Economics

This report examines the local economic impact associated with a proposed new bridge across the St. Croix River, linking Washington County, MN and St. Croix County, WI. The new bridge is intended to functionally replace the aging and insufficient existing bridge crossing, and expand highway system capacity to meet current and projected future travel demand across the river. The Minnesota side of the existing bridge is located in downtown Stillwater, while the new bridge and highway approach to it completely bypasses that area. This study focuses on economic impacts associated with the bypass of downtown Stillwater, but also examines economic impacts on the Wisconsin side of the river.

Concern about traffic congestion and loss of mobility on our highways and interstates led Mn/DOT to conduct an Interregional Corridor Study, completed in October 1999. The goal of the Study is to proactively manage the important connections between regional centers in a more cost-effective manner. This goal is consistent with Mn/DOT's strategic objective to develop an interregional corridor system that enhances the economic vitality of the state by providing safe, timely, and efficient movement of people and goods to regional trade centers.

While the 1997 Statewide Transportation Plan supports investments that enhance safety and timely travel between activity centers (regional trade centers), it defined the Interregional Corridor System as the entire 5,200-mile principal arterial system. The entire principal arterial system is too large as the interregional system to allow sufficient focus on the key transportation corridors throughout the state. In addition, previous Plans did not provide guidance on how these corridors should perform from a mobility perspective. The result has been a lack of attention on some major corridors and some inconsistencies between districts on how corridors are managed. As a result, the Minnesota Department of Transportation (Mn/DOT) initiated the Interregional Corridor Study to identify important economic corridors in the state. The goal of the Interregional Corridor System is to maintain safe, timely and efficient transportation services between regional centers. Providing good transportation service to the main activity centers will improve or maintain productivity, reduce transportation costs and support the interdependencies that exist between different areas of the state and between Minnesota and other states and counties.

The mission of the Minnesota Department of Transportation (MnDOT) is to “Plan, build, operate and maintain a safe, accessible, efficient and reliable multimodal transportation system that connects people to destinations and markets throughout the state, regionally and around the world.” Minnesota-based manufacturers ship their products using Minnesota’s roads, bridges, airports, railways, and waterways to local, state, national, and international markets. The transportation system, when aligned with shippers’ needs and priorities, plays a significant role in supporting state and regional economic vitality. MnDOT collected and analyzed information on manufacturers’ perspectives in MnDOT District 6 (southeastern Minnesota) to: •better understand their perspectives and priorities, •build relationships to better align the transportation system in the long-term with shippers’ needs, and •support continuous improvement at MnDOT with ongoing input from this customer segment.

In June 1970, the Department of Highways of the State of Minnesota contracted with North Star Research and Development Institute to undertake a study of "The Economic Impact of The Freeway System on the Twin Cities Metropolitan Area". The economic impact of the freeway system on the Twin Cities Metropolitan Area is widespread and effects numerous aspects of the life of the citizens of the region. The ramifications of the freeway system extend into many aspects of our activities -- social and economic. Because the interrelationships between social and economic factors are complex and due to constraints on both time and resources, it was decided to isolate one particular aspect of the freeway system and study that in some detail. The economic impact was selected as the most fruitful to examine at this time. This report, therefore, relates only to the economic aspects of the impact of the Metropolitan Area freeway system. The economic impact analysis covers six vital areas of the public and private economy that have been identified with freeway construction and use. These six areas are as follows: 1. Land Use Changes and Potential 2. Effects on Retail Trade 3. Effects on Residential Property Values 4. The Alteration of Property Tax Patterns 5. Economic Impact of the Freeway System on Industrial and Commercial Transportation 6. The General Economic Impact on the Community

The Responsibility of the Task Force was to provide the Governor and the Legislators of the State of Minnesota, the following information: - Recommendations regarding long range (6-10 years) highway needs to assure economic vitality of the State's economy. - An estimate of the funding necessary to satisfy the identified needs. - A prioritization of highway objectives (i.e; safety, maintenance, capacity, response to economic development, etc.) - Recommendation for improved resource (people and dollars) utilization. - Recommend alternative funding sources, - A strategy for implementation.

