Mn valley 5 15 by Free Press Media

Peter Pan teacher Mary Slack does a counting game with Camryn Walth, 5. Photo by Pat Christman

Child care challenges Industry couples hard work and rewards Also in this issue • Pneumat Systems Inc. • Antiquing in Mankato •Thomas Tree & Landscape

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4 • may 2015 • MN Valley Business

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F E A T U R E S May 2015 â&#x20AC;˘ Volume 7, Issue 8

The child care business brings a variety of challenges, particularly for those doing a solo home business. But the rewards of working with kids is worth the effort for many.

Gene Nelson started Pneumat Systems in 1985 which has evolved into a company creating a variety of solutions for large scale bin cleaning, such as at ethanol plants.

Running an antique shop can be a tough business, but with the right approach several dealers have found the key to staying successful and satisfying their love of antiques.

Jim and Jane Thomas started a tree trimming and removal business in 1986 but soon realized they much more enjoyed the challenges and rewards of landscaping.

MN Valley Business â&#x20AC;˘ may 2015 â&#x20AC;˘ 5

■ May 2015 • VOLUME 7, ISSUE 8 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Pete Steiner Heidi Sampson Ted Orness PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross PAGE DESIGNER Christina Sankey ADVERTISING Ginny Bergerson MANAGER ADVERTISING sales Jen Wanderscheid Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Denise Zernechel DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6336, or e-mail mankatomag@mankatofreepress.com. MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street., Mankato MN 56001.

■ Local Business memos/ Company news................................7 ■ Business and Industry trends...... 10 ■ Minnesota Business updates....... 12 ■ Business Commentary................. 14 ■ Construction, real estate trends.. 33 ■ Agriculture Outlook...................... 34 ■ Agribusiness trends..................... 35 ■ Job trends..................................... 36 ■ Retail trends................................. 37 ■ Greater Mankato Growth.............. 38 ■ Greater Mankato Growth Member Activities ....................... 40

6 • may 2015 • MN Valley Business

From the editor

By Joe Spear

Business and the republic

You don’t have to read far into the daily news to find myriad instances where business and the government clash. It isn’t always necessarily a negative. You might say the government clashed with oil giant BP when it spilled millions of gallons of crude into the Gulf of Mexico from a pipeline that couldn’t be capped. In that case, government was protecting everyone’s right to a clean environment but also the business interests of Gulf Coast fishing and tourism industries. Closer to home, you see the same kinds of competing interests in the pending decisions to start copper and nickel mines on Minnesota’s Iron Range close to Minnesota’s pristine forests and lakes in northern Minnesota. They’re balancing the great need for jobs against the need to minimize risk to Minnesota’s natural resources. In another unusual twist, we find government not restricting business, but trying to open up another market for business: selling liquor from liquor stores on Sundays, something that has long been prohibited in Minnesota, but not many other states. That debate does not appear to have a partisan divide nor a business/ consumer divide. Some businesses – large national liquor retail chains – want the freedom to sell their product on Sunday. Smaller, independently owned retailers don’t want the law changed, figuring their business won’t go up much, but the expenses of staying open another day will. In that debate, you saw many smalltown Republicans and some Democrats against the change, while others on both sides favored the free market idea. Sen. Julie Rosen, R-Vernon Center, also offered another take on the argument when she said the government-owned municipal liquor stores in small towns were opposed to opening on Sundays. The bill was eventually voted down in the Minnesota Senate on a 35-28 vote. The day-care providers profiled in this month’s feature story also find themselves dealing with changes in business that could be brought on by

the government. Some of the home day-care providers worry a push by Gov. Mark Dayton to allow unionizing of day cares would hurt their ability to provide day care to parents at a reasonable price. In another move, a Dayton plan to fund early childhood learning at the schools, some say, would drain all the preschool kids away from day-care centers and home day cares. On the other end of the age spectrum, nursing homes face tremendous consequences when the Legislature changes, or doesn’t change, the reimbursement schedule for payment. Minnesota has a unique government role in that business as it does not allow nursing homes to charge a rate to anyone higher than the rate the government provides for Medicaid patients. So businesses find themselves needing to manage yet another aspect of the free market --- government’s influence in changing how the markets work. We know some of the biggest businesses hire law firms and lobbyists to make sure political leaders understand the implications of their actions. But for the vast majority of small businesses, they must simply work with their legislators to foster an understanding of business. That’s sometimes easier said than done. Mike Pinske, owner of AmeriCare Mobility Van in Mankato, has been working for eight years to get the state to improve the rates and methods of providing rides to patients needing medical care. The complex system was the subject of a state auditor’s report when an out of state company was shown to be imposing high costs beyond what seemed normal or justified and at the same time hurting other operators. It looks like a bill authored by Sen. Kathy Sheran, DFL-Mankato, will bring some fairness and equity to the system. But it was a long time coming MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@mankatofreepress.com

Local Business People/Company News

■

United Way hires two

Corayln Musser was hired as the Resource Development Director at the Greater Mankato United Way and is responsible for executing the campaign initiatives, training volunteers and developing community relationships. Laura Murray has started as the Community Outreach Director and is responsible for special projects, community resources, grant writing and various communications activities. ■■■

Johnson hires, promotes employees

Johnson Outdoors Marine Electronics announced new hires: Andrea Hoffman, Kassi-Jo Ziegler, Jacob Murphy, and Elizabeth Sakib. Also, Adam Fries was promoted to Quality Assurance Supervisor.

Van Engen joins Frandsen

Nick Hinz, president of Frandsen Bank & Trust in Mankato and North Mankato, announced the addition of Shane Van Engen as senior vice president at the North Mankato office. Prior to joining Frandsen, Van Engen, a CPA, spent 13 years with a large financial services company in various capacities; most recently business banking manager for southern Shane Van Engen Minnesota. He previously served as a senior lender/vice president in San Francisco, Dallas, and Minneapolis. Van Engen grew up in Fairmont. He holds a bachelor’s degree in finance and marketing from the Carlson School of Management. ■■■

■■■

Sybrant Passes CPA Exam

Welcome Home earns award

CliftonLarsonAllen announced that Eric Sybrant has passed the Certified Public Accounting Exam. Sybrant was an intern before accepting a full-time position. He graduated from Minnesota State University. ■■■

Lumiere Real Estate launches

Lumiere Real Estate Group is a newly formed real estate company specializing in residential sales and service. Lumiere was founded by Deb Atwood who is the broker/owner and Deb Atwood Jen Schmidt Jen Schmidt, who is an owner/Realtor. Atwood and Schmidt have nearly 40 years of combined experience. (lumiererealestategroup. com) ■■■

Baird receives enviro award

Rick Baird of the city of Mankato, received the 2015 Minnesota Erosion Control Association Environmental Leadership Award. Each year MECA awards their Environmental Leadership Award to an individual, company, government agency or organization that has demonstrated leadership in the erosion and sediment control, or storm water management field. Created in 1988, MECA strives to communicate erosion and sediment control techniques and practices and encourage the use of those practices and actively promotes new and innovative storm water management practices.

Mary Weller

Karla Malone

Coldwell Banker Welcome Home Realty, has been named a Coldwell Banker Premier Office for 2014, the highest honor given to Coldwell Banker offices. This is the third consecutive year this office has been given the

award. It is co-owned by Mary Weller and Karla Malone. ■■■

Landmark Realtors honored

Century 21 Landmark Realtors is a recipient of the Century 21 Quality Service Office award for its commitment to providing customer service to its clients. Based on Tamara Mulligan Mary Jo Mickelson customer surveys, the award recognizes those independent offices that earn a minimum customer satisfaction index of 90 percent or better on real estate transactions they closed. Landmark is owned by Jonathan Kietzer. Broker associate Tamara Mulligan was also awarded the Quality Service Pinnacle Producer award. To earn the award an agent must receive completed customer surveys with an average survey score of at least 95 percent or better for two consecutive years. Mulligan was also given the Great North Region Multi-Million Dollar Producer Award. The criteria for this award is production in excess

MN Valley Business • may 2015 • 7

of $80,000 adjusted gross commissions or 20 closed units. Realtor Mary Jo Mickelson was awarded the Quality Service Producer Award, with a survey score of at least 90 percent. ■■■

Blethen relocates to Profinium

Blethen, Gage & Krause is relocating their office to the Profinium Place tower at 100 Warren St., Suite 400 in midMay. ■■■

Schweim hired at U.S. Bank

U.S. Bank has hired Joshua Schweim to its commercial banking team in Mankato. Schweim, a commercial credit analyst, works at the U.S. Bank office located at 115 E. Hickory St. in downtown Mankato. Schweim comes to U.S. Bank with more than seven years of experience working in tax and audit services, most recently in bank compliance at Eide Joshua Schweim Bailly. He is a Bethany Lutheran College grad. ■■■

West earns million dollar distinction

Warren “Buster” West, of the Minnesota Business Center of the Principal Financial Group, has earned membership in the Million Dollar Round Table in addition to qualifying for the company’s Premier Club. West is a 19-year qualifier of the MDRT, representing the top life insurance and financial service professionals worldwide. MDRT is an international, independent association of approximately 38,000 of the world’s life insurance and financial services professionals. The Premier Club recognizes producers for their sales. ■■■

U.S. Bank promotes two

Alec Pfeffer

Matt Holt

U.S. Bank in Mankato promoted Alec Pfeffer to relationship manager for its commercial banking team. Pfeffer has been with U.S. Bank since 2010, most recently as a commercial credit

analyst in Mankato. The bank also named Matt Holt a credit analyst for its commercial banking team. Holt has been with U.S. Bank since 2013, most recently as a universal banker. Holt is a graduate of Bethany Lutheran College.

