Business & Economy

Thief River Falls, Digi-Key bet housing and day care can lure workers to NW Minn.

A woman moves boxes
A woman moves boxes at Digi-Key’s factory in Thief River Falls. City leaders are working with Digi-Key executives to boost housing and child care offerings, hoping to attract workers.
Mathew Holding Eagle III | MPR News

No region in the United States is immune to the lack of affordable homes and child care options for working people. Solutions remain elusive. What’s striking in Thief River Falls is how much effort and collaboration is aimed at addressing the problem.

"We're working really hard to try to find some solutions," said Dave Doherty, president of Digi-Key during a tour of the company’s sprawling warehouse. Around 3,600 employees work at the electronics facility located on the western edge of Thief River Falls.

Digi-Key's growth ambitions require a larger pool of workers to draw on over time, especially as existing employees retire.

"You know, we've had to face labor shortages almost since day one,” said Doherty. “And there's a number of successful companies in the area and all competing for a great labor pool."

A man talks with his hands
"We've had to face labor shortages almost since day one," says Digi-Key president Dave Doherty.
Mathew Holding Eagle III | MPR News

The problem is without a greater supply of housing and child care options, with costs that fit household budgets, recruiting and retaining families to this community will only get more challenging in the years ahead.

Digi-Key is tackling these quality-of-life issues by partnering with government and community organizations to boost production of housing and child care offerings.

A child care initiative, spearheaded by the group Advance Thief River, finalized a plan at the end of last year to increase the number of child care businesses.

The group created an awareness campaign that promotes child care as a desirable business. They also identified potential locations and landlords willing to lease property to child care providers.

"We have right around 400 seats available for any day care that wants to start up," said Brian Holmer, mayor of Thief River Falls.

Wood pallets line a floor
Wood pallets line the factory floor at Digi-Key’s headquarters in Thief River Falls. The town and company are working together to help solve the region's labor shortage.
Mathew Holding Eagle III | MPR News

Increasing housing for workers remains a challenge. A study completed in 2012 suggested that 90 units per year were needed each year for the next 10 years. Since then, just 591 housing units have been built in Thief River Falls.

Other ideas in the works include a preliminary plan to work with four developers of multi-family housing to create more units. A community land trust is also being considered. If all the projects move forward nearly 300 new units would be built.

"And it's not just affordable housing, because what's affordable? It's workforce housing, something that somebody that can afford it on a workforce salary," said Holmer.

A man sits for an interview
Brian Holmer, mayor of Thief River Falls, sits for an interview in his office.
Mathew Holding Eagle III | MPR News

A decade ago, housing and child care weren’t considered part of a community's economic development portfolio. That's changed.

"Economic development is coming around to this concept of it's more than just getting jobs into a community,” said Brigid Tuck, a senior economic impact analyst at the University of Minnesota Extension office in Mankato. “It's about how do we get residents? How do we retain residents? How do we make welcoming communities?"

A strength of the communities in northwestern Minnesota is their ability to tap social capital for solving problems. Social capital refers to the strong community bonds and connections that promote civic engagement and collaboration among community leaders.

"I think this region has been struggling with this long enough,” said Tuck. “They've started to really come together and figure out how does economic development and workforce development [work best]? How do we work together to really help keep our businesses and grow our businesses?"

A snowy sidewalk
The Ralph Engelstad Arena in Thief River Falls. City leaders and Digi-Key, the largest local employer, are working on ways to lure workers to the region.
Mathew Holding Eagle III | MPR News

Investing in a strong workforce can mean the difference between a vibrant local economy and one that's in decline. That doesn't mean it's an easy task.

"You can't ever take your foot off the gas," said Shane Zutz, head of head of human resources at Digi-Key. "I think the minute you take a breath, guess what happens? Then you're already behind again."

Correction (April. 14, 2023): Digi-Key’s president’s title was incorrectly identified in a previous version of this story. This has been fixed.