The proliferation of brown-fields—former industrial sitesthat remain vacant, polluted,and underutilized after they are

abandoned by their original occu-pants—has contributed to metropolitansprawl, and has diminished livability,economic competitiveness, and humanand environmental health in metropol-itan areas throughout the United States.According to the U.S. General Account-ing Office, more than 400,000 brown-fields exist nationwide. Although themedia typically portray brownfields as auniquely urban problem, inner-ringsuburbs in metropolitan areas arefrequently littered with brownfields,and they often face greater brownfieldcleanup and reuse obstacles than docentral cities.

As suburban cities in the UnitedStates have grown to cover a largergeographic area than central cities, thenumber of suburban brownfields hasgrown as well. The Superfund’s NationalPriorities List now contains 370suburban and 160 urban brownfieldsites. Of the 3,000 brownfield sites thatthe Minnesota Pollution ControlAgency (MPCA) estimates are located inthe Twin Cities metropolitan area, 54%are suburban, with this number repre-senting 37% of brownfields in the entirestate of Minnesota. A number offactors—including inadequate financialresources, limited redevelopmentcapacity, and competition from redevel-oped central-city industrial sites andundeveloped industrial sites in

Reusing Brownfields: Obstacles andOpportunities for Inner-Ring Suburbsby Jeffrey L. Miller

Center for Urban and Regional Affairs

In This Issue:

n Reusing Brownfields: Obstacles and Opportunities for Inner-Ring Suburbs . . . . .1 q Dennis Ahlburg Appointed to Fesler-Lampert Chair in Urban and

Regional Affairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10q Project Support Available from CURA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11n Minnesota’s Performance in Attracting Foreign Direct Investment . . . . . . . . . .12 n The Newborn Screen: An Underutilized Tool for Screening and

Counseling for Thalassemia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 q Project Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26q Update: The Minnesota Population Center . . . . . . . . . . . . . . . . . . . . . . . . . .26 q CURA’s Trade Centers of Minnesota Project Receives Award . . . . . . . . . . . . . .27q New Publications from CURA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

VOLUME XXXI NUMBER 3 OCTOBER 2001

REPORTER

outer-ring suburbs—have contributed toan environment in which inner-ringsuburbs struggle to address the problemof brownfield redevelopment and reuse.

During the 1999–2000 school year, Ireceived a graduate internship throughCURA to work for the CommunityDevelopment Department at the City ofRoseville, an inner-ring suburb of theTwin Cities. My work at the departmentwas focused on the Twin Lakes Redevel-opment Area, a major brownfield reuseproject. Based on my experiences, thisreport will explore the primary causes ofsuburban brownfields, the land-reuseobstacles facing inner-ring suburbs, andthe differences between inner-ringsuburban and central-city brownfields.The Twin Lakes project will then beused as a case study of typical brown-field reuse obstacles facing inner-ringsuburbs. The report will conclude with adiscussion of lessons learned from theproject, as well as recommendations forimproving brownfield reuse planning inthe Twin Cities metropolitan area.

Emergence of Suburban BrownfieldsMetropolitan land-use and developmentpatterns evolve over time through newsuburban development, infill projectswithin developed cities, and reuse ofunderutilized land. The Twin Cities’inner-ring suburbs, which developedbetween 1945 and 1965, started out aspredominantly residential “bedroomcommunities” at the metropolitan edge,but now occupy the inner ring of urbandevelopment around Minneapolis andSt. Paul (Figure 1). Following residentialmigration, post-World War II migrationof central-city industries to the suburbstook advantage of plentiful and cheaperundeveloped suburban land. However,as inner-ring suburbs eventually filled inand were surrounded by newer suburbs,their industrial sites carried higher landcosts, higher property taxes, andoutdated facilities and no longerprovided adequate space for firms’future expansion needs. Fifty years aftertheir original development, inner-ringsuburbs now contain minimal undevel-oped land and many outdated, polluted,and underutilized industrial sites.

Industrial activities, technologies,and markets also evolve over time,causing industrial facilities to expand,decline, relocate, update, or deteriorate.

The emergence of large suburbanbrownfields reflects the expanding scaleof industrial activities, increased use oftoxic chemicals, and more frequenttechnological advancements at the timeof major suburban industrial develop-ment (Table 1). In the postwar era,predominant industrial shipping modesalso shifted from railroads and water-ways to freeways and airways. Althoughindustries themselves evolve over time,basic industrial location criteria haveremained the same: low developmentcosts, low transportation costs for goodsand employees, skilled workforce avail-ability, and space for future facilitiesexpansion. Inner-ring industrial sites arenot easily reused for new industrialdevelopments or converted to otherland uses because they often have oldand obsolete infrastructure, buildings,technologies, and transportation access,and thus require restoration, updating,or removal prior to site reuse. Inner-ringindustrial sites typically meet with addi-

tional zoning regulations, special assess-ments for upgrading urban infrastruc-ture, environmental assessments,contamination cleanup, and site designrequirements to ensure compatibilitywith nearby development, each ofwhich can increase development delaysand costs. When inner-ring industrialsites no longer meet basic industriallocation criteria, they fail to competewith other metropolitan industrial sites.

Finally, federal and state environ-mental laws enacted in the 1980s, withtheir extensive cleanup standards andpolluter-must-pay approaches, serve asdisincentives for industrial propertyowners, potential buyers, and lenders toreuse brownfields. Higher costs anduncertainties relating to brownfieldassessment and cleanup often sacrificebrownfield reuse for environmentalenforcement. Many brownfields haveno or little contamination, but bear thestigma of contamination nonethelessbecause they are former or underutilized

2 CURA REPORTER

Cover photo: The Twin LakesRedevelopment Area, a large, inner-ringsuburban brownfield reuse projectlocated in Roseville, Minnesota.

Mpls St. Paul

Roseville

Twin LakesRedevelopmentArea

Inner-Ring Suburbs

Central Cities

Seven-County Twin CitiesMetropolitan Area

Figure 1. Location of Twin Cities’ Inner-Ring Suburbs and Twin Lakes Case StudyArea

industrial sites, or are located nearknown contaminated property. Withoutformal contamination assessments,perceived contamination issues canprevent uncontaminated or mildlycontaminated sites from being reused.

The incredible backlog of brown-fields in inner-ring suburbs representsthe loss of valuable physical, environ-mental, and economic resources formetropolitan areas. Although federaland state environmental agencies enactand enforce the majority of environ-mental policies regulating brownfieldcleanup and reuse, land use iscontrolled locally. Twenty years oflimited success with federal and stateenvironmental programs is forcing localgovernments to expand their role inbrownfield reuse. Leaders at city, sub-regional, and metropolitan levels mustface the daunting responsibilities anduncertainties of reusing vast acres ofbrownfields that have negativelyaffected their economies and residents’quality of life for years.

Brownfield Reuse Obstacles in Inner-Ring SuburbsAlthough inner-ring suburbs can learnfrom central cities’ brownfield reusestrategies, they also face different land-reuse obstacles. Inner-ring suburbs origi-nate from a later time period anddifferent development pattern thancentral cities, resulting in different taxbases, political structures, and environ-mental and land-use issues. Becauseinner-ring suburbs are much youngerthan central cities, they also have less

experience with large-scale land-reuseprocesses. The suburban context ofinner-ring industrial sites creates twobroad categories of brownfield reuseobstacles: competition from other sitesin the metropolitan real estate marketand limited public redevelopmentresources.

Essentially, brownfields are low-value industrial sites within the metro-politan real estate market. Theiroutdated industrial facilities and poten-tial contamination problems are liabili-ties for any type of reuse because they

substantially increase redevelopmentcosts and time frames. As industrialreuse sites, inner-ring brownfieldscompete with both undeveloped indus-trial sites at the metropolitan edge andredeveloping industrial sites in thecentral city. Undeveloped sites at theedge of metropolitan areas offer fewerdevelopment constraints, larger spaces,easier freeway access, higher visibility,and lower development costs. Central-city industrial sites are attractive fortheir image potential, their access toemployees and services, and the redevel-opment assistance offered by publicredevelopment agencies. Underutiliza-tion of developed industrial land andcontinuous development of new indus-trial land has created an oversupply ofmetropolitan industrial land, estimatedat 30 to 50 years of supply in severalmidwestern cities.

As nonindustrial reuse sites, inner-ring brownfields must also compete atthe metropolitan scale. Althoughcentral-city brownfields are typicallyconcentrated along waterfronts and rail-road corridors—the primary transporta-tion modes at the time of their originaldevelopment—suburban brownfieldsare generally concentrated along stateand county highway corridors becausetheir industrial development coincidedwith the highway-building era. Central-city brownfields attract nonindustrialreuses because they often provide desir-able sites for residential neighborhoods,entertainment districts, and parks. In

OCTOBER 2001 3

Table 1. Spatial Distribution of Site Remediation Section (SRS)* Known Contami-nated Sites in the Twin Cities Metropolitan Area

43 52 50 93 145(29.7%) (35.9%) (34.5%) (64.1%) (100%)

28 30 58 86 116(24.1%) (25.9%) (50.0%) (74.1%) (100%)

296 652 363 659 1,311(22.6%) (49.7%) (27.7%) (50.3%) (100%)

367 734 471 838 1,572(23.3%) (46.7%) (30.0%) (53.3%) (100%)

Inner-ringsuburbs

Centralcities

Developingsuburbs

Suburbantotal

Metro areatotal

Resource Conserva-tion and RecoveryAct (RCRA) sites

Superfund sites(state and federal)

Voluntary Investiga-tion and Cleanup(VIC) sites

Total

*Site Remediation Section is the Minnesota Pollution Control Agency’s list of knowncontaminated sites.

Source: Minnesota Pollution Control Agency

Potentially contaminated soil and groundwater in the Twin Lakes RedevelopmentArea must undergo environmental site assessments to determine whether contami-nation exists, and if so, to what extent. Contaminated properties must be cleanedup prior to redevelopment.

contrast, inner-ring suburbs developedas extensions of central cities, with littleregard for natural amenities, so theirsites are less attractive for nonindustrialreuses. Additionally, most brownfieldreuse funding programs discouragenonindustrial reuses because theyprovide less tax-base and employmentgrowth.

Although soil and water characteris-tics were originally overlooked inlocating suburban industries, industrialrelease of hazardous substancesthreatens a property’s soil and, evenworse, the groundwater runningbeneath the site. Inner-ring communi-ties are more likely than central cities torely on groundwater for drinking water,making suburban residents more vulner-able to groundwater contamination as ahealth issue. Groundwater contamina-tion impacts larger areas, includingadjacent properties and surface water,and is more costly to clean up. Subse-quently, many inner-ring brownfieldsare more difficult and expensive toclean up than central-city brownfieldsbecause they are located on morevulnerable land, impact larger areas, andpose greater health threats linked togroundwater contamination.

Inner-ring suburbs contain 22% ofthe commercial-industrial land in themetro area (Table 2), yet they havesubstantially less financial, political, andstaff resources than central cities to

tackle the unpredictable costs of brown-field reuse projects. Most inner-ringsuburbs are dominated by low-densityresidential development, with a smallershare of commercial-industrial develop-ment. In the Twin Cities, low-densityresidential development represents 62%of inner-ring land value (45% of landuse) compared to 54% of the centralcities’ land value (41% of land use). Incontrast, commercial-industrial develop-ment represents 15% of inner-ring landuse, but 21% of the central cities’ totalland use. Central cities benefit fromgreater commercial-industrial taxrevenues as well as higher taxes gener-ated from central business districts, eliteneighborhoods, and high-density resi-dential development. For example, thetotal 2001 commercial-industrial taxbase for Minneapolis and St. Paulcombined is 29% greater than the totaltax base for the 22 inner-ring suburbs1

involved in fiscal disparities ($302million versus $234 million), whereasthe central cities’ population is just 14%greater than that of the inner-ringsuburbs. Minneapolis and St. Paul alsohave large public redevelopment agen-cies with dedicated funding, theMinneapolis Community DevelopmentAgency and the St. Paul Port Authority.

These agencies’ capacity to collect taxesand issue general obligation bondsprovides the lion’s share of centralcities’ redevelopment funding. As aresult, inner-ring redevelopment isconstrained by lower tax revenues percapita than central cities.

At regional, state, and federal levels,inner-ring suburbs also face stiff compe-tition from central cities for redevelop-ment funding. Minnesota’s 1971 fiscaldisparities act (officially known as theCharles R. Weaver Revenue DistributionAct) requires that Twin Cities metropol-itan communities participate in regionaltax-base sharing by contributing 40% oftheir commercial-industrial tax-basegrowth since 1971 to a regional pool.This pool of funds is then allocated backto each community based upon theirtax base per capita, in effect lesseningtax differentials between high- and low-tax-rate cities. The shared tax basecurrently accounts for almost 30% ofthe Twin Cities’ commercial-industrialtax base, and approximately 11% of itstotal tax base. Although most inner-ringsuburbs benefit from regional tax-basesharing, some cities with highercommercial-industrial tax bases and thegreatest need for brownfield reinvest-ment (including Roseville, GoldenValley, Fridley, St. Louis Park, andMaplewood) lose a substantial portionof their tax base. Specifically, Rosevilleloses almost 10% of its total tax base,

4 CURA REPORTER

Table 2. Selected Demographic Data for Central Cities and Suburbs in the Twin Cities Metropolitan Area, 2000

Inner-ringsuburbs

Centralcities

Developingsuburbs

Suburbantotal

Metro areatotal

Total population, 2000 669,769 585,245 1,387,042 1,972,287 2,642,056Pct. change in total population, 1990–2000 4.6% 3.6% 28.0% 19.7% 15.4%Pct. of metro area population 25.4% 22.2% 52.5% 74.6% 100.0%

Total households, 2000 274,461 241,785 512,333 754,118 1,028,579Pct. change in total households, 1990–2000 1.3% 7.8% 34.8% 24.8% 17.5%Pct. of metro area households 26.7% 23.5% 49.8% 73.3% 100.0%

Projected total jobs, 2000 476,000 352,430 698,640 1,051,070 1,527,070Pct. change in projected total jobs, 1990–2000 5.5% 13.5% 36.6% 27.9% 20.0%Pct. of metro area projected jobs 31.2% 23.1% 45.8% 68.8% 100.0%

Industrial land (acres) as pct. of metro area total 18.0% 20.0% 62.0% 82.0% 100.0%Commercial land (acres) as pct. of metro area total 14.5% 25.0% 60.5% 85.5% 100.0%Commercial-industrial land (acres) as pct. 16.8% 21.8% 61.4% 83.2% 100.0%

of metro area total

Sources: Twin Cities Metropolitan Council; Citizens League

1 Nine of the thirty-one inner-ring suburbs are noteligible for fiscal disparities because they have apopulation of less than 9,000 residents.

funds that could be used for brownfieldreuse (Table 3). Suburban cities alsocompete for federal and state redevelop-ment funding, whereas central cities areguaranteed U.S. Department of Housingand Urban Development (HUD) redevel-opment funds as entitlement communi-ties for Community Development BlockGrants.

Inner-ring suburbs often lack suffi-cient staff and information resources toeffectively pursue brownfield reuse.Their small city staffs are responsible forthe same set of functions as largercentral-city staffs, including economicdevelopment, housing, zoning, compre-hensive planning, and public works.Because inner-ring suburbs are small,mostly developed, and experienceminimal growth, their budgets cannotsupport large staffs common in centralcities and growing outer-ring suburbs.

Central cities also benefit from largededicated redevelopment agencies,

whereas suburbs have a small redevelop-ment staff within their economic devel-opment departments. Often smallsuburban governments need to contractout project work to consultants for rede-velopment projects, planning studies,environmental assessments, andcomprehensive plans. Inner-ringsuburbs’ reliance on consulting firmsprevents local staff from gaining theredevelopment knowledge and expertiseto tackle future brownfield reuseprojects.

Finally, inner-ring suburbs often lackpolitical support and redevelopmentexperience for taking on brownfieldreuse projects. Suburban residents’ atti-tudes typically advocate less govern-ment, in the form of lower taxes,smaller city staffs, and resistance towardlarge publicly subsidized redevelopmentprojects. Inner-ring suburbs are lesslikely to use their eminent domainrights, which are often required for

assembling large redevelopment proj-ects, because they lack residents’support for aggressive governmentaction. Because inner-ring suburbsdeveloped later than central cities, theysimply have less experience with rede-velopment, and do not have thementality or procedures necessary tofuel brownfield reuse.