8 • may 2015 • MN Valley Business

Condux Tesmec hires Thompson

Condux Tesmec added Bryan Thompson as its new field service manager. He is in charge of providing equipment troubleshooting, as well as onsite service and repair to customers throughout the United States and Canada. In addition, he will assist in parts, stocking and inventory management. Condux Tesmec offers a full line of stringing equipment including pullers, Bryan Thompson tensioners and puller-tensioners ■■■

Open Door adds dietitian

Open Door Health Center has added Kari Nelson. As an expert in food and nutrition, Nelson will assist medical, dental, and behavioral health providers to evaluate the overall health of patients, provide patient and family education, assist with coordination of patient care, and develop nutrition plans and interventions based on patient needs. She will also work with patients and families to individualize Kari Nelson plans for specific dietary needs while considering medical diagnoses, special needs, stage in life, all while taking into account individual or family resources available for purchasing food. She graduated from North Dakota State University with a Bachelor’s degree in dietetics and is also certified as a Chronic Care Professional through the Health Sciences Institute. She is a member of the Academy of Nutrition and Dietetics. ■■■

Sowers earns Pinnacle Award

Bryan Sowers, a vice president of commercial banking for U.S. Bank in Mankato is a winner of U.S. Bank’s Annual Pinnacle Award, the company’s highest employee achievement honor. Sowers was among a group of top performing employees nationwide to win the award and was recently recognized at a company dinner in San Antonio, Texas. This is Sowers’s fifth Pinnacle award. Bryan Sowers He works at the U.S. Bank office located at 115 E. Hickory St. in downtown Mankato. He graduated from the University of Minnesota with a degree in agribusiness.

CTS promotes two

Dave Norris

Nicole Siirtola

Dave Norris is now CTS’s Chief Operating Officer. Norris brings 24 years of sales and management experience to CTS, with the last 15 years of this experience centered on technology and developing processes. He has also spent time as an entrepreneur and volunteering. After nearly six years with the company, Nicole Siirtola has become CTS’s Business Manager. She has an extensive background in human resources, sales, accounting and customer service. ■■■

Corn Growers hires research director

The Minnesota Corn Growers Association has hired Paul Meints to serve as the o rg a n i z a t i o n ’s R e s e a r c h Director. Meints will oversee a farmerfunded research Paul Meints portfolio totaling $4 million annually that supports projects at institutions like the University of Minnesota, as well as on-farm initiatives such as Discovery Farms Minnesota. Meints, who grew up on a family corn, soybean, pork and beef farm in Chippewa County in Western Minnesota, has a bachelor’s degree in agronomy and a master’s degree in plant breeding genetics from the University of Minnesota. Meints earned his Ph.D. at Oregon St. University.

Ludeman qualifies for conference

Sander Ludeman was among Edward Jones advisors to be selected to the Financial Advisor Leaders Conference. He was one of 944 financial advisors who qualified out of the firm’s 14,000 financial advisors in the U.S. and Canada. The conference is in May at the firm’s headquarters in St. Louis. Edward Jones, a Fortune 500 company, provides financial services for individual investors in the United States and, through its affiliate, in Canada.

Advance Pain Mgmt. adds Michiri

Advanced Pain Management in Mankato has added Michael Michiri. Born in Kenya, Michiri earned his Bachelor of Science in Nursing from Minnesota State Michael Michiri University. He received his Master of Science in Nursing-Family Practice at Metropolitan State University in St. Paul. Michiri is a member of the American Association of Nurse Practitioners. ■■■

Profinium promotes Engelby

M e l i s s a Engelby has been promoted by Profinium to Director of Mortgage and Personal Banking. She will be responsible for p ro v i d i n g leadership, Melissa Engelby d i r e c t i o n , implementation and generation of systems, policies, procedures and support to ensure the overall quality, compliance and results for the divisions in all locations. Melissa has been working at Profinium since 2006 and has served in many positions including Truman Market President.

MN Valley Business • may 2015 • 9

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Business and Industry Trends

Agriculture Grain stays low

calculation reflects the expected change in gasoline prices but does not take into account more gradual changes in average fuel economy and driving behavior.

Local corn prices in April were around $3.53 a bushel, down some from March and down $1 from a year earlier. Soybean prices were also down from March to $9.13 a bushel in April, which is $5 off of the same time in 2014.

Milk continues slide

Milk prices fell about 70 cents for the month to $17.35 per hundredweight in April. That’s nearly $6 lower than in April of 2014.

Economy

Job Fund spurs state investments

Iran deal could free up oil

Energy

Crude down $2 per barrel

Minnesota companies have committed to investing $344 million and creating more than 1,800 jobs in Minnesota since the Job Creation Fund was launched last year, according to figures released by the Minnesota Department of Employment and Economic Development. The agency said $16.7 million in funding from the program has encouraged 31 corporate expansion projects throughout the state. The Council of Development Finance Agencies recognized the Job Creation Fund last year, calling it one of the most innovative finance programs in the country. “The Job Creation Fund has been an important economic development tool that is encouraging growth in Minnesota,” DEED Deputy Commissioner Kevin McKinnon said in a statement. Of the 31 projects approved for funding from the program, 17 have been in the Twin Cities and 14 in Greater Minnesota.

Gas spending lowest in decade

As gas prices stay relatively low, the average household expenditure on gasoline in 2015 is expected to be about $1,817, the lowest level in more than a decade. This level is about $700 less than average household gasoline expenditures in 2014. Actual spending can vary based on driving-related factors (number of vehicles, annual distance driven), some of which depend on demographic considerations (location, income, size of household). As one might expect, households with more people tend to spend more on gasoline in a year. Two-person households represent the highest portion of all households (about one-third) and have motor gasoline expenditures close to the average of all households. Historical data from this survey show that households with five or more people spend about 40-50 percent more annually on gasoline compared with two-person households, while one-person households spend about 50 percent less. Using projected gasoline prices, annual expenditures for gasoline are expected to fall from $2,513 in 2014 to $1,817 in 2015 and then rise 13 percent to $2,058 in 2016. This 10 • may 2015 • MN Valley Business

In April, Iran and the five permanent members of the United Nations Security Council plus Germany reached a framework agreement that could result in the lifting of oilrelated sanctions against Iran. Lifting sanctions could substantially change the forecast for oil supply, demand, and prices by allowing a significantly increased volume of Iranian barrels to enter the market. If and when sanctions are lifted, the baseline forecast for world crude oil prices in 2016 could be reduced $5-$15/barrel from the level presented by the federal Energy Information Administration. Iran is believed to hold at least 30 million barrels in storage, and Iran has the technical capability to ramp up crude oil production by at least 700,000 barrels per day by the end of 2016. The pace and magnitude at which those volumes would reach the market would depend on the terms of a final agreement. North Sea Brent crude oil prices averaged $56 a barrel in March, a decrease of $2 from the February average. Brent crude oil prices will average about $59 in 2015 and $75 in 2016. West Texas Intermediate prices in 2015 and 2016 are expected to average $7 and $5 below Brent, respectively.

Natural gas stocks high

Natural gas working inventories were 75 percent higher in April than a year earlier, but 12 percent lower than the previous five-year average. The winter withdrawal season typically ends in March, and April is typically the beginning of the injection season, which runs through October. EIA projects natural gas inventories will end October 2015 at 3,781 Bcf, a net injection of 2,310 Bcf. This would be the fourth-highest injection season on record.

Power companies go to natural gas

Power generators are using more natural gas than last year, primarily because of lower natural gas prices compared with coal prices. The use of natural-gas-fired generation is projected to average 30 percent of total generation in 2015 compared with 27 percent during 2014. U.S. coal production is expected to fall by 7.1 percent in 2015, as natural gas displaces coal for power generation.

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MN Valley Business • may 2015 • 11

Minnesota Business Updates

■

■ ADM wants no deforestation Agribusiness giant Archer Daniels Midland will establish a zero deforestation policy for its global commodity supply chains, potentially forcing its soy, palm oil, and cattle suppliers to also eliminate deforestation from their operations or face losing business with the firm. The move, to be formally approved in May, came after a campaign by institutional investors and environmentalist groups. With ADM’s sprawling operations, including a presence in 140 countries, the commitment is one of the most significant in the commodity sector where a growing number of corporations are adopting social and environmental safeguards for raw materials sourcing, said Lucia von Reusner of Green Century Capital Management, a shareholder activist fund that pressured ADM to adopt the policy. “Clearing forests to grow food destroys the very ecosystems that agriculture depends on, and is a shortterm business model that poses long-term threats to global food security and our climate,” von Reusner said in a statement. “ADM’s new policy aims to de-link food production from the crude practice of destroying forests, and sets the precedent for a new model of agricultural production that protects the environment and our food supply.” Given that ADM has 265 processing plants and 460 crop procurement facilities, the commitment should be farreaching. The deal could also influence other big commodity producing and trading firms, according to Barbara Bramble of the National Wildlife Federation, which participated in the effort to persuade ADM.

