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(Associated Press photo)

Costco Wholesale Corp. will soon begin building a distribution center in Owatonna, its first in Minnesota.

The 354,000-square-foot building is the largest of three that are rising this fall and winter on the west side of Interstate 35 that bisects the city about 60 miles south of Minneapolis-St. Paul.

“Everything west of I-35 is industrial park,” says Troy Klecker, Owatonna’s development chief. “All of this is happening there.”

Daikin, a maker of industrial air conditioners, and Minimizer, a maker of parts for semi-trucks and trailers, are also building new facilities in the Owatonna park.

Together, the three projects will add about 400 jobs.

Costco plans to hire 125 full-time employees and another 75 or so part-timers to the distribution center. The Owatonna City Council earlier this month approved up to $13 million in tax increment financing for the project. As part of its construction, Costco will spend about $2 million on road improvements in and around the industrial park.

Daikin, the Japanese-based manufacturer that also has a substantial presence in nearby Faribault, has already started work on a 150,000-square-foot warehouse adjacent to its Owatonna plant. When completed, the portion of the company’s existing building used as a warehouse will be modified for more production.

Minimizer is building a 100,000-square-foot factory and office on 13 acres it purchased from the city of Owatonna last month. The company will move approximately 80 employees from sites in Blooming Prairie to the new facility in Owatonna in 2021.

Klecker said all three companies were drawn to Owatonna because of its proximity to I-35 and to Highway 14, which goes west to Mankato and east to Rochester. “We’re in the middle of two crossroads,” he said.

The moves were first reported by the Owatonna People's Press and Finance and Commerce in Minneapolis.