Fargo-Moorhead: From 89,000 in 1950 to 330,550 (est.) in 2045
FARGO, N.D. – “It’s getting increasingly easier to attract top talent here.”
“There is such an amazing vibe and so many young people in the downtown.”
“We’d have to say there is tremendous growth in the local economy.”
You know, we really ought to be used to this by now. But we’re still amazed to hear people talk that way about Fargo, the city whose name was a punchline when it appeared as a movie in 1996, but which in recent years has turned up on national Top 10 lists for its dynamism, sophistication and quality of life.
The population estimate in the headline is from the local Metropolitan Council of Governments. It represents a 41 percent boost from the current population of 234,000.
So, what has the Fargo-Moorhead area been doing right? And what challenges remain?
In late November, Prairie Business posed those questions to a group of 16 Fargo-Moorhead leaders who met at our invitation over lunch. Fargo Mayor Tim Mahoney, the presidents of North Dakota State University, Minnesota State University Moorhead and Concordia College, and a dozen other presidents and vice presidents of area businesses and organizations started off by describing the metro area’s progress, which impressed them all.
It was Mayor Mahoney who said “we’d have to say there is tremendous growth in the local economy.
“We’ve had capital growth,” the mayor continued. “When we look at how much Fargo grows, it used to be a pace of $250 million a year, now we’re at about $450 to $500 million a year. That’s the Block 9 project downtown, the retail you’ll see growing on 45th Street South – new capital growth.”
Sales tax revenues are up, and the city’s two major medical centers are “doing fantastic, with more business than they know what to do with,” Mahoney said. He should know; Mahoney, a physician, works as a surgeon at Internal Medicine Associates in Fargo and Lake Region Healthcare in Fergus Falls, Minn.
“We have more people flying out of our airport,” said the mayor, a claim confirmed by Hector International Airport Executive Director Shawn Dobberstein, who was also at the meeting.
“And we’re expecting the diversion to go through; that will be a $2.5 billion project over the next few years. Which we think will have a positive impact on our economy as well.”
In the discussion of the city’s assets, two items stood out.
The first is the metro area’s strong mix of universities, four-year colleges, two-year colleges and branch campuses. To take just one example, “we have a really unusual partnership in the Tri-College University,” said William Craft, Concordia College president.
TCU is a cooperative agreement between Concordia, Minnesota State University Moorhead and North Dakota State University. Most recently, the partnership resulted in an agreement with Sanford Health to open a health-care simulation training center in Fargo, one of few such centers in the nation.
“It is not common to have that kind of alliance across not only private-college and public-university lines, but across state lines,” Craft said.
“And speaking for a college of about 2,100 students, I can say we would not be opening such a training center on our own. They are exceptionally costly, but because we’re working together, we have a chance to create this as a benefit for all of our students. It’s incredible.”
The other asset that was highlighted time and again at the meeting was Fargo’s downtown. “We have 2,600 employee-owners across 22 states,” said Tammy Miller, Border States Electric CEO.
“So, at our corporate office here in Fargo, we are always recruiting. And it’s getting increasingly easier to attract top talent here.”
The downtown’s health is one big reason, Miller said.
In a 2014 column in Forbes magazine, California author Joel Kotkin described Fargo’s bad old days: “Twenty years ago, when I first visited the city, downtown was torpid on a good day,” Kotkin wrote.
“Storefronts were old, funky and often empty. The local hotels ranged between acceptable to sorry.”
Today, “the feel has certainly changed,” Kotkin concluded, and Miller of Border States Electric agreed.
“We had four people from Texas; they stayed in downtown, they went out at night to downtown. And they just could not believe it: there is such an amazing vibe and so many young people in the downtown.”
Asked what prompted the turnaround, attendees pointed to key events. One was NDSU’s decision in 2000 to move certain departments to a historic downtown building – a building that had been donated to the university’s foundation by Doug Burgum, now governor of North Dakota.
“I’ve worked downtown since 1982, and I think NDSU’s coming downtown was the turning point,” said Kevin Hanson, COO of Gate City Bank.
“I remember going out to dinner, and after 5, it would be a ghost town. Since NDSU came downtown, it’s a totally different culture. That was a major change.”
Another event was the passage of Renaissance Zone legislation by North Dakota lawmakers in 1999. The law exempts qualified projects from local property and state income taxes for five years.
“On the state level, we’re often dissing incentives, but that was an incentive that worked,” said Mark Nisbet, North Dakota principal manager for Xcel Energy and board chair of the Fargo Moorhead West Fargo Chamber of Commerce.
“The city never went backwards on its taxes. Instead, it just abated taxes while those improvements were being made, and now it has a higher tax base. It’s a good example of how incentives can work.”
As for challenges facing the F-M area, “workforce comes up consistently at the Chamber,” Nisbet said. “It keeps rising to the top of the list.”
Nicole Christensen, chief nursing officer at Essentia Health, agreed. Notably, though, the shortages are not uniform: “We see good ability to recruit individuals out of our university system,” Christensen said.
“But we also see a challenge with individuals after their first year of employment. That’s when we see them moving out of our community.”
Typically, nurses and other health care providers at that stage in their careers depart for the Twin Cities, where salaries are higher. Which brings up a long-standing problem that lawmakers should be reminded of: Medicare still pays less to North Dakota providers, as Essentia – which has facilities in both Minnesota and North Dakota, as well as Wisconsin and Idaho – knows first-hand.
So, Essentia’s facilities in Detroit Lakes, Minn., get paid more for for the same services than does Essentia Health-Fargo. “So that’s a challenge for us and for North Dakota,” Christensen said.
Housing is another issue. Young people have a tough time finding starter homes that they can afford; likewise, older people from rural North Dakota also are priced out when they try to move closer to their grandchildren. Smaller lots, smaller houses and smaller apartments are starting to be the result, Mahoney said.
Then there’s the challenge of finding day care services that are both high quality and affordable. Expect the Chamber to engage more directly with that issue in months to come, Nisbet said.
All things considered, though, Fargo’s in a great spot.
EAPC Architects Engineers recruits talent for its offices across Minnesota and North Dakota, among other states. “And we get people for Fargo right away,” said Alan Dostert, president and CEO.
For some other communities, “it can be more of a struggle.”
What’s Fargo’s advantage?
“I think it’s an energy thing,” he said.
“There’s an energy in Fargo, and it’s an easy recruit because of that. Fargo just has a buzz to it, and people are really interested in what’s happening here.”
Editor, Prairie Business