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Company hopes to break ground on childcare center this spring

On Tuesday of this week, the Mower County Board of Commissioners unanimously approved a 15-year tax abatement for Hormel Food Corps for the construction of an over 13,000 square foot, market rate community childcare center.

It’s one of the biggest steps for the company as it nears finalization of the center’s layout and targeted ground breaking this spring. Both the City of Austin and Austin School Board will also hold hearings on the project in the coming days.

“We’re really optimistic they will go through,” said Angie Bissen, manager of HR Business Partners for the company.

The tax abatement requests are the newest development for the estimated $5 million project, but its roots go much deeper in trying to answer the childcare challenge, a challenge that communities across the state and nation are coping with.

According to numbers cited in its 2022 Child Care Need Summary Southeast Minnesota, First Children’s Finance noted that in Austin alone the childcare capacity is currently short 531 slots. Meanwhile, that number rises to 809 slots when considering the whole of Mower County.

While it doesn’t reflect the actual number of children needing childcare services, it does reflect a dire need, something Bissen said Hormel’s own employees have been echoing for years.

“We had been hearing feedback from our team members as well as other employers in our community that available childcare options are a very important piece of establishing a vibrant community,” she said, but added. “It has become a challenge for attraction and retention. There’s also an economic development aspect so we started looking into it from that angle.”

That economic development points directly to the center’s proposed location, which would situate it on a piece of land recently purchased by Hormel Foods along 17th Avenue NW, just west of Worlein Funeral Homes and north of the Holiday Inn Austin Conference Center.

The location would give parents easy access to drop off and pick up as well as provide quick access to the 18th Avenue NW corridor.

“We landed at that location because we really were excited about the central nature of that location,” Bissen said. “It’s easy and convenient for parents and community members to support businesses that support that point.”

Construction is expected to last 12-16 months once ground is broken, hopefully sometime in late April and early May. Once completed, it’s expected that the center will have 130 slots for children,  with 100 slots dedicated to infant and pre-kindergarten students.

What’s not known yet is how many slots will be open to the general public. Hormel employees will have first preference of slots, but what that number looks like in the end hasn’t been decided. At the same time, early estimates have the center running at around 85% of total enrollment

“There’s a lot of operational decisions to be made over the next few months,” Bissen said. “As far as slots, we haven’t made a lot of decisions yet.”

What is known is that Hormel doesn’t expect to make a profit on the center or even break even, a reason the company is asking for the 15-year tax abatement.

During Tuesday’s County Commission meeting, Jeff Holt, senior manager of Corporate Properties explained the reasons were to ensure the center is financially feasible.

“If we price this at a rate to break even, it would be similar to ones in the metro,” Holt said. “It’s not sustainable.”

Before voting Tuesday, Commissioner Jerry Reinartz voiced his support for the project saying, “This is definitely a worthwhile project we’re all in favor of.”

It could also be a possible template for Hormel’s other locations.

“Austin is not unique in the fact that childcare is important in communities and something really important to both employees and parents,” Bissen said. “I think this project can provide a really great learning experience we can use to understand the impact of childcare in communities.”

“I hope we’ve conveyed how excited we are to bring another option into the community,” she added.