Roseville’s Twin Lakes RedevelopmentArea: A Case Study in BrownfieldRedevelopmentThe Twin Lakes Redevelopment Area inRoseville, located immediately north ofMinneapolis and St. Paul (Figure 1), is alarge underutilized industrial area thathas been the site of brownfield cleanupand reuse projects since 1988. TwinLakes encompasses 273 contiguous acresdeveloped with truck terminals andtrucking-related businesses, of which170 acres remain to be redeveloped.Trucking industry expansion in the

*Because only cities with a population of more than 9,000 can participate in the fiscal disparities program, nine smaller inner-ringsuburbs in the Twin Cities metro area are not eligible for regional tax-base sharing, and therefore are not included in this table.

Sources: Citizens League; Minnesota Pollution Control Agency

OCTOBER 2001 5

Table 3. Regional Tax-Base Sharing Statistics vs. SRS Sites for Inner-Ring Suburbs,* 2001

Commercial-industrial tax

base(millions of

dollars)

Total tax base(millions of

dollars)

Commercial-industrial taxbase as pct.of total tax

base

Net gain (orloss) in taxbase due to

sharing(millions of

dollars)

Pct. changein tax base

due tosharing

Pct. change incommercial-industrial taxbase due to

sharing

Known contami-

nated sites

Anoka $13,740 $ 5,759 41.9% $1,305 9.5% 22.7% 22Brooklyn Center 23,526 12,352 52.5% ,746 3.2% 6.0% 16Brooklyn Park 52,901 21,327 40.3% 2,158 4.1% 10.1% 20Columbia Heights 10,484 2,810 26.8% 2,512 24.0% 89.4% 7Crystal 14,679 3,787 25.8% 2,516 17.1% 66.4% 2Fridley 29,852 16,619 55.7% (1,091) -3.7% -6.6% 22Golden Valley 35,486 18,634 52.5% (2,350) -6.6% -12.6% 2Hopkins 17,827 7,841 44.0% ,432 2.4% 5.5% 26Little Canada 8,212 3,245 39.5% ,279 3.4% 8.6% 5Maplewood 42,184 23,431 55.5% (2,856) -6.8% -12.2% 12Mounds View 8,496 3,320 39.1% 1,093 12.9% 32.9% 0New Brighton 18,749 5,813 31.0% 1,104 5.9% 19.0% 25New Hope 18,852 8,202 43.5% ,414 2.2% 5.0% 19North St. Paul 7,125 1,670 23.4% 1,675 23.5% 100.3% 1Oakdale 20,814 6,910 33.2% 1,238 5.9% 17.9% 6Richfield 26,733 8,660 32.4% 2,564 9.6% 29.6% 10Robbinsdale 8,307 1,832 22.1% 1,868 22.5% 102.0% 6Roseville 50,318 28,644 56.9% (4,969) -9.9% -17.3% 32St. Louis Park 56,386 26,576 47.1% (2,237) -4.0% -8.4% 41South St. Paul 12,162 3,622 29.8% 2,953 24.3% 81.5% 9West St. Paul 15,468 4,713 30.5% 1,435 9.3% 30.4% 5White Bear Lake 20,215 6,231 30.8% 1,629 8.1% 7.1% 16

1960s necessitated relocation oftrucking firms from St. Paul’s UniversityAvenue area to Roseville’s Twin Lakesarea, which offered larger and cheapersites with excellent highway access.

Following federal deregulation of thetrucking industry in 1980, manytrucking companies consolidated andrelocated to outer-ring suburbs or wentout of business, leaving behind under-

utilized industrial sites in areas such asTwin Lakes. In response to decreasingtax revenues and jobs, Roseville identi-fied Twin Lakes as ripe for disinvest-ment and deterioration, and as unlikelyto achieve its highest and best land uses.

In 1988, Twin Lakes was designatedas a tax increment financing (TIF)district until the year 2014. Rosevilledeveloped a Twin Lakes Land Use GuidePlan, incorporating major land-usechanges and construction of a newroad, Twin Lakes Parkway. The land-useplan envisioned a mix of office, retail,and business land uses to graduallyreplace industrial uses. The parkway is anecessary infrastructure improvement tobreak up existing large parcels andprovide access to future redevelopedsites. Roseville also negotiated an agree-ment with a developer, Ryan Compa-nies, to lead redevelopment of theentire area, in accordance with the land-use plan. According to the agreement,Roseville will provide TIF funds to helpthe developer with site acquisition,building demolition, and contamina-tion cleanup, with the developeragreeing to reimburse Roseville’sexpenses with future revenue from thesale or lease of redeveloped sites.

Brownfield reuse benefits and costshave been significant thus far at TwinLakes, and Roseville has projected futurebenefits and costs for reuse of theremaining 170 acres (Table 4). From

6 CURA REPORTER

Benefits

Costs

• 170 acres of land to be assessed, cleaned up, andreused

• 5,800 additional jobs• $167 million in additional annual payroll• 1.8 million sq. ft. for new nonindustrial land uses,

including medical, high-tech, office, hotel, employeeservices, and housing

• $155 million in additional market value• $5 million in additional tax capacity

• $190 million in private construction investment• an estimated land redevelopment gap of $30 million—

due to high land costs, contamination assessment andcleanup, and demolition and relocation costs—wouldrequire public costs

• $14 million in public infrastructure costs for Twin LakesParkway (property acquisition, contamination cleanup,and construction), sewer, landscaping, and transitimprovements, with an estimated $6 million gap

Table 4. Major Benefits and Costs of Twin Lakes Redevelopment Project

Completed reuse projects (four phases) Future reuse projects (three or four phases)

Source: City of Roseville Community Development Department

• 23 acres of land cleaned up and reused• 1,150 jobs added• $40 million in annual payroll added• 322,600 sq. ft. of light industrial and office space

added• $19.4 million in market value added• $830,000 in annual property tax revenue added

• $24.4 million in public and private investment

Twin Lakes Corporate Center is a brownfield reuse project that emphasizes more flexi-ble and efficient industrial redevelopment, including multi-tenant buildings, increasedlot coverages, more flexible building space, and room for business expansion.

OCTOBER 2001 7

1993 to 1997, five Twin Lakes propertieswere redeveloped through collaborativedevelopment agreements betweenRoseville and the developer, using TIFfunds and MPCA’s Voluntary Investiga-tion and Cleanup program to acceleratethe brownfield reuse process. Initialredevelopment projects met withcontamination surprises that wereexpensive for Roseville, and that werediscovered after Roseville and the devel-oper already owned the properties. Toproceed with the redevelopmentprocess, Roseville partnered with thedeveloper, an environmentalconsultant, and MPCA to create anemergency cleanup plan. Unfortunately,these unanticipated cleanup issues ulti-mately cost Roseville $2.7 million,essentially draining all Twin Lakes TIFrevenues for the next 12 years.

At this point in the project, Rosevilleand the developer consider constructionof Twin Lakes Parkway absolutely neces-sary for attracting additional privatesector redevelopment. Roseville offi-cially mapped Twin Lakes Parkway in itscomprehensive plan so that it can moveforward with property acquisition androad construction. In 1999, Rosevillewas awarded a U.S. EnvironmentalProtection Agency (EPA) BrownfieldAssessment Demonstration Pilot grantof $200,000 for contamination assess-ments, cleanup planning, and commu-nity outreach for Twin Lakes Parkway.Working with environmental andeconomic development consultants,Roseville conducted contaminationassessments on all road right-of-wayparcels. In the past year, Twin Lakes wasawarded two additional brownfieldgrants from the EPA to capitalize arevolving loan fund for brownfieldcleanup and to conduct an areawidegroundwater evaluation of Twin Lakes.

Lessons Learned from the Twin LakesProjectThe Twin Lakes case study offers impor-tant insights regarding both potentialbrownfield reuse planning approachesand obstacles to inner-ring suburbanredevelopment. Twin Lakes land reusehas benefited from a clear and long-term public vision that Roseville hasprovided with its Twin Lakes Land UseGuide Plan, Twin Lakes Parkway design,and TIF program. Based on basic realestate location criteria, Roseville origi-nally envisioned a Twin Lakes businesspark made up of a diversified mix ofbusinesses with excellent access toamenities, including freeways, a new

parkway, transit, retail businesses, lakes,and recreational trails. Roseville iscommitted to adapting Twin Lakes fornonindustrial land uses through publicinfrastructure reinvestment, includingbuilding Twin Lakes Parkway, creatinglandscape and stormwater managementplans, developing lakeside parks andtrails, and conducting environmentalassessments of the site. Recently,Roseville completed a Twin LakesRenewal Strategy to update and consoli-date its various Twin Lakes land-useplans. As part of this renewal strategy,Roseville conducted an AlternativeUrban Areawide Review, and has addedresidential uses to Twin Lakes’ futureland-use plan (see Figure 2). Roseville isalso a member of the North MetroI-35W Corridor Coalition, a group ofseven suburban cities that formallycollaborates on subregional land use,transportation, economic development,and growth planning strategies thatimpact brownfield reuse.

Fear of expensive contaminationassessment and cleanup costs continuesto be an obstacle to private reinvest-ment and reuse of Twin Lakes’ brown-fields. Roseville conducted environ-mental assessments on all privateparcels in the proposed Twin LakesParkway right-of-way and discoveredonly isolated areas of contamination. Tofurther reduce uncertainties about

possible contamination problems,Roseville is conducting a groundwaterevaluation of the entire Twin LakesRedevelopment Area. By initiating andfinancing these upfront environmentalassessments, Roseville is doing its partto reduce contamination uncertainties,create standard streamlined approachesto brownfield assessment, and acceleratebrownfield reuse.

Given the limited financial resourcesof inner-ring suburbs and the uncertaincosts of brownfield cleanup, investingpublic funds in brownfield reuse is risky.If any unforeseen cleanup costs areincurred, as happened in Twin Lakes,local redevelopment funds can be wipedout. Public costs associated with futureredevelopment at Twin Lakes—whichwill include environmental assessments,contamination cleanup, land acquisi-tion and write-down costs, parkwayconstruction, and infrastructureimprovements—is expected to totalmore than $40 million. Multiple publicredevelopment funding programs andprivate funding sources are necessary tofinance large-scale brownfield projects.Roseville’s targeted public brownfieldreuse funding sources include TIFdistrict funds, EPA grants, MetropolitanCouncil grants, HUD grants and loans,and Minnesota Department of Tradeand Economic Development grants.Delayed redevelopment of major

Planned Twin Lakes Parkway

Twin Lakes RedevelopmentArea Boundary

Surface Water

Office/Medical/Hi-Tech Flex

Housing-Office Mixed Use

Service Mixed Use

Figure 2. Twin Lakes Proposed Master Plan Land Uses

Data sources: Ramsey County GIS; City of Roseville GIS

8 CURA REPORTER

portions of Twin Lakes has forcedRoseville to seek multiple fundingsources to compensate for declining TIFfunds, which expire in 2014 (Table 5).Roseville organized a Twin LakesFunding Sources Collaboration group tohelp identify potential funding sourcesfor various redevelopment components.

The Twin Lakes reuse project bene-fits from strong partnerships betweenRoseville, a committed private devel-oper, private consultants, MPCA, andEPA. Because Roseville has proven itscapacity for coordinating successfulbrownfield cleanup and reuse, the cityhas gained the confidence and supportof its partners for future brownfieldprojects. The benefits of a strong public-private partnership are cumulative, andultimately compensate for Roseville’sotherwise limited resources—bothfinancial and planning—available forbrownfield reuse projects.

In general, Roseville has beensuccessful at building political supportfor Twin Lakes brownfield reuse plan-ning and the city’s role in the process.Roseville periodically solicits input fromresidents, business owners, policymakers, and developers regarding TwinLakes land-use and infrastructure plan-ning. Roseville conducted public work-shops for its original 1988 Twin LakesLand Use Guide Plan, the VISTA 2000citywide visioning process in 1992, theTwin Lakes Parkway Plan in 1997, andthe Twin Lakes Renewal Strategy in2000. Currently, Roseville updates thecommunity and other stakeholdersabout Twin Lakes projects via newslet-ters and the city’s website. Althoughconcerns about environmental impacts,traffic increases, and public interventionin the redevelopment process still exist,Roseville consistently adapts its plansand policies to maintain politicalsupport for Twin Lakes projects.

Policy RecommendationsThe proliferation of brownfields ininner-ring suburbs, the daunting obsta-cles to suburban brownfield reuse, andthe lessons learned from Twin Lakesprojects underscore the need for morecollaborative and comprehensivebrownfield reuse approaches in inner-ring suburbs. Existing brownfields andredevelopment policies favor centralcities, even though inner-ring suburbsnow face many of the same problems,but with significantly fewer resources.To effectively tackle suburban brown-field challenges, inner-ring suburbsshould pool resources and redevelop-

ment efforts to develop subregionalbrownfield reuse planning approaches.Based on my research, I propose fourhigh-priority policies to promote betterunderstanding of brownfields at thesubregional scale and to level the play-ing field for inner-ring brownfield reuse.

Form Subregional Brownfield Plan-ning Partnerships. The most promisingstrategy for overcoming inner-ringsuburbs’ limited resources for brown-field reuse is to establish collaborativesubregional brownfield planning part-nerships that include both public andprivate stakeholders. Ideally, such part-nerships would involve cities, counties,and regional agencies, along with envi-ronmental, financial, and developmentexperts. Cities’ resources could beconsolidated into a one-stop shop forbrownfield information and services,increasing each city’s brownfield reuseplanning capacity, allowing subregionalcoordination of brownfield reuse, andachieving economies of scale for brown-field planning. Community brownfieldeducation and marketing programswould be important services of these

subregional partnerships. Pooling finan-cial resources would help reduce thecosts of brownfield cleanup and reusefor cities, compensate for suburbs’nonentitlement status for federal HUDredevelopment funds, and leverageadditional redevelopment funds fromstate and federal brownfield fundingagencies. Roseville has a unique oppor-tunity to explore the potential benefitsof collaborative subregional approachesto suburban brownfield reuse throughits participation in the North MetroI-35W Corridor Coalition.

Proactively Assess Brownfields toBuild a Comprehensive SubregionalInventory. Proactive environmental andeconomic assessments of potentialbrownfield sites would provide a holisticview of brownfields across neighboringcommunities and an understanding ofthe broader brownfield market. Basedon environmental assessments andreuse potential, brownfields could befully characterized, mapped, and priori-tized using a geographic informationsystem (GIS) database. A multidimen-sional brownfield inventory should

• Brownfields Assessment Demonstration Pilot grant• Brownfields Cleanup Revolving Loan Fund grant

• Economic Development Loan Fund guaranteed loans:Section 108 of Community Development Block Grantsprogram—public redevelopment projects

• Brownfields Economic Development Initiative grants—contamination cleanup and redevelopment projects

• Economic Development Initiative grants—public rede-velopment projects

• Voluntary Investigation and Cleanup program

• Contamination Investigation and Response Action PlanDevelopment grant

• Contamination Cleanup grant

• Contamination Tax—reduction to property tax rate ofassessed contaminated property

• Tax Base Revitalization Account grant—cleanup ofcontaminated land

• Livable Communities Demonstration Account grant—redevelopment planning

• Tax increment financing bonds• Property tax abatement refunds

Table 5. Major Brownfield Reuse Funding Programs in Minnesota

Brownfield funding programs

Source: City of Roseville Community Development Department

Funding agencies

U.S. EnvironmentalProtection Agency

U.S. Department ofHousing and UrbanDevelopment (withRamsey County asfunding applicant)

Minnesota PollutionControl Agency

Minnesota Departmentof Trade and EconomicDevelopment

Minnesota Departmentof Revenue

Twin Cities Metropol-itan Council

Cities

include the following three key compo-nents:

Contaminated properties—identifylocations, spatial area, and types andseverity of contaminated sites basedon site contamination assessmentsEnvironmentally vulnerable proper-ties—identify properties highly vul-nerable to contamination based ongroundwater vulnerability assess-mentsUnderutilized industrial properties—identify industrial properties nolonger achieving their highest andbest uses based on building-to-landvalue ratios

Groundwater vulnerability assessmentsand land utilization assessments wouldhelp clarify appropriate types of brown-field reuses from both an environmentaland an economic perspective. Ulti-mately, the brownfield reuse processcould be sped up if sites with minimalcontamination and high reuse potentialwere identified and prioritized early inthe redevelopment process.

