Graco will double size of its Rogers plant and training center

Pump and spray equipment maker Graco Inc. next year will more than double the size of the company's David A. Koch Center in Rogers to create the largest construction project in the city's history.

The project — designed by RSP Architects and being built by Mortenson Construction — will expand manufacturing and training, as well as creating better space to connect with customers and product distributors, Graco said on Thursday.

The plan is expected to cost roughly $73 million and calls for adding 480,000 square feet to Graco's existing 316,000 square foot building. The current site houses manufacturing, office and product development operations.

Construction will start later this month and finish by the end of 2019. About 84 new workers will be hired for the site over four years. There are more than 450 workers at the current center.

In addition to owning the David A. Koch Center, Graco also leases a distribution warehouse in Rogers that has 160 employees.

The Koch Center expansion is the latest growth move for Minneapolis-based Graco, which is known for making auto paint sprayers, industrial pumping systems used by food giants and foam sprayers regularly used to insulate homes and offices.

"Our growth is allowing us to build this world-class facility," said Dale Johnson, president of Graco's Worldwide Contractor Equipment Division. "Upon completion of the project, we will be opening the doors to our state-of-the-art training center for distributors and customers from around the globe."

The city, county and state will each assist Graco with the project.

Rogers City Administrator Steve Stahmer said the city plans to provide $1.15 million in tax increment financing breaks over a nine-year period and that Hennepin County this week agreed to give Graco grants worth about $836,000 to cover infrastructure and utility costs.

"Graco really is one of the city's premier employers and we are just happy that they have invested in Rogers for many years to come," Stahmer said.

City officials said they expect the state of Minnesota to provide job-creation "rebates" to Graco, provided the company honors its hiring and retention commitments.

In a statement, Rogers Mayor Rick Ihli said the city is excited about Graco's whole project because it brings both the development and jobs to the region. Once done, the enhanced Koch Center will be the largest property in the city. Including the leased warehouse, Graco will control nearly 1 million square feet of space in Rogers.

"Council and staff have worked hard alongside Graco to help make the project a reality. It will represent the single largest construction project in our city's history in both size and value," Ihli said. "We are proud Graco has chosen to expand and invest in Rogers, and we look forward to the partnership with Graco for many years to come."

Last month, Graco reported that nine-month sales jumped 13 percent to $1.25 billion and that nine-month profits jumped 24 percent to $267 million. The company reiterated its annual forecast, saying that full year sales should rise in the mid-to-high single digits. Graco ended 2017 with $1.47 billion in sales.

"With the exception of [Europe and the Middle East] underlying demand in our key end markets and geographies remains solid," CEO Patrick McHale said after the earnings release. "While we expect to face headwinds from tariffs, material costs and currency translation in the fourth quarter, we still believe we are well positioned to deliver another year of record sales and earnings in 2018."

Dee DePass • 612-673-7725