■ Sears to sell real estate Sears Holdings Corp. formed a real estate investment trust that will acquire about 254 of the retailer’s properties, generating more than $2.5 billion in proceeds for the money-losing department store chain. The REIT, Seritage Growth Properties, will lease the Sears and Kmart locations back to the retailer, according to the Financial Post. Seritage will fund the purchase with debt and proceeds from a rights offering that’s expected to close by the end of the second quarter. The deal marks one of the more dramatic moves CEO Eddie Lampert has made to reshape the company after more than three years of losses. Lampert has sold and spun off assets such as the Sears Hometown & Outlet Stores Inc. chain and the Lands’ End clothing brand while working to transform Sears into a leaner retailer focused on generating sales online and from loyalty-program members. “This is the last big thing that they can do,” Matt McGinley, an analyst at Evercore ISI in New York, told the Financial Post. “It basically takes the assets of the real estate and separates them from the liability that is Sears.”

12 • may 2015 • MN Valley Business

Sears has previously tried to squeeze more value out of its real estate holdings by selling locations, leasing space to other retailers and developing properties, and investors had long speculated that Lampert ultimately would form a REIT. The shares surged 31 percent, the most ever under Lampert, when the company announced in November that it was exploring the possibility.

■ Johnson ponders boat business Johnson Outdoors, the Racine, Wisc.-based provider of outdoor recreation equipment, could divest its watercraft business if it is not successful in turning around the unit. The company’s plans for the unit were revealed during an interview following a company presentation given by CFO David Johnson. John said that the company’s goal is for the watercraft business to be profitable in 2015, though he conceded afterward that the unit is currently still in turnaround mode. For its most recent fiscal year, ended Sept. 27, the watercraft business generated nearly $51 million in revenue, compared to about $58 million for the same period a year prior, and had an operating loss of roughly $2.1 million, compared to a loss of about $400,000 for the previous fiscal year. And, while Johnson Outdoor’s tent business has also struggled - the division is mostly the Eureka brand Johnson called it a great “beachhead,” for the company’s other products, and so was unlikely to be divested. The company’s other products include marine electronics, including radar devices that help fishers detect fish, diving equipment, and camping equipment. In the meantime, Johnson Outdoors is also interested in acquisitions, and would be interested in buying businesses with performance or technology aspects. John said a company such as Osprey Packs Inc., a maker of outdoor gear, would be an attractive target. Another outdoor product of interest are paddle boards, Johnson said during the presentation.

■ Bank CEO’s pay jumps 79% U.S. Bancorp President and Chief Executive Officer Richard Davis’ total compensation package was hiked by over 79 percent on a year-over-year basis, according to a Securities and Exchange Commission filing. The annual salary of $19.4 million came on the heels of improved growth throughout 2014. Davis, also the chairman of U.S. Bancorp, received an increased base salary of $1.2 million compared with $1.1 million in 2013. Moreover, stock awards of $5.6 million remunerated to him reflected a year-over-year rise of over 7 percent. His pay package also included $1.9 million as option awards and $2.5 million as non-equity incentive plan compensation. Notably, Davis’s pay increased substantially owing to a change in the value of his pension driven by appreciably

higher discount rates. The sum awarded to him as change in pension value and nonqualified deferred compensation earnings as well as other compensations totaled $8.2 million, considerably higher than the previous year’s amount of $0.09 million. Davis’ last year pay package had plunged 41 percent on a year-over-year basis primarily due to the lower value of his future retirement benefits. Davis has been acting as the CEO since 2006.

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■

Business Commentary

By Ted Orness

Employers dive into the untapped labor pool

n the February issue of MN Valley Business Magazine, I wrote about the untapped labor resource in our community. The main theme was that people with disabilities and other barriers to employment can be a tremendous source of skilled labor for businesses willing to be more nimble and flexible. With the incredible growth of business, new development, and expansion in our community, businesses who hire people with disabilities or other barriers to employment are being rewarded as the need for labor increases. Businesses must realize they have to be more flexible and creative in order to fill any upcoming labor gaps. This brings to light an important subject every business should consider when looking at the workforce of today and of the future: diversity and inclusion in the workplace. Every business or organization must acknowledge its own statement of purpose when pursuing a culture of diversity and inclusion. It must be in coordination with larger and future goals of the organization, and it starts with the leadership of the organization to communicate the message and why it is important to everyone. I’m proud to work in a community that promotes and supports diversity and inclusion both in the business sector and the community at large. In the past half century, the greater Mankato area has led the region in employing people with disabilities, in large part due to non-profit organizations like MRCI WorkSource. So how does diversity in the workplace benefit business? • Whether its disability, cultural, ethnic, or gender, diversity in the work place fosters innovation. Bringing together different views, backgrounds, and experiences brings unique and creative problem solving opportunities to the table. • Research from McKinsey & Company, a major Management Consultancy Firm, illustrates that organizations with a high level of inclusion and diversity significantly outperform organizations that do not. • According to the Center for American Progress, by 2050 there will be no racial or ethnic majority in the country. The ever growing immigrant population and their children will account for 83 percent of the growth in the working age population. It will be important for businesses to understand how to successfully hire and retain this diverse workforce.

14 • may 2015 • MN Valley Business

How do you increase and promote diversity in the workplace? • Recognize what your company’s actual needs are. Does your company’s workforce resemble the community that you do business in? A good example I like to use is Hill Top Hy Vee, Mankato. The next time you walk into the store, take a look around and you’ll see a broad spectrum of employees - young, older, ethnic, and disability all working together under one place of business. “Our goal at Hy Vee Hill Top Mankato is to reflect the Image of the community in which we do business.” Dan Vondrak, said store director. • Reach out to area non-profits and organizations for input and guidance to help make those connections to increase diversity and inclusion. • Offer diversity and disability awareness training to your staff and workforce. This dispels any myths or misconceptions and prevents future issues in the workplace. Flexibility in the Workplace, a case in point • Imperial Plastics needed to add staff to all three of their production shifts quickly to fulfill their high production demand. They came to MRCI and worked through our refugee program to employ the workers needed to meet their demands. MRCI partnered with Express Personnel to help fill over 100 production positions. MRCI and Express partnered together and designated Mohamed as the refugee training consultant to oversee training and follow along services to ensure success. This partnership has helped understand any cultural differences or communication needs while enhancing the diversity and culture of Imperial Plastics. • A local manufacturer wanted to partner with MRCI WorkSource and only had 10-hour shifts available. They agreed to try a 10-hour split shift between two workers. MRCI identified qualified candidates. The split shift was successful so the manufacturer offered MRCI workers split shifts for every position. • As a supported employment agency for people with disabilities, MRCI WorkSource has to be nimble and creative in our practices to help our workers find community employment. We held our own job fair for

our workers to attend. Six employers came to MRCI just as they would for any job fair. Employers got to meet and interview over 55 perspective candidates. All MRCI candidates had several training sessions before experiencing the job fair. Participants learned soft skills, as well as interviewing skills. 10% of the candidates attending the job fair landed jobs. It was a huge success. Major corporations develop Diversity Initiatives. Corporations such as AT & T, Coca Cola, 3M, and many others understand the benefits of having a diverse and inclusive workforce. At Coca Cola for example the CDR, or Chief Diversity Officer Position was created to develop and monitor diversity initiatives, connect with the community, and share best practices. Many organizations have developed D & I Teams, or Diversity and Inclusion Teams to develop diversity programs and initiatives. MV

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MN Valley Business • may 2015 • 15

Marsha Madigan, husband Scott and son Mike operate Peter Pan Preschool & Child Care.

For the kids Child care a labor of love

By Tim Krohn | Photos by John Cross and Pat Christman

t’s when parents are picking up their kids at the end of the day that Marsha Madigan remembers why she still loves being in the child care business after 30 years. “The best time is when the kids are going home and they’re all excited, telling their parents what they did, and that they went outside and saw this and that and it was so fun. That’s very satisfying,” said Madigan, owner of Peter Pan Preschool and Child Care in upper North Mankato. Deb Evan, who has run a home child care for three decades, says being around kids keeps her young. “It’s a ton of work, but to go for a walk with them and see (plant) shoots coming up or to flip a rock over and look at the bugs — to see the world through their eyes — that’s why I’m in it,” Evan said. “I didn’t do this for all the paperwork. I did it because I’m good with kids.” Jodi Malecha, director of The Children’s House at Minnesota State University, doesn’t get to interact with the kids as much as she did through much of her 20-year

career in the business, but she makes sure she has time with them. “I never get tired of it. When I moved to the office, I made sure I still go down and read to them and have lunch with them. When I’m sick of paperwork, I go down (the hall to the center),” Malecha said. For countless parents, finding quality child care is an important, challenging and costly endeavor. Home day cares in the Mankato area generally charge in the range of $130-$135 a week. Larger child care centers, with the added overhead of building and staff costs, generally charge in the $160-$170 range for preschoolers and $185-195 a week for infants. That compares with an average of $250 a week for an infant in the Twin Cities. For child care operators, the business offers special rewards but also challenges with more regulations, ongoing training, and uncertainty about the future related to a

Cover Story

16 • may 2015 • MN Valley Business

Deb Evan (left) checks out an exhibit at the Children’s Museum during a recent trip there by the local Child Care Association members. proposal by the governor for universal preschool.