Treat Brownfields as a RegionalTax-Base Issue. Brownfield cleanup andreuse obstacles have a direct negativeimpact on local and regionalcommercial-industrial tax bases, andtherefore should be reflected in the TwinCities’ regional tax-base sharing calcula-tion. Just as commercial-industrialtax-base growth is shared regionally,brownfield costs should be sharedregionally to reduce fiscal disparitiesamong cities impacted by brownfields.Underutilized industrial sites onceprovided regional employment opportu-nities, and their future reuses willprovide jobs or other benefits regionally.

Based upon a regional average, localbrownfield costs per acre (including siteassessments, cleanup, and redevelop-ment) could be estimated and deductedfrom each city’s commercial-industrialtax base. Cities would still contribute40% of their commercial-industrial tax-base growth, but tax base per capitawould be adjusted downward forbrownfield costs, resulting in increaseddistribution of the fiscal disparities poolto cities with brownfields. Brownfieldsentered into the Voluntary Investigationand Cleanup program would qualify forthis tax-base adjustment, which wouldserve as an incentive for cities to beginthe brownfield cleanup process. In addi-tion, metropolitan and county redevel-opment funding programs—includingthe Metropolitan Council’s Tax BaseRevitalization and Livable Communitiesprogram and county-administeredCommunity Development Block Grantsfunds—should more aggressivelysupport subregional brownfield reuse ininner-ring suburbs.

Establish Subregional BrownfieldReuse Plans. Because brownfieldcontamination and reuse impacts crosscity borders, and because suburbanbrownfield projects must compete forpublic redevelopment funds, contiguoussuburbs should establish subregionalbrownfield reuse plans. Brownfieldsrepresent a valuable subregional oppor-tunity because they provide the lastlarge-lot opportunities for redevelop-ment in otherwise developed areas. Toalleviate the oversupply of metropolitanindustrial land, brownfield reuses mustbe analyzed subregionally based oncurrent real estate location criteria and

future subregional industrial needs.Many brownfields could be redevelopedmore efficiently through residential,commercial, institutional, or parklanduses. A brownfield reuse plan wouldoffer a broader subregional vision, iden-tify subregional brownfield prioritiesand processes, reduce uncertainty forpotential public and private investors,reduce the oversupply of industrialland, and strengthen the subregion’seconomic competitiveness.

ConclusionEfficient and successful reuse of inner-ring suburban brownfields requiresbroader planning resources, reuseoptions, and collaboration at strategicsubregional scales. Broader sharing ofbrownfield information, assessments,inventories, and reuse plans wouldexpand reuse options while reducingthe oversupply of industrial land in thesubregion and metropolitan area.Treating brownfields as a regional costwould enable collaborative subregionalbrownfield planning partnerships, poli-cies, processes, and funding. Newapproaches to inner-ring brownfieldredevelopment represent importantopportunities for ensuring healthy andcompetitive metropolitan areas, recy-cling existing developed landscapes,reducing metropolitan sprawl, andcreating new metropolitan developmentforms to meet today’s evolvingeconomic, social, and environmentalrealities.

Jeffrey L. Miller is a research fellow inurban planning at the Design Center forAmerican Urban Landscape in the Collegeof Architecture and Landscape Architec-ture at the University of Minnesota. Herecently graduated from the Master ofPlanning Program at the Hubert H.Humphrey Institute of Public Affairs, andthis article is based on his thesis project.At the time the research for this articlewas initiated, Mr. Miller was employed asa graduate student intern by the City ofRoseville through CURA’s Local Govern-ment Planning Interns program.

OCTOBER 2001 9

Twin Lakes Health Center, constructed in 1994, represents a successful nonindustrialreuse project that provides convenient health services for community residents,increased tax base revenue, and more efficient land use.

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10 CURA REPORTER

Dennis Ahlburg, professor ofhuman resources and indus-trial relations in the CarlsonSchool of Management’s

Industrial Relations Center, has beennamed to the Fesler-Lampert Chair inUrban and Regional Affairs for2001–2002. Ahlburg’s appointment,which was announced this past June,was made by the Dean of the GraduateSchool and Vice President for ResearchChristine Maziar, based on recommen-dations from CURA.

“I am honored to be awarded thechair after its first holder, JohnAdams,” Ahlburg replied when askedfor his reaction to the announcement.“I think CURA has done an out-standing job of supporting research oncritical public policy issues facingMinnesota. . . . So much of the workdone in urban and regional affairsaffects us directly, either because weexperience the effects of the issue orbecause [the issue affects others] in ourcommunity or state, and these are thekinds of issues too often overlooked.”The Fesler-Lampert Chair, he said,“brings recognition within the Univer-sity that these issues are important.”

The Fesler-Lampert Chair in Urbanand Regional Affairs is one of fourendowed chairs and two named profes-sorships made possible through agenerous contribution to the Univer-sity of Minnesota by David R. andElizabeth P. Fesler. The Fesler-LampertEndowment in Interdisciplinary andGraduate Studies was initially estab-lished in 1985 through a $1 milliongrant from the David R. Fesler Fund ofthe Saint Paul Foundation, Inc. Thegift was matched by a $1 million allo-cation from the Permanent UniversityFund, and the combined endowmentand matching funds have now grownin value to over $9.5 million. Theendowment is intended to stimulateinterdisciplinary research and teachingthrough the appointment of distin-guished, broadly learned scholars toendowed faculty positions at theUniversity of Minnesota.

Tom Scott, director of the Centerfor Urban and Regional Affairs, said

that he is “exceptionally pleased tohave Dennis Ahlburg serve as CURA’ssecond holder of the Fesler-LampertChair in Urban and Regional Affairs.”Scott noted that Ahlburg has “a longand distinguished record of researchand teaching covering a wide range oftopics related to demography, popula-tion studies, and workforce develop-ment. He also has a history withCURA, having participated in severalCURA projects, including an examina-tion of differences in the supply anddemand for nurses in Minnesota, andstudies of poverty in the state.”According to Scott, Ahlburg’s currentresearch, which focuses on employeeturnover rates among Minnesotacompanies, “fits well with CURA’soverall research mission.”

Ahlburg has taught at the Univer-sity of Minnesota for more than 20years. He received his bachelor’s degreein economics from the University ofSydney and his master’s degree ineconomics from the AustralianNational University before completinghis Ph.D. in economics at the Univer-sity of Pennsylvania in 1979. He took aposition as a lecturer in economics atSwarthmore College before coming tothe University of Minnesota in 1980 asassistant professor in the Departmentof Industrial Relations. Ahlburg has

been a visiting professor or researchfellow at numerous universities andpolicy centers around the world,including the Australian NationalUniversity’s National Center for Devel-opment Studies, the East-West Center’sProgram on Population, the Depart-ment of Social Statistics at the Univer-sity of Southampton (U.K.), and theUniversity of Minnesota’s Center onAging and Center for PopulationAnalysis and Policy.

In addition, Ahlburg has served asdirector of graduate studies in theIndustrial Relations Center at theCarlson School of Management, and asdirector of the Center for PopulationAnalysis and Policy in the HumphreyInstitute for Public Affairs. He wasrecently appointed associate dean offaculty and research at the CarlsonSchool of Management, and he iscurrently on the editorial review boardof more than a dozen leading journalsand organizations in the field ofeconomics.

Although he admits that theobjects of his research are “not usuallyconsidered part of mainstreameconomics,” Ahlburg’s work has madea significant contribution to knowl-edge and understanding of urban andregional affairs. He has written, edited,or co-authored more than 100 articles,books, and reports on topics as diverseas poverty and income distribution,the commercial sex industry andpublic health, the effects of populationgrowth on economic development,and the relationship between unem-ployment and social problems such ashomicide and suicide. “My researchhas focused on the intersectionbetween economics and demography,”he explained. “I am intrigued by whypeople behave the way they do, and Itry to show how an understanding ofeconomics helps us understand a lot ofhuman behavior.”

Ahlburg’s publications include TheDecline of the U.S. Steel Industry: SomeLabor Market Implications for North-eastern Minnesota (Northeast MinnesotaTask Force, 1983), “The Social Costs ofUnemployment” (in Work, Leisure, and

Dennis Ahlburg Appointed to Fesler-LampertChair in Urban and Regional Affairs

Dennis A. Ahlburg

OCTOBER 2001 11

Technology, Longmans Cheshire, 1986),“The Pay-Performance Relationship inthe National Football League” (inAmerican Professional Sports, Universityof Illinois Press, 1991), Poverty inMinnesota: Incidence, Change, Correlates(CURA, 1997), Southeast Asian Popula-tions in Crisis (with Gavin Jones andTerry Hull, United Nations PopulationFund, 1998), and “Population Fore-casting” (in Principles of Forecasting,Kluwer Academic Publishers, 2001).Ahlburg’s recent collaboration withBrian McCall (University of Minne-sota) and Stephen DesJardins (Univer-sity of Iowa) has investigated thefactors affecting college dropout andgraduation. This work has beenpublished in the Journal of HigherEducation, Research in Higher Education,and the Journal of Human Resources.Ahlburg also has been a frequentcollaborator with CURA, as well as aregular contributor to the CURAReporter.

Currently, Ahlburg is engaged in aresearch project with colleaguesConnie Wanberg, Theresa Glomb, and

Steven Smela called the MinnesotaRetention Study, which investigateswhy employees leave companies. “Welook at economic factors such as pay,benefits, and promotion prospects,”Ahlburg explained, “but also psycho-logical factors such as expectations ofthe job and the organization andwhether they were met, whether theindividual feels they ‘fit’ the organiza-tion, and how personal or work crisesaffect retention.” This research isparticularly crucial to Minnesota,where turnover among employeesexceeds the national average and hasbecome a major human resourcesproblem for companies.

Ahlburg plans to use the resourcesprovided by his appointment tocontinue carrying out the empiricalwork that is at the heart of the study:surveying a selected group ofemployees every four months over thecourse of several years to track theiremployment behavior and determinethe factors that underlie them. “Wethink the decision to leave an organi-zation is not something that happens

in an instant—it builds over time,”Ahlburg noted. “To study thisbehavior, you therefore need to collectdata over time. We plan to look at howthese factors change over [the courseof two years], and how their effects onretention change.” He also hopes touse the resources to begin work on twoextensions of the study: an analysis ofemployee turnover in the long-term-care industry in Minnesota, and aproject on recruitment and retentionof childcare workers in the state forthe Department of Children, Families,and Learning.

The Fesler-Lampert Endowment isintended as a tribute to David Fesler’sgrandfathers, Bert Fesler and JacobLampert. The Fesler-Lampert Chair inUrban and Regional Affairs isappointed for a one-year period, andreceives approximately $55,000 forresearch, salary, and logistical support.The funds are jointly administered bythe University of Minnesota Founda-tion and the University of Minnesota.

n The Community AssistantshipProgram (CAP) matches community-based nonprofit organizations, citizengroups, and government agencies inGreater Minnesota with students whocan provide research assistance.Eligible organizations define a researchproject, submit an application, and ifaccepted, are matched with a qualifiedstudent to carry out the research. Thedeadline for applications for spring2002 (January through May) isNovember 1, 2001. For more informa-tion, to discuss potential projects, orfor assistance with applications, con-tact CAP coordinator Jan Joannides byphone at (612) 251-7304, or by e-mailat joann001@umn.edu.

n Neighborhood Planning forCommunity Revitalization (NPCR)provides student research assistance toMinneapolis and St. Paul comm-unity organizations involved inneighborhood-based revitalization.Projects may include any issue relevant

to a neighborhood’s needs and inter-ests, including planning, programdevelopment, or program evaluation.Priority is given to projects that sup-port and involve residents of color.Applications from organizations collab-orating on a project are encouraged.Applications are due November 7, 2001,for winter/spring 2002 assistance. Formore information, visit NPCR’s websiteat http://www.npcr.org, or contactNPCR project director Kris Nelson byphone at (612) 625-1020, or by e-mailat nelso193@umn.edu.

n The University NeighborhoodNetwork (UNN) links communityorganizations to course-based neigh-borhood projects that students carryout as part of course requirements. Formore information about support forcourse-based projects, visit UNN’s web-site at http://www.unn.umn.edu, orcontact UNN coordinator Emily Schugby phone at (612) 625-0744, or by e-mail at unn@umn.edu.

Project Support Available from CURA

Credits

Photo on cover courtesy of the DesignCenter for the American UrbanLandscape, University of Minnesota.

Photos on pages 6, 10, 12, and 25 bySteve Schneider.

Photo illustration on page 19 by NancyConroy.

Photos on pages 3 and 9 courtesy ofJeffrey Miller.

All figures prepared by the CartographyLaboratory, Department of Geography,University of Minnesota.

Design by Mori Studio.

Printed by University Printing Services.

For several decades after WorldWar II, the phrase “multinationalcorporation” was virtuallysynonymous with overseas

activity by U.S. businesses. Europeanand Japanese firms moved aggressivelyinto foreign operations only in the late1960s and early 1970s. As late as 1977,the share of foreign affiliate output inthe gross product of the private U.S.economy was only 2.3%. This figuremore than doubled during the nextdecade. Likewise, the growth of employ-ment in foreign-controlled firms in theUnited States increased by an average of11.8% per year from 1977 to 1989, andthe share of total employment duringthe same period grew from 1.7 to 4.9%.

Governor Rudy Perpich’s administra-tion began a public campaign in 1981to internationalize Minnesota’s businesshorizons by promoting both increasedexports to other countries and foreigndirect investment (FDI) in the state.Perpich viewed FDI as a major untappedsource of economic revitalization—atool that could increase overall statewealth and its imperfect but politicallysalient correlate, jobs. As part of thecampaign, Perpich made a series ofhighly publicized foreign trips, openedthe Minnesota Trade Office, and chose acommission to recommend the site forthe World Trade Center, which wascompleted in 1984 in downtown St.Paul.

The 1980s brought painfuleconomic adjustments to Minnesotaand most other states. The federalgovernment cut taxes while reducinggrants to the states, thereby substan-tially increasing the service burdenplaced upon them. Until late in thedecade, many states’ economic prob-lems were exacerbated by a shrinkingindustrial base made vulnerable by theascendant dollar. Therefore, althoughMinnesota’s FDI efforts came earlier,were more dramatic, and were betterpublicized than most, nearly every state,eager to pursue any development possi-bilities, jumped onto the international

12 CURA REPORTER

Minnesota’s Performance in Attracting ForeignDirect Investmentby Robert T. Kudrle

business development bandwagon. By1987, all but two states had well-identified parts of state governmentengaged in some kind of internationalbusiness development, and nearly everystate claimed to be actively recruitingforeign investors.

The sharp increase in FDI—particu-larly the well-publicized activities ofJapanese investors—caused alarm insome circles. No less a figure than Mass-achusetts Institute of Technology (MIT)economist Paul Krugman predicted thatpolitical disputes over FDI would over-shadow trade disputes in the 1990s. Thisdid not happen for several reasons. First,the Japanese economy fell into reces-sion in the 1990s, and fears aboutJapanese dominance disappeared.Second, the rate of expansion of FDIduring the 1990s was much lower thanearlier, tracking quite closely the growthof the U.S. economy as a whole. Third,even when the negative reaction to FDIwas loudest, most of the public andpolicy makers alike remained supportiveof FDI in their own jurisdictions.Although most states maintained minorlegal restrictions over foreign invest-ment in agricultural land, finance, andinsurance, no significant state-levelpolicy changes unfavorable to FDI wereenacted. In retrospect, it appears thatthe 1980s provided the same period ofrapid adjustment to new economicopportunities for foreign firms in theUnited States that the 1950s and 1960shad afforded U.S. firms in Europe.Throughout Europe in the decades afterWorld War II, penetration by U.S. firmsgrew rapidly at first, after which theshare of U.S. investment remained rela-tively steady. Despite its rapid rise in the1980s, the current level of FDI leavesthe United States with a considerablylower level than any other majormodern economy except Japan, wherethe estimated stock of direct investmentin 1995 was 0.3 % of gross domesticproduct (compared with 7.7% in theUnited States, and 13.2% for the Euro-pean Union).

