Issuu on Google+

Public spending, private gain Also in this Issue: • Swedish Kontour’s 50th year • The Downs family: Pagliai’s, NaKato • Special Focus: Safeguarding computer systems


COMMUNICATED WITH LEGAL EASE. ANOTHER DAY. ANOTHER VICTORY. Over

50

$

/mo

on average vs. previous provider

Becoming a patent attorney was the best decision David ever made. But signing up for Charter Business was a smart idea too. With Internet up to six times faster than standard DSL*, David now zips through thousands of Patent and Trademark Office records and transfers encrypted engineering plans in seconds. He even gets a phone line with unlimited long distance†, all for the same price he used to pay for just Internet. Protecting innovation is David’s business. No wonder he trusts Charter Business.

877-BIZ-BUNDLE

www.EverydayVictories.biz

Contact your dedicated Charter Business representative today.

©2012 Charter Communications. Savings claim based on Small Business Claims Study by Data & Management Counsel, Inc.*Speed comparison as of 3/14/12. Internet speeds may vary. †Unlimited Long Distance available only to Charter local customers and applies only to direct-dial calls within the U.S., Puerto Rico, and Canada. Restrictions apply. Call for details.


It's not what you look at that matters,

it's what you see.

Corporate Graphics Your Printing Solutions Company 1750 Northway Drive North Mankato, MN 56003 800-729-7575 www.corpgraph.com


September 2012 • Volume 5, Issue 1

18

Special Focus: Information technology

Swedish Kontour’s 50th year

Anders Björling and his late wife, Janet, met at Gustavus and later returned to St. Peter. It’s there they began Swedish Kontour Imports inside part of their home. Today the store still thrives offering a variety of Scandinavian goods.

The public-private economy

Whether it’s a $20 million construction project at MSU, a military contract for a Mankato manufacturer, vendor contracts from the city of Mankato, or a wastewater treatment plant design contract, public spending aids private business.

The Internet is an extremely hostile place with hundreds of thousands of viruses and malware lurking. Even with what can be costly threats, most businesses are typically more reactive than proactive in defending their systems.

36

22

40

Wendy Schmidt, Creekside Boutique

Wendy Schmidt started a small shop in a space in Kasota, gaining experience, confidence and customers. Today she operates Creekside Boutique on Mankato’s northeast hilltop, offering unique and trendy clothing, shoes and accessories.

MN Valley Business • september 2012 • 3

Features

F E A T U R E S


D E P A R T M E N T S ■

From the Editor................................. 6 Joe Spear: Public goods provide private business

■ Business Commentary.................... Richard Davenport: MSU president

Business informer............................. 8

Job trends.......................................10

Greater Mankato Growth................28 Raising awareness of Greater Mankato

Vehicle, retail, construction trends in the area ■

Regional, state unemployment information

Departments

Retail trends....................................12 Auto sales, retail sales and hotel business

Regional Outlook.............................34

All in the Family..............................42 Expanding the family business

Business memos/ Company news................................44 Promotions at Pioneer Bank and Eide Bailly, Wiessen ■

Business updates............................16 HickoryTech net income falls, Hutchinson Technology names president, AgStar’s income rises, and more

rejoins Paulsen Architects, Gay joins Carlson-Tillisch, and more

On the Cover: Sarah Richards, president and CEO of Jones Metal Products in Mankato. Photo by Pat Christman

4 • September 2012 • MN Valley Business

.......33

Jack M. Geller: Mobile Internet is an equalizer ■

Area commodity prices ■

■ Greater Mankato Growth CVB Mankato Marathon: Bold changes for 2012

Agriculture Outlook.........................14 Agribusiness trends........................15

Greater Mankato Growth Member Activities . ........................30 Groundbreakings, new businesses, relocations and expansions

Kent Thiesse: Ethanol debate ■

Construction, real estate trends.....11 Building permits, housing starts, home prices, interest rates

