Pat Sexton is Executive Director of the Rochester Area Builder’s Association in Rochester, Minnesota. The Association is focused solely on construction and advocates for the highest level of professionalism in the building industry. As Rochester braces for a decade of transformative growth, with Mayo Clinic’s Bold. Forward. Unbound. initiative, Pat acknowledges the inevitability of obstacles along the way, including the need for more skilled workers. Yet, his optimism remains unwavering, rooted in the belief that patience and perseverance will pave the way for a brighter future. At the heart of Pat's mission lies a singular ambition: to foster the expansion of housing in Rochester.
Rochester Area Builders Association
Bold. Forward. Unbound.
Experience Rochester, MN
Pat Sexton is Executive Director of the Rochester Area Builder’s Association in Rochester, Minnesota. The Association is focused solely on construction and advocates for the highest level of professionalism in the building industry. As Rochester braces for a decade of transformative growth, with Mayo Clinic’s Bold. Forward. Unbound. initiative, Pat acknowledges the inevitability of obstacles along the way, including the need for more skilled workers. Yet, his optimism remains unwavering, rooted in the belief that patience and perseverance will pave the way for a brighter future. At the heart of Pat's mission lies a singular ambition: to foster the expansion of housing in Rochester.
Rochester Area Builders Association
Bold. Forward. Unbound.
Experience Rochester, MN
The Growing Destinations podcast is brought to you by Experience Rochester. Learn more about Minnesota's third largest city, which is home to Mayo Clinic and features wonderful recreational and entertainment opportunities, by visiting experiencerochestermncom.
Pat Sexton:There is no faster way to wealth for you or your family than owning a piece of land and a piece of property. That is tried and true, proven.
Bill Von Bank:Welcome to the Growing Destinations podcast, where we take a deep dive into destination development and focus on a wide range of topics, from tourism and entertainment to economic development and entrepreneurism and much more. I'm your host, Bill Vaughn Bank. Pat Sexton is Executive Director of the Rochester Area Builders Association in Rochester, Minnesota. The association is focused solely on construction and advocates for the highest level of professionalism in the building industry. As Rochester braces for a decade of transformative growth with Mayo Clinic's Bold Forward Unbound initiative, Pat acknowledges the inevitability of obstacles along the way, including the need for more skilled workers. Yet his optimism remains unwavering, rooted in the belief that patience and perseverance will pave the way for a brighter future. At the heart of Pat's mission lies a singular ambition to foster the expansion of housing in Rochester. Pat Sexton, welcome to the Growing Destinations podcast. Thanks, Bill. Happy to be here. Pat, I'm excited to have our conversation today and talk about the building industry specifically in Southeast Minnesota, but before we do that, tell us a bit about yourself and your background.
Pat Sexton:Mostly I'm a political hack, long, longstanding political hack. I grew up in the Twin Cities, did jobs for Governor Arne Carlson, governor Tim Pawlenty, worked a little bit with Governor Jesse Ventura. Did some private sector stuff. Worked for Honeywell West Group and then did some public affairs consulting as well. Came down to Rochester my wife got a job as Mayo's lobbyist and at the time I was working as Alina's lobbyist, so that didn't quite work out so well. Came down here did some public affairs, worked for the Southeast Minnesota Association of Realtors, did a little stay at home dadding and also some commercial real estate. And then here I am at the Rochester Area Builders.
Bill Von Bank:You've assumed the role of executive director of the Rochester Area Builders in 2023. Can you share with us your vision for the future of the association under your leadership?
Pat Sexton:I always make a point to say I have nothing to do with the association. I'm just there. It is the builders who run it and it's the members who run it. But what I'm hopeful that I can help get done is get more housing built in Rochester. For roughly 10 years, we've done a fantastic job at building really expensive apartments and we have not done a very good job of building what I would consider a wealth-creating unit, whether that's a single-family home or a condo or a townhouse. We haven't done very good at that, and so whenever I'm done whether it's two years or 20 years with this job, if I can look back and say more houses were built in Rochester when I was there, I would consider that a huge success.
Bill Von Bank:Why do you think there has been such a demand for this, or why hasn't there been this type of housing being built? I guess is a better question.
Pat Sexton:It would be really easy to say it's all government's fault or it's all somebody's fault. It's a massive amount of things that have gone into it. There's some government involvement. Certainly, our fees have gone up. They're very expensive compared to what they were, say, 10, 15, 20 years ago. Timelines to get projects approved have gone up from where they used to be.