The study upon which this article isbased attempted to evaluate howMinnesota fared during the “foreigninvestment rush” of the 1980s, theeffects of which will last long into thefuture. My interest in the subject goesback to the days when I served as aconsultant for the City of St. Paulduring its successful bid for the WorldTrade Center, and continued when Iconsulted for the Urban Institute severalyears later as it evaluated Minnesota’sbusiness development efforts. The

Center for Urban and Regional Affairssupported my research on the evalua-tion of state international businessdevelopment efforts in the late 1980s, aswell as the more recent study of foreigndirect investment in Minnesota uponwhich this article is based (see sidebar).

The StudyThis study attempted to look at FDIcomprehensively, and to place theresults in an easily understood context.It aimed to fill a gap between purelydescriptive writing about variations instate performance and highly special-ized statistical studies of certain kinds ofinvestment. The study examinedMinnesota in the context of theperformance of all 48 contiguous statesin the United States1 using a simplemodel that considered investment ineight distinct economic sectors, as wellas total investment.

Foreign direct investment can betracked in a variety of ways, includingmeasures of contributions to grossproduct, total asset ownership, andemployment produced. Employmentresults are reported in this articlebecause employees are most accuratelyclassified among sectors. Table 1 showsthe amount of employment generatedby FDI by state and by sector in 1996,2

as well as the ratio of FDI employmentto total employment in the state foreach sector.

Based on these data, Minnesotascarcely stands out as a host to foreigndirect investment. Its FDI-controlledshare of private employment wasslightly below the simple nationalaverage of all of the states for totalinvestment—3.5 versus 3.6%—and wasbelow the national average for each ofthe sectoral categories except Real Estateand Other Industries. The important

OCTOBER 2001 13

Full Report onForeign DirectInvestmentAvailable from CURAMinnesota as a Host for Foreign DirectInvestment: A Comparison withOther States. By Robert ThomasKudrle. Minneapolis: Center forUrban and Regional Affairs, 2000.CURA 00-3. 75 pp. Free.

This report presents thecomplete results of a study,conducted by the Freeman Centerfor International Economic Policyat the University of Minnesota,investigating how well Minnesotahas fared in attracting foreign directinvestment (FDI) compared withthe other 47 contiguous states inthe United States. Based on Bureauof Economic Analysis and Interna-tional Trade Administration data forthe year 1996, the study evaluatedthe significance of various state-level determinants of FDI, includinggross state product, gross stateproduct growth rate, geographiclocation, economic structure, work-force unionization rate, highereducation expenditures, and corpo-rate income tax rate.

Using employment figures asthe primary measure of investment,Kudrle measured Minnesota’s FDIperformance both for aggregatelevels of investment, and for eightindividual investment sectors:manufacturing, wholesale trade,retail trade, finance, insurance, realestate, services, and other unclassi-fied industries (agriculture, forestry,fishing, mining, construction,transportation, communication,and public utilities). The authorfound that a state’s overall size andthe existing structure of itseconomy were both significantfactors in determining a state’s FDIperformance. Based on theseresults, the report concludes thatMinnesota should pursue an indi-rect approach to foreign directinvestment policy by establishing afavorable climate for the attraction,retention, and growth of economicactivities that it regards as other-wise desirable.

To order, call (612) 625-1551 oremail cura@umn.edu.

2 Data from 1996 were used because these were thebest recent figures available at the time theresearch was conducted. Since that time, two moreyears of state-level data have become available, butthey are presented in a new set of business sectorcategories that are incompatible with earlier meas-ures used. Still newer data at the national levelsuggest a strong rebound in U.S. FDI from 1998 to2000. Most experts see this surge as a temporaryresponse to a strong economy in the United Statesand weaker economies abroad.

1 Alaska and Hawaii are not considered here, or inmost other studies of FDI. In addition to their lackof physical proximity to the other 48 states, eachhas unique attractions as a host for FDI that arelargely unrelated to conditions in other states.Specifically, Alaska is host to much of the coun-try’s petroleum investment, and Hawaii is a vaca-tion paradise relatively close to the Far East andhas therefore drawn very high levels of foreignreal estate investment.

14 CURA REPORTER

Source: Bureau of Economic Analysis, Operations of U.S. Affiliates of Foreign Companies, Table G7,http://www.bea.doc.gov/bea/uguide.htm#_1_23

* Finance does not include depository institutions.

Table 1. Sector Employment from Foreign Direct Investment by State, and in Relation to Total State Sectoral Employment,1996

Alabama 61,400 3.2% 37,900 9.8% 8,800 9.3% 3,200 1.0% 0 0.0% 600 2.5% 0 0.0% 6,600 1.5% 3,000 0.5%

Arizona 56,700 2.8% 17,900 8.9% 4,000 3.9% 14,300 3.8% 250 0.5% 1,750 5.5% 300 0.9% 8,900 1.5% 5,500 0.9%

Arkansas 35,100 3.0% 22,900 9.0% 3,500 7.1% 3,200 1.6% 0 0.0% 600 5.3% 100 1.1% 2,500 1.0% 1,500 0.4%

California 545,300 3.9% 194,500 10.5% 93,200 12.3% 65,300 2.8% 4,300 1.6% 17,200 7.9% 6,300 3.3% 109,600 2.5% 49,500 1.2%

Colorado 69,800 3.4% 19,400 9.8% 6,300 6.3% 14,100 3.7% 700 1.9% 4,400 12.4% 400 1.3% 10,200 1.7% 12,600 1.9%

Connecticut 83,300 5.0% 35,800 12.9% 9,000 11.0% 24,600 8.9% 600 1.9% 2,400 3.3% 300 1.9% 6,300 1.2% 3,200 0.8%

Delaware 15,400 3.9% 7,500 12.9% 300 2.1% 3,000 4.2% 0 0.0% 1,750 24.0% 0 0.0% 1,600 1.5% 250 0.2%

Florida 214,400 3.2% 64,600 13.1% 17,800 5.3% 47,400 3.6% 600 0.4% 5,300 4.3% 2,800 2.5% 42,500 1.9% 30,100 1.6%

Georgia 185,900 4.9% 87,900 15.0% 22,200 9.3% 19,700 2.9% 1,000 1.4% 7,600 12.1% 1,100 2.9% 24,300 2.5% 20,300 1.8%

Idaho 11,700 2.2% 3,100 4.2% 1,000 3.4% 5,500 5.5% 0 0.0% 400 6.1% 0 0.0% 900 0.7% 700 0.4%

Illinois 229,700 3.9% 117,500 12.1% 27,000 7.8% 19,400 2.0% 4,300 3.1% 9,100 6.5% 400 0.7% 25,800 1.5% 20,000 1.3%

Indiana 124,900 4.3% 90,400 13.3% 9,600 6.8% 9,100 1.6% 200 0.4% 2,200 4.6% 0 0.0% 7,700 1.1% 4,700 0.6%

Iowa 36,300 2.5% 23,200 9.3% 1,600 1.9% 1,800 0.7% 0 0.0% 2,700 7.1% 0 0.0% 1,400 0.4% 5,500 1.4%

Kansas 41,300 3.1% 16,200 8.2% 6,300 8.3% 2,900 1.2% 100 0.4% 2,200 9.8% 0 0.0% 2,300 0.7% 10,000 2.3%

Kentucky 84,100 4.7% 55,600 17.7% 12,800 15.5% 3,600 1.1% 100 0.3% 500 2.5% 0 0.0% 6,100 1.4% 4,800 0.9%

Louisiana 54,400 2.8% 17,300 9.1% 3,200 3.4% 8,800 2.6% 0 0.0% 1,100 4.2% 0 0.0% 8,000 1.5% 5,400 0.8%

Maine 30,600 5.3% 11,900 13.4% 1,300 5.0% 12,70011.1% 0 0.0% 500 4.4% 0 0.0% 1,300 0.8% 750 0.4%

Maryland 94,500 4.0% 30,500 17.4% 5,700 5.2% 33,600 7.7% 500 1.1% 4,300 11.0% 300 0.8% 9,500 1.2% 8,600 1.1%

Massachusetts 163,200 5.1% 60,300 13.5% 9,000 5.3% 54,50010.0% 1,000 1.5% 7,200 9.9% 600 2.0% 23,000 2.0% 7,100 1.0%

Michigan 157,300 3.5% 80,400 8.2% 13,900 6.3% 18,900 2.3% 700 0.8% 2,800 4.1% 200 0.5% 19,100 1.5% 17,200 1.6%

Minnesota 88,900 3.5% 46,500 10.8% 3,500 2.3% 4,400 1.0% 300 0.7% 2,900 5.1% 500 2.0% 5,700 0.8% 25,000 3.8%

Mississippi 21,600 1.8% 12,400 5.0% 2,400 5.3% 2,000 1.0% 0 0.0% 400 3.2% 0 0.0% 2,700 1.0% 1,300 0.3%

Missouri 83,600 3.1% 45,300 10.8% 9,800 6.6% 5,700 1.2% 1,750 3.1% 3,700 8.0% 300 1.1% 5,300 0.7% 10,800 1.4%

Montana 4,200 1.1% 800 3.3% 100 0.5% 1,200 1.5% 0 0.0% 0 0.0% 0 0.0% 500 0.5% 1,500 1.1%

Nebraska 18,100 2.0% 9,000 7.9% 900 1.7% 1,700 1.1% 0 0.0% 700 2.9% 0 0.0% 4,400 1.9% 1,300 0.5%

Nevada 25,000 2.8% 6,000 15.3% 1,200 3.6% 4,800 3.4% 0 0.0% 100 1.1% 300 2.0% 2,600 0.7% 9,300 3.6%

New Hampshire 30,200 5.3% 17,100 16.3% 1,000 3.7% 8,600 7.2% 0 0.0% 1,000 7.5% 0 0.0% 600 0.4% 750 0.5%

New Jersey 206,500 5.5% 94,300 19.5% 32,400 11.9% 29,900 5.0% 3,300 4.8% 8,300 9.6% 600 1.6% 23,700 2.0% 12,900 1.2%

New Mexico 15,400 2.1% 4,300 9.4% 800 2.9% 3,500 2.5% 0 0.0% 100 1.3% 100 1.3% 1,700 0.8% 3,600 1.2%

New York 345,400 4.2% 105,400 11.3% 35,200 8.2% 75,500 6.1% 24,200 10.8% 24,100 13.1% 5,400 3.5% 48,800 1.7% 25,000 1.1%

North Carolina 225,800 5.9% 120,300 14.2% 16,700 9.2% 45,400 7.0% 300 0.4% 4,100 8.9% 300 1.0% 13,000 1.5% 25,100 2.2%

North Dakota 4,800 1.5% 2,200 10.0% 200 0.9% 200 0.3% 0 0.0% 300 6.2% 0 0.0% 1,600 1.7% 200 0.2%

Ohio 223,600 4.0% 136,700 12.4% 13,400 4.7% 31,200 3.0% 100 0.1% 3,000 3.2% 100 0.2% 18,400 1.2% 10,700 0.8%

Oklahoma 35,000 2.4% 17,200 9.8% 3,700 5.6% 4,400 1.7% 300 1.1% 700 3.5% 100 0.7% 4,200 1.1% 1,200 0.2%

Oregon 49,100 3.1% 18,500 7.8% 9,600 10.7% 9,900 3.5% 300 1.0% 1,500 6.1% 200 0.9% 5,100 1.2% 3,800 0.8%

Pennsylvania 234,300 4.2% 118,900 12.7% 16,800 6.4% 37,800 3.9% 900 0.8% 5,700 4.5% 200 0.4% 18,500 1.1% 34,200 2.5%

Rhode Island 19,300 4.1% 8,100 9.8% 1,500 8.0% 6,600 8.1% 0 0.0% 300 3.1% 0 0.0% 1,800 1.2% 900 0.8%

South Carolina 116,000 6.4% 68,500 18.6% 7,000 10.3% 23,600 6.9% 0 0.0% 1,750 7.5% 200 1.1% 7,900 1.9% 6,100 1.1%

South Dakota 5,200 1.4% 2,900 6.0% 300 1.5% 800 1.1% 0 0.0% 200 4.0% 0 0.0% 400 0.4% 700 0.6%

Tennessee 133,600 5.0% 80,600 15.5% 13,700 9.6% 13,700 2.9% 0 0.0% 2,600 7.0% 100 0.5% 13,800 2.0% 8,300 1.2%

Texas 316,900 3.6% 128,000 12.1% 30,900 6.4% 40,000 2.6% 1,100 0.7% 6,600 4.5% 1,800 1.6% 52,300 2.2% 25,800 0.9%

Utah 32,900 3.3% 10,800 8.4% 1,200 2.5% 7,800 4.2% 0 0.0% 300 2.0% 0 0.0% 8,200 3.0% 4,400 1.4%

Vermont 9,800 3.4% 3,400 7.3% 2,100 16.5% 2,300 4.3% 0 0.0% 0 0.0% 0 0.0% 1,400 1.6% 500 0.6%

Virginia 141,200 4.1% 50,000 12.4% 9,500 6.5% 46,300 7.9% 500 0.7% 1,100 2.5% 200 0.5% 14,000 1.5% 18,900 1.6%

Washington 86,000 3.3% 30,700 8.9% 7,500 5.1% 20,200 4.4% 200 0.5% 2,800 6.8% 400 1.2% 13,200 1.9% 10,400 1.2%

West Virginia 26,300 3.7% 11,400 13.8% 2,200 7.2% 3,800 2.8% 0 0.0% 100 1.3% 0 0.0% 2,600 1.4% 5,300 2.1%

Wisconsin 70,700 2.6% 46,000 7.6% 3,300 2.5% 6,600 1.4% 0 0.0% 3,200 5.2% 0 0.0% 6,600 1.0% 4,200 0.6%

Wyoming 6,100 2.6% 2,500 23.0% 300 4.0% 1,300 2.8% 0 0.0% 100 4.1% 0 0.0% 400 0.8% 1,200 1.1%

Average pct. 3.6% 11.4% 6.2% 3.7% 0.8% 5.8% 0.8% 1.4% 1.2%

All Industries Manufacturing Wholesale Retail Finance* Insurance Real Services OtherEstate Industries

question, however, is how wellMinnesota is doing by comparison withits potential as a host for foreign directinvestment. If states with severe weatheralways do poorly in attracting FDI, forexample, then maybe Minnesota hasbeen unusually successful.

Methodology. To answer this ques-tion, the study examined the accumula-tion of FDI activity across all 48 statesfor the year 1996 by employing regres-sion analysis. This approach assumesthat measurable increases or decreasesin several independent variables canpredict the value of the dependent vari-able—in this case, FDI-related employ-ment. Regression analysis attempts toquantify how much the dependent vari-able changes (and in what direction) inresponse to a one-unit change in anysingle independent variable, holdingthe other independent variablesconstant.

There are important limitations tothe study’s findings due to the use ofthe state as the unit of analysis and theresulting sample size of 48, which isrelatively small for the purposes ofstatistical analysis. The small numbermakes it difficult to isolate the effects ofspecific independent variables, particu-larly when the variation in one variableacross all 48 states is small, or whenvariations among two or more inde-pendent variables are correlated witheach other. Moreover, each additionalvariable increases the difficulty offinding a persuasive statistical result. Tominimize this problem, independentvariables that showed high levels ofcorrelation with other variables wereexcluded from the analysis. However,this increases the risk that importantfactors were left out and that the truecauses are therefore misunderstood.

I began my research by exploringprevious studies of FDI and the many

variables these studies considered. Mostvariables did not show a high andconsistent level of correlation with alter-native measures of accumulated foreignactivity in various sectors. This includedmeasures of climate and temperature,an encouraging finding for Minnesota.

A few independent variables thathave proven important in other studiesseemed to be logical candidates ascausal factors for the level of FDI. Grossstate product, or GSP, provides the bestsingle measure of a state’s total econo-mic activity. If foreign investment wereattracted equally by state economicactivity of all kinds, this variable wouldexplain all of it. Although I did notexpect that extreme assumption tohold, I did expect total economicactivity measured by GSP to have astrong and positive influence on invest-ment, despite the fact that some earlystatistical studies of FDI had ignored it.

