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U study finds economic growth for Willmar, other outstate cities

South First Street, shown here Monday, is the attraction that draws customers to businesses there and elsewhere in Willmar. Tribune photo by Gary Miller

WILLMAR -- Willmar's economy ranks closely behind significantly larger Greater Minnesota cities and lake country communities that count on tourism and recreation for a large part of their economy, according to a recently released study by the University of Minnesota.

The research, by William J. Craig and Bruce W. Schwartau, for the University's Center for Urban and Regional Affairs, shows that Willmar had $282 million in taxable retail and service sales in 2009, which was 31 percent more than the community's 1990 total of $216 million.

The study puts Willmar in seventh place, behind Rochester, Duluth, St. Cloud, Mankato and Brainerd and Alexandria. The study includes only outstate communities and does not include state Department of Revenue data from the seven-county metro area.

The Rochester, Duluth, St. Cloud and Mankato communities each have at least $900 million in sales, and each city saw at least 27 percent increases between 1990 and 2009. However, Mankato's taxable retail and service sales increased 123 percent, from $406 million in 1990 to $904 million in 2009. The south central Minnesota city had per capita spending of $17,153 for its 52,703 population. The statewide average of per capita spending was $9,800 per person.

Willmar, with city population listed at 19,610 people, had per capita sales of $14,382 in 2009.

By comparison, Marshall had taxable retail and service sales of $200 million in 2009, a 69 percent increase over 1990's $118 million. The per capita spending, based on a population of 13,680, was $14,593.

Hutchinson's 2009 total of $169 million was 64 percent above the $103 million in sales in 1990. On a per capita basis, with a total population of 14,178, spending was $11,927.

Worthington lost 15 percent of its sales, with $108 million in 2009. That total was down from the $126 million spent in 1990. The per capita spending, based on population of 12,764, was $8,432.

The study, to classify cities into a hierarchy from largest to smallest by the community's sale of goods and services, also has implications for the state highway network, and other public and private policy decisions. The authors used Department of Revenue numbers to measure the activity of trade centers across the state.

In 2009, the total retail and service sales in the state was about $40 billion, with $25 billion in the seven-county metro area and $15 million in Greater Minnesota. The outstate portion of sales increased slightly from 35 percent in 1990 to 37 percent in 2009.

The authors found that the state's trade center level system is top heavy, with the top four outstate cities having taxable sales twice that of Brainerd and triple that of smaller cities like Alexandria, Willmar, Bemidji and Marshall.

The imbalance increases even more when Rochester, Duluth, St. Cloud and Mankato are included with the next 18 largest cities, including Alexandria, Willmar, Marshall, Hutchinson and New Ulm. The 22 cities account for 52 percent of all sales in the 80 counties in outstate Minnesota.

The authors conclude that size does matter, with larger cities possessing momentum and faster growth than other cities. However, size is not insurance against economic loss. Worthington, with its 15 percent loss, is an example, as is Fairmont, which lost 41 percent in sales, dropping from $105 million in 1990 to $62 million in 2009.

The authors also note that cities in the lakeshore area, Alexandria and Brainerd, or Ely, on the edge of the Boundary Waters Canoe Area, benefit from recreationally spending.

Another factor is that people in smaller cities, such as Fairmont, St. Peter and Waseca, drive to a city like Mankato for their shopping, lowering their spending in their own community.

However, Craig and Schwartau note that a city's destiny is not preordained. Owatonna, which attracted Cabela's, Target, Lowe's and Wal-Mart, plus the outlet shopping center, has become a retail destination. The city posted $239 million in sales in 2009, a 65 percent increase over 1990's $145 million.

Gretchen Schlosser

Gretchen Schlosser is the public safety reporter, and writes about agriculture occasionally, for the West Central Tribune. She's been with the Tribune since 2006 and has 17 years of experience working in news, media and communications. 

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