20


september 2012 • VOLUME 5, ISSUE 1 PUBLISHER James P. Santori EXECUTIVE Joe Spear EDITOR ASSOCIATE Tim Krohn EDITOR CONTRIBUTING Jack M. Geller WRITERS Sara Gilbert-Frederick Tim Krohn Jean Lundquist Richard Davenport Kent Thiesse Marie Wood PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross GRAPHIC Jenny Malmanger DESIGNER PAGE DESIGNER Christina Sankey ADVERTISING David Habrat MANAGER ADVERTISING Barb Wass ASSISTANT ADVERTISING Seth Glaser DESIGNERS Sue Hammar Christina Sankey

From the Editor

CIRCULATION Denise Zernechel DIRECTOR

For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 507-344-6390

MN Valley Business is published 12 times a year at 418 South 2nd Street Mankato, MN 56001.

Public and private business shouldn’t be at odds

I

t’s no secret that the Mankato region benefits economically from the spending decisions of various governments and government spending in general. With large employers and institutions like Minnesota State University, South Central College, and St. Peter Regional Treatment Center, there’s going to be a number of economic benefits flowing to private businesses and employees in the region. Government jobs make up nearly 13 percent of the jobs and 17 percent of the wages in Blue Earth County. In Nicollet County, government jobs make up a whopping 20 percent of all jobs and 25 percent of all wages paid. Of the top three regional employers reported by Greater Mankato Growth, two are government (MSU and Mankato Public Schools) and the first is a nonprofit — Mayo Clinic Health System. The anecdotal evidence from our lead feature story this month is also impressive. Some $20 million of the city of Mankato’s $85 million budget goes to local construction projects. That’s in addition to the various contracts the city has with area businesses including $100,000 to HickoryTech for technology services, $60,000 a year to Red Feather Paper for various cleaning supplies and $50,000 to The Free Press for city legal notices and other advertising. MSU offers the same kind of economic “stimulus.” Some 600 vendors with Mankato and North Mankato addresses were paid a total of $5.5 million for their services. Over the past five years, MSU has initiated $50 million worth of construction projects, with many local subcontractors getting work. A study done several years ago showed MSU had a total economic impact on the region of $307 million, a figure that is likely closer to $400 million now. Private companies in town like the Bolton and Menk engineering firm attributes 75 to 80 percent of their business to municipalities. Jones Metal Products builds battery boxes that go on nuclear submarines in a contract with

6 • september 2012 • MN Valley Business

By Joe Spear the federal government. Military contracts account for 15 to 20 percent of the longtime local company’s business. So political trends to cut government spending will clearly have some economic impact on the Mankato region. People should carefully consider whether government spending cuts with tradeoffs in lower taxes will generate the kind of economic impact these institutions now offer the region. We can debate the value of how much government spends, but we would be wise to consider this: a tax cut does usually not spur the kind immediate and direct jolt to the economy that government spending does. When government spends a $1, the entire $1 goes into the economy. When one gets a tax cut of $1, only part goes into the economy. Most people don’t spend all their money once they get it. They save some of it. That’s not to say saving is bad. We all could do more saving and investing. And spending should be scrutinized. We can always do things better and more efficiently and with less waste and cost in government and the private sector. But residents of the Mankato region should consider the consequences carefully because we have more “exposure” if you will to cuts in government spending than many other places. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@mankatofreepress.com


Girls Night Out Thursday, September 13 5:00 - 7:00 pm

Bring friends and an appetite for savory appetizers and fresh ideas for your home!

there for

you

Tom Evensvold

Steve Olson

Mark David Thompson Monson

Many have trusted MinnStar Bank’s personal service to help them build and grow their businesses—and we can do the same for you. Downtown Mankato 507-625-6816 Lake Crystal 507-726-2137 Good Thunder 507-278-3630

BUSINESS BANKING

www.minnstarbank.com Member FDIC


Business Informer

Employment Unemployment claims in manufacturing soar While first-time claims for unemployment continue to fall overall compared to last year, claims in the manufacturing sector soared in June. The Mankato region was especially hard hit. In the nine-county region, unemployment claims in manufacturing hit 222 in June, up 71 percent compared to June of 2011. Sate wide, manufacturing unemployment claims rose 25 percent, to 3,482.

