Company's HQ may be small, but St. Paul sees a big coup

Flagstone Foods is a growing firm, but one few in the Twin Cities business community have likely heard of. For now, at least.

St. Paul officials and city boosters are touting its newest corporate citizen, a purveyor of healthy snacks, which has chosen the capital city as its new home. At an open house for Flagstone last week, Mayor Chris Coleman said the news "is just one more sign that St. Paul has its doors open for business."

Flagstone was formed in 2010 by a San Francisco private equity firm that joined two snack food companies that it had bought, including Minneapolis-based American Importing Co. The company provides branded and private-label nuts, trail mix and dried fruits "to all major retailers," said CEO Paul Lapadat. He declined to specify any customers.

Flagstone employs just 46 people at its new headquarters in the Lawson Commons building, making it far smaller than the city's major downtown employers, including Ecolab and Securian Financial. (Flagstone's dried fruits operation off Kasota Avenue in Minneapolis has about 450 employees.)

Yet the cachet of luring a new headquarters to its central business district is palpable, as a tough economy ravages jobs and as more people telecommute. Minneapolis is home to higher-profile corporate headquarters downtown, including Target Corp. and U.S. Bancorp, but St. Paul benefits from having the State Capitol nearby, and several state offices downtown.

Plus, a headquarters presence has a "really nice economic multiplier effect," in terms of generating business from visiting clients who will frequent the city's hotels and restaurants, said Matt Kramer, president of the St. Paul Area Chamber of Commerce. Another benefit involves corporate executives who support the city's cultural community either financially or by helping out using their business expertise, he said.

Michael Langley, CEO of Greater MSP, said corporate headquarters also tend to attract legal, accounting, marketing and other types of service firms. While many central business districts will try to use retail as a starting point to spur economic development, he said such efforts are better served by first building "strong corporate activity downtown."

Still, corporate headquarters depend on the wiles of the economy and business cycles. The Twin Cities have lost several high-profile headquarters, including Pillsbury in downtown Minneapolis, which was bought by General Mills in 2000.

Lapadat, of Flagstone Foods, says his privately held company is growing "in the double digits" annually. (The company doesn't release financial information.)

"I think St. Paul is pretty excited to have a growing company downtown," he said. "They have welcomed us with open arms."

The city awarded Flagstone an $80,000 loan to help with the move, which will be forgiven at the end of the year as long as the firm maintains at least 40 full-time employees on site. All told, Flagstone employs about 1,300 people nationwide.

Lapadat, who has extensive experience with large food companies, said Flagstone's new St. Paul address was attractive to several members of the company's executive team because they have ties east of the Mississippi. He's among them: A native of Shoreview, Lapadat graduated from Mounds View High School and the University of St. Thomas before heading west for an MBA at UCLA.