After spending 14 years growing Affordable Buttons into a business with an annual revenue of $3.5 million, its owners say Rochester no longer is affordable enough to remain here.
Linda Christopherson, who moved her family-owned operation to Rochester in 2003, plans to shift her growing national button-making business with 166,000 customers to the heart of St. Charles in Winona County.
"The cost of having space in Rochester has gotten too costly," she said. "It's sad. We're a revenue importer. We ship to 80 percent of the states every day. But there's nothing in Minnesota to keep a business like us, other than the fact that we love Minnesota."
Christopherson and her husband, Tom, lease their space in the Highlands Business Park, as well as a 3,000-square-foot warehouse in Rochester.
They pay the property taxes for the properties, which have increased substantially in recent years. Leaving the city and Olmsted County is expected to add up to substantial savings for Affordable Buttons.
"In St. Charles, what we'll pay annually in taxes will be about the same as what we now pay monthly in Rochester," she said. "St. Charles is the perfect community for us."
Many of Affordable Buttons' competitors are based in states with lower tax rates or in cheap labor countries such as Mexico or China. That competition spurred the business to look at ways to reduce its costs.
The Christophersons looked at communities throughout the region and out of the state for about a year before settling on St. Charles as a new home.
During the next few months, they hope to start moving from 3269 19th St. NW in the Highlands Business Park to the former home of Active Tool & Die Manufacturing at 1221 Whitewater Ave. in St. Charles. Active Tool built a new facility in the Chattanooga Innovation Park on the edge of the city.
The 8,500-square-foot building will give Affordable Buttons a lot more space than it has in Rochester, and all of that space will be under one roof.
"It will be a lot more efficient," she said.
While the bulk of the operation and jobs will move, Christopherson is spinning off her Image Splash printing business to stay in Rochester as a separate entity. Image Splash prints brochures, business cards, shirts and other items.
It launched in 2011 with a very different business model than Affordable Buttons. Button customers from all over the country and the world make orders online. Image Splash is focused on the local community and is more "relationship-based."
"We definitely will keep Image Splash based in Rochester," she said. "That is not going to change."
While Christopherson sees this move as a shift away from the Med City and its growing pains, Gary Smith, of Rochester Economic Development Inc., has a different view.
"They will still be part of Rochester's economic base and labor market. This is just an example of Rochester becoming more of a Rochester metropolitan marketplace," he said.
Smith said each business must look at their own expenses and make the decisions that are right for them.
"I'd be more concerned if they were moving out of state or to the Twin Cities," he said.
Christopherson isn't certain how many of her 35 employees will end up working in St. Charles, but she does expect it to be easier to find workers outside of Rochester.
"The troublesome thing is there are more jobs than there are good people here. Rochester is in a painful state right now. Everybody is feeling it," she said.
Prior to deciding to move to St. Charles, she tested the waters by advertising for help there. That experiment turned out to be a success and resulted in five new employees for Affordable Buttons.
Bus service between Rochester and St. Charles also was considered, which means employees will have a reasonable way to make the daily trip from the Med City.
Looking long term, Christopherson said St. Charles will give them exciting options that wouldn't be available in Rochester.
"I think it'll be great for us and for St. Charles," she said.