Association offers support

Child care, particularly home day cares, can be an isolating business. “You’re with kids all the time, you’re not around adults a lot,” Evan said. That’s why Evan thinks the local Caring & Sharing Child Care Association is so valuable for those in the industry or who are thinking of starting a day care. The association has monthly meetings where training is offered for members or non-members who want to attend. While anyone can attend, only licensed child care operators can become members of the group, which has been around for 40 years. All of the training is approved by Blue Earth and Nicollet counties’ child care licensing staff, so the training counts toward a child care operator’s annual training requirements. Some of the training topics this year include mental health training, “kids in the kitchen,” pediatric CPR and first aid, and “music madness.” “Every spring we do a tour of homes where different providers let us tour their homes. It gives people getting into the business ideas on how to set up their business,” Evan said. “We tour some homes and a bigger center.” The association also has a referral service to help members fill openings at their day cares. “The association is very supportive,” Evan said. “People go to meetings and realize that everyone is having the same issues and dealing with the same things they are.” Attack on home child care? Many in the home child care industry feel a bit under siege. Whether by design or not, Evan said a variety of proposals are viewed as resulting in making home child care an untenable business.

The effort to unionize child care operators, for example, is seen by many as something that would bring added regulations and costs to small child care operators. But Evan said the big worry by home child care owners is Gov. Mark Dayton’s proposal for “universal preschool.” “If universal preschool happens, it will force a lot people out. If you can’t have the 4-year-olds, it’s going to drive a lot of places out of business,” Evan said. Madigan said she too is wondering how the system would work, who would pay for it and where there would be room for all those 4-year-olds in schools. Meschka said she’s not sure what to think of the proposal at this point. “I like the idea but I’m curious about how it would look. I’m not exactly sure how it should be done. Not everyone looks at it the same way.” Dayton originally set aside $110 million for a partial funding of the initiative to provide preschool to all 4-yearolds but asked that another $238 million be added from the budget surplus to fully fund the effort. “This is a year to establish those priorities and we have the resources to be able to fund this huge step forward for the future of our state,” Dayton told The Associated Press. Some children’s groups say that while the intention may be noble, they’d rather see scarce public resources focused on helping low-income families with quality preschool. The preschool would largely be done in the schools, which has led the teachers union — which would see its ranks swell — support it. And while many studies demonstrate the advantage given to kids in quality preschool, other studies say that any advantage disappears by the time children are in first or second grades. Evan said she has concerns as an operator but also a taxpayer and someone who understands the differences in children’s makeup.

MN Valley Business • may 2015 • 17

Left: Mary Slack plays a counting game with Blake Brekke and Camryn Walth at Peter Pan Preschool & Child Care. Right: Heather Riegert tends to some of the infants at Peter Pan. “They’re talking about it going into schools, but where is there room for that and who’s going to pay for it?” she said. But mostly, Evan doesn’t think 4-year-olds need to begin the structure of school. “At 4 they should be playing and being a kid and not basically being a kindergartener,” said Evan, who last month testified against the bill at the Legislature. (The prospects for the bill were uncertain at the writing of this article.) “They believe all kids should all come into school at the exact same learning point, but that’s not real life. Everyone is different. They want too much control over what they’re learning and how at all ages.” Evan said she also predicts there are more changes coming to licensing and training that will have the effect of harming home day cares. “I’d have to be honest if someone asks me now, I’m not so sure it’s a great choice to get into (home day care) right now.” Challenges of home child care While day cares of any size can be a whirlwind of noisy, exuberant, controlled mayhem, home child care operators face special challenges that come with going it alone. Evan got into the business like many do — as a young mother she was looking for a way to spend more time with her own kids and avoid paying someone else for day care. “I lived in Winnebago and moved here when my daughter was 1 and I was working at Kato Engineering. As soon as I got here neighbors started asking if I could watch their kids for a while. So I decided I could make this into a business.” Her first customers were the owners of the former Mexican Village and their kids continue to be close friends with her daughter — one of the perks of the trade, she said. While she is licensed to watch up to 12 kids (depending on their ages), she has cut back some from her earlier years in the business. “I start the day with eight and have six little ones most of the day.” “Doing it is a challenge. I’m here every second, but if you have to step outside for a second, they’re all following you all the time. They have to be in your sight or within your hearing all the time,” “They keep me hopping. It’s a physical challenge. I’m 55

18 • may 2015 • MN Valley Business

and in good shape because of this.” She said a supportive husband is a necessity. “The house looks like a child care all the time. It’s one thing when your kids are growing up and that’s what your house looks like, but it’s different when it’s other kids. My husband is great about it.” And she said, cynics and grumps shouldn’t be in the business. You have to be a happy person all the time and always looking for things to teach the kids when you’re on a walk or whatever you’re doing.” While the paperwork, training and commitment of a home child care can be daunting, Evan said the rewards are plenty. “I have an ex-day care child who’s 32 who was just here today visiting me. She visits me whenever she comes back to town. That’s the reward.”

Peter Pan’s long history

Peter Pan Preschool was started in 1962 by Mary Jane Blethen and later run by Lynn Glen, from whom Madigan bought the business in 1992 after working there for her. Madigan ran the center for 10 years before taking a break and teaching kindergarten for several years. In 2013 she and her family built a new center near Benson Park in upper North Mankato. The center has 60 kids from 6 weeks old to prekindergarten and has a staff of 20. They’re open from 6:30 a.m. to 6 p.m. Madigan said the demand for child care is a constant. “There are always waiting lists. I teach the older class, right before they go to kindergarten, and the only time there is an opening is when they go into kindergarten.” She said the child care shortage is likely stronger in Mankato because of its success. “Mankato is a good place to work, so a lot of people are coming in and there are a lot of kids. There’s especially a need for (child care for) babies because with infants you just scrape by as an operator because you need (a higher ratio of teachers), and you don’t want to charge people so much they can’t afford it,” Madigan said. “I have three kids of my own, so I know how it is — you have to be reasonable with costs.” Peter Pan has infant rooms and toddler rooms. Infants

childhood teaching classes. MSU doesn’t offer it anymore, leaving only South Central College and Rasmussen with any kind of childhood teaching programs. “The sad thing is we just don’t have many early childhood programs from teachers anymore. My daughter took elementary ed, but early childhood (training) is important for the infants to preschool.” She said that despite the relatively low pay in the industry, “I have a lot of people who want to get the training. It’s hard to hire enough qualified staff when there aren’t the programs to train them.” After so many years she’s beginning to see former child care kids enrolling their kids in Peter The kids at the Children’s House at Minnesota State University get some creative playtime outside. Pan. “One of my teachers, her move from the “non mobile” room to the other infant room husband went to Peter Pan and their little boy goes here.” once they become more mobile and then to the toddler Madigan said despite the challenges, she loves what she room at the 16- to 18-month age range. does. “I love this age group and working with them. It’s a “It’s tough planning for openings because you don’t lot of fun working with families.” know when the little ones are going to transition from the baby room to the toddler room,” Madigan said. Staffing requirements are more stringent the younger the child is. “For babies there are four infants to a teacher. We have eight babies in each room. For toddlers, it’s seven kids to one teacher.” Like many child care centers, Peter Pan isn’t accredited but it is licensed by the state. “I’m a licensed teacher and my staff has a lot of experience, so I’m not worried about being accredited,” Madigan said. “The accreditation is expensive and a lot of time you can end up doing more accrediting work than you do teaching. It’s just a big process to go through.” Peter Pan uses a theme-based curriculum. “It’s sort of the old-fashioned kind. Each week we have a theme and work around that theme. This week it’s baby animals and spring, so everything we do works around those themes, from counting, sensory tables, science tables and reading. And I’m big on music in the curriculum.” This fall they will incorporate that theme-based curriculum with what is called “high scope” curriculum that, in part, contains more ongoing assessments. Madigan assesses students as they near entering kindergarten, using the same kind of assessments schools use. “How far they can count, writing their names, knowing their last names – a whole list of things.” She said there is much more paperwork and more regulations than when she first started in the business. But, she said, many of the regulations were things she was always doing, such as first aid and CPR training for staff. Peter Pan doesn’t participate in the federal food program in which day cares can receive federal funding to help with food costs. “We have some kids where we get money through the county for child care, but we don’t do the federal food programs. It’s just easier because there’s so much paperwork involved. We have a full-time cook, which is nice, so we don’t have to have our food catered. The costs are better than catering out if you have enough kids.” Madigan said that despite the shortage of day cares, there are fewer options for those wanting to take early

A MSU tradition

The Children’s House started on what was then the lower campus of MSU in 1973, offering child care services not just to MSU employees but to anyone from the community. (About 60 percent of the kids at Children’s House are MSU employees’ children.) The Children’s House, which has 90 kids, is the only nationally accredited child care center in the area. “Being part of the university, it was important to them for us to be accredited. And it’s a great way to see how we’re doing,” Malecha said. “We did it last in 2011 and it’s for five years,” Malecha said of the national accreditation. “It’s very extensive work. We do a self-study and take their standards and go in our classrooms and see what we’re already doing and what changes we need to make.” They then need to do a portfolio of documentation, photos and forms proving what they do. That is then followed by an onsite visit by accreditors and a review by a panel in Washington, D.C. The Children’s House, located in Wiecking Center, has an advantage many centers don’t — an abundance of staff, thanks to work study, which is a financial aid program that pays students to work on campus. “The wonderful thing is our college students. We have a lead teacher with at least a bachelor’s degree in each of our four classrooms and we employ about 60 students who are assistants and teacher’s aides.” Most of those students are elementary ed students but some come from other programs. Malecha went to school at MSU and taught preschool in the Twin Cities before filling an opening at the Children’s House. “I like this program. I like that we remain play-based. The curriculum is designed around the children and all the colleges students make for a great ratio and the kids really get to know them.” MV

MN Valley Business • may 2015 • 19

Gene Nelson started Pneumat Systems in 1985.

