St. Jude Plans Headquarters Expansion in Twin Cities Area

Other healthcare and medical firms expand in Minneapolis area

Jul. 9--Twin Cities area medical technology companies have become the latest sector of the economy to engage in a building boom, and there's no sign that their construction and expansion projects will slow down soon.

Last month's news that St. Jude Medical Inc. expects to begin work this fall on the first phase of a long-term expansion of its Little Canada headquarters continues a series of ambitious projects by major med-tech companies. Others include Medtronic Incorporated's new facilities in Mounds View for its cardiac rhythm management division, Boston Scientific Corporation's addition to its Maple Grove campus, and the expansion of some former Mentor Corp. facilities in Minneapolis acquired last year by Coloplast of Copenhagen, Denmark.

Smaller med-tech firms also have been expanding, in most cases by building out leased space. The list includes Micromedics Inc., an Eagan manufacturer of surgical and ear treatment products; Minnetronix Inc., a St. Paul designer and maker of cardiovascular and therapeutic devices, and Devicix, an Eden Prairie developer and manufacturer of medical instruments and software.

The expansion by medical manufacturers stands in contrast to the overall decline in manufacturing in Minnesota, including closures like the Ford Motor Co. plant in St. Paul and 3M Company's specialty tape facilities. Throughout the Twin Cities, the vast bulk of industrial space being built is for warehouses and distribution facilities, not manufacturing plants.

Figures compiled by the Minnesota Department of Employment and Economic Development show that statewide, manufacturing jobs declined by almost 13 percent from 2000 to 2006. During the same period the number of jobs connected to medical devices rose by almost 24 percent to 28,244.

The availability of a large, experienced workforce was a major reason Coloplast decided last year to move its U.S. headquarters to Minneapolis, according to Jan Fredericksen, president of the Danish company's North American operations. That year Coloplast acquired Mentor's urology division, which included the $5.8 million purchase of the Mentor campus on West River Road.

The campus consists of five buildings totaling 180,000 square feet. Fredericksen said Coloplast hopes to begin construction this fall on another 70,000 square feet with completion set for the end of 2008. The size of the site, 5 acres, limits future expansion, so the company is looking for another 100,000-square-foot building to lease elsewhere in the Twin Cities.

The added space at both sites will be used for operations that are being transferred from Marietta, Ga., and Santa Clara, Calif., as well as longer-term workforce expansions. Fredericksen said.

"Our base is so well-established here in medical devices. It makes all kinds of sense for companies to expand where there's a wealth of employees with technical expertise," said Gary Germundsen, a senior associate with the Minneapolis office of Colliers Turley Martin Tucker, a commercial real estate broker and property manager.

Germundsen, whose past med-tech clients include St. Jude and Plymouth-based EV3, said he is scouting area expansion sites for several other medical products firms. Longer-term, Germundsen said he expects future clients to come from some of the fledgling med-tech ventures now occupying relatively small facilities at University Enterprise Laboratories, the University of Minnesota's biotech incubator, he said.

Planning future space needs for smaller med-tech firms can be especially difficult, said Paula Anderson, whose brokerage firm, Square Feat, has worked extensively with start-ups making the transition to bona fide businesses.

"You can have a client that has a breakthrough, and very quickly needs to hire more people and has a need for more space," she said.

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