Life Fitness, Rosemont, Illinois, recently broke ground on a 48,500-square-foot expansion of its factory in Ramsey, Minnesota.
The $4 million construction project will bring the factory's total size to 330,000 square feet. Ground was broken on the project Sept. 24. The addition, scheduled for completion in March 2016, is expected to increase production efficiency by restructuring floor layout. The expansion also is expected to provide additional jobs in the surrounding area.
The expansion is a result of factory production nearly doubling during the previous six years, according to a media release from Life Fitness.
"Our factory in Ramsey is vital to our global production," Life Fitness President Chris Clawson said in a statement. "We produce more products in Ramsey than anywhere else in the world, and we’re excited to continue growing with the community and providing more job opportunities as we expand."
The city of Ramsey approved a tax increment financing (TIF) agreement, a Minnesota business subsidy, to facilitate the project on Sept. 22. (Read more about it at the bottom of this page.) Minnesota's Department of Employment and Economic Development approved a job creation fund (JCF) award up to $441,600 for the expansion in a five-year contract ($182,000 in a job creation award and $259,600 in a capital investment rebate). Life Fitness said it will seek to use the project's capital with area contractors to invest in the area's economy.
"The city of Ramsey and state of Minnesota have both been a significant help in this expansion project, and we thank the community for its support and for being our partners in growth," Clawson said.
Life Fitness is the biggest employer in Ramsey, providing 300 full-time jobs and 100 part-time jobs at the factory, according to the city. Life Fitness has committed to creating a minimum of 14 full-time jobs over the next two years through the TIF agreement. Life Fitness Ramsey Plant Manager Adam Schrank told Club Industry that the company, in consideration of the TIF agreement and JCF award, is planning to create 26 positions over the next five years.
The Ramsey facility was acquired by Life Fitness in 1998, and it was expanded from 60,000 square feet to 225,000 square feet in 2000 amid global company growth, according to Life Fitness. The Ramsey factory produces more than 140 commercial strength Life Fitness and Hammer Strength fitness equipment products. It also produces welded components for Life Fitness cardiovascular equipment that are shipped to the Franklin Park, Illinois, factory for full assembly.
The Ramsey factory produces the Insignia Series, SYNRGY360, Multi-Jungles, Cable Motion machines, Hammer Strength Select Series, Hammer Strength plate-loaded equipment, and Hammer Strength Motion Technology Selectorized equipment.
"The planning for the expansion has been in process for more than a year as we anticipated strong demand for our new products," Schrank said.
With the addition, the total market value of the site is estimated to increase from $7.96 million to $9.89 million, and the city is estimated to increase its real estate tax revenue from $302,013 to $375,619.
Life Fitness also plans to expand further on a former health club site south of the factory, which is included in the TIF agreement. The second phase would add an additional 50,000 square feet for manufacturing purposes, increase the estimated total market value of the real estate to $11.89 million and increase the city's real estate tax revenue to $451,776.
The former club, Health Quest, is considered a "blighted" building, according to the city. The bank-owned property has been vacant since 2004. The TIF award for up to $224,000 to Life Fitness would cover building demolition, site cleanup, capping of wells and land acquisition costs.
The clearing of the Health Quest site is expected to be finished by April 2016, according to the TIF agreement, and the additional expansion is expected to be completed by 2018, according to the TIF plan. Schrank said no groundbreaking plans or timeline for the second expansion phase are set. The $4 million project cost for the current expansion does not include the second phase, Schrank said.
Life Fitness, a division of Brunswick Corp., Lake Forest, Illinois, also has factories in Falmouth, Kentucky; Tulsa, Oklahoma; Bristol and Delavan, Wisconsin; and Kiskoros, Hungary.
The TIF Agreement