she says. “They’re always watching out for us and we watch out for the community.” PB

Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

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