Some research has also suggested thatinvestment might be larger in a particularstate in anticipation of future demandfrom within that state. Therefore, thesecond variable included in my analysis,growth, was a measure of the rate ofgrowth of GSP between 1980 and 1996.

The study also employed a new vari-able, sector, based on my focus oninvestment at the sector level, and myhunch that the variations in FDI maydepend quite strongly on the economicstructure of the state. For example, if astate has a high level of manufacturingactivity, it might be expected to providefertile soil for foreign activity in thatsector, all else being equal. More impor-tantly, because as much as 80–90% of allentering FDI in recent years has takenplace through acquisition rather than“greenfield” investment (investmentfrom the ground up), the size of thesector roughly indexes the opportunityfor such acquisition.

Variables related to a state’s locationhave also proven important in previousstudies. Europeans traditionally enteredAmerican markets and gained experi-ence with FDI in the United Statesthrough the Northeast. Investment fromthe Far East (especially Japan) frequentlybegan with activity on the West Coast.These states together are designated bythe variable coast.

The variable far, which measures thedistance of a state’s center from the cityof Pittsburgh, was also used in thisstudy with the expectation that a state’sdistance from the manufacturing beltwould be associated with a lowerforeign manufacturing presence becauseof the high geographic interdependencein some manufacturing subsectors,particularly automobiles and parts, anindustry in which foreign investorshave been particularly active.

Finally, the study included a vari-able, union, that is influenced by publicpolicy: trade union3 membership. Lowunionization may be attractive toforeign investors. Union membership asa percentage of the workforce isincluded in every regression resultreported below.

Results. Table 2 shows a representa-tive regression from the study for eachof the sectors examined. The numbersreported are regression coefficients,which indicate how many units ofchange in employment are associatedwith a one-unit movement in each ofthe independent variables, and in whichdirection. A minus sign indicates anegative relationship—that is, anincrease in the independent variable isassociated with a decrease in FDI-relatedemployment.

The results reported in Table 2 fallinto three categories, based on thestatistical testing. For results in boldfacetype, there is a less than 1% chance thatthe expected association between theindependent variable and FDI-relatedemployment is accidental (meaningthere is no actual relationship betweenthe variables). For results in italics, there

OCTOBER 2001 15

3 For example, so-called right-to-work legislation,now in force in 20 states, effectively diminishesunion power by removing the requirement of aperson’s union membership (or the payment of acompensatory fee) as a condition of continuingemployment at a workplace. Two other public policyvariables—state expenditure on higher educationand state corporate income taxes—have receivedmuch attention in recent studies of FDI. Both ofthese variables were considered in this study, butneither variable showed any promise in explainingFDI or FDI-related employment. This does not meanthat these variables are irrelevant; data limitationsmay simply have masked their influence.

Table 2. Regression Coefficients for Foreign Direct Investment in the Forty-EightContiguous United States, 1996

Independent VariablesSector GSP Sector Growth Coast Union Far R2

Manufacturing 0.226 255.095 2.641 -13.627 -0.037 -2.401 0.876Wholesale 0.068 1.605 -0.369 1.793 -0.105 — 0.777Retail 0.106 84.114 2.486 4.841 -0.213 — 0.700Finance 0.009 11.816 -0.243 0.274 0.018 — 0.339Insurance 0.020 85.010 0.051 -0.186 0.008 — 0.777Real Estate 0.004 51.374 -0.085 0.158 -0.015 — 0.657Services 0.090 24.183 -0.654 1.034 -0.291 — 0.898Other 0.061 — 0.845 -0.896 0.145 — 0.687Total 0.659 — 3.201 1.232 -0.697 -2.164 0.930

is a less than 5% percent chance thatthe expected association between thevariables is accidental. Finally, forresults reported in regular type, there isa greater than 5% chance that theexpected association between the vari-ables is accidental, and the result istherefore assumed to be unreliable. R2

indicates the fraction of the total varia-tion in employment across the statesthat is associated with the variation inall of the independent variables takentogether.

Manufacturing. A state’s GSP appar-ently has a strong and positive impacton foreign investment in manufac-turing, and the results suggest that thispositive association extends across allinvestment sectors. The relative size ofthe state’s manufacturing sector alsodraws FDI. Gross state product is meas-ured in thousands of dollars, and thesize of the state sector relative to othersectors is measured as a decimal frac-tion. FDI-related employment is meas-ured in thousands. The results thereforesuggest that, all else being equal, anadditional million dollars of gross stateproduct will be associated with an addi-tional FDI manufacturing employmentof 226 persons. Holding the grossproduct of the state (and all other vari-ables) constant, a 1% increase in manu-facturing’s share in state employmentwill raise FDI manufacturing employ-ment by 2,551 persons. As expected, farsignificantly diminishes a state’s appealin terms of manufacturing investment.The negative sign for coast does notimply that having an ocean coastlinesomehow deters manufacturing invest-ment. It appears to mean that thefactors leading to manufacturingactivity generally have not attached tocoastal states and do not do so for FDI

either. The R2 value for this sector indi-cates that the independent variablesconsidered in the study explain nearly88% of the variation in manufacturingFDI employment among the 48 states.

A measure of Minnesota’s perform-ance relative to the other 47 states wasemployed for all of the sectors analyzed,and the results are reported in Table 3.Correcting for the factors presented inTable 2, Minnesota’s shortfall from theexpected value of FDI manufacturingemployment for the state is 3,542persons. In other words, characteristicsof the state other than those included inthe equation are causing that manyfewer persons to be employed by foreigninvestors than would have beenexpected. This amounts, however, toless than 1% of the state’s manufac-turing labor force.

Wholesale Trade. Wholesale tradeaccounted for 9.8% of national FDI-related employment in 1996. Myanalysis shows a negative associationbetween employment and unionization.If one takes the result at face value, itimplies that a 1% increase in the union-ization of the labor force decreaseswholesale FDI by 105 workers. Many ofthese wholesale establishments are asso-ciated with international trade linked invarious ways to the investing firm.Unsurprisingly, the coast variable ishighly significant; being one of the 13coastal states results in an increase ofnearly 1,880 jobs in wholesaling, whichis nearly 18% of the average state valueof FDI wholesale employment. Minne-sota has an employment shortfall inwholesale trade of 3,887 persons, whichis 2.6% of the estimated size of thestate’s wholesale sector.

Retail Trade. Retail trade, whichaccounted for about 16.5% of nationalFDI employment, presents a set ofsectoral characteristics quite differentfrom the previous two. One wouldexpect a very high correlation betweentotal retail FDI employment andpersonal income, which is too closelyassociated with GSP to be included inthe equation, and also little variationacross the states in the size of the retailsector relative to GSP. The link betweenlocal income and retail demand alsosuggests the likelihood that the growthrate of demand could be important andsignificant, a prediction confirmed bymy analysis. Coast is also significant,and boosts retail jobs by approximately4,841. Minnesota again experienced ashortfall, in this case 7,801 jobs, whichis slightly more than 1.7% of retailemployment in the state.

Finance. Finance is a very smalldirect investment sector, accounting forroughly 1% of total employment in1996. This figure does not includedepository institutions, for which state-level data were not available. By defini-tion, acquisition can occur only in areaswith existing activity in finance, andeven greenfield investors might beexpected to seek labor in areas wheredomestic finance is particularly wellestablished. In fact, only about one-third of the variation in the data can betracked to the independent variablesexamined, the lowest level in the studyby far, and only GSP is statisticallysignificant. Minnesota’s performance asa host to financial service investmentshows another shortfall, in this case564, which is 1.24% of financialemployment in the state.

Insurance. Insurance employment inthe 48 states was about three times thatof finance. As in the finance sector, onemight expect some “huddling” in well-established insurance centers wheretargets of acquisition will also beconcentrated, and here this hunch wasconfirmed by my results. The large andsignificant coefficient suggests that forevery 1% increase in the relative size ofthe insurance industry in a state, thelevel of employment by foreign insur-ance companies goes up by between 715and 850 jobs. In sharp contrast with thefinance sector, three-fourths of the vari-ation in the data can be explained bythe variables considered here. Onceagain, Minnesota has a shortfall—in thiscase, 480 jobs, which is 0.84% of thestate’s workforce in the insurance sector.

Real Estate. The real estate categoryincludes only firms for which real estateis the primary business. FDI-relatedemployment in the real estate sector isthe smallest of any of the sectorsstudied, a mere 27,000 employees in1996, or about one-half the size of totalFDI-related financial sector employ-ment. As in the case of insurance, thereis a highly significant positive coeffi-cient related to the size of the real estatesector in the state, suggesting somemix of acquisition targets and well-developed labor expertise. The fractionof variation explained is a relativelymodest two-thirds. Other regressions forreal estate included variables used onlyfor this sector. The possibility thatrestrictions on either foreign ownershipof agricultural land or on corporateownership of land could negativelyaffect the interest of foreigners inbuilding real estate businesses wasexamined, but neither measure was

16 CURA REPORTER

Table 3. Deviations from PredictedForeign Direct Investment EmploymentLevels for the State of Minnesota, 1996

Unexplainedemployment

Percentage ofemployment

Manufacturing -3,541.61 -0.82%Wholesale -3,886.62 -2.58%Retail -7,801.38 -1.71%Finance -563.62 -1.24%Insurance -479.55 -0.84%Real Estate 211.34 0.83%Services -3,134.89 -0.43%Other Industries 15,218.67 2.33%Total 5,216.30 0.20%Total w/o -16,784.00 -0.64%

NW-KLM

associated with FDI employment. Realestate is the first sector in whichMinnesota has more employment thanpredicted, with 211 more peopleemployed in foreign-owned real estateenterprises than expected.

Services. The discrete service cate-gories are broken down for national-level tabulations, but not for the statelevel. The service sector includes thefollowing:

hotelsbusiness servicesmotion picturesengineering, architectural, and sur-veying servicesaccounting, research, management,and related serviceshealth servicesother services

Somewhat surprisingly, relative servicesector size has a positive effect on FDI-related employment, suggesting that,despite the mixed bag of activities,service sector size still gauges acquisitiontargets, and perhaps that the samestate-level forces that draw domesticactivity also draw foreign investors aswell. The negative coefficient for theunion variable is both larger and moresignificant than for any other sector. Thisimplies that every 1% decrease in union-ization is associated with 291 moreFDI-related service jobs. A high 90% ofthe total variation in FDI-related employ-ment can be explained by the variablesconsidered here. The Minnesota shortfallfor the service category is 3,135 jobs.

Other Industries. This data categoryis a grab bag, but it includes someimportant activities: agriculture,forestry, and fishing; mining; construc-tion; transportation and communica-tion; and public utilities. Together theseaccounted for about 9.6% of FDIemployment in 1996. Despite thevariety of activities included in thiscategory, many of these industries aresubjected to substantial governmentregulation. Although only foreign agri-cultural landownership is regulated atthe state level, federal regulation is asignificant factor. Telecommunicationsregulations have recently been liberal-ized, but both telecommunications andbroadcasting have historically had a20% foreign-ownership cap. Similarly,in domestic air transport, there has beena 25% cap on foreign ownership, subjectto discretionary waiver by the Secretaryof Transportation, who has used it tobargain with specific foreign govern-ments for concessions to U.S. airlines.For some forms of natural resource

exploitation, the federal governmentalso limits foreign activity.

Clear expectations about this sectorare hard to develop. Given its hetero-geneity, no attempt was made todiscover what part of a state’s economythe various activities represent. Severalof the sectors involved are so heavilyunionized that state-level unionizationwould not likely affect the overallresults. It is also important to note thatthe Department of Commerce rulemaking 10% ownership in a firm suffi-cient for all of a firm’s activities tocount as “foreign investment” can beexpected to produce some odd results.

Results for this sector indicate thatless than 70% of the total variation inemployment is explained by the vari-ables considered in this study. As wasthe case with the finance sector, whichis about one-tenth the size of thepresent category, only the GSP variableproduced a significant result.

This is the only category besides realestate in which Minnesota has higheremployment than predicted, with15,219 more people employed thanexpected. Unfortunately, there is asimple and somewhat discouragingexplanation for this result, one that alsoprovides an important reminder aboutthe limitations of the data. The homecountries of investors could not besystematically considered for each statein this study due to data limitations.Nonetheless, home country data forMinnesota is very instructive for thecategory Other Industries. A total of22,500 Minnesota employees werereported as working for Dutch firms in1996. Because there are no large Dutchinvestments in Minnesota outside of theairline industry, one has to assume thatvirtually all of these employees workedfor Northwest Airlines. In other words,Minnesota’s positive employment resultfor this category is largely due to theDutch firm KLM’s 19.6% temporaryownership share in NorthwestAirlines—a minority stake in a firm thathas always been located in Minnesota.

Total Investment. The precedinganalysis demonstrates enough diversityamong apparent causal variables and R2

to cast doubt on the wisdom ofdiscussing state-level FDI withoutconsidering specific sectors. Nonethe-less, many studies of FDI rank states bytheir overall position, so it is importantto consider total investment as part ofthe current analysis. As in the case of allprevious results, GSP is by far the mostsignificant single determinant of total

FDI, implying that every million dollarsof additional state product is associatedwith 659 additional FDI jobs. There islittle else to report. Only the far variablemakes a significant showing, reflectingits importance in manufacturing andthe nearly 45% share of that sector intotal FDI employment. Nevertheless,93% of total variation in employment isexplained by the variables consideredhere.

Minnesota’s unpredicted extraemployment for all investment sectorsis 5,216, but the reasons for this appar-ently strong showing have already beennoted: the KLM investment in North-west, which was completely liquidatedby May 1998. The last row in Table 3shows the results for Minnesota withthe estimated state employment fromKLM-Northwest removed: a shortfall of16,784 jobs, or about 0.64% of the total1996 workforce for the state. Clearlysome other states’ apparent positions inthe overall FDI pecking order may bejust as tenuously dependent on onefirm’s behavior as was Minnesota’s. Atthe same time, no one could seriouslyclaim that the KLM investment stakehad much, if anything, directly to dowith the attractiveness of Minnesota asa site for FDI.

Policy ImplicationsThe original justification for encour-aging FDI was the same as that for mostother economic development proposalsin the 1980s: to create jobs. But unem-ployment rates have varied sharplyaround Minnesota, and even successfulFDI promotion often brings foreigninvestment to sectors least in need ofemployment gain, meaning much ofthe new labor must be imported. Fromthe perspective of 2001, even the generalobjective of job promotion may seemanachronistic in light of Minnesota’shigh employment rate and consequentlabor shortages throughout much of thestate. Moreover, although such highemployment rates have not persisted fora long time, and they are unlikely to doso in the future, FDI cannot fine-tune astate’s economy. Across the businesscycle, only FDI linked directly to foreignmarkets and not highly correlated withU.S. domestic demand would help tostabilize employment rates.

It has long been known that effortsto attract FDI to Minnesota begun withsuch fanfare under the Perpich adminis-tration met with only modest success atbest. But could we have done better?This study suggests some answers.

OCTOBER 2001 17

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First, the data used in the study includeboth acquisitions and greenfield invest-ments. The latter were over one-quarterof the total FDI by value in 1980; thishad dropped to 16.1% in 1990 and11.8% by 1993. National data for 2000indicate an astonishing 99% of outlayswere for acquisitions. A drive to bringavailable FDI to Minnesota during thisperiod would increasingly haveinvolved what amounts to investmentbrokerage. But can state policy really domuch to improve foreign intelligenceabout Minnesota firms that might beripe targets for takeover? Even if suchpolicy made economic sense, would ithave been politically viable? Negativeanswers to both questions probablyunderlie an increasing emphasis withinthe Minnesota Trade Office towardexport assistance and away fromattempts to lure more FDI. In 1986,trade office resources devoted to exportpromotion exceeded that for FDIencouragement by only 60%. By theearly 1990s, resources earmarked exclu-sively for FDI had virtually disappeared.This looks like a wise reordering ofpriorities, although little is knownabout the effectiveness of the export-oriented activity. It should also be notedthat the resources used by the state forinternational business development aremodest, and have remained remarkablystable; the international business budgetwas $2,202,000 in 1986, and $2,018,000in 2000.