■■■

Construction Home sales up There were 175 existing homes sold in July in southcentral Minnesota, compared to 148 the same month last year. Results have been mixed this year, with sales number lower than last year in four of the months and higher in three of the months.

Foreclosure numbers mixed New foreclosure data for the second quarter of this year show a majority of area counties saw an increase in foreclosures compared to the same quarter last year. Blue Earth County had 38 foreclosures for the quarter, up one from a year ago. Nicollet County saw a decline in foreclosures from 17 to 15. In the nine-county area, four counties saw foreclosures stay the same or decline, while five saw increases.

■■■

Energy

Gas prices move up

With higher crude oil prices, the government’s Energy Information Administration has increased the average regular gasoline retail price forecast for the third quarter of 2012 to $3.49 per gallon from $3.39 per gallon projected last month (state taxes vary). The government expects regular gasoline retail prices, which averaged $3.53 per gallon in 2011, to average $3.53 per gallon in 2012 and $3.33 per gallon in 2013.

8 • september 2012 • MN Valley Business

Crude production highest since ‘97 The government expects U.S. total crude oil production to average 6.3 million barrels per day in 2012, an increase of 0.6 million barrels daily from last year, and the highest level of production since 1997. Projected U.S. domestic crude oil production increases to 6.7 million barrels per day in 2013.

Ethanol production drops off As a result of drought conditions affecting corn harvests and prices throughout the Midwest, ethanol production fell from 920 thousand barrels per day for the week ending June 8 to 809 thousand barrels daily for the week ending July 27. The agency has reduced its 2012 ethanol production forecast from 13.8 billion gallons to 13.3 billion gallons. Ethanol production is expected to recover in the second half of 2013, averaging about 880 thousand barrels per day for the year.

Natural gas prices fall Natural gas working inventories ended July 2012 at an estimated 3.2 trillion cubic feet), about 17 percent above the same time last year. The government expects the Henry Hub natural gas spot price, which averaged $4 per million British thermal units in 2011, to average $2.67 per MMBtu in 2012 and $3.34 per MMBtu in 2013.

Oil prices rally Despite downside risks to global oil demand, the spot price for Brent crude climbed back above $100 per barrel in July after prices sank below $90 per barrel in June. Markets have rallied around expectations that policymakers in the European Union, China, and the United States will provide more economic stimulus to counteract slowing growth. Additionally, Iran’s threats to block oil from transiting through the Strait of Hormuz have triggered market anxiety and prompted upward price pressure. Although angst over global growth and supply disruptions may continue to contribute to price volatility, the government believes that Brent crude oil, a benchmark for the global oil price, will average $104 per barrel for the third quarter of 2012.

Coal use for power lowest in 20 years

U.S. Coal Consumption. Power-sector coal consumption, which averaged over 1 billion short tons annually from 2003 through 2008, fell by 46 million short tons in 2011. Lower electric power sector natural gas prices have led to a significant increase in the share of natural gas-fired generation. Coal consumption in the electric power sector should total 825 MMst in 2012, the lowest amount in 20 years. Power sector coal consumption will remain flat in 2013 as the effects


of higher electric power sector natural gas prices are offset by the weak increase in electricity consumption.

Renewables use down After growing by 14 percent in 2011, total renewable energy consumption is projected to decline by 2.4 percent in 2012. This decrease is the result of hydropower resource levels beginning to return to the long-term average. Renewable energy consumption increases 2.1 percent in 2013 as hydropower continues to decline (2.9 percent) but nonhydropower renewables grow by an average of 4.7 percent.# Under current law, Federal production tax credits for windpowered generation will not be available for turbines that begin operating after the end of 2012. Wind-powered generation, which grew by 26 percent in 2011, is forecast to grow an additional 17 percent in 2012. As a result of drought conditions affecting corn harvests throughout the Midwest, the ethanol production forecast for the second half of 2012 has fallen from an average of 900 thousand barrels per day to 830 thousand barrels per day.

