The Economics of Land Usage in Saint Paul

Like many cities with strong industrial roots, Saint Paul, Minnesota, recognizes the value of protecting its industrial zones and ensuring a future of diverse land use. Light industrial businesses, which include breweries, body shops, and small manufacturers, are vital parts of local business ecosystems and are known to provide good-paying employment without requiring secondary education. While there is value in low barrier-to-entry jobs and the goods and services these businesses offer, negative public perceptions of industrial land use and real estate pressures to convert these properties to residential or retail space often leave the light industry in peril.

Since 2022, ICIC has conducted research sponsored by the Saint Paul Port Authority to demonstrate the ongoing importance of light industrial uses to the city’s economy. To better understand the financial landscape of Saint Paul, ICIC took on the task of categorizing all properties within the city based on their land use types (Figure 1). This comprehensive process allowed for a thorough evaluation of each group’s expenses and contributions toward the city’s 2020 budget. To determine these expenses and contributions, ICIC analyzed various factors, including the demand for city services from residents and businesses, the frequency of emergency response calls, the length of maintained roadways, and other relevant data points. Through this diligent approach, ICIC was able to gain a more holistic understanding of the implications of these different land uses for the city’s resources, and help it plan for the future of light industry effectively.

Figure 1: Map of Land Uses in Saint Paul, Minnesota. Click here for the Interactive Map.

Summary of Findings

The findings of the research analysis can be summarized as follows:

  • Light industrial land uses in Saint Paul contributed the least to, and required the least funding from, the City in 2020.

    Figure 2: The Revenues and Expenditures of Land Usage Across Industries
  • Light industrial land use produces the second largest return per dollar spent, behind professional services.

    Figure 3: Return per Dollar Spent Across Industries
  • Light industrial land use is spatially and fiscally efficient, contributing the second largest amount to the City per acre, behind professional services.

    Figure 4: Dollars Contributed per Acre Across Industries

“The Saint Paul Port Authority is an economic development agency committed to expanding the city’s tax base and serving as a conduit to quality job opportunities. As such, we make it a priority to advocate for ‘no net loss of light industrial land’ in the City of Saint Paul. It has long been our belief that light industrial businesses make positive contributions to our community and provide jobs with above average pay with low barriers to entry. Thanks to the ICIC’s research, we were able to quantify this information and provide the data to illustrate the contributions our redevelopment projects have made in terms of jobs and taxes.”
– Andrea Novak, Senior Vice President of Marketing, SPPA

Ongoing Research

In 2023, ICIC will expand on last year’s fiscal impact work. The research will primarily analyze how the industry composition of these zones has changed since 2008. It will also investigate the effects of industrial land use taxes on public school funding in the city, estimate the number of jobs and businesses supported by the Port Authority’s business centers, and analyze a new multi-use development project underway. The insights from this study will guide future policy decisions in Saint Paul. The land use and economic impact analysis methods ICIC has used in St. Paul could be applied in any metro in the nation with similar data availability and could provide local governments and community stakeholders with timely, detailed insights to guide policy and economic development decisions.


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