One argument against brokerageseems clearly wrong. Some believe thatFDI, or out-of-state investment moregenerally, contributes far more toemployment or state wealth whenbrand-new enterprises are begun. Butoutsiders can typically make the bestacquisition bid for a firm when theyhave superior production or marketingstrength. A takeover could reduceemployment by improving productivitywithout improving market share, buttypically this is not the case. Strongerfirms usually improve their market posi-tion, and that will typically lead toincreases in employment, although theemployment increases may not all takeplace in the state where the mainactivity is located. In addition, bothgreenfield investment and acquisitionscan reduce employment in competingfirms in the state.

Greenfield investments have othercharacteristics that make their relativeemployment impact uncertain. Even inperiods of high unemployment, mostnew operations do not draw heavily on

a broad range of unemployed workers.Instead, they draw on individuals withspecific skills across local, state,regional, and national labor markets,often yielding a modest impact on localunemployment. Business expansion intimes of high employment could createlabor market difficulties for other firmsthat might cause them to relocate.Hence, the impact of many greenfieldinvestments, not only on local employ-ment but also on the tax base, may beas hard to predict as that of anacquisition.

In general, of course, there is apresumption of increased economicactivity from both kinds of FDI. This, inturn, is expected to have an uncertainbut positive impact on both employ-ment and the fiscal situation of theimmediate jurisdiction—assuming thattoo much revenue has not been fore-gone to lure the investment in the firstplace, as many believe was the case withAlabama’s successful bid for a Mercedesplant. This argument applies equally toall types of out-of-state investment.Moreover, this study established thatoverall state size and the existing struc-ture of the state’s economy are over-whelmingly strong factors in deter-mining a state’s FDI potential. Thesecond factor captures some combina-tion of takeover targets for acquirers andappropriate personnel for both acquirersand greenfield investors. In addition,the line between FDI activity and otherbusiness is becoming increasinglyblurred. As FDI matures, much newforeign economic activity in a state willcome from foreign firms already settledin other states, and presumably usingcriteria for expanding their activitiesthat are virtually identical to theirAmerican-owned counterparts.

The winning entry in the apoc-ryphal license plate slogan contest,“Iowa—Gateway to Nebraska,” suggestsone cause of Minnesota’s shortfalls frompredicted investment. Most other statesin the region, notably Wisconsin, showdeficits using the same predictors.Minnesota is geographically disadvan-taged for most location-sensitive invest-ment, and appears to hold no unusuallystrong attraction for most of the rest.Even the strong showing in real estatelargely reflects Canadian investmentbased on experience with propertymanagement in severe weather.

The broad picture of FDI determi-nants summarized here suggests thatMinnesota’s best approach to FDIpromotion is indirect. The state should

establish a favorable climate for theattraction, retention, and growth ofeconomic activities that it regards asdesirable. If that strategy works, FDI islikely to play a modest positive rolewithout much special attention.

Robert T. Kudrle is professor of publicaffairs at the Hubert Humphrey Instituteof Public Affairs at the University ofMinnesota, and professor of law at theUniversity of Minnesota Law School. Hestudies industrial organization, publicpolicy toward business, and internationaleconomic policy. He has served as asso-ciate dean for research at the HumphreyInstitute, directed the master’s program inpublic affairs, and consulted for many U.S.and international government organiza-tions. Many persons assisted in the prepa-ration of the study upon which this articleis based. The author especially thanksDaniel Kramer and Mara Yerkes for superbresearch assistance.

18 CURA REPORTER

NeighborhoodOrganizationsConference

The Center for Urban andRegional Affairs will sponsor aconference on “The Role andFuture of Neighborhood Orga-

nizations in the Twin Cities” onTuesday, October 30, 2001, from 1:30 to8:00 PM. The conference will be held atthe University of Minnesota’s Hubert H.Humphrey Center, located at 301 19thAve. S. on the West Bank of campus.

Neighborhood organizations faceunprecedented challenges as housingconditions and business prospectschange, crime rates increase, relation-ships with government agenciesbecome more uncertain, and raisingfunds becomes more difficult. Thisconference will provide key informationand discussion on the current neighbor-hood environment, the changing roleof neighborhood organizations, andwhat neighborhood organizations cando to adapt and thrive in these chal-lenging times.

The conference is free, but registra-tion is required. To register, call (612)625-1551. For more information aboutthe conference, contact Kris Nelson at(612) 625-1020 or nelso193@umn.edu,or Jay Clark at (612) 625-2513 orclark037@umn.edu.

OCTOBER 2001 19

Thalassemia is recognized by theWorld Health Organization asthe most prevalent geneticblood disorder in the world.

The thalassemias are a family of inher-ited blood disorders that affect anindividual’s ability to synthesizehemoglobin, the protein in red bloodcells that transports oxygen and othernutrients throughout the human body.Although treatments exist for thedisorder, it is not curable and is oftenfatal. Currently, there are more than300,000 thalassemia patients world-wide. In the United States, an estimated2 million people carry the genetic traitfor the disorder, and more than 100children with severe thalassemia syn-drome are born every year, 10 to 12 ofthem in Minnesota.

Because the incidence of thalassemiais particularly high among people ofAsian descent, thalassemia is emerging asa public health problem of increasingimportance in Minnesota, where thenumber of Asian immigrants continues togrow. Minnesota health regulationsrequire newborn screening for a numberof diseases and disease traits, includingthalassemia, and place on the primarycare provider the responsibility for com-municating to parents the results of suchtests. Unfortunately, the newborn screenremains an underutilized tool in thedetection of the trait for thalassemia andother hemoglobin-related disorders due toinadequate follow-up by physicians.

To identify ways in which thenewborn screen can be used more effec-tively in the prevention of thalassemia,it is necessary to identify the strengthsand weaknesses of the current screeningsystem in Minnesota. With supportfrom CURA, we developed and con-ducted a survey of primary care physi-cians in the state that focused on theirprocedures for following up onnewborn screens. This article reportsour findings. First, we describethalassemia and the treatment optionsavailable for the disorder. Then, wediscuss the benefits and drawbacks ofsuccessful newborn screening programs

for thalassemia and other diseases, anddescribe the screening system in Minne-sota. Next, we present the results of thephysician survey we conducted. Finally,we offer recommendations for strength-ening and improving the newbornscreening system in Minnesota andother states.

Thalassemia: Epidemiology and ClinicalPresentationThe thalassemias constitute a tremen-dous economic and social burden foraffected populations and for society as awhole. The increasing incidence of thedisease in the United States and thenature of the disease itself constitute apublic health problem of growingconcern.

Epidemiology. The name thalassemiacomes from the Greek root thalassa,meaning “the sea,” because the firstreported cases were Mediterranean inorigin. Today, the thalassemias aredistributed across the Mediterraneanregion, the Middle East, the Indian sub-continent, and throughout Southeast

Asia in a line stretching from southernChina down the Malaysian peninsula tothe Indonesian islands (Figure 1). Inmany of these countries, gene frequen-cies for the different forms ofthalassemia are high.

In the United States, an estimated 2million people carry the genetic trait forthalassemia, and each year, more than100 children are born with the disease,10% of whom live in Minnesota. As thenumber of people of Asian origincontinues to grow in Minnesota,1

thalassemia is emerging as a publichealth problem of increasing impor-tance.

Clinical Presentation. Althoughthere are many variations ofthalassemia, for the purposes of thisdiscussion, the disease can be dividedinto two main types: beta (β)thalassemia and alpha (α) thalassemia.

The Newborn Screen: An Underutilized Tool forScreening and Counseling for Thalassemiaby Joline Dalton and Lakshmanan Krishnamurti

1 The number of Asians living in Minnesota grewfrom 52,000 in 1990 to 130,000 in 1999, a 66%increase. This number is expected to continue togrow in the coming decades.

20 CURA REPORTER

Thalassemia is inherited in a Mendelianrecessive fashion. This means thatparents who carry the trait and aresymptom free have roughly a one infour chance of giving birth to a severelyaffected child.

Beta Thalassemia. Beta thalassemia,also known as Cooley’s anemia, is a fatalgenetic blood disease that results in thefailure to produce normal hemoglobin,the oxygen-carrying component of redblood cells. To remain alive, childrenborn with beta thalassemia must under-go blood transfusions every two to threeweeks. Over time, iron from the trans-fused blood cells builds up and becomestoxic to tissues and organs, particularlythe liver and heart. Untreated, thiscondition leads to early death, typicallythrough heart failure. To help removeexcess iron, patients must undergo adaily infusion of the drug Desferal, adifficult and painful process that takes upto 12 hours. Although Desferal infusionshave increased the life span ofthalassemia patients, many find the dailytreatments so burdensome that theyabandon therapy altogether, whichalmost invariably leads to acceleratedhealth problems and early death.Successful bone marrow transplants caneliminate the need for blood transfusionsand Desferal infusions in some cases ofthalassemia, but because of the risksinvolved, transplants are considered anoption only for the minority of patientswho have a matched sibling donor.

Although many beta thalassemiapatients are living longer as a result ofthese new therapies, longer life expect-ancy has itself lead to new problems.Many beta thalassemia patients whocontinue to undergo treatment end upstruggling with secondary medical prob-lems resulting from their condition suchas heart disease, hepatitis, liver cancer,osteoporosis, and fertility problems.

Alpha Thalassemia. Alphathalassemia shows several importantdifferences from beta thalassemia.Because alpha chains, which are acomponent of hemoglobin molecules,are shared by fetal and adult hemo-globin, the disease is manifest in bothfetal and adult life. The disorder resultsfrom the encoding of alpha globin byfour genes (two from each parent)instead of the typical two genes (onefrom each parent). The clinical featuresof alpha thalassemia differ in severitydepending on how many alpha globingenes are not functioning properly. Themost severe form of the disorder(hydrops fetalis) is caused by fournonfunctioning genes, while the leastsevere form (no symptoms) results fromone nonfunctioning gene.

Hydrops fetalis is found primarily,although not exclusively, amongcouples of Southeast Asian origin, and isencountered in increasing numbers inNorth America and elsewhere. Thesepregnancies inevitably result in fetaldeath during the third trimester of

gestation or shortly after birth, andoften are associated with seriousmaternal morbidity and even mortality.Hydrops fetalis may be detected byultrasound during the second trimesterof pregnancy. Frequently the diagnosisis made only after the birth of one ormore hydropic newborns. The correctdiagnosis of these hydropic fetuses issometimes missed at autopsy. Afterexperiencing the horrendous obstetrical,medical, and psychosocial problemsassociated with such pregnancies, manycouples decide against becoming preg-nant again, and some even request ster-ilization.

Newborn Screening and Counseling forThalassemiaAdvances in technology now permitnewborn screening for an increasingnumber of genetic and nongenetic condi-tions. Routine screening for hemoglobin-related disorders began in 1987, after aNational Institutes of Health (NIH)conference on sickle cell disease andother hemoglobin-related disordersrecommended that every newborn childbe screened to prevent the potentiallyfatal complications of sickle cell diseaseduring infancy. As a result, newbornscreening for sickle cell disease, thalas-semia, and other hemoglobin-relateddisorders is now mandatory in 47 states,including Minnesota.

The Benefits and Risks of NewbornScreening. As with screening and

Distribution of thalassemia

Figure 1. Worldwide Distribution of Thalassemia, 1999

OCTOBER 2001 21

counseling for any genetic disease,there are potential benefits and risks toscreening newborns to detect theirstatus as a trait carrier for thalassemia(Figure 2). The objective of the new-born screen for hemoglobin-relateddisorders is the early detection ofinfants with diseases such as sickle cellor thalassemia. However, the screen alsodetects infants who, although without adisorder themselves, are carriers of thegene for a hemoglobin-related disease.As many as 1 in 32 infants tested maybe identified as a carrier of the trait, andneonatal screening may identify 17 to100 times more carrier infants thaninfants with a full-blown disorder.However, the majority of parents ofinfants identified as genetic trait carriersare not notified of their child’s carrierstatus, and are not offered the option ofconfirmatory testing or counseling. Thisis particularly true in the case of alphathalassemia. Indeed, several large-scalenewborn screening programs nation-wide do not report—either to thepatient’s parents or to the physician ofrecord—when alpha thalassemia traithas been detected in a child, and coun-seling programs currently do not existfor this disorder.

Although some may argue againstfollow-up and counseling in caseswhere a child is identified as a traitcarrier, on the grounds that this is notthe primary purpose of the newbornscreen, these views ignore the right ofparents to full access to genetic infor-mation about their child. Indeed, with-holding such information violateslegislative guidelines in many statesthat screen for genetic disorders. Whenparents are not informed of the carrierstatus of their child, they may wronglyconclude that the result of the newbornscreen did not reveal any geneticanomalies.

In addition, the opportunity forparents to make informed reproductivechoices is effectively lost when theinitial identification of a newborn as atrait carrier is not followed by confirma-tory testing for the infant, testing ofother family members, and appropriatecounseling. Experience withcommunity-based thalassemia educa-tion campaigns and counselingprograms in the Mediterranean hasshown that such programs frequentlyinfluence parents’ subsequent reproduc-tive choices. Since the late 1970s, volun-tary screening of adults of child-bearingage, genetic counseling, and prenataldiagnosis have been introduced among

populations in the Mediterraneanregion considered at risk for thalas-semia. These programs have beenmarked by intensive educationalcampaigns (via mass media, schools,workplaces, and local community gath-erings) about beta thalassemia and themethods for its prevention. The highlevel of acceptance of the program bythe public has produced a dramaticreduction in the number of newbornswith severe forms of thalassemia. InSardinia, for example, the incidence ofbeta thalassemia major has droppedfrom 1 in every 250 births in 1975 to1 in every 4,000 births in 1996, aprevention rate of 94%. In continentalGreece, the number of newborns withthalassemia dropped from a high of 120a year to only 15 cases in 1992. There isonly limited experience with suchprograms in the United States. However,in a study conducted by Dr. PeterRowley in Rochester, New York, 88% ofSoutheast Asian women offered prenatalcounseling for thalassemia accepted it,and 90% brought their partners in fortesting.2

The cost of establishing and main-taining thalassemia control programs inthe Mediterranean has already beengreatly outweighed by the economicand social benefits of the reduced inci-dence of the disease among newborns.The cost of transfusion and iron chela-tion for a child with beta thalassemiaranges from $30,000 to $100,000 peryear. Although the advantages of athalassemia control program areobvious in high-prevalence areas, even

in relatively low prevalence areas likethe United Kingdom and the UnitedStates, the cost of thalassemia preven-tion programs is far less than theprojected cost of treating patientswith thalassemia for life. In weighingthe ultimate costs and benefits ofsuch a program, one must considernot only the economic benefits, butalso the numerous social benefits thataccrue from preventing seriouschronic illness and offering reproduc-tive choice to families.

Despite the obvious benefits ofthalassemia screening and counselingprograms, there are potential risksassociated with such programs aswell. Failed efforts to institute sicklecell screening in the United Statesduring the 1970s illustrate some ofthese problems. Between 1970 and1972, 12 states and the District ofColumbia enacted mandatory sicklecell screening for all African-Americancitizens. More often than not,however, these laws were written andpassed without adequate attention tothe risk of stigmatizing patients—notonly those with the disease, but alsothose who simply carried the sicklecell trait. Many African Americansidentified as trait carriers were deniedhealth and life insurance, employ-ment opportunities, and even accept-ance into the U.S. Air Force Academy.Thus, while screening and counselingprograms can potentially be veryeffective at reducing the incidence ofdisease, it is important that commu-nity members are given input duringthe creation of such programs, andthat the programs are accompaniedby extensive education of healthcareproviders, policy makers, and thecommunity at large.

Benefits of neonatal detection of carrier status:

• Informed future reproductive choice of parents• Informed future reproductive choice of child• Opportunity to educate families about clinical implications of carrier status• Social and psychological empowerment of families from ownership of genetic

information

Risks of neonatal detection of carrier status:

• Anxiety caused by misdiagnosis or misinterpretation of test• Exposure of nonpaternity• Social and psychological aftereffects• Discrimination by employers or insurers

Figure 2. Benefits and Risks of Neonatal Detection of Carrier Status for GeneticDisorders

2 P. T. Rowley, “Prenatal HemoglobinopathyScreening: Receptivity of Southeast AsianRefugees,” American Journal of Preventive Medicine 3(1987): 317–322.