Bin there, done that Pneumat finds solutions for bin cleaning

By Heidi Sampson | Photos by John Cross

ene Nelson started Pneumat Systems as a pneumatic vat service or what could be considered a large vacuum cleaner service in 1985. According to Greg Nelson, son of Gene and president of Pneumat, the business started in response to grain trucks taking the Highway 169 curve to fast while going over the river, often tipping over and spreading grain all over the embankment. As a result, Pneumat quickly became a problem solving business when it was called in to clean up the spill. At that time, they also began cleaning out scale pits, grain elevators, and finally, largescale bins. However, Gene Nelson quickly realized there

wasn’t really a suitable tool for cleaning out large-scale bins. “The solution to large-scale bin cleaning,” said Greg, “was how we ended up inventing one of our flag-ship products called the Bin Whip, which is best described as a giant weed eater that we drop down inside silos and bins. The Bin Whip knocks the product that is supposed to be flowing but isn’t anymore, loose. Over the years, we developed the equipment to a point where we started to sell it to some of our customers instead of us traveling all over the country. We now sell them the equipment and show them how to

Profile

20 • may 2015 • MN Valley Business

run it.” In 1992, Greg joined his father, Gene, after having spent a few years as a mechanical engineer in Minneapolis following the completion of his degree from the University of Minnesota. “We try to position ourselves as a problem solving company for big conglomerates,” said Greg. “We focus on moving bulk flow for the company. Many times they will call and say, ‘Hey, this will not come out of here. What do you got?’ In fact, that’s how some of these newer products came about, by solving a particular customer’s problem.”

the end of the tube in four directions, usually. So, the Cardox finds that natural weaknesses in the product and breaks it loose.” The typical size bin Pneumat works with is generally anywhere from narrow 30-foot tall bins up to the 200-foot tall silo that’s 60 feet in diameter. Greg can recall a time when his crews had to use binoculars to see their Bin Whip while cleaning out a 200-foot tall silo in Wyoming. When they first showed up and mounted their Bin Whip at the top, the customer chuckled wondering how Pneumat’s Bin Whip could possibly clean out their bin. However, while cleaning out the bin, the customer used Bin Whips to Cardox large mine trucks to catch what the Bin Whip was Wi t h the knocking loose. When introduction of the one of the customer’s Bin Whip, Pneumat employees at the Systems found their bottom didn’t close niche specializing in the gate between the movement of bulk trucks, they ended up product in the ethanol, dropping a bunch of grain, cement, feed coal so that they and coal industries. almost buried the Pneumat’s equipment entire truck within solutions are designed minutes. After the for materials such as incident with the DDGs, powdered mine truck, the cement, coal, company they were fertilizer, powered working with chemicals, minerals, commented, “that ash, biomass and little thing works many more bulk flow pretty good.” products. Since Recently, Pneumat Pneumat Systems, Systems, Inc. has Inc. is solution driven, been solving issues they can even associated with filling customize a specific rail cars more system to meet a efficiently. Like all of particular companies the other solutions at specific material Pneumat, the needs as they’ve RailSpreader was engineered equipment developed after a for customers like customer called up Cargill, ADM, Land and asked if their Bin O’Lakes, Cemex, and Whip could load rail Holcim. In fact, many cars more efficiently. of their bulk handling “The rail spreader solutions including is not all that brand their Bin Whip, spanking new in B i n D r i l l , terms of innovation,” R a i l S p re a d e r, said Greg. “It came H o p p e r P o p p e r, about as a result of Cardox, and the our looking for a new The Hopper Popper is an air cannon like tool to loosen compacted grain or other materials. AirForce Air Cannon, way to solve a were all developed to provide unique solutions to a customer’s problem. So, where the Bin Whip is like a giant particular customer’s problem. weed eater, our RailSpreader is really a salt spreader but “All of our equipment is designed as solutions to a made to function in a rail car. The RailSpreader allows us problem,” said Greg. “For instance, our BinDrill creates a to fill the cars more efficiently so that every tenth rail car space for the Bin Whip to work once we drill down from is now free.” the top and get that flow channel moving. If the product is Pneumat Systems employs 22 people with the majority way too hard for even the BinDrill, another product we of those employees coming up on to 20 or more years of have is called Cardox. Cardox is actually a 4½-foot-long service. As a business, Pneumat also works with Minnesota steel tube that we pump high-pressure C02 into. We then State University and South Central College, providing a place a heater in the end of it that can be turned on place for interns to learn about their business while giving electrically. The heater allows us to heat the C02 to higher interns as much feedback and hands on learning tasks as pressures and higher temperatures, which releases out of possible.

MN Valley Business • may 2015 • 21

“We try to find the best people that we can and we pay them well,” said Greg. “We’ve had a lot of good success with our interns over the years. Since we see ourselves as getting bigger, we will need more equipment and people who can contribute.” The radius of business for Pneumat Systems, Inc. is worldwide as they ship a good deal of their equipment to South America, Asia and Europe. However, even with worldwide appeal, Pneumat Systems plans to focus on expanding their product lines for their customers here in the U.S. “Considering our business, we do all of our manufacturing on site,” said Greg. “Around 75 to 80 percent of our equipment comes in as raw material. It can take us anywhere from a few days to a few months on a given project. Some of our bigger projects, we really need to customize to get the product to fit their specific needs. However, we’ve been very fortunate, as our employees will do whatever it takes to get the job done right and quickly. MV

Top Left: Jerry Billings assembles arms for the Hopper Popper air cannon tool shown in the background. Top Right: Terry Ponkratz is shop supervisor. Middle: This base socket connector accepts high pressure 40,000 pounds per square inch hoses.

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Kim Alinder sets up a display at Broad Street Antiques which opened last summer.

Just Gotta Have It: Browsing Mankato’s Antique Stores By Pete Steiner Photos by John Cross

tart with this: there IS a buyer for that vintage Gretsch tuba, somewhere out there… Plenty of folks are devoted to “Antiques Roadshow” and “American Pickers.” Lots more have fun browsing estate and garage sales, looking for that one just-right object of desire. But if you really ADORE antiques, well, maybe you open an antique store. Challenging as it can be (a couple of venerable local stores will close this year), the antique business appears to be holding its own here in River City.

Four Wheaties boxes celebrating the Twins’ ’87 and ’91 World Series are prominently displayed. This is Old Town Antiques, named “best antique store” in the July 2012 edition of Mankato Magazine. A sign on the door says, “not buying,” because the store will close in late fall. “It’s been so much fun, it’ll be bittersweet,” say owner Sharon Sens. There’s plenty of traffic this day, and Sens makes it clear, it’s not a business decision, it’s a lifestyle decision. She and husband Bobby (formerly owner of Bobby Joe’s Pub) want more time “to do some things.” One quickly senses why Sens loves the business: she seems to know half the people who keep trickling in, and she strikes up easy conversation with those she may not know. “You meet so many people. This is our life. It’s very social. But… there comes a time.”

Spotlight

•••• The Platters, that classic 50’s vocal group, are playing as the scribe wanders in, noting a rack of vintage vinyl – Mantovani, anyone?

24 • may 2015 • MN Valley Business

Mary Hanna in Generations Antiques, which she runs with her husband Rick on Front Street. Sens’ departure from the scene will present a challenge to her four dozen “dealers.” They are pickers and antiquers, some from as far away as Washington State, who rent space to display the merchandise they collect from estate and garage sales. Sens collects the rent and a ten percent commission from whatever she sells. Her dealers get a check at the end of each month. In a business where margins are thin, key to Sens’ success are two factors: she supplies about 90 percent of the labor to run the store, and she and Bobby owned the building, thus eliminating rent increases. Online advisory sites emphasize that rent or lease terms can make or break a small business. This is Sens’ second career. Her first was at Hickory Tech (Enventis), and there’s a nod to that in a unique piece displayed in a prominent corner: an old telephone switchboard like you might see in a black and white movie. Just needs the right buyer… One dealer, who sells as her hobby, says she’ll need to find a new outlet. She’s just brought in a lovely crocheted baby blanket and some satin-lined, never worn baby clothes – pink, for a girl, all “probably from the ‘30’s.” Definitions of what is “antique” vary – some say it must be a century old, others say, from before World War II. But other more recent stuff – “collectible” as it’s called – can also be in high demand. The trick is deciding what is saleable. “Business is super,” Sens smiles, with customers coming from as far away as California and Arizona. She says the Internet hasn’t really hurt business: “People would rather shop, see it, touch it.” What’s hot? Vintage jewelry and vinyl record albums. What’s not? “You can’t give Beanie Babies away now.” At that moment, a young couple comes to the counter, she to buy a vintage sweater, he with the four Wheaties/Twins boxes. ••••

