For Release: 12/20/2007

Minnesota Energy Resources Agrees to Sell Rochester Office Building to City and Combine Operations at New Site in 2008

Rochester, MN – Minnesota Energy Resources Corporation (MERC), a subsidiary of Integrys Energy Group, Inc. (NYSE: TEG), today confirmed that it had agreed to sell its near-downtown office building to the City of Rochester, MN. The sale will allow MERC to combine its Rochester operations into one building complex. Currently, MERC owns the office building and leases a Rochester warehouse along with a small building in nearby Kasson, MN.

“The City approached us with an offer to buy the property,” said Stan Shreve, MERC’s Rochester Operations Manager. “And we’ve been thinking about finding ways to improve efficiency, so the time is definitely right.

“We think it’s a win-win situation,” Shreve added. “The City can find a higher use for our existing building, and MERC can gain some efficiency over time by combining operations into one facility.”

The agreement calls for the City of Rochester to complete purchase of the downtown building following construction of the utility’s new facilities located on three acres on Technology Drive in Northwest Rochester.

Shreve said that MERC expects to design the new facilities using Leadership in Energy and Environmental Design (LEED) “green” building guidelines in five key areas of human and environmental health: sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality. LEED concepts/components impact the design and construction of the facility and help reduce or even eliminate negative environmental impacts, reduce operating costs, and provide "people-friendly" environments.

All Rochester area employees will work in the new facilities when they are completed some time in 2008.

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