St. Paul City Council questions return on investment in Greater MSP

The city of St. Paul gives Greater MSP $125,000 each year to work on regional economic development. But when the City Council heard Wednesday what that has paid for, some members questioned whether the city had been getting its money's worth.

Greater MSP, a public- private partnership, says it has been involved in the creation of 70 new jobs in the city over the past five years, and has helped retain 1,030 jobs.

Council Member Rebecca Noecker called the new job numbers "shockingly low," noting it equates to $9,000 contributed for each job added.

"These numbers … they just aren't good enough for our contribution," Council Member Chris Tolbert said.

The council did not take any action, but Greater MSP representatives pledged to increase their efforts in the city.

"We, too, had noticed there was a low job count in St. Paul," Greater MSP spokesman Mike Brown said. He said an initiative launched last summer to highlight business opportunities in a couple of neighborhoods of St. Paul and Minneapolis could help change that.

The city's investment helps pays for the work of 21 employees at Greater MSP, CEO Michael Langley said, and they are going to redouble their efforts to make sure St. Paul gets what it needs.

The public-private partnership headquartered in St. Paul is mostly funded by private companies, but Greater MSP draws about a fifth of its $6 million budget from local governments. Its 40-member board of directors includes St. Paul Mayor Chris Coleman, Minneapolis Mayor Betsy Hodges and the CEOs of many companies in the Twin Cities area.

St. Paul's meeting with Greater MSP comes a month after Minneapolis dropped its 2017 funding for Greater MSP from $125,000 to $10,000. The city opted to instead use the money for a new employee who would work on business retention and expansion. Tolbert and Noecker said St. Paul also could do that if Greater MSP is not helping them get the jobs they want.

Langley said the group is working with Minneapolis to reinstate the funding the city pulled. The region has seen significant results from Greater MSP's work to grow jobs and promote the area, but it can be difficult to measure those results on a city level, he said.

Greater MSP should meet with city staff and elected officials to talk about goals, how to track outcomes and give the city annual reports, Noecker said. She also said the city needs to hold Greater MSP accountable for spending.

"We're seeing very lavish celebrations and meetings," Noecker said.

Langley was paid $814,000 in 2015 — a base salary of $515,000 plus $299,000 in deferred compensation as an incentive for him to finish his five-year contract.

Greater MSP staff notes on Wednesday's presentation, obtained by the Star Tribune, encouraged representatives to "be impressive, but not slick. The council has concerns about how we spend our $$."

The notes said some council members think the group spends lavishly, and advised Greater MSP representatives not to talk about the Ryder Cup or Minnesota Orchestra's European Tour, which Greater MSP staff attended. The note was attributed to St. Paul's Planning and Economic Development Director Jonathan Sage-Martinson.

After Wednesday's meeting, Sage-Martinson said he advised Greater MSP to talk about projects that were a St. Paul priority. He added that the Ryder Cup generated a lot of visitors to St. Paul.

Despite concerns, council members said they are supportive of the goal of a regional approach to economic development. Mayors Coleman and Hodges have emphasized the importance of regionalism and said they want to continue funding the partnership.

"I believe in regionalism," Noecker said. "But … we don't believe in it like we believe in the tooth fairy. We need to get results."

Jessie Van Berkel • 612-673-4649