OWATONNA — About 100 new jobs will be created, most of them in town, when a new Twin Cities-based construction company takes up residency in an Owatonna facility later this year.
Rise Modular, with corporate offices in downtown Minneapolis, is under contract to purchase the former Slidell building on Lemond Road in Owatonna. The building will be converted into a space to build “volumetric modular” apartment buildings and hotels — buildings that are made by stacking and joining finished modules to form a building.
The modules, which will be produced in Owatonna, will be at a maximum of 16 feet wide, 12 feet tall and up to 72 feet long, said Jason Jendrysik, vice president of operations for Rise Modular. Once the module is constructed, it will then be transported to the site of the apartment building or hotel where it will be lifted by a crane and stacked up with other modules to form the apartment building or hotel, said Jendrysik.
“Just like Legos,” he said.
The Owatonna factory — located at the corner of Lemond and SW 24th Avenue, across the street from Gopher Sport and next door to Cybex — should be up and running by the end of the year, said Christian Lawrence, the founder and CEO of Rise Modular, with hiring of workers to begin in the fall. Lawrence projects about 80 people will be needed for the production staff — from entry-level up to managers — when the facility is at full capacity, with an additional 20 administrative staff members. The administrative staff will largely be based in Minneapolis.
Between now and then, time will be spent getting the facility ready to handle the construction of the modular units. When the factory is up to full capacity, Lawrence expects it will be able to build 1,000 modular units — about 1 million square feet of space — per year.
Lawrence said there were a number of factors that attracted him to Owatonna in general and that building in particular.
“The facility requirements are rather unique,” he said, adding that the building needed to be “not just a warehouse.”
Lawrence said he spoke with Mayor Tom Kuntz on more than one occasion about possible properties in the city, as well as to Troy Klecker, the community development director for the city.
“We talked about options and potential locations in the industrial park,” Klecker said.
But they needed the building to have some specific features. Because of what will be built inside and then taken out of the building, the facility would need to have adequate height and large bays, Lawrence said. And, he was looking for a building that not only had adequate size to begin with, but also had the room to expand. He found all of that, he said, in the former Slidell building.
The facility could eventually expand to 500,000 square feet, Lawrence said.
He also said he liked the community and was encouraged by the workforce. If the factory eventually expands, as he hopes it will, the number of people employed there could expand as well, he said.
Lawrence did not say how much he was spending on the building itself, but he did confirm that the Owatonna project will cost about $20 million.
The use of modular construction for hotels and apartment buildings is not uncommon on the East or West Coasts, but it hasn’t been used much, if at all, in the Upper Midwest — something which Lawrence discovered when he was trying to develop a 200-unit apartment complex in St. Michael, Minnesota. He wanted to use modular construction, knowing that such construction can be done for 5% to 10% less than the cost of traditional construction.
The problem he ran into was that he couldn’t find a company nearby that could handle the job. The nearest he could find was in Boise, Idaho, with costs up to $10 per mile to transport each unit. That would mean that he could end up spending up to $3 million just to get the modular units from Idaho to Minnesota. So Lawrence, a developer who had not been in the construction business before, decided to start his own company, and Rise Modular was born.
“There’s no better way to start a company,” he said.