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Thief River Falls finds challenge in keeping housing growth at pace with employment

New single-family homes are being built on the south end of Thief River Falls, Minn. GRAND FORKS HERALD/Eric Hylden

THIEF RIVER FALLS, Minn. -- Mayor Jim Dagg smiles as he describes the biggest challenge facing his community: keeping up with the demand for housing.

“We’re very fortunate. We have 8,600 residents and we have 10,000-plus jobs in our community,” he said. “That’s just a wonderful thing, but it leaves us with a housing problem.”

A 2012 housing study indicates a need for 90 new housing units annually for up to the next 10 years in the Thief River Falls market area, which includes 14 cities in Pennington, Marshall, Red Lake and Kittson counties.

The dilemma prompted the city of Thief River Falls, Pennington County and Jobs Inc., the local economic development authority, to pool funding of about $100,000 a year to hire a new economic development director whose chief immediate priority will be to deal with housing. Officials expect to be interviewing candidates over the next few weeks.

The housing crunch has been sparked by strong job growth, most notably by the city’s biggest employer, Digi-Key, an electronics component distributor that has more than 2,600 employees in Thief River Falls and is growing by 10 percent or more annually.

More than 1,100 Digi-Key employees commute, with more than 100 of them driving 120 or more miles on their daily round-trips, according to a letter Digi-Key President Mark Larson wrote to city officials in December.

Digi-Key now buses employees to work from East Grand Forks, Crookston and most recently, Bagley.

“We’ve tapped out the local employment pool,” Larson said in his letter. “Since most of the people applying for these positions are from outside the immediate area, without local housing options they are forced to find employment in other cities.”

It’s not just Digi-Key. Regional manufacturers such as Arctic Cat in Thief River Falls, Marvin Windows in Warroad, Minn., and Grafton, N.D., Central Boiler in Greenbush, Minn., and Polaris Industries in Roseau, Minn., also are competing for employees.

In addition, Sanford Health is nearing completion of a $57 million hospital on the south side of the city. Officials expect employment to increase at the hospital complex, as well as from related health care businesses that likely will develop after the new hospital opens this fall.

Building plans

Residential housing has been a priority for a few years now.

In fact, 131 new single-family homes — an average of about 13 annually — have been built in the city over the past decade, according to Mark Borseth, community services director.

But construction really has kicked into high gear over the past year.

A total of 75 new apartment units were built in Thief River Falls between 2008 and 2013. Another 84 will be built this year alone, he said.

“We’re not even counting what’s going on outside our border, so it’s all good,” Dagg said. “And there’s been a lot of activity out there.”

Here are some of the projects:

  • River Falls Estates, a 41-unit apartment building, opened in January. It’s nearly full now.
  • River Pointe Estates, which includes six four-plex buildings, is scheduled to be under construction by late this year or in early 2015.
  • The city is working with a Grand Forks, N.D., developer to develop 84 rental units — two 30-unit buildings and twin homes planned along Pennington Avenue in the south end of town. Construction could begin later this year.
  • The city also is negotiating to buy a 70-acre site near Digi-Key and Arctic Cat that could provide an additional 900 housing units, including about 20 40-unit apartment buildings and a 100-lot manufactured home court.

“We’re talking about a residential development with trees and walking and bicycle trails that would be close to two major employers,” Dagg said.

A city housing task force also is studying a variety of housing grants through the state, including the Greater Minnesota Housing Fund’s Building Better Communities program, which focuses on houses and lots that are somewhat smaller than average, perhaps with narrower streets, according to Borseth.

“The target price of those houses is probably in the $130,000 to $140,000 range,” he said. “It’s a struggle to try to get to that point, but it’s something we’re researching pretty heavily right now.”

New investment

The mayor said local officials are encouraged by the construction around town, most notably the new Sanford Medical Center and other projects on the south end of town.

“What we’re starting to see now, which is very exciting, is individuals who have done fairly well locally are starting to invest their money in projects. It’s nice to see, because they want us to prosper and grow,” Dagg said.

He cited as an example the new GrandStay Hotel and Suites, a 55-room hotel that opened in January along Minnesota Highway 32 near Digi-Key and Arctic Cat.

“We’ve definitely seen a need for it,” said Joey Hallstrom, one of a group of primarily local investors who developed the hotel. “There’s been a hotel built here basically about every 10 years since the 1970s.”

Hallstrom, who started the Black Cat Sports Bar next door to the hotel 15 years ago, said it only made sense to build a new hotel along the expanding Highway 32 corridor, which attracts a growing number of business travelers.

“We’re busy,” he said. “There’s a lot of excitement going on here.”

The mayor shares the feeling.

“The housing situation has added some challenges to our little community, and we’re growing to beat the band and we’re trying to keep on top of the situation,” he said.

Community leaders are working to identify potential areas for expansion, so they can work through zoning issues and have property ready for development.

“As simple as it is, something’s going to happen in 2015 and something will happen in 2016,” Dagg said. “If we in the city can work together so that developers can just come and pick a lot … and build, based on what they can find out through the housing studies, we’re excited about that.”

Kevin Bonham

Kevin Bonham covers regional news, mostly from northeast North Dakota, for the Grand Forks Herald. A North Dakota native who grew up in Mandan and Dickinson, he has been a reporter or an editor with the Herald and Forum Communications for more than 30 years. Find his articles at: He welcomes story ideas via email,, or by phone, (701) 780-1110.