All the local dealers agree: inventory is key to running a successful antique store. Lots of inventory. And maybe no one has more than that other long-time Mankato store, Generations Antiques, on Front Street near the Wagon Wheel. Mary and Rick Hanna opened the store in 1997 in Old Town, but outgrew that space and moved to the present 10,000-square-foot location in 2000. Mary is retired from teaching, Rick still has a consulting practice. The Hannas’ business model is slightly different: they don’t have dealers renting space. What they don’t acquire on their own, they buy direct from people who stop in. With her lifelong fascination with antiques, Mary has a sense of what will sell and if the price is right. Just in case, she can consult a shelf full of thick price guides behind the counter. Her passion for the business is clear. Her mother ran a shop, and, “I loved antiques from the time I was six. I thought, someday I’ll have my own shop!” She swears she knows where everything is in the large store, and when she gets a moment, the teacher in her comes out as she proudly offers a history lesson, showing some of her oldest, one-of-a-kind items on the farthest wall of the shop: an iron pouring ladle used to make cannonballs in the Civil War, an enormous wooden kraut cutter that’s probably 150 years old. “You have to match the right buyer,” she smiles, confirming something everyone in the business knows. Like the Sens, the Hannas controlled costs by owning their own building. They also do not sell online. Hanna estimates her customers are probably 60-40 percent women versus men. The store is open Wednesdays through Saturdays. An important clientele are all the outof-towners who come in for Civic Center and convention events. Many of the attendees like antiques and make the rounds of Mankato’s shops in their free time. So what’s hot? “A lot of people like country kitchen decorations – cookware, old utensils, coffee pots. Cast iron kettles are desired.” Old cookbooks often sell. Vintage

MN Valley Business • may 2015 • 25

Sharon Sens in Old Town Antiques. She and her husband Bobby are retiring and closing the store this year. jewelry – not necessarily antique – is popular. There’s a long antique case, not for sale, filled with jewelry that is. Hanna says you have to keep up on collectibles as well as antiques: “If you limit yourself, you exclude some customers.” What’s NOT hot? “The market for old silver has slowed. People don’t want to polish it!” But, “if people see something their grandmother had, they seem to want it – reminds them of their childhood.” A woman brings an $18 vase to the counter. It’s just before Easter, and “a day for vases!” Hanna exclaims. She rings the sale up on their antique cash register. “We’re an antique shop,” she smiles. “We had a modern cash register, but we found this.” •••• “Retro Ron” Nord scoffs a bit at the History Channel’s renowned “Pickers.” “I’ve forgotten more than they’ll ever know. But they (got the TV-reality show idea) first.” Mostly retired as an auctioneer and collector, the 65-yearold Nord still makes the rounds, because when antiques are in your blood, well… He says, “The whole business has changed so radically (since the emergence of) the Internet,” and “a lot of the good stuff now goes to eBay first.” He notes that the Great Recession really hurt. After all, antiques are a luxury and lost out when people had less disposable income. A third problem for antique dealers is, the Millennial generation “are digital collectors,” avoiding “clutter” by putting their collections of photos, music and more on their smart phones and iPods. “They don’t have formal dining anymore,” and that undercuts the market for fine china and crystal. So what does Retro Ron see as marketable? “Collectibles come in and out of vogue. Vintage ‘60’s stainless steel flatware now moves better than sterling.” Old toys are hot, as are old advertising signs. Old coins can bring a ten percent premium.

26 • may 2015 • MN Valley Business

•••• As one walks into Mankato’s newest antique store, one might well hear the polyrhythmic sound of many wall clocks ticking. A whole corner of Broad Street Antiques is devoted to clocks. Longtime St. Peter antique dealers Steve and Kim Alinder opened the store last summer at the invitation of Keith Kreft, who bought the former Town and Country Interiors brick building and put his hair salon in the south half. Steve jokingly says, “I’m still asking why.” But he escorts you to the back room, where he attends to his personal passion: framing old maps, which have been hot sellers lately. The Alinders’ model varies slightly from others: they do rent space to collector/ vendors, but instead of collecting a commission on sales, they ask vendors to help staff the store during Wednesday through Saturday hours. Broad Street Antiques maintains an active Facebook presence to aid its marketing. In fact, recently they drew a number of “likes” while pushing a “Country Chic Paint Workshop” to “refresh your furniture and home décor.” The fee included a three-hour workshop and paint supplies, all to take the old and make it new. “Re-purposing is big now,” Alinder explains. But like Retro Ron, he laments, “Our biggest problem (is), the younger generation are not as interested. They want simplicity. IKEA is our competitor. (Still,) people sure do like coming in here.” •••• Give Retro Ron the last word: “There will always be antiques stores,” he says. “If it was expensive and wellmade, in limited quantities, it will be in demand.” A wellrun store still makes money, he says, but “it helps to have a second income. People get into the business to support their own collections.” MV

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2800 SF of Flex space available with good visability from Hwy 169. Additional 8400 SF building available.

MN Valley Business • may 2015 • 27

Jim Thomas and golden retriever Marley, who serves as the official greeter at the Thomas Tree & Landscape showroom.

Digging in

Landscaping generates fun, friendships By Heidi Sampson Photos by John Cross

pon walking into Thomas Tree & Landscape on Highway 22, customers are immediately greeted by the warm muzzle of Marley Thomas, a large Golden Retriever who occupies the official position of Senior Greeter and Director of Welcoming Services. Their second much smaller dog, Sophie Thomas is Director of Security Operations who works hard to provide their top of the line security system for the business. However, “Squirrel,” who is actually a squirrel, was rescued as a baby in the spring of 2014, and has quickly settled into his role as chief entertainer around the office. Although Marley, Sophie, and Squirrel are important elements of the relaxed atmosphere of Thomas Tree & Landscape, Jim and Jane Thomas are serious about what they began as

a tree trimming, pruning and tree removal business in 1986. Somewhere along the 29 years of service to the Mankato area, a customer asked them to do a landscape project. Although they knew little about landscape design, Jim and Jane readily agreed to the challenge of trying something new. From that point on, the landscape side of their business quickly evolved into what it is today. “We decided landscaping was way more fun than trimming trees,” Jim said. “With trimming trees there isn’t a whole lot of creativity, but with landscaping there is. So, we’ve kind of shifted gears now. The tree trimming part of our business is real minor. Our main business is landscape installation.” Within their business, Jim does the landscape design with the help of other staff members, as well as sales and scheduling of

Feature

28 • may 2015 • MN Valley Business

Mik Lamont hauls river rock to a pond the crew is building in Mankato. projects, employees and equipment. Jane handles the accounting, assists with scheduling and all of the HR work as the two work side-by-side in developing Thomas Tree & Landscape. However, the two could not have grown their business alone and say it’s their experienced staff that has contributes to the growth of their business. Jim’s motto, “The difficult we do every day. The impossible just takes longer!” However, nothing is too impossible for him and his crew as they work together to create more than just a simple landscape design, they strive for unique and original according to each customer’s specific tastes. Due to their rapid growth in landscape design, Jim and Jane in 2002 added retail landscape supplies to assist customers interested in doing projects themselves. “We do not sell plant material, but everything else we do sell,” said Jane. “Also, we are very willing to help those who want to do their own projects. If they come in with a project, we will sit down and help them go through it while explaining what should be done first, second and third. We just don’t sell them the material and say, ‘thanks and see you later.’ ” Landscape to Maintenance As a part of their specialty service, Thomas Tree & Landscape, Inc. also does gardening, flowerbeds, and property maintenance. They plant annuals, conduct necessary plant care, as well as take care of the beds throughout the season. Even though the business doesn’t carry plant material at their site, they will order or buy local whenever possible. Due to the seasonal nature of

Thomas Tree & Landscape, their employee base throughout the winter months is 10 or 11 employees who are all full-time, and in the summer, they can average up to 15 employees. “We also plow snow in the winter like every other landscape business because that is the only other thing that you can do,” said Jim. “If we get a snow fall once a week or every 10 days, it keeps all of us real busy all winter long.” Although snow removal may be typical for a landscape business, completing the majority of their tree pruning and tree removals within the winter months is also a commonplace occurrence. Trees like elm, oak, and various fruit trees, can only be pruned during the winter months. Also, it helps to wait until the ground is frozen for tree removal so that they can drive their equipment across the lawns without doing any damage. “With a stump grinder, tree stump removal in the winter is actually fairly easily,” said Jim. “I’m not sure why people think that’s not possible to do simply because the ground is froze but we do it.” A typical year for Thomas Tree & Landscape, Inc. generally runs from April through late November to early December, depending upon snowfall and frost. Although the majority of their business is within 20 miles of their location, the past two or three years, they’ve been traveling up to 60 miles away with a great deal of work coming from the Fairmont area. “We did a job over in Fairmont around four years ago,” Jim said. “After our initial project, word got out and now we handle a lot of landscaping needs over that way. We