22 CURA REPORTER

Newborn Screening in Minnesota.In 1999, the Minnesota Department ofHealth (MDH) screened for fivedifferent conditions: congenitaladrenal hyperplasia, congenitalhypothyroidism, phenylketonuria,galactosemia, and hemoglobin-relateddisorders such as sickle cell diseaseand thalassemia. The departmentscreens approximately 65,000newborns per year. Since 1991, therehas been a steady increase in thenumber of newborns who havehemoglobin-related disorders, or whocarry the trait for such disorders (seeTable 1). This increase is most likelydue to the increase in the SoutheastAsian population during the 1990s.According to the U.S. Census Bureau,the Asian population in Minnesotaincreased 66% during the last 10years, mainly due to the increasedemigration of Hmong people toMinnesota.

The State of Minnesota mandatesfollow-up for all genetic abnormalitiesdetected by newborn screening. Thespecific procedures for follow-up careare dependent on the condition that isdetected. All normal newbornscreening results are mailed to thesample submitter, which is usually thehospital or clinic where the child wasborn. For samples that are unsatisfac-tory (e.g., due to an inadequatesample or a borderline result), thesubmitter is contacted and asked toresubmit the sample. Children whosetest results indicate inborn errorsof metabolism or major hemoglobin-related disorders such as sickle celldisease are tracked by MDH to verifythat confirmatory testing is done tocorroborate the initial screeningresults.

In contrast, MDH does notrequire tracking of or follow-up forchildren whose test results indicatethey are genetic trait carriers for ahemoglobin-related disease such asthalassemia. In such cases, responsi-bility for patient follow-up lies withthe primary care physician, who mustorder appropriate confirmatory tests,seek the opinion of an appropriatespecialist regarding follow-up care,notify parents of test results, andprovide (or refer parents to) appro-priate genetic counseling. Becausethere is no centralized agency respon-sible for overseeing physician follow-up care, it is uncertain how frequentlyfurther testing is performed toconfirm carrier status, or how oftenthe parents of newborns are informed

of the screening or confirmatory testresults.

Evaluation of Parental Notification ofAbnormal Newborn ScreensBecause confirmatory testing andfollow-up in cases of an abnormalnewborn screen is the responsibility ofthe primary care provider, we sought toevaluate the follow-up care actuallyprovided in such instances.

Method. A survey questionnaire wasdeveloped to solicit information fromphysicians involved in patient follow-upfor newborn screening. Questions askedabout such things as the timing offollow-up care, the procedure used forfollow-up testing, what information wasdisclosed to the patient’s family, thephysician’s opinion of his or her ownexperiences with patient follow-up, thetiming of reporting of results, and theusefulness of the information onnewborn screens provided by MDH.Space was also included for generalcomments regarding respondents’answers or the process of newbornscreening in Minnesota.

Under Minnesota law, the newborn’splace of birth is required to provide ascreening sample to the MinnesotaDepartment of Health. MDH recom-mends that the sample be collectedbetween 24 and 72 hours after birth,and requires that the sample be clearlyand accurately labeled with thenewborn’s name, date of birth, time ofbirth, specimen date, and collectiontime. The mother’s name and otheridentifiers are included on the newbornscreening card that accompanies thesample. To allow for accurate and effi-cient follow-up, all samples also requirecomplete physician information, andthe physician indicated on the lab slip isconsidered the “physician of record.”

We obtained from MDH a list of 126physicians or clinics listed as the physi-cian of record for newborns who hadconfirmed abnormal screen results for

phenylketonuria, galactosemia, sicklecell disease, congenital hypothyroidism,congenital adrenal hyperplasia, orhemoglobin-related disorders. In caseswhere only a clinic was listed, the clinicwas eliminated from the list. From theoriginal list of 126, a total of 112 physi-cians were identified. We were ulti-mately able to locate the addresses andphone numbers of 76 of these physi-cians, either by contacting directoryassistance or by referencing the AMAwebsite (http://www.ama-assn.org). Theremaining 36 physicians (32%) wereeither not listed, or had relocated andleft no forwarding address.

A survey and cover letter were sentto all 76 physicians. A total of 33completed surveys (43%) werereturned. Of the respondents, 16 (48%)were pediatricians, 15 (45%) werefamily practice physicians, and 2 (6%)were neonatologists. Twenty-five of therespondents (75%) practiced in theMinneapolis–St. Paul area or sur-rounding suburbs, while 8 respondents(25%) practiced in greater Minnesota.Although the respondents were demo-graphically similar to those who wereinitially sent surveys, their responsesmay not be representative of the opin-ions and practices of the majority ofphysicians in Minnesota.

Results. Results from the physiciansurvey are presented below. It shouldbe noted that the level of physicianinterest and participation in newbornscreening is most likely overempha-sized in this study because those whowere more interested were more likelyto complete and return the survey.Thus, whatever percentage of theserespondents indicated difficulty noti-fying children’s parents of theirnewborn screen results or providingfollow-up care, there is probably acorrespondingly larger percentage ofparents of newborns who are not noti-fied of the results of their child’s screenor offered follow-up care.

Condition 1991 1992 1993 1994 1995 1996 1997 1998Congenital adrenal hyperplasia — — 35 48 64 67 37 35

Congenital hypothyroidism 15 24 54 79 83 91 33 49

Phenylketonuria 7 6 4 7 9 17 9 10

Hemoglobin-related disorder 33 24 18 21 16 23 26 23

Hemoglobin-related disorder carrier 899 1,099 960 1,012 1,202 915 1,094 1,524

Galactosemia 19 15 29 15 24 4 8 9

Table 1. Number of Abnormal Newborn Screen Results in Minnesota, 1991–1998

Source: Dr. David Jinc, Director, Newborn Screening Department, Minnesota Department of Health

OCTOBER 2001 23

Type of Abnormal Newborn Screen.Of the 33 respondents, all reportedhaving had a patient with an abnormalnewborn screen during the last fiveyears for one of the five conditionsscreened for by MDH. Twenty of therespondents (60%) reported having hadtwo or more patients with an abnormalnewborn screen within the last fiveyears. A breakdown of responses by typeof abnormal screen is shown in Table 2.Of the respondents, 31 (94%) reportedhaving had a patient with an abnormalscreen for a hemoglobin-related disordersuch as thalassemia, 18 (55%) had apatient with an abnormal screen forcongenital hypothyroidism, 5 (15%)had a patient with an abnormal screenfor phenylketonuria, 10 (30%) had apatient with an abnormal screen forgalactosemia, and 7 (21%) had a patientwith an abnormal screen for congenitaladrenal hyperplasia.

Procedure for Follow-Up. Thirty-twoof the respondents (97%) indicated thatthey were the primary individualresponsible for notifying parents aboutthe results of the newborn screen. Othermembers of their practice who discussednewborn screen results with patientsincluded registered nurses (19%) ornurse practitioners (16%). One respon-dent indicated that one nurse practi-tioner was responsible for notifyingparents of all the newborn screenresults.

Eighteen respondents (55%) reportedthat all parents of newborns wereprovided with newborn screen results,regardless of whether the test results wereabnormal or normal. One respondentindicated that all newborn screen resultswere charted, but that not all results wereverbally disclosed to parents. Fourteenrespondents (44%) indicated that theydo not disclose newborn screen results toall parents. Of the 33 respondents, 18(55%) indicated they do not disclosenormal results to all parents, and 1 (3%)indicated he or she does not discussresults if the patient is identified only asa trait carrier for a hemoglobin-relateddisorder.

Reasons cited for not discussingscreen results with parents included thefollowing:

long delay in reporting of normalresults by MDH/information notavailable to discuss with parents (5out of 33, or 16%)time constraints (4 out of 33, or 13%)disinterest of parents (4 out of 33, or13%)unavailability of parents (2 out of 33,or 6%)language barriers (1 out of 33, or 3%) Timing of Follow-Up Care and

Reporting of Results. Fourteen respon-dents (42%) indicated that the age ofthe newborn at the time parents wereinformed of an abnormal newbornscreen was generally between three daysand one week. Eleven respondents(33%) reported that the age of thenewborn was generally one to twoweeks, while the remaining respondentsstated that the newborn was either twoto three weeks old (7 out of 33, or 21%)or more than three weeks old (3 out of33, or 9%). One respondent noted thatthe timing was dependent on the condi-tion for which the patient had anabnormal screen. Those respondentswhose patients were more than twoweeks of age when parents were notifiedindicated that the condition for whichthe newborn had an abnormal screenwas generally a hemoglobin-relateddisorder.

Most respondents (31 out of 33, or94%) reported that they made effortsto perform confirmatory testing thatsame day for the condition for whichtheir patient had an abnormal screen.Those who did not provide confirma-tion the same day were likely toprovide results within one week.Those who exceeded one week inconfirming the results explained thatit is customary to confirm results forhemoglobin-related disorders after sixmonths of age.

A majority of the physicians (27out of 33, or 82%) indicated that

screen results were provided to themby MDH in a timely manner. Sixrespondents (18%) felt they did notreceive results in a timely manner,while four (12%) indicated that boththe hospital and MDH were slow toreport normal results. Two respon-dents (6%) indicated delays inabnormal newborn screen reporting,and noted that newborns are oftensymptomatic with congenital adrenalhyperplasia or congenital hypothy-roidism by the time the respondent isnotified of screen results. Thisappeared to be a particular problem inthe hospital setting, where theattending physician is generally noti-fied of screen results, even though heor she may not be responsible for thenewborn’s primary care and thereforemay not document the results in thenewborn’s chart in a timely manner.

Information Provided to Parents.According to most respondents (29 outof 33, or 88%), parents were generallyaware that newborns were screened forgenetic disorders. Only four respon-dents (12%) indicated that mostparents were unaware their child hadundergone newborn screening. Onerespondent noted that most parentswere aware of screening for phenylke-tonuria exclusively.

Table 3 provides a breakdown of thetype of information respondents typi-cally provide to parents of a newbornwho has had an abnormal test result forone of the conditions screened for byMDH. Most respondents (30 out of 33,or 91%) said they discuss what stepsneed to be taken to obtain diagnosticconfirmation. Additionally, most physi-cians said they discuss clinical informa-tion regarding the condition (28 out of33, or 82%) and referral to a specialist(22 out of 33, or 67%). Other topicsdiscussed include genetic inheritance ofthe condition (12 out of 33, or 36%),trait carrier testing for parents and otherfamily members (8 out of 33, or 24%),and availability of community and

Hemoglobin-related disorder 31Congenital hypothyroidism 18Galactosemia 10Congenital adrenal hyperplasia 7Phenylketonuria 5

Table 2. Number of Abnormal NewbornScreen Results Reported by Physicians

Genetic disorder Reportedincidence

▲▲

▲▲

▲

Table 3. Information Provided to Parents of Newborns with a Positive NewbornScreen Result

Type of information provided

Information about obtaining diagnostic confirmation 91Clinical information about the condition 82Referral to a specialist 67Information about inheritance of the condition 36Information regarding carrier testing for parents/other family members 24Information regarding community groups and support groups 12

Pct. of respondents

support groups (4 out of 33, or 12%). A majority of physicians stated that

their clinic had available—or had accessto—patient information on the condi-tions screened for (31 out of 33, or94%), patient information on supportgroups (27 out of 33, or 82%), carriertesting facilities (27 out of 33, or 82%),and a genetic counselor (29 out of 33, or88%). The two respondents (6%) whoseclinics do not have patient informationon the conditions also said they do nothave access to this information. The sixrespondents (18%) whose clinics do nothave support group information statedthey were unaware of where to accessthis information. The six respondents(18%) whose clinics do not providecarrier testing for family members indi-cated that they had to refer familymembers for such testing due to difficul-ties in billing. Finally, the four respon-dents (12%) whose clinics do not havegenetic counselors stated that they referparents to similar specialists, such as ageneticist.

Evaluation of Minnesota Departmentof Health. All of the respondents reportedthat the screen results provided by MDHwere easy to understand. Most respon-dents (29 out of 33, or 88%) felt that theinformation allowed them to efficientlyprovide testing to confirm the initial diag-nosis. Those who did not agree (12%)stated that the results do not clearly indi-cate the best next test, or provide onlypartial direction. Most respondents (29out of 33, or 88%) stated that they couldreadily locate an appropriate specialistbased on the information provided. Thosewho did not agree (12%) stated that theycould not locate the name or number of aspecialist. Additionally, one respondentindicated that specialists for hemoglobin-related disorders were easy to identify, butthat it was more difficult to locate special-ists for other conditions. Finally, tworespondents (6%) indicated that it wasdifficult to find a specialist in the providerinsurance network. A majority of respon-dents (27 out of 33, or 82%) stated that theinformation provided by MDH allowedthem to readily identify resources availableto the patient, such as supplemental insur-ance and support groups. Those respon-dents who felt they could not identifypatient resources (18%) indicated theywere not aware of any resources availableto them through the Minnesota Depart-ment of Health.

Improving Follow-Up Care Based onNewborn Screens As with any genetic disease, there arepotential benefits and risks to screening

newborns to detect their status as a traitcarrier for thalassemia. Accordingly,newborn screening, confirmatorytesting, parental notification, and coun-seling should be carried out in thecontext of a carefully designed andstructured program. Involvement ofparents and consumer groups, providers,and policy makers is important indesigning models of delivery of suchservices. At minimum, a comprehensiveprogram to improve identification andcounseling of individuals withthalassemia should require and establishstandard reporting procedures foruniversal notification of thalassemiascreen results, offer genetic counselingto the families of all children with anabnormal newborn screen, create publiceducational campaigns aboutthalassemia and the methods for itsprevention, and make healthcareproviders aware of the importance ofnewborn screening and parental notifi-cation for thalassemia.

Identifying and Locating the Physi-cian of Record. One of the mostcommon difficulties with follow-up fornewborn screens is incomplete or illeg-ible information accompanying thesample, including misspellings or misin-formation regarding the primary carephysician. In a previous study, forinstance, J. M. Tuerck found that 25% ofsamples were missing essential informa-tion such as name and address of patientor the primary care provider.3 In ourstudy, insufficient information about thephysician of record on the list of namesprovided by MDH frequently made itdifficult to identify the primary careprovider. More than 30% of the nameson the list were insufficient or inaccurate,making it impossible to locate the appro-priate physician in those cases. Commonproblems included incomplete physiciannames, or names of physicians whoappeared on the newborn screeningsamples received by MDH, but who nolonger practiced medicine. MDH offersno guidelines for indicating the physi-cian of record on the newborn screensample. Because MDH does not directlynotify parents of the results of thenewborn screen, if the physician ofrecord cannot be located, parents willmost likely never learn of an abnormalscreen result. Educating both parents andhospitals about the importance ofcompleting the newborn screening cardmay help increase compliance.

Notification of Results. Respondentsindicated that they were not able toprovide universal disclosure of newbornscreening results because they routinelyreceived results from MDH after thenewborn’s two-week clinic visit. Onepossible reason for the delay may bethat results have to go through thescreening sample submitter (the place ofbirth) before being returned to theprimary care physician. The submittermay also have difficulty notifying thephysician of record based on incompleteor inaccurate information provided onthe sample. Studies of other newbornscreening programs have noted that acommon cause of delay is late submis-sion of the sample to the laboratory.4

The delay in submission could make itdifficult to provide the results to thephysician of record in a timely manner.

As previously explained, screeningfor hemoglobin-related disorders such asthalassemia identifies not onlynewborns affected with a disease, butalso carriers who will not develop thecondition but are at risk of havingoffspring with the disease. The biolog-ical parents of a child identified as atrait carrier are also at risk of havingan affected newborn in the future.One survey respondent indicated thathe or she did not disclose screenresults to parents of newborns who arecarriers for a hemoglobin-relateddisorder. Not disclosing such informa-tion deprives the newborn and itsfamily of information that may have aprofound effect on future family-planning decisions. In addition, allnewborn screening results can poten-tially be placed in the newborn’smedical records, whether parents areinformed of the results or not. It isclearly unjust to put a newborn traitcarrier at risk for genetic discrimina-tion by insurance companies,employers, or others without notifyingthe parents of the child’s trait carrierstatus.

