Switchback Medical, a manufacturer specializing in the development of medical devices, got the go-ahead from the Brooklyn Park City Council June 28 to relocate to the city with assistance from state and city-issued forgivable loans.
The company, which was founded and 2018 and is currently headquartered in Maple Grove, is considering and expansion into the 120,000-square-foot Egan Companies building at 7625 Boone Ave. N., near Hennepin Technical College.
“I am always excited when anybody wants to move — I’m going to say it — from Maple Grove to Brooklyn Park, from any community to our community, bus especially that.” Councilmember Lisa Jacobson said. “I’m excited for more job growth, adding more jobs for any business that after coming out of a pandemic (is) expanding.”
In April, the company approached the city with an interest in partnering to submit an application for the Minnesota Department of Employment and Economic Development’s Minnesota Investment Fund program, which provides funding to local governments and businesses to retain jobs and businesses in their communities.
That is, using the city as a pass-through and administrator, the state provides businesses – particularly those in the fields of engineering, manufacturing and technology – with forgivable loans to assist with relocation within the state. In exchange, those businesses promise to retain and create an agreed-on number of jobs.
Loan forgiveness is contingent on the number of jobs created by the company. If the company creates fewer jobs than it initially committed to, a portion of the loan will be required to be paid back.
Switchback Medical plans to invest up to $10 million to relocate its headquarters and manufacturing facilities to Brooklyn Park. The state, through the city, is offering the company $400,000 in forgivable loans to purchase clean rooms, new machinery and equipment.
This funding is planned to aid in the creation of 90 new jobs in the next two years.
Another 70 jobs existing at the Maple Grove facility will be retained at the new facility.
Salary at the facility ranges from approximately $26 per hour for machine operators to approximately $50 per hour for engineers.
Without the loan funds, Switchback Medical is considering relocating to Wisconsin.
Regardless of job creation statistics, the city has the option to not forgive a portion of the loan and retain payments for its own funds.
However, the city plans to forgive its portion of the loan, with the expectation that Switchback will participate in the Brooklynk workforce development and internship program.
“It’s a tight market for people right now. We’re just trying to find qualified operators, technicians, engineers. It is difficult” said Daryl Kiefer, representative for Switchback Medical. “I think that’s part of working with MIF and Brooklynk as well, is also working on the early stage — kids come in, interns, even high school interns, to be able to understand and see what we do and hopefully help them to move down that path of being either an engineer or an operator or a technician. That opportunity I think is good for them to see that.”
Switchback also requested support for an application to DEED’s Job Creation Fund, which is similar to the Minnesota Investment Fund, but functions as a pay-for-performance grant rather than an up-front loan.
Rebates through the fund can be as high as $2 million. In Switchback’s case, the rebate would be determined after jobs are created and retained, rather than before.
The council unanimously supported Switchback in both initiatives.
Councilmember Wynfred Russell thanked Switchback for moving to the city, but also asked that they considering hiring Brooklyn Park residents for the open and new positions. Councilmember Boyd Morson concurred.
Hennepin Technical College, North Hennepin Community College and Rasmussen University could all offer pipelines to employment with the manufacturer, Russell said.
“We would love to be able to hire as many people as we possibly could from that group from Brooklyn Park,” Kiefer said. “I think it makes a lot of sense to be able to hire people who are close to our facility.”
However, Switchback currently employs workers from throughout the region, he said.
Councilmember Susan Pha said she supports helping businesses that provide livable wages to employees.
“I am always supportive of doing forgivable loans at zero interest to help companies do that and succeed here in our city,” she said.
Since 2016, through the Minnesota Investment Fund, more than 350 new jobs were created in Brooklyn Park, while 150 were retained.
Other companies that have received loans to relocate to Brooklyn Park through the fund include Biomerics, Takeda, Cirtec, and Juno Pacific.
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