Minneapolis is a book lover’s paradise. There are dozens of neighborhood bookstores, a sleek new $125 million Minneapolis Central Library, and Open Book, the nation’s first facility devoted to the literary arts. No wonder it was dubbed America’s most literate city last year.

But one of the best-kept secrets is that Minneapolis and nearby Mankato have evolved over the past 75 years into major publishing hubs for the school and public library market. “[Minnesota publishers] are at the forefront in children’s nonfiction publishing,” says Wendy Woodfill, a children’s and young adult librarian at nearby Hennepin County Public Library. Susan Carr Brown, a children’s and teen librarian for Minneapolis Public Libraries, adds that local publishers do a great job supplementing the school curriculum and filling library shelves with rich information that kids need for classroom assignments and just pure fun.

Why has Minnesota become a mecca for this kind of niche publishing? Michelle Bayuk, marketing director for the Children’s Book Council, suspects that an entrepreneurial spirit, coupled with a strong book culture, contributed to the growth and expansion of this group of publishers. And books ranging from the disquieting Holocaust picture book Rose Blanche (Creative Editions, 2003) to the innovative The Titanic: An Interactive History Adventure (Capstone Press, 2007) have had educators and librarians buzzing at trade shows and poring over Web sites, catalogs, and review publications looking for more.

Of the estimated 40 publishers that serve the school and library market in this country, eight are in Minneapolis and four are in Mankato, including three of the nation’s largest independently-owned children’s book publishers. Just how big are they? ABDO Publishing Group, Capstone Publishing Group, and Lerner Publishing Group—all of which are family owned and operated—supplied more than 1,600 of the approximately 2,350 titles released last year by Minnesota publishers for the school and library market.

The largest, Capstone, which is headquartered in Mankato, has 36 editors working out of a satellite office in the Minneapolis suburb of Bloomington. It produces about 700 fiction and nonfiction titles each year for the pre-K to 12th-grade market through its four library publishing companies—Capstone Press, Compass Point, Picture Window, Stone Arch—and up to 200 titles a year through its curriculum publisher, Red Brick Learning.

Spotting an important trend, Capstone jumped on the graphic novels bandwagon a few years ago, and most recently added CD-ROMs to its print books, allowing users to read on a computer screen. “What we want to create is old-fashioned books that are also new-fashioned in that they appeal to children who have so much coming at them,” Stone Arch’s Joan Berge explains of Capstone’s expansion, which includes classics such as Gulliver’s Travels in a graphic-novel format, as well as interactive histories of events like the Boston Tea Party.

Lerner, which just released a six-book series in collaboration with NASCAR called The Science of NASCAR, publishes fiction and nonfiction series for the K–12 market. With 26 staff editors, the company publishes 350 fiction and nonfiction titles each year through eight imprints, six of them specifically designed for the school and library market. Of that half-dozen, there are three nonfiction imprints that support the curriculum—Lerner Publications, Millbrook Press, and Twenty-First Century Books, as well as three specialty imprints—ediciones Lerner (Spanish language books for young readers), Carolrhoda Books (fiction and nonfiction single titles), and Graphic Universe (graphic fiction and nonfiction).

Founded in Mankato 27 years ago, ABDO now has offices in nearby suburban Edina. It manages to release 450 titles per year for the K–12 market with only 12 editors on staff. Like Capstone, ABDO is committed to pursuing a two-pronged approach in reaching its target market, producing both print and digital books. Its hottest titles right now are its “Cool” series of how-to books, including Cool Crafts and Cool Science.

“You have to use different strategies to get children to read,” says Dan Verdick, ABDO’s marketing director, describing two of the company’s recent initiatives, one drawing upon classic comics and the other implementing high-tech tools to aid high- and low-achieving readers.

That partly explains why the publisher has partnered with Marvel Comics to launch the Spotlight imprint, which repackages graphic novels for the school and library market, as well as why it unveiled an interactive books line, which it’s calling “ABDO iBooks,” says Verdick.

The ABDO iBook resembles Capstone’s interactive library line and lets users highlight words and learn definitions on the computer screen as they—or an educator—read aloud. ABDO’s version, however, includes a comprehensive quiz at the end of the text.