Changes in notification andsubmission must be made to ensurethat universal notification of parentsis possible, efficient, and effective. Toensure universal disclosure of newbornscreening results, all parents ofnewborns, as well as their primary careproviders, should receive a copy of thechild’s screening results.

Information Provided to Patients.The responsibilities of primary careproviders regarding patients with genetic

24 CURA REPORTER

3 J. M. Tuerck, “Computerized Surveillance ofErrors in Newborn Screening Practices,” AmericanJournal of Public Health 77 (1989): 1528.

4 C. Greene, “Top Ten Pitfalls in NewbornScreening,” Genetic Drift 15 (1998): 6–9.

conditions include proper identificationof patients who might benefit fromgenetic services, appropriate referral, andrecognition of the psycho-social needs offamilies who have known genetic condi-tions or susceptibility to these conditions.Less than half of respondents indicatedthat they did provide inheritance infor-mation to the family about the geneticconditions screened for, and even fewerdiscussed carrier testing with or providedsupport group information to parents ofnewborns with an abnormal newbornscreen result. Several respondents indi-cated they did not have access to or couldnot locate support group information.

Based on the responses of physiciansin this study, we do not know the qualityof the information provided. Studies havefound that physicians can provide geneticcounseling, but that they need adequatetime with the patient and training ingenetics to be effective.5 It is well knownthat primary care physicians in theUnited States are allotted very little timewith their patients. In addition, thegenetic knowledge of physicians hasroutinely been shown to be inadequate,both for communicating inheritanceinformation to patients and for under-standing genetic information.6

Many molecular genetic testing labo-ratories state in their reported resultswhether genetic counseling is indicatedfor a particular result. The MinnesotaDepartment of Health should considerincluding a similar statement in the caseof abnormal newborn screen results,particularly in those cases where furthertesting has confirmed their putative diag-nosis. Whatever plan is ultimatelyadopted, it is important that all providersinvolved in newborn care are educatedabout the notification process and theimportance of reporting results to parentsin a timely manner. Minnesota is one ofthe few states that currently does notprovide formal education to primary careproviders or parents. Many of the difficul-ties voiced by primary care physicianscould be overcome with a better workingknowledge of the screening tests and theresources provided by MDH.

To further ensure that appropriatefollow-up care is provided by qualifiedindividuals, children with an abnormal

newborn screen result and their familiesshould be matched with a qualifiedgenetic expert. Many other states provideone-on-one counseling to children with ahemoglobin-related disorder or trait andtheir families, and several have trait coun-selors who provide counseling for all traitresults. Currently, MDH does not provideor require such counseling. Periodic eval-uation of the program should be builtinto the follow-up system to ensurequality care. Further research is alsoneeded to evaluate both the consquencesof a carrier-state diagnosis for infants andparents, and the cost effectiveness ofdifferent models of delivering test resultsand counseling.

Conclusion Thalassemia and other hemoglobin-relateddisorders are among the most commongenetic diseases in the world. They consti-tute a tremendous health, economic, andsocial burden for affected populations and

the healthcare systems that serve them.With the continuing demographic changein the United States, and in Minnesota inparticular, such disorders are growing inimportance as public health problems.Universal newborn screening aims atearly detection of severe forms ofhemoglobin-related disorders. Detectionof trait carriers for such disorders is aninadvertent consequence of newbornscreening, but it provides a valuable toolfor identifying affected families whomight benefit from genetic counseling.Effective public health programs havebeen implemented in several countries forscreening, counseling, and prevention ofthese diseases, and they have been wellreceived by the affected populations. InMinne-sota, the onus of confirmingscreen results and counseling familiesrests with the primary care provider. Thisstudy has shown that informationregarding the genetic carrier state of anewborn for a hemoglobin-related

OCTOBER 2001 25

Because thalassemia and other hemoglobin-related disorders constitute a tremen-dous health, economic, and social burden, a comprehensive program to improveidentification and counseling of individuals with thalassemia is needed.

5 P. T. Rowley, “Genetic Counseling forHemoglobinopathy Carriers: Comparison ofPrimary Providers of Prenatal Care andProfessional Genetic Counselors,” American Journalof Human Genetics 56 (1995): 769–776.

6 S. J. Hayflick, “Primary Care Physicians’Utilization and Perceptions of Genetics Services,”Genetic Medicine 1 (1998): 132–141.

26 CURA REPORTER

Project Awards

To keep our readers up-to-date aboutCURA projects, each issue of theCURA Reporter features a few capsuledescriptions of new projects underway. The projects highlighted in thisissue are made possible throughCURA’s Program for InteractiveResearch. All five projects involvesignificant issues of public policy, andinclude active participation withcommunities, groups, or organizationsin Minnesota. The projects describedhere represent only a portion of thosethat will receive support from CURAand its partners during the comingyear.

n James McManus (Large LakesObservatory, UMD) will investigatethe causes of eutrophication of twourban lakes in Virginia, Minnesota,and work with community membersto identify ways to reclaim the lakesfor recreational use.

n Judith M. Garrard and Susan B.Foote (Health Services ResearchPolicy, School of Public Health) willcollaborate with the Minnesota State

Patrol to research state trends amongindividuals driving under the influ-ence of drugs, as well as criminal jus-tice outcomes for those arrested forsuch violations.

n Laura Kalambokidis (AppliedEconomics) will investigate the eco-nomic impact of alternative land usepolicies on Minnesota communitiesthrough case studies of Chisago andIsanti counties.

n Kathryn D. Rettig and KerryKriener-Althen (Family Social Science)will examine the effectiveness of theMinnesota Child Support Guidelinesin meeting the fiscal needs of chil-dren of divorced, unmarried, andnever-married parents.

n Melissa M. Stone (HumphreyInstitute of Public Affairs) will workwith the Ramsey County CommunityEmployment Partnership to conduct acase study of Work Resource Hubs,collaborations that are used to imple-ment social welfare reform and work-force development.

Update: The Minnesota Population Center

The Minnesota Population Center(MPC) recently celebrated its firstbirthday by counting its accom-plishments: more than $10

million in research grants and designa-tion as a national center for populationresearch by the National Institutes ofHealth, one of only 13 such centers in thecountry.

MPC was officially launched in March2000 with a $100,000 grant from the VicePresident for Research under the Interdis-ciplinary Research, Scholarly and CreativeActivities Program (IRSCA). The center isan interdisciplinary unit devoted toresearch and teaching on demography,the statistical analysis of human popula-tions. Since its creation, the center hasenjoyed tremendous growth, andcurrently supports 38 faculty andpostdoctoral members and 80 supportstaff who are engaged in a variety of

population-related research projects.Because of its empirical orientation

and emphasis on policy-relevant research,MPC has devoted considerable effort todeveloping the technology to sharedemographic data worldwide. Forexample, the Integrated Public Use MicroSample (IPUMS) is a two-century-longstatistical sample of raw census returnsthat MPC has made accessible online toresearchers and analysts worldwide.Another project currently under way—theNational Historical Geographic Informa-tion System (NHGIS)—is an effort tocollect, standardize, and make publiclyavailable all existing aggregate-levelcensus data from 1790 to 2000.

In addition to its research projects, theMinnesota Population Center hostsspecialized forums, workshops, andsymposia on topics related to populationresearch, including a brown bag seminar

series that brings nationally and interna-tionally recognized demographers from avariety of disciplines to Minnesota toshare their research. The center is also oneof three coordinating members of theMinnesota Data Center (MNDC) network,serving as the data depository andproviding a fee-based custom data service.

CURA is enthusiastic about this newcenter because of its obvious implicationsfor policy research and outreach relevantto Minnesota. CURA and MPC arecosponsoring the Conference on Demo-graphics for Policy Analysts this October(see announcement on page 28), andhope to work together on other initia-tives.

For more information about theMinnesota Population Center, visithttp://www.pop.umn.edu, or contactMPC’s director Steven Ruggles atruggl001@umn.edu or (612) 624-4081.

disorder frequently is not conveyed tothe child’s parents. As a result, thenewborn screen is an underutilized toolfor detecting thalassemia and otherhemoglobin-related disorders. Toimprove newborn screening in Minne-sota, a comprehensive program toimprove identification and counselingof individuals with thalassemia, accom-panied by an educational campaignaimed at physicians and the generalpublic, should be implemented.

Joline Dalton is a genetic counselor in theDepartment of Genetics, Cell Biology, andDevelopment and at the Institute ofHuman Genetics, both at the University ofMinnesota. She recently graduated fromthe University of Minnesota with an M.S.in genetic counseling.

Lakshmanan Krishnamurti, M.D., isassistant professor in the Department ofPediatrics at the University of Minnesota.His research and teaching interestsinclude the role of the primary careprovider in screening and counseling forhemoglobin-related disorders, as well asthe epidemiology and treatment of suchdisorders.

OCTOBER 2001 27

Agroup of researchers from CURAand the Minnesota Departmentof Transportation (MnDOT) hasreceived an award from the

University of Minnesota’s Center forTransportation Studies (CTS) recognizingtheir contributions to the Trade Centers ofthe Upper Midwest project. The team ofsix researchers from CURA (WilliamCasey, the late Tom Anding, and BarbaraLukermann) and MnDOT (AbbyMcKenzie, Cecil Selness, and CathyGillaspy) was honored with a specialrecognition award under the CTS ResearchPartnership program. The award isintended to recognize research projectswithin the research program that result insignificant impacts on transportation, andreward teams of individuals who havedrawn on the strengths of their diversepartnerships to achieve those results.

Beginning in summer of 1998, theteam from CURA and MnDOT collabo-rated on an update to an earlier analysis oftrade centers in the region conducted byTom Anding and others. The team’s finalreport, Trade Centers of the Upper Midwest1999 Update, was prepared by WilliamCasey and published by CURA in June1999. The update focused on identifyinghigher order trade centers in the UpperMidwest that served relatively largegeographic areas, and was used byMnDOT as the basis for allocating trans-portation funds to Minnesotacommunities.

The Trade Centers of the UpperMidwest project was originally initiated in1963 by CURA’s first director, the lateJohn R. Borchert, and produced a reportby Borchert and Russell B. Adams titledTrade Centers and Trade Areas of the Upper

Midwest. Borchert and Adams described aninterconnected system of economic tradecenters stretching across the region, andclassified population centers inMinnesota, Montana, North Dakota,South Dakota, and Wisconsin into one ofeight categories based on the extent towhich they provided employment andservices to nearby communities andsurrounding rural areas. Using Borchertand Adams’ work as a starting point,Anding and others later expanded thescope of the project to include Iowa andNebraska, and updated the analysis usingcomputerized data sets unavailable earlier.Their report, Trade Centers of the UpperMidwest: Changes from 1960 to 1989(1990), described a complex economicsystem that had continued to evolve andchange throughout the period understudy.

CURA’s Trade Centers of Minnesota ProjectReceives Award

A Directory of Nonprofit Organizationsof Color in Minnesota, fourth edition.Minneapolis: Center for Urban andRegional Affairs, 2001. CURA 01-13.301 pp. Free.

One of CURA’s most popular publica-tions, the directory lists more than 600not-for-profit associations, organiza-tions, and mutual assistance andfraternal groups in the state of Minne-sota that are controlled by people ofcolor or primarily serve one or morecommunities of color. The directoryprovides the name and address of eachorganization listed and, where available,phone and fax number, e-mail address,Web address, name of contact person,and a brief description. Organizationsare indexed alphabetically by name, bythe community the organization serves,and by the main activity in which theorganization engages. Also included aremailing label matrices for all organiza-tions listed.

The directory is also available on theWeb as a searchable database. The onlinedirectory contains all of the information

in the latest print edition, and will beregularly updated to reflect additions,deletions, or changes to the listing oforganizations. Visitors can search forspecific organizations by communityserved, major activity area, and keyword;make customized mailing labels based onsearch results; update or add their organi-zation’s listing online; and limit theirsearch to those organizations whose list-ings have been added or updated sincethe print version of the directory waspublished in September 2001.

The online edition of the directorycan be found at http://www.cura.umn.edu/publications/npoc.html. Singlecopies of the print directory are availableupon request. To order, contact CURA byphone at (612) 625-1551, by fax at (612)626-0273, or by e-mail atcura@umn.edu.

“When the Rehabilitation IdealFails: A Study of Parental RightsTermination.” By Esther Wattenberg,Meghan Kelley, and Hyungmo Kim.Child Welfare 80 (July/August 2001):405–431.

This article, co-authored by CURAassociate Esther Wattenberg, exploresthe circumstances of parents whoseextreme neglect and abuse of theiryoung children resulted in the drasticstate action of termination of theirparental rights. The authors reviewthe records of 97 children inMinnesota aged 6 and under whoseparents’ parental rights were termi-nated between 1991 and 1997,develop profiles of these children andtheir parents, and identify a “riskpool” of parents whose childrenbecame wards of the state. Based onthis risk pool, the authors establishguidelines that may help alert practi-tioners to those parents who areunlikely to safely maintain their chil-dren. Questions and implications forpolicy and practice are highlighted.Reprints of this article are availablefrom the University of MinnesotaCenter for Advanced Studies in ChildWelfare by calling Anne Preston at(612) 624-4231 or sending e-mail tocascw@che.umn.edu.

New Publications from CURA

28 CURA REPORTER

Volume XXXI, Number 3 October 2001

CURA connects University faculty and studentswith the people and public institutions workingon significant community issues in Minnesota.CURA helps:

■ faculty and students produce more relevant research on critical issues

■ students strengthen their education through practical experience

■ government agencies and community organizations get the assistance they request

■ the University of Minnesota fulfill its land grant and urban missions

The CURA Reporter is published quarterly to provide information about CURA projects andprograms. This publication is available in alter-nate formats upon request.

Thomas M. Scott, directorWilliam J. Craig, associate director Michael D. Greco, editor

Phone: (612) 625-1551 Fax: (612) 626-0273

E-mail: cura@umn.edu Website: http://www.cura.umn.edu

The University of Minnesota is committed to the policy thatall persons shall have equal access to its programs, facilities,and employment without regard to race, color, creed, religion, national origin, sex, age, marital status, disability,public assistance status, veteran status, or sexual orientation.

Printed with agri-based ink on recycled paper,including 20% post-consumer fiber.t

CURAUniversity of Minnesota330 HHH Center301—19th Avenue S.Minneapolis, MN 55455

ADDRESS SERVICE REQUESTED

Nonprofit Org.U.S. Postage

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REPORTER

Third Upper MidwestConference onDemographics,November 29

The Third Upper Midwest Conference on Demo-graphics for Policy Analysts will explore the theme“The Changing Face of Demographic Data: Censusand Other Data Sources for Policy Analysis.”

Cosponsored by CURA, the Minnesota Population Center,and other research centers and state agencies engaged indemographic analysis, this gathering will provide a uniqueopportunity for both experienced data analysts andnewcomers to learn about census and noncensus data avail-able for policy analysis, recent population trends, newmethods of analysis, and current trends in the data environ-ment. The conference will be held Thursday, November 29,2001, at the Earle Brown Continuing Education Center onthe University of Minnesota St. Paul campus. Visithttp://www.pop.umn.edu/midwest_main.html for moreinformation, or contact Noreen Huntington at(612) 625-6748 or nhunting@cce.umn.edu.

Conference on SocialJustice Issues,October 27

Citizens for Democracy, a Twin Cities groupcommitted to citizen participation in democracy,will host a one-day conference in Minneapolis onOct. 27, 2001, to examine issues of social justice,

civic engagement, and current policy agendas that dependon citizen support. The conference, titled “A Citizen’s Callto Justice: Creating a New Democracy,” will focus onimpending policy decisions that affect people’s lives and oncreating a network of progressives dedicated to revitalizingdemocracy. Scheduled speakers include john a. powell,executive director of the Institute on Race and Poverty atthe University of Minnesota; Peter Edelman, professor oflaw at Georgetown University; and Senator Paul Wellstone(DFL-Minnesota).

CURA, the Institute on Race and Poverty, the Headwa-ters Fund, VoterMarch Minnesota, the DFL Education Foun-dation, the Minneapolis Urban League, and the Minnea-polis branch of the NAACP provided initial funding for thisevent.

For more information or to register for the conference,visit http://www.umn.edu/irp or call (612) 624-2904.