Major Industries and Commercial Activity
The health care industry dominates Rochester's economy, with more than 2 million people coming to the Mayo Clinic each year to seek treatment. The clinic admitted 127,300 patients in 2003. Mayo Medical Ventures licenses medical products and treatments worldwide that are developed at Mayo.
Wholesale and retail trade is the second-largest employment sector in the county. Many local industries sell their goods to the local International Business Machines (IBM) plant and to Mayo Medical Center.
Rochester has been rated by Inc. magazine as one of the top entrepreneurial cities in the country. The manufacturing industry employs almost 15 percent of the work force. Production includes food and dairy processing, computer and computer components, electronics, and precision machining. Strong areas of growth in the economy are agricultural, metal fabrication, and distribution companies. Other businesses having a major impact on the local economy are construction, printing, packaging, hotels, restaurants, communications, and entertainment facilities. The continuing growth of the economy is evidenced by the addition of some 20 firms over the past several years.
Agriculture still plays an important role in Rochester's economy, along with food processing and dairy production. Area farms produce annual crops of soybeans, corn, and a variety of fruits and vegetables, and dairy farms generate more than 2 million pounds of milk each year. Rochester is the home of Marigold Foods, which produces the well-known Kemps brand of ice cream.
Items and goods produced: hospital/surgical equipment, electronics, metal fabrication, food processing, agricultural-related products, home pasteurizers, silos, beverages, toilet preparations, computer equipment, grain, poultry
Incentive Programs—New and Existing Companies
It is the mission of the Rochester Area Economic Development, Inc. (RAEDI) to assist new and existing companies with expansion, location, or research efforts. RAEDI has a corporation to provide better access to the U.S. Small Business Administration's 504 Loan Program, which finances long-term assets for 10- or 20-year terms. The program normally leverages a bank loan with a 504 loan to finance up to 90 percent of the project costs. RAEDI also administers the MicroEnterprise Loan Fund, which aids eligible businesses that are located in the city, five or fewer employees, a written business plan, and an owner or 51 percent of the employees who are at low or moderate income levels. The maximum loan amount is $7,500.
The Tax Increment Financing Program, a state authorized financing mechanism, is offered by the city to assist basic businesses in financing their local expansion or location. Funds may be used to purchase land and make public improvements that support business development projects. Minnesota offers programs to provide a mechanism for businesses to sell bonds at tax-exempt interest rates, allowing firms to receive long-term, low interest financing for fixed assets.
Job training programs
The Minnesota Department of Employment and Economic Development operates a network of workforce centers throughout the state. This WorkForce Center System, which has an office in Rochester, partners with local businesses to provide customized job training and other workforce development services.
The Mayo Foundation is currently undergoing major expansion and renovation. A series of projects, which began in 1997, are integrating patient care facilities on Mayo's downtown campus, from Rochester Methodist Hospital on the north to the Mayo Building on the south, into an interconnected facility. The projects involve adding about 850,000 square feet of new space as well as renovation of existing space. When completed, costs will reach well over $125 million.
The new Rochester Art Center opened in May 2004 and is the most recent addition to the downtown Rochester Cultural Campus. The creation of Cascade Lake Park will support a lake with the best possible water quality and will provide residents and visitors with a variety of recreational and educational opportunities. The refurbishment of Highway 52 has been recently completed.
Rochester Area Economic Development, Inc. (RAEDI), Rochester's one-stop shop for businesses seeking economic assistance, has as its goal the development of a varied economy. It reports that Rochester and environs have the highest concentration of high-tech industries among all U.S. metropolitan areas. Rochester' technology base has continued to grow over the past decade with the addition of more than 20 new technology firms.
Economic Development Information: Rochester Area Economic Development, 220 S. Broadway, Ste. 100, Rochester, MN 55904; telephone (507)288-0208
Daily freight rail service is offered by the Dakota Minnesota & Eastern Railroad. Rochester has more than 20 motor freight carriers.
Labor Force and Employment Outlook
The following is a summary of data regarding the Rochester metropolitan area labor force, 2004 annual average:
Size of nonagricultural labor force: 101,900
Number of workers employed in . . .
construction and mining: 4,700
trade, transportation, and utilities: 15,600
financial activities: 2,700
professional and business services: 5,300
educational and health services: 35,900
leisure and hospitality: 8,500
other services: 3,700
Average hourly wage of production workers employed in manufacturing: $13.56 (statewide)
Unemployment rate: 4.2% (February 2005)
Cost of Living
The cost of living in the Rochester area is slightly below the national average, except for housing prices, which tend to be slightly above the median. Nevertheless, Rochester residents can be assured that real estate is a good investment; Rochester's home appreciation rate is in the top quarter of all metropolitan areas.
The following is a summary of data regarding several key cost of living factors for the Rochester metropolitan area.
2004 (3rd Quarter) ACCRA Average House Price: $234,900
2004 (3rd Quarter) ACCRA Cost of Living Index: 95.8 (U.S. average = 100.0)
State income tax rate: Ranges from 5.85% to 7.85%
State sales tax rate: 6.5%
Local income tax rate: 1.0% of first $72,000; 2.0% over $72,000
Local sales tax rate: 0.5%
Property tax rate: tax capacity (1.0 to 1.25%) multiplied by 118.794%
Economic Information: Rochester Area Chamber of Commerce, 220 S. Broadway, Ste. 100, Rochester, MN 55904; telephone (507)288-1122; fax (507)282-8960
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