Apart from the three giants, the Creative Company releases 75 titles in its nonfiction series each year under its flagship imprint, Creative Education. They include Ancient Wonders of the World and, its latest, Adventure Sports. A small imprint, Creative Editions, releases five hardcover picture books each year, such as Erika’s Story, while a third imprint, Creative Paperbacks, releases a small quantity of both Creative Education and Creative Editions backlist titles in paper, from the “Let’s Investigate” series to The Velveteen Rabbit.

The Child’s World has steadily turned out about 200 books a year for the early-education market, always with an emphasis on phonics. The publisher is best known for its Sound Box Books, which have sold 38 million copies since their publication in 1984. Founder George Peterson, Jr. says his company has yet to dabble in ebooks because “there’s such a need for basic materials in reading and language arts.”

For the past two years, Black Rabbit Books, originally a Creative Company imprint, has been publishing 300 curriculum-based titles for high- and low-achieving young readers each year. They include Stargazers Books, with text written at two different levels for repeat readers.

Apart from Lerner and ABDO, Minneapolis-based publishers tend to produce fewer books in more narrowly defined subject areas. The largest, Bellwether Media, is releasing 90 titles this year in its fiction and nonfiction series for beginning and remedial readers, including its “Blastoff! Readers” series. Free Spirit, best known for its classic best seller Hands Are Not for Hitting, specializes in books with social and emotional development themes. Last year, the 25-year-old company published 20 books, CDs, and software products. Oliver Press, which specializes in historical and biographical series for YA readers, releases eight to 12 books a year. And TeachMe produces language-immersion books and CDs for children and ESL teachers, and just released a four-volume series consisting of a hardcover illustrated book and an accompanying CD called Christmas Music & Customs Around the World.

Meanwhile, two small Minneapolis presses have just begun issuing books for the school and library audience. Maren Green, launched by a former Free Spirit employee, has so far released 17 titles, including Manners Are Important—all of which deal with social and emotional development themes for readers from birth to age nine. Farmer’s Hat Productions has published four books focusing on sports and outdoor exploration for preschoolers to second graders with such titles as Boating ABCs.

Several of the 40 trade publishers based in the Twin Cities also successfully market select titles to the school and library market. Llewellyn Worldwide reports that 50 percent of its Flux imprint titles for YA readers go to public libraries, and a Milkweed Editions title, The Cat: Or, How I Lost Eternity by Jutta Richter, was named a 2008 Batchelder Honor Book by the Association for Library Service to Children at this year’s American Library Association midwinter meeting.

Minnesota’s ties with children’s publishing date back to 1932 in Mankato, when George Peterson, Sr. founded the Creative Educational Society—now the Creative Company—to sell rubber stamps, and subsequently, children’s books. And it’s become a tight-knit community. Although Creative is neither the biggest nor the most innovative of the Mankato educational publishers, four of the region’s five largest children’s educational publishers have all spawned from Creative. “Virtually every publishing house that has a relationship to Mankato is the result of a former Creative employee or else a Peterson family member,” says Berge, president of Stone Arch Books.

The Child’s World and Black Rabbit, for example, are both direct offshoots of Creative. While these two publishers are now independently owned and operated, they continue to pursue the same kind of traditional print publishing program that Creative maintains.

Capstone and ABDO were never Creative offshoots, which may explain why their emphasis is on cultural trends—and why they dove into the graphic novels and interactive book markets. While ABDO was launched by a former Creative accountant and his three daughters, Capstone Press was launched by several former employees of a Creative imprint called Crestwood House, who launched Capstone after Creative sold Crestwood to MacMillan. After publishing 14 titles, its founding publishers sold Capstone in 1991 to the Coughlan family, who also own several limestone quarries.

Even the Minneapolis children’s book publishers have been shaped and are still influenced by the Mankato publishers, though few have moved between the two communities like Bellwether’s publisher John Martin. He launched his career at Oliver Press, transferred to Capstone Press in 1993, where he eventually served as its president for four years, before returning to Minneapolis, to launch Bellwether.

While competition among the state’s children’s book publishers is inevitable, “It’s surprisingly civil at the trade shows,” says one publisher who asked to remain anonymous. “We trade catalogs with one another.” But overall, the rivalry has “made us a better publisher,” says Adam Lerner, president and publisher of Lerner Publishing. “It pushes all of us to do a better job for the readers. And that’s the most important thing.”