This report was prepared by the Minnesota Department of Transportation in accordance with 1991 Minnesota Session Laws, Chapter 298, Article 8, Section 2. Due to the short time period available to conduct the study, the concepts it contains have had limited exposure outside of the Department Some study concepts were presented at the annual Meeting of Minnesota Regional Development Organizations in July. Presentations have also been made to some regional development commissions and metropolitan planning organizations at their regular meetings. In addition to fulfilling the legislative requirement, this report raises some fundamental issues regarding highway accessibility in Minnesota. Some of these issues will be explored further under the direction of a task force with broad representation.

Highway 12 has often been accused of being a liability to the economic growth of communities adjacent to it. over the years, many suggestions have been made regarding safety and traffic movement features. A few minor improvements have been made, but basically it is still the same design as it was when it was first paved in 1920. In the fall of 1986, the Mid-Minnesota Development Commission was awarded a grant from the Minnesota Department of Transportation. The grant was for the purpose of studying whether or not the economy of communities along Highway 12 was negatively affected by lack of significant upgrading of the highway. This objective was accomplished by contrasting the Highway 12 corridor with the four-lane corridors of U.S. 169 South to Mankato and North to Milaca. An independent person was hired to help analyze the data. His analysis of the study helped him arrive at a conclusion that the economies of communities along U.S. Highway 12 are definitely negatively impacted because it is not a four-lane highway. We hope you will use this document to help petition for the upgrading of U.S. Highway 12.

The primary purpose of this report is to place an economic dollar value on the environmental impacts of shifting products from the waterway mode to a land mode. Since the original study, entitled "Environmental Impact of a Modal Shift", was completed in 1991, two of the three modal shift examples discussed have taken place. This study also looks at what caused the modal shifts to take place and discusses their merits. The study compares the fuel cost efficiency of the water mode to land modes and the air emission results of burning additional fuel to move the same product tonnage. This study does not discuss freight rate variations between the modes as the focus is on environmental impact cost. Where comparable, waterborne transportation has an environmental cost impact of one fifth that of rail and one tenth that of truck. The study also discusses accident rates on a per ton mile basis, but no dollar figures are available for comparison purposes at this time.

The Economic Component of the Metro Freight Study is composed of five chapters. Chapter 1 is an overview of the Twin Cities Metro Area in terms of economic trends and the identification of strategic industries in which the Metro Area enjoys a competitive advantage. The focus of the analysis is on the manufacturing, transportation and wholesale sectors of the economy. These sectors tend to be the most freight intensive industries, especially in terms of two-way freight movements. Also, these sectors are value added activities that are the most important to the basic health of Minnesota's economy. Chapter 2 describes the "Diamond of Competitive Advantage" ("Diamond") and uses the framework it provides to analyze four clusters of strategic Twin Cities industries. Four clusters of strategic industries are identified; profiled in terms of Location Quotients, employment, value of shipments/sales, and typical shipment mode; mapped relative to Twin Cities interstates and freeways; and analyzed using the four components of the "Diamond." Chapter 3 describes the economic, demographic, and manufacturing trends affecting industries in the Twin Cities Metro Area. The chapter begins with a discussion of the similarities and differences between the economies of Minnesota and the U.S.; the shift in employment from manufacturing to services; and the Twin Cities as a participant in the U.S. and global economies. The chapter also reviews major demographic trends and their potential effects on the supply of workers and discusses changes in the manufacturing environment that have altered the freight demands of manufacturers and wholesalers. Chapter 4 relies extensively on County Business Patterns data for 1984 and 1994 to analyze the increasing concentration of Minnesota's economy in the Twin Cities Metro Area, the Metro Area's role as a Regional Trade Center, and the economic relationship between the Metro Area and the balance of the state. Chapter 5, the final chapter, summarizes the conclusions presented in Chapters 1-4 and raises a number of issues that could pose future challenges to transportation planning in the Metro Area.