Owatonna surpasses $100M in building permit valuations

For the first time in the city’s history, Owatonna recently topped the $100 million mark in building permit valuations. To date, the city has issued 1,758 building permits for residential, commercial and industrial construction.
The previous record high occurred in 2008, when the city issued permits valued at a little more than $78 million to 1,796 applicants.
The 2020 total is nearly double 2019 figures, thanks in large part to the development in Owatonna’s industrial park.
But as Ken Beck, a building official for the City of Owatonna, said it takes both the big jobs and lots of smaller jobs to hit the $100 million mark. About half of the projects to make the city’s Top 10 list in 2020 were industrial, with the other half coming from residential and commercial construction.
“We are very fortunate and lucky,” said Owatonna Community Development Manager Greg Kruschke, adding that 2020 will go down as very successful year with a lot of good project.
Over the past five years, Kruschke said, the city and its community and business partners put a lot of effort into getting connected to brokers and developers in the industrial market.
Costco’s decision to locate its new distribution center in Owatonna is a direct result of those efforts, according to Kruschke and Brad Meier, president of Owatonna Area Chamber of Commerce and Tourism.
“Costco had a need and was looking for a location in this region,” said Meier. “We checked the boxes of what they were looking for – location, workforce and ease of distribution.”
Costco’s Distribution Center, which opened earlier this fall in the industrial park, topped the city’s 2020 permit list, with a building permit valuation of $29.5 million. That figure is the estimated cost of constructing the building, including labor and materials. Like all building permits, the figures do not include the cost of land or fixtures.
Costco’s 385,000-square-foot building sits on about 173 acres of land with easy access to I-35 and Hwy. 14. The depot will be serving 29 stores throughout the Upper Midwest, including those located in Minnesota, North Dakota, South Dakota, Nebraska, Kansas and portions of Missouri, Wisconsin and Iowa, according to Meier.
Officials said Costco added about 200 jobs to the local economy.
“That’s the piece that has an immediate impact on the community,” said Meier. “Additional jobs for people in this region is good.”
In addition to the 200 jobs created by Costco, the 200-plus trucks that run in and out of Costco each day could bring more development.
Because Costco is a big name, both Kruschke and Meier talked about the attention Owatonna has garnered from national developers and brokers.
And, that attention could help Owatonna land a truck stop in the future.
The city has been reaching out to developers about a truck stop since Hwy. 14 opened in 2013, Kruschke said.
“We see the benefits of a truck stop (at the intersection of I-35 and Highway 14), but we don’t have anything in the ground yet,” said Kruschke.
Costco declined to comment for this story.