The Lugers, led by patriarch John Luger, became the first factory owners to capitalize on the opportunities that North St. Paul offered. In the spring of 1887, John Luger entered into an agreement with the [North St. Paul] Land Company to move his entire furniture factory from Wabasha, Minnesota to North St. Paul. Construction commenced in June and by September the Lugers had transferred 13 carloads of machinery from Wabasha to North St. Paul. On a fall day in September, John Luger arrived from Wabasha to inspect construction progress of his factory complex. In the following weeks he transferred the remaining equipment and employees from Wabasha to North St. Paul. Luger's advertised sale of all of his factory buildings in Wabasha at first was misinterpreted by some St. Paulites as the sale of all of his buildings in North St. Paul. This rumor and its implied disruptive influence on North St. Paul's development quickly was put to rest by the [North St. Paul] Sentinel.

By the end of October, 1887, the Wabasha factory was closed and all machinery and employees had been relocated. The Sentinel described the Luger Furniture factory as "a town by itself." A smoke stack rose 86 feet above numerous yellow brick buildings that sprawled across the five-acre site, which was located on the east side of Helen Street, between seventh Avenue and the Soo Line Railroad tracks. The Lugers had invested over sixty-five thousand dollars in machinery and buildings to create an industrial complex that included the factory, dry kiln, warehouse, varnish room, lumber shed and many other buildings. In November, Luger Furniture commenced production. The company's work force consisted of thirty-three Lugers, approximately 60 factory workers, and six traveling agents who sold their furniture from Minnesota to California.

For the Lugers everything did not proceed as smoothly as had been anticipated. At first well drillers were unable to locate water on the factory site. But in September continuous drilling eventually produced a working well at an unexpected depth of 174 feet. Then in November, the 69-foot long main drive belt in the factory ripped from end to end during testing. A month later an industrial accident severed an employee's fingertips. At the same time employees, for unreported reasons, walked out on strike. The strike lasted two weeks, but apparently did not seriously affect Luger's business. By the end of December the company was shipping a carload of furniture each day, supplying local and regional needs, and turning down orders that they could not fill. In 1894 they installed a 50-thousand gallon cistern at the furniture factory to supply water for the sprinklering system. The following year, they linked the furniture and table factories with telephone lines. That same year, in 1895, the company won first prize for excellent quality furniture at the Northwestern Furniture Exposition in Minneapolis.

For a number of years the furniture company operated at full capacity, even as the economy and the financial well being of the town took turns for the worst. The North St. Paul Bank failed, and the North St. Paul Land Company, the North St. Paul Cottage Company and the Casket Company were foreclosed upon. As the factories and businesses failed, residents lost jobs and could not pay debts, causing further foreclosures. During this time, The Luger Company maintained full employment, a "silver lining" of sorts for those fortunate to be in their employ. The Lugers not only kept the furniture and table factories open, they also expanded their businesses during this depression. Branch sales offices were opened in Boston and Kansas City and opened a large showroom in Minneapolis. The Lugers also organized their own mutual benefit association to assist employees and their families during slack periods.

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