Pat Sexton:But that's not the whole entire picture. Covid was a part of it, but you got to really go back to the mortgage meltdown of 08, 09, and 10. That took out a lot of people who built homes. They aren't in business anymore. National home builders left, larger builders left. Those people are not there to build the house and the people are not there to buy the land to turn it into a lot to turn into a house. Certainly, under COVID we had problems with the supply chain all but shut down for everybody everywhere. That led into more expensive wood, more expensive concrete. So that's a part of the problem. Inflation has been devastating and interest rates have been devastating. So all of that comes together and so we cannot build. No one can build a $300,000 house anymore, $200,000 house anymore. The lot's not there, the land's not there, the product's expensive and the fees are expensive. So a long answer. But that's kind of the perfect storm that's been created. There isn't a lot of housing built anywhere, but Rochester is particularly bad. We have neighboring states that have done better than we have.
Pat Sexton:Can you point to any solutions? Many solutions, I would say. The first thing we should do is stop making dumb policy that at the end of the day, creates an increased expense in the house. So if you want cheaper housing, the last thing you should do is make housing more expensive. That seems pretty silly, but there's at least one example of a draft study I've seen that would increase the price of housing. Why would we do that 10 years ago? Maxfield study comes out and says you need to build 900 homes a year.
Pat Sexton:Last year we built about 100, maybe two. The year before we built about 200. So right there, there's 1,400 homes in two years that we didn't build. Deficit, massive deficit. So if we were so bad that we decided to do a study 10 years ago and we've done dramatically worse, how much worse of a spot are we in now? We should take a look at the government fees that are out there and the timelines and say maybe if you can build a house for $500,000 or less, or just any house, no fees, whatever. Something has to be done that is dramatic and drastic, to change where we are because we are not building enough homes. And I would just like to say those are 1,400 families that are stuck in apartments that are not wealth creating, or those are 1,400 families that aren't moving here. Who does that benefit? If we create this, if we have a system that is preventing housing from being built, let's change the system. Let's help those 1,400 people out, plus the thousands that didn't get homes before that.
Bill Von Bank:Well, you've taken on this role and are running with it. The Rochester Area Builders Association has been serving the community for over 70 years. How do you see the organization evolving to meet the changing needs of the industry and the community it serves? I mean, we've already talked about the changing needs of the community, so tell us more about this longstanding association.
Pat Sexton:The association. Really, it's kind of like a mini chamber of commerce focused solely on construction. So we have home builders, commercial builders, people that build buildings, people that build houses, people that build apartments, people that build restaurants those are all our members. But we also have association or affiliate members who are bankers, plumbers, painters all the people that support all of that building.
Pat Sexton:And what I'm trying to get us back to is the association really started when five or six or seven home builders got together in a room and said you know, we could probably be more effective with the government and more efficient with the way we do business if we somehow aligned ourselves. And I would like us to get back to that, where those home builders are running this association, because they know best I can't build anything, I can't saw, I can't hammer a nail, I can't do anything, but what I can do is take their ideas and help them get them implemented. So that's what we're trying to do is get those home builders back to be a part of the association and then do what they think needs to be done to get those homes built in the final analysis.
Bill Von Bank:Collaboration and networking are essential components of any successful association. How do you foster collaboration among your members and with other relevant stakeholders in the construction and real estate industries?
Pat Sexton:Sure. So we have networking nights once a month, and so those are chances for all of our members to come together and what do you do, bill, who are you with Whatever and just talk and hopefully that leads to trusting relationships, which hopefully leads to more business. But we also have specialty events, like we have a remodelers council, and so that's just the folks that do remodeling. They get together, talk about things specific to their industry. We have golf events as well, more social play, shoots, that kind of stuff. So networking and bringing people together that want to do business with each other is really important to what we do.
Bill Von Bank:The association emphasizes professionalism within the building and home improvement industries. How do you ensure that members uphold these standards and what support does the association provide?
Pat Sexton:We'd like to say that we're kind of like the good housekeeping seal of approval.
Pat Sexton:If you're a builder member, you have to be licensed, you have to have insurance, you have to be permitted, and then if you're a Rochester area builder member, we have a way that if you make a mistake or a client alleges you make a mistake, we've got a process to make sure that that client is satisfied or that that complaint is rectified.
Pat Sexton:So not everybody is a member of ours. So I guess the first thing I would suggest if anybody's listening is, before you build a deck or build a house or build a driveway, check out the RAB website and try to find a person who does the painting or the concrete work or the deck work, because I think you're going to be able to trust them and even if they do make a mistake, we have a process to maybe rectify that. We also provide continuing education to our members so that they can learn the latest whatever about their industry and then through the networking events they often learn about, well, here's a new way to do this or a new way to do that. So I think you can trust that a Rochester Area Builder member is going to be a highly qualified person to do whatever project you want.
