Resolutions supporting Job Creation Fund (JCF) applications to the Minnesota Department of Employment and Economic Development on behalf of Rolls-Royce Solutions America Inc.

Adoption of the attached resolutions.

Rolls-Royce Solutions America Inc. (RRSA), currently operating in Mankato, plans to make equipment and building improvements to their current facilities located at 100 Power Drive and 304 Lundin Boulevard. RRSA, a wholly owned subsidiary of Rolls-Royce PLC (Darby, England), is a manufacturer of low and high-power range engine-generator sets ranging from 30kW to 3.2MW. RRSA has been providing power generation solutions in the Mankato community for over 65 years.
 
Currently, RRSA has one production and office facility along with four leased warehouse locations (three located in Mankato and one located in Becker, Minnesota). Additionally, there is one leased facility in Mankato for engineering and R&D functions. RRSA plans to consolidate all the leased warehouse facilities into one central logistics and operations center. This would involve constructing a new approximately 280,000 square foot building to the south of the current production and office facility located at 100 Power Drive. This proposed facility will have all raw materials delivered to, unloaded in, and stored within until needed in the production facility to assemble an engine-generator set. There will also be storage and staging for the finished product to then be loaded and shipped to our customers. Some production related sub-assembly will also be included in this facility. There will also be an office space for business-related office functions. Additionally, RRSA plans to make equipment and building improvements to the existing facility at 100 Power Drive. The Power Drive facility will be setup to produce high-power range S4000 gensets.
 
In addition to the project at Power Drive, RRSA also plans to relocate a portion of production operations to a currently leased facility at 304 Lundin Boulevard. The Lundin Boulevard location would be RRSA’s low power range product and would allow for expanded capacity on both their low power range and high-power range gensets. The Lundin Boulevard facility will receive raw inventory, assemble gensets, test gensets and ship to customers.
 
Capital expenses for the projects include building improvements, cranes, handling equipment, test bays, logistics equipment, and operational tooling. The project at the Power Drive location is estimated at $30.5 million over 3 years and the project at the Lundin Boulevard location is estimated at $4.5 million over 3 years.
 
RRSA is requesting the City to participate in the project through submittal of a Job Creation Fund (JCF) application to the Minnesota Department of Employment and Economic Development (DEED) for the projects located at 100 Power Drive and 304 Lundin Boulevard. DEED evaluates the application and notifies the City of approval or denial. If approved, DEED will formally designate the business as a Job Creation Fund business. DEED would draft a business subsidy agreement specifying project goals and duration for the agreement and send it to the business for signature. The City’s role is to submit the application to DEED on behalf of RRSA, provide a resolution supporting the project, and to assist the business with yearly reports and payment requests submitted to DEED. DEED will provide the JCF funds to the business once DEED verifies the performance of the project goals.
 
The JCF program provides job creation awards and capital investment rebates to designated businesses to new and expanding businesses engaged in manufacturing, warehousing, distribution, and technology-related industries for creating or retaining high-paying jobs and for construction or renovation of facilities or making other property improvements. The amount of funding available under the JCF programs is determined by DEED for each project. DEED determined up to $500,000 would be available to the project located at 304 Lundin Boulevard and up to $1,500,000 would be available to the project located at 100 Power Drive.
 
The public purpose for the above is job creation. RRSA currently employs 419 employees in Mankato and plans to create 103 new jobs over 3 years at the Power Drive location (50 direct jobs and 53 indirect jobs) and plans to create 25 new jobs in 2026 at the Lundin Boulevard location (25 direct jobs). The proposed wage and benefits for all direct and indirect jobs exceed the “livable” wage requirements of the Economic Development Policy Guidelines. Direct jobs include production and logistics material handling staff and indirect jobs include office staff.
 
The “livable” wage requirements of the Economic Development Policy Guidelines, which is based on a range between 80 percent of the median household income for Blue Earth County as established by the U. S. Census Bureau and compensation of at least 110 percent of the federal poverty level for a family of four, as determined annually by the U. S. Department of Health and Human Services (currently $16.50/hour).