MN Valley Business • may 2015 • 29

Left to right: Jim Thomas, Brad Norland and Mike Lamont work on a large pond for a customer in Mankato. also acquire a lot of our business from those seeing our displays while driving down Highway 22. Also, we’ve been very fortunate with our customers, as we’ve made a lot of good friends through the years and we’ve had a lot of the same customers for 25-29 years. It’s kind of cool when you can work for the same people for 20-plus years but that’s also part of the enjoyment associated with this line of work. It’s the friendships made and the people you meet.” If considering an outdoor project, the most popular designs driving current landscaping trends consist of outdoor living spaces, which would include outdoor kitchens and fire pits. Jim estimates 70 to 80 percent of the patios they construct also have fireplaces built into them. If customers want to see a proposed landscape project before it’s started, Thomas Tree & Landscape has design programs and software, which allows them to do 3-D imaging. In fact, with their programs and software, they can take a picture of the house where the proposed project is to take place, put in all of the plant material, sidewalks and patio possibilities to see exactly what it is their proposed landscape design would look like when it’s finished. “Our customers are extending their living rooms to the outside,” said Jim. “They aren’t just installing simple patios anymore. We install patios, fire pits, retaining walls, and landscape lighting. Fifteen to 20 years ago, the average project or budget a homeowner would complete was

roughly $3,000 to $5,000. Now, it’s unbelievable as projects average between that $10,000 to $20,000 range. However, people didn’t put that much into their yards back then either. Customers were generally buying basic shrubs, landscaping and rock. Lately, we have several landscaping projects in the $50,000

dollar range. The fact that that isn’t uncommon any more, amazes us. Today, people are choosing to invest in their homes as our customers are content to stay right here rather than going on trips, or even selling and buying bigger homes.” MV

Banking | Mortgage | Insurance | Trust | Wealth Planning

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MN Valley Business • may 2015 • 31

Merit Award for Outstanding Performance Concrete Paving Association and DOT

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32 • may 2015 • MN Valley Business

Construction/Real Estate Residential building permits Mankato

(in thousands)

- 2014 - 2015

11000

Residential building permits North Mankato

- 2014 - 2015 (in thousands)

3000

$826

8250

2000

$1,784

$452

5500

1000

2750 0

Source: City of Mankato Information based on Multiple Listing Service and may not reflect all sales

- 2014 - 2015

Includes single family homes attached and detached, and town homes and condos

55 J

Source: Realtors Association of Southern Minnesota

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

(in thousands)

- 2014 - 2015

Commercial building permits North Mankato

- 2014 - 2015 (in thousands)

2000 1500 1000

$1,149 $1,301

$100 $201

500 M

Source: City of Mankato

Source: City of North Mankato

Interest Rates: 30-year fixed-rate mortgage

Foreclosures: 2014 Year End

— 2014 — 2015

5.5 5.0

4.3%

4.5 4.0 3.5 3.0

- 2014 - 2015

110

80000 70000 60000 50000 40000 30000 20000 10000 0

Housing starts: Mankato/North Mankato

165

174 98

220

Source: City of North Mankato

Existing home sales: Mankato region 275

3.7% J

Source: Freddie Mac

County

2013

2014

Percent change

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

101 19 27 70 25 43 39 36 24

72 21 21 47 28 24 22 27 7

-29% +11% -22% -33% +12% -44% -44% -25% -71%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • may 2015 • 33

■

Agricultural Outlook

By Kent Thiesse

Livestock profits up, crop farmers’ profits dip

014 was highly profitable year for most livestock producers in southern Minnesota but it was the lowest profit year in several years for the region’s cash crop producers. The Farm Business Management summary for southern and west central Minnesota was recently released by the Farm Business Management instructors. The summary includes an analysis of the business records from farm businesses of all types and sizes. It is one of the best gauges of the profitability and financial health of farm businesses in the region. Net income average: $96,000 The average net farm income for 2014, after crop and livestock inventory adjustments, capital adjustments, depreciation, etc., was $96,337, which compares to $73,675 in 2013. The 2014 Net Farm Income is a reduction of nearly 75 percent from the record net income of $272,544 in 2012. The 2014 income was also well below the averages of $199,794 in 2011 and $183,808 in 2010, but was above the $61,350 net income in 2009. The 5-year average (2010-2014) Net Farm Income from the FBM Summary is now at $165,231. The average farm business had $925,932 in gross farm income in 2014, which was a slight decrease from the 2013 level, which was the highest ever FBM annual gross income per farm. The average cash operating expenses for 2014 were $776,714, which were up about 5 percent compared to 2013, and were highest ever average cash operating expenses per farm. There was large variation in income in 2013, with top 20 percent profitability farms averaging a net income of $435,495, and the low 20 percent profitability farms averaging a negative net income loss of ($108,265). The average farm business showed an earned net worth improvement of $51,304 in 2014, which compares to

$105,709 in 2013, and $230,548 in 2012. There was also a large variation in farm net worth improvement in 2013, with the 20 percent high profitability farms showing an average Net Worth increase of $325,604 and the low 20 percent profitability farms showing a decline in average net worth of ($139,801). Crop production analysis The average corn yield on the FBM farms in 2014 was 164 bushels per acre, which was the lowest yield since 2007, and compared to 170 bushels per acre in 2012, as well as the record yield of 191 bushels per acre in 2009. The average FBM corn yield has exceeded 170 bushels per acre in eight of the past 10 years (2003-2014), with 2014 and 2007 being the exceptions. The average soybean yield in 2014 was 47 bushels per acre, which is the same as the 2013 yield, but is below the average yield of 50 in 2012 and 52 in 2010, but was above 44 bushels per acre in 2011. The average price of the corn sold in 2014 was $4.47 per bushel, compared to $6.30 per bushel in 2013, $6.13 per bushel in 2012, $5.24 per bushel in 2011, and $3.76 per bushel in 2010. The average price for soybeans sold in 2014 was $11.74 per bushel, compared to $13.65 per bushel in 2013, $13.26 per bushel in 2012, $11.50 per bushel in 2011, and $9.75 per bushel in 2010. The average listed costs for corn production on cash rented land in 2014 was $5.28 per bushel, compared to $5.30 per bushel in 2013, $4.72 per bushel in 2012, $4.31 per bushel in 2011, and $3.34 per bushel in 2010. The average listed costs for soybean production on cash rented land in 2014 was $10.10 per bushel, compared to $11.36 per bushel in 2013, $10.06 per bushel in 2012, $10.16 per bushel in 2011, and $7.72 per bushel in 2010. The average net return, excluding a labor and management return,

34 • may 2015 • MN Valley Business

from corn production on cash rented land in 2014 was a negative ($51.26) per acre, which compares to ($14.00) per acre in 2013, $343 per acre in 2012, and $247 per acre in 2011. The average net return from soybean production on cash rented land in 2014 was $4.29 per acre, compared to $78.07 per acre in 2013, $205.20 per acre in 2012, and $87.37 per acre in 2011. Livestock production analysis Producers finishing feeder pigs in 2014 were the most profitable in the past 10 years (2005-2014), with a net return of $15.03 per cwt. of carcass sold, or about $31.00 per market hog sold, which compares to profit margins of a $1.03 per cwt. in 2013, and a negative ($1.05) per cwt. in 2012. The average net return in FBM dairy operations in 2014 was $1,249 per cow, which compares to approximately $287 per cow in 2013, and $290 per cow in 2012. The average milk price in 2014 was $24.36 per cwt., which was up from the $20.20 per cwt. average milk price in 2013. The average net return from beef cattle finishing in 2014 was $57.76 per cwt., or about $783 per head produced, and was up from a profit level of $7.66 per cwt. in 2013. The average net return from beef cow/calf operations in 2014 was $451.63 per cow, down from $36.61 in 2013. Overall financial health strong Overall, net returns from crop operations were negative for many producers in 2014, with average profitability levels that were much lower than in recent years; however, there was considerable variability in profit levels. Profits in the livestock sector in 2014 were the best in the past decade (2005-2014), due to moderating feed costs and strong market prices. Even though average 2014 net farm incomes were lower compared to recent years, the overall average financial health of the farm businesses remained fairly strong in

Agriculture/Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2014 — 2015 8

— 2014 — 2015 20

$4.54

$14.23

12 8

$9.13

$3.53

Source: USDA

Iowa-Minnesota hog prices

Source: USDA

Milk prices

185 pound carcass, negotiated price, weighted average

— 2014 — 2015 140

$23.65

110

Minimum prices, class 1 milk Dollars per hundredweight

— 2014 — 2015 30

125

$119.03

$59.20

65 50

(dollars per bushel)

Soybean prices — southern Minnesota

Source: USDA

$17.36 M J

Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

2014. Complete farm management results are available through the U of M Center for Farm Management FINBIN Program at: http://www. finbin.umn.edu/ MV Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@ minnstarbank.com

Source: USDA. Based on federal milk orders. C. Sankey

What factors are affecting your property’s marketability? Request an appraisal today. • Agricultural • Commercial • Residential Give us a call at 507-359-2004 or visit www.ummc.co to learn more.

New Ulm • Olivia • New Hope • Faribault

www.ummc.co

Read us online! MN Valley Business • may 2015 • 35

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major March Industry ‘14 ‘15 Construction Manufacturing Retail Services Total*

229 139 44 225 637

Percent change ‘14-’15

258 156 32 190 636

Major Industry

+12.7% +12.2% -28.9% -16% -0.2%

March

Construction Manufacturing Retail Services Total*

‘14

‘15

Percent change ‘14-’15

4,546 2,708 1,355 5,787 15,396

3,924 2,734 1,103 4,725 12,486

-13.7% +1% -18.6% -18.4% -19%

Services consist of administration, educational, health care and social assistance, food and other miscellaneous services. *Categories don’t equal total because some categories not listed.