Bill Von Bank:One public-facing event that's really cool is the Rochester Area Builders Home Show. Can you tell us more details about that?
Pat Sexton:Sure, that was just in early February. You don't have to be a member to be an exhibitor, but roughly at least half of our exhibitors were members. That's a chance for you to go and look at if you're going to do what's a good example maybe you're going to do a new water system in your house. Come and talk to Culligan the guys right there that will either be working on it or selling you that product and you get to learn what Culligan's doing. You may get to learn what their competitor's doing.
Pat Sexton:So the home show is a great way to kind of kick tires and kind of learn what you may want to do. What we find is it leads to great leads for our exhibitors. They get a ton of work out of the home show. Maybe not this year, maybe not even next year, but maybe three years down the line somebody will have gone to somebody at the home show, kicked their tires and said, okay, I'm finally ready to build a house or put the water system in or build a deck. So it's just a great chance to kind of one-stop shop. If you're a builder, you're here, kind of a remodeler of anything, you're going to be at that home show and a person can be really efficient and effective with who they talk to.
Bill Von Bank:You're both B2B and B2C Correct, exactly, so I want to now look forward to Mayo Clinic's Bold Forward Unbound Initiative, which is a significant investment in Rochester to transform patient care, research and education. How do you anticipate this $5 billion development will impact the construction and building industry locally.
Pat Sexton:Well, first off, my goodness, aren't we lucky to be here. I mean, can you imagine if 10 years ago, pre-DMC, if somebody had said there's going to be a $5 billion project in Rochester, who would believe that that could ever?
Bill Von Bank:possibly happen. That's the biggest in Minnesota.
Pat Sexton:Correct Ever. Two or three US Bank stadiums. I mean it's amazing. So we're lucky to be here. We have access to the greatest healthcare on the planet. And not only that over the next five or 10 years they are going to change the face of healthcare on the planet with this building. And I just can't believe how incredibly lucky we are to be here. I'm old enough to remember two or three years ago when Amazoncom was going all over the United States trying to fleece I would argue, fleece states to pay for their headquarters, and that headquarters was $2.5 billion for phase one and another $2.5 billion for phase two. This is Mayo Clinic just saying to everybody. Oh, by the way, we're going to invest $5 billion here, which means there's going to be probably $10 billion of investment in Rochester, minnesota, over the next 10 to 15 years. And I don't think I can't get my head around what that means or how that will roll out, but I just think we're just incredibly, incredibly lucky.
Bill Von Bank:With such a massive project underway, what opportunities do you see for local builders, contractors? And then there's tails attached to that.
Pat Sexton:Think about it. If you're a builder working on this unbound building which will move floors, what are you going to learn about how to do a building that's never been created at least to my knowledge, has never been created anywhere. So, whether you're a painter or a bricklayer in concrete, you're going to learn something new because this building hasn't been built anywhere else before. So you're going to be able to take that new knowledge and put it into the next hotel you build, or the next restaurant you build, or the house you build. So I think the ripple effects are going to be amazing for our architects, our engineers, our builders, our tradesmen. It's just going to be incredible, in addition to the $10 or $15 billion of economic stimulus.
Bill Von Bank:A lot of construction work, which means a lot of workers. A recent CNBC report highlights the need for trained people to fill construction jobs. Are you seeing a labor shortage in Rochester or southeast Minnesota for skilled construction workers Since?
Pat Sexton:I got here in August. That has probably been the most frequent thing brought up is how do I find employees? I honestly don't have an answer to that. I don't know how we're going to find employees. There are between what's going on here?
Pat Sexton:I think Facebook is building something up in Rosemont. We've got a ton of activities just to build the roads and houses that we need. Now I'm not sure where this new workforce is going to come from. I think we're going to have to create some interesting ideas. Maybe it's mobile homes in certain like at Grand Park or something like that, to house these people, because they're not all going to move here and stay here. Some will, some will move here. So recruitment from other states? I think so absolutely. As work dries up in California I think they've had the most significant decrease in construction workers those folks should come here and come and work in Rochester, but where they're going to come from and how long they're going to stay, I think that's all to be determined. I'd love to know that answer, but I don't know what it is.
Bill Von Bank:A viable industry, for sure. How do you go about recruiting teenagers or people headed to college thinking about what their next career is? How do you go about saying, hey, here's a career for you.
Pat Sexton:One of the things we try to do is insert ourselves into middle schools. For example, john Ishen and Jay Burke, who are members of REB, are working with a Kellogg middle school and taking 10 or 20 kids and saying let's design a playhouse. So they had two groups design a playhouse, so they designed they each. They had two groups design a playhouse up for votes. The winning got it and they're going to build that. So they're going to learn how to measure, how to paint, how to nail, how to do all that stuff. But that's. That's a smaller piece.
Pat Sexton:I've spoken with the superintendent of Rochester public schools and they've got a new app that they're going to insert, where a kid will go on there and maybe when they're really young they want to be an architect, and so they're going to be able to look at things with algorithms that will support what they're looking at. But maybe they change and want to be a painter or whatever. But at the end of the day, they're going to be able to learn about industries that they're interested in and then that changes with them over time and then hopefully, at some point in middle school we can insert to them. You should go consider talking to Krauss, anderson, or you should talk to Valor Mechanical, because they have jobs that you seem to be interested in. I think that's the way to do it. I've got kids coming up towards college age and I'm encouraging them to look at trades because it's a twofer. You don't have to take on hundreds of thousands of dollars of debt. You can make hundreds of thousands of dollars at the same time. So it's a huge twofer and then eventually you can build that into a career of your own or a business of your own.
Bill Von Bank:Beyond the immediate construction needs going on in Rochester, how do you anticipate Mayo Clinic's bold forward unbound will impact the long-term sustainability and growth of the construction industry in Rochester and the surrounding areas?
Pat Sexton:Let's talk about stuff just beyond Unbound. So we passed a sales tax renewal. Rochester area builders were strong supporters of that. We're going to have a regional sports complex. We're going to put $50 million into housing, $50 million into roads and $50 million into flood control. Those are all construction projects we talked about building up in Rosemount. We've got a new bridge going in on 6th Street. We've got Buster Rapid Transit. We've got tunnels going under 2nd Street, a couple of them.
Pat Sexton:These are massive amounts of construction that we're going to be hard to get downtown. It's going to be hard to get in and around downtown, but if you can have the patience and vision to see what this town is going to look like in 10 years and it is going to be off the charts amazing. So for the construction trades it's going to be tricky to find the jobs I think to be very blunt. There's going to be poaching of jobs. That's going to be real and that's going to happen. And we're going to get an influx of people from outside of Rochester. That's going to happen.
Pat Sexton:But all of that will make Rochester stronger and better over the long run. Even if there are bumps in the road, I just can't imagine how fantastic this place is going to look 10 years from now and, at the end of the day, imagine that patient who now has hope that might not have hope, but for building this new building I think that's what it may. Always talks about putting the patient in the center of the room. We should do that as Rochester citizens too. What's best for that patient, because we're going to benefit too.
Bill Von Bank:As you look to this association and your role in it and maybe crystal ball ahead a little bit, what exciting things are on the horizon. I mean, we've just talked about multi-billion dollar exciting things on the horizon, but from an industry perspective.
Pat Sexton:My hope is what I started with housing.
Pat Sexton:I am hopeful that we can get hundreds and hundreds, if not thousands, of wealth creating units built in Rochester over the next 10 years.
Pat Sexton:There is no faster way to wealth for you or your family than owning a piece of land and a piece of property. That is tried and true, proven. We have hurt the last decade or two of new people, younger people, because for all of the reasons I mentioned government interest rates, supply, et cetera they're not able to buy houses anymore and that's the fastest way to wealth creation. So being able to do that, if we're able, 10 years from now, to say we built 10,000 housing or wealth creating units in the last 10 years, that's a huge success. So that really gets me fired up and gets me excited, and I think all of us should do what we can to make sure that that gets done. Because if you have a town of people living in apartments, they're not growing roots. If they're living in wealth-creating units, if they're living in housing, they will grow roots. Their kids will play t-ball. Those kids will grow up and work for you. They'll work for a restaurant. That's what we really need.
Bill Von Bank:Pat Sexton. Fascinating conversation today. Best of luck with the Rochester area builders moving forward and thanks for being our guest on the Growing Destinations podcast moving forward. And thanks for being our guest on the Growing Destinations podcast. Thanks a lot, Bill. This was fun. Thank you for tuning in to the Growing Destinations podcast and don't forget to subscribe. This podcast is brought to you by Experience Rochester. Find out more about Rochester, Minnesota, and its growing arts and culture scene, its international culinary flavors and award-winning craft beer by visiting experiencerochestermncom.