Local non-farm jobs

Minnesota Local non-farm jobs

- 2014 - 2015

Nine-county Mankato region 124,102 126,524

133000

(in thousands)

2000

111000

1000

100000

Local number of unemployed

- 2014 - 2015

Nine-county Mankato region 10000

Minnesota number of unemployed

- 2014 - 2015

133,805 135,243

150000

6000

100000

4000

50000

2000 0

200000

7,434 6,277

8000

2,844 2,879

3000

122000

- 2014 - 2015

Mankato/North Mankato Metropolitan statistical area

Unemployment rate Number of non-farm jobs Number of unemployed

2014

2015

4.2% 56,380 2,490

3.4% 58,055 2,034

Source: Minnesota Department of Employment and Economic Development

36 • may 2015 • MN Valley Business

Unemployment rates Counties, state, nation

(includes all of Blue Earth and Nicollet Counties) February

County/area Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan Minneapolis/St. Paul Minnesota U.S.

February 2014 4.4% 6.4% 8.1% 7.7% 6.1% 3.9% 6.3% 6.2% 6.4% 4.9% 5.3% 7.0%

February 2015 3.8% 5.5% 5.4% 6.5% 5.0% 3.1% 5.4% 5.4% 5.8% 4.0% 4.4% 5.8% C. Sankey

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold - 2013 - 2014 1200

884

1000

798

800

$406

$387

400

100

200 J

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato $56,900 $45,279

60000

Source: Sales tax figures, City of Mankato

Mankato food and beverage tax

- 2013 - 2014

85000

50000

$55,837 $59,000

68000

40000

51000

30000

34000

20000

17000

10000 J

Source: City of Mankato

Gas prices-Mankato — 2014 — 2015

- 2013 - 2014

500

200

400

(In thousands)

300

600

Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.

Sales tax collections Mankato

Stocks of local interest

March 10

Percent change

Archer Daniels

$45.52

$47.64

+4.7%

Ameriprise

$130.24

$125.42

-3.7%

Best Buy

$39.97

$37.20

-7.0%

Crown Cork & Seal

$50.52

$54.62

+8.1%

Eventis

$20.88

$20.76

-0.6%

Fastenal

$40.60

$40.99

+1.0%

General Growth

$28.82

$28.89

+0.2%

General Mills

$51.79

$56.37

+8.8%

Hutchinson Technology

$3.23

$2.58

-20%

Itron

$35.20

$36.69

+4.2%

Johnson Outdoors

$30.75

$33.90

+10.2%

$162.26

$164.50

+1.4%

Target

$77.67

$82.71

+6.5%

U.S. Bancorp

$43.71

$43.42

-0.7%

Wells Financial

$28.51

$28.35

-0.6%

Winland

$1.00

$0.96

-4.0%

Xcel

$34.16

$34.31

+0.4%

$3.55

$2.22

1 0

Gas prices-Minnesota — 2014 — 2015

$3.52

4 3 2 $2.16

1 0

Source: GasBuddy.com C. Sankey

MN Valley Business • may 2015 • 37

Take Your Career and Business to the Next Level For more than 30 years the Greater Mankato Leadership Institute has provided cutting-edge professional development with a community focus, and in that time has graduated more than 800 future community leaders. The comprehensive nine-month program consists of 11 day long sessions from September thru May. Each year the curriculum is updated to ensure graduates are well prepared to serve as leaders in their workplace and our community. Applications are now being accepted for the 2015-16 Greater Mankato Leadership Institute. For information on the program or to apply online, visit greatermankato.com/leadership-institute.

Congratulations to the 2014-15 Greater Mankato Leadership Institute Graduates

Greater Mankato Growth

Graduates with be honored at a reception on May 18, 2015. Alissa Brekke Casey Christenson Burle Christopherson John Considine III Eric Dosch Adam Fries Andrew Garry Leah Hansen Jana Hansen Elizabeth Harstad Paula Heyer Carly Hopper Lucas Howk Shane Johnson Mark Johnson Leah Kranz Chris Lienemann Dianna Lyngholm Elizabeth Manderfeld Theodore Manthe Becky McCarty James Meyer Josh Milow Julie Morgan Ted Ornas Eric Peters Alec Pfeffer Kayla Powers Jennifer Rorick Tamera Saar Amy Schroepfer Paul Shneider Joelle Shouts Bradley Swanson Roger Sward Susan Tarnowski Greg Torseth Shane Van Engen Jennifer Zieske

Pioneer Bank Lime Valley Advertising, Inc. Enventis Greater Mankato Growth Schwickerts Tecta America LLC Johnson Outdoors MEI Enventis Mankato Clinic Greater Mankato Area United Way Corporate Graphics International Minnesota State University, Mankato Minnesota State University, Mankato Bremer Bank House of Hope, Inc Labelworks Minnesota State University, Mankato Carlson Craft Minnesota State University, Mankato Bethany Lutheran College Braun Intertec MEI Blue Earth County The Orthopaedic & Fracture Clinic, P.A. MRCI Worksource Wells Federal Bank U.S. Bank Profinium, Inc Mayo Clinic Health System Minnesota Valley Federal Credit Union AgStar Financial Services Blethen, Gage & Krause PLLP Greater Mankato Growth/Visit Mankato City of North Mankato Mankato Clinic South Central College Enventis Frandsen Bank & Trust Mankato Clinic

38 may 20152013 • MN Valley Business 1 •• JANUARY • MN Valley Business

Creating Connections By: Shannon Gullickson, Greater Mankato Growth Talent Programs Director

Pictured above: Greater Mankato Young Professionals connect with each other outside the office walls during a social event on the river.

s an advocate for the region’s growth and retention of a talented workforce, Greater Mankato Growth (GMG) has developed two very successful and popular programs to help individuals grow professionally as well as engage with others in unique and constructive ways. The programs, Greater Mankato Leadership Institute and the Greater Mankato Young Professionals, both offer professional development components, but more importantly, they offer opportunities for participants to connect with others they would most likely not meet in their day-to-day lives. For 32 years the Greater Mankato Leadership Institute has provided unique opportunities for participants to further develop their professional skills while they become more familiar with the community around them. During the nine month program the Leadership Institute class is immersed in varying curriculum including topics such as ethics, diversity, communication, civic engagement and history. While the majority of the sessions take place in a traditional learning environment one of the first sessions occurs on the Minnesota State University, Mankato high ropes course. When looking back on their time spent in the program many alumni report this session is one of the most valuable and helps to shape the many personal relationships formed throughout the entire Leadership Institute program.

Another member of the current class, Chris Lienemann of Minnesota State University, Mankato, shared with his supervisor that “it is really energizing to be among this group of leaders from the Greater Mankato area who are all eager to think and share and learn about how to be a better leader for our organizations and our community. The level of positive energy and support within the group is much greater than I was expecting. I’ve gone through some very good management and leadership training programs in the past, but the difference in the quality of participation between a mandatory program and a volunteer opportunity like this one is quite noticeable.”

“I’ve lived in Mankato my entire life and have been a member of the YPs since the program started. Even though I felt like I had a number of connections before joining the YP’s, I’ve had the chance to make dozens of new personal and professional connections, not to mention work with many YPs directly as part of various committees,” said YP Chair Nathan Hanel of Capstone. Many of the events YPs participate in introduce the members to the many exciting, but not always obvious activities in the area, such as kayaking the Blue Earth River, rock climbing at Minnesota State University, Mankato or snowshoeing at Chankaska Creek Ranch and Winery. In addition, professional development events provide the chance for members to take part in networking and educational opportunities such as touring area businesses, meeting with experienced business owners and managers as part of the mentor luncheon series or participating in a class that may help prepare them for future business or professional ventures. “Through the YP program I have been able to develop many professional and personal relationships in the community. The YP’s are composed of amazing people that I look forward to getting to know better at each event,” said Jaci Sprague of Junior Achievement of Greater Mankato. The Greater Mankato Leadership Institute and the Young Professionals program are just two ways that Greater Mankato Growth helps foster unique and lasting relationships. While the YPs accept members at any time throughout the year, the Greater Mankato Leadership Institute has an application deadline of June 1 to be part of the 2015-16 class. For more information about both of these programs visit greatermankato.com/programs.

MN Valley Business • may 2015 • 39

Greater Mankato Growth

“Leadership Institute has helped me in so many ways, both personally and professionally,” says current class member Kayla Powers of Profinium, Inc. “The greatest thing about [the program] has been learning from a variety of different viewpoints. Our class ranges from bank presidents to yoga instructors and law enforcement officials to printing press managers. This variety in the class really exposes you to different ways of thinking which, I believe, makes you a better person.”

While the Greater Mankato Leadership Institute has more than 30 years of history in the community, the Greater Mankato Young Professionals (YPs) were organized in 2008 to help provide opportunities for the region’s newest sector of the workforce. The YPs work to engage with one another while focusing on learning, socializing and community engagement. The program currently consists of 170 members and offers social and professional development events that offer a unique opportunity to meet new residents of the community as well as those who have chosen to live and work in the region after residing here for many years.

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