CO2 emissions fall more After declining by 2.4 percent in 2011, fossil fuel emissions are projected to further decline by 2.3 percent in 2012, but increase by 1.0 percent in 2013.

keep them healthy and happy. occupational medicine services Mankato Clinic Urgent Care @ Adams Street is your provider of Occupational Medicine Services. Our staff will collaborate with you to help manage risk factors, keep your employees healthy and happy and get them back to work quickly and safely after an injury. No appointment is necessary for most examinations. Just walk in for prompt, professional service. For additional information call 507-385-4075 or visit www.mankatoclinic.com

Urgent Care Hours of Operation: Monday - Friday from 8 a.m. - 8 p.m. Saturday from 8 a.m. - 5 p.m. Sunday 11 a.m. - 5 p.m.


Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Business Barometers

Nine-county Mankato region

Major industry

July

Construction Manufacturing Retail Services Total*

’11

’12

Percent change ’11-’12

244 130 59 859 1,292

134 222 48 642 1,046

-45.1% +70.8% -18.6% -5.2% -19.0%

2011

2012

130,000

110,000

1,000

A

M

5,848 2,782 1,578 8,778 18,986

2,988 3,482 1,143 6,308 14,221

-48.9% +25.2% -8.6% -28.1% -25.1%

2011

J

J

A

Local number of unemployed Nine-county Mankato region

S

O

N

2011

D

2012

J

F

M

A

M

J

J

A

S

O

N

D

Minnesota number of unemployed 2011

9,251 7,634

10,000

0

2012

3,009.7 2,836.2

3,000 2,000

M

Percent change ’11-’12

Minnesota non-farm jobs

120,000

F

’12

(in thousands)

126,632 127,618

J

’11

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.

Nine-county Mankato region

100,000

July

Construction Manufacturing Retail Services Total*

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

Major industry

2012

222,989 178,408

225,000

8,000 200,000

6,000 4,000

175,000

2,000 0

J

F

M

A

M

J

J

A

S

O

N

July

2011

Unemployment rate

6.2%

5.3%

54,811

56,827

3,603

3,155

2012

Source: Minnesota Department of Employment and Economic Development

10 • september 2012 • MN Valley Business

J

F

M

County/area

(includes all of Blue Earth and Nicollet Counties)

Number of non-farm jobs

150,000

A

Unemployment rates

Mankato/North Mankato Metropolitan statistical area

Number of unemployed

D

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

M

J

J

A

S

O

N

D

Counties, state, nation July 2011 July 2012 6.1% 5.4% 7.1% 7.9% 6.5% 6.2% 5.5% 6.1% 7.1% 7.0% 6.9% 9.3%

5.4% 5.5% 6.2% 6.6% 5.7% 5.1% 5.2% 5.8% 7.2% 5.9% 5.9% 8.6% J. Malmanger


Construction/Real Estate Residential building permits Mankato 2011

2012

(in thousands)

Residential building permits North Mankato (in thousands)

2011

$3,000

$1,698.5 $2,243.9

2012

$8,000 $2,000

$6,000 $4,000

$1,000

$2,000 $0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato

$0

Existing home sales: Mankato region 2011

2012

148 175

200

Information based on Multiple Listing Service and may not reflect all sales

20

50

10 M

A

M

J

J

A

S

O

N

D

M

J

J

A

S

O

N

D

Commercial building permits Mankato 2011

(in thousands)

$1,822.5 $1,086.3

2012

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

2012 6 15

0

J

F

M

A

M

J

J

A

S

O

N

D

Source: Cities of Mankato/North Mankato

Source: Realtors Association of Southern Minnesota

$9,000

A

2011

100

F

M

40 30

J

F

Housing starts: Mankato/North Mankato

150

0

J

Source: City of North Mankato

Commercial building permits North Mankato (in thousands) $12,000

2011

$2,844.3 $100

2012

$9,000

$6,000

$6,000 $3,000 $0

$3,000 J

F

M

A

M

J

J

A

S

O

N

D

Management 4.5% Adm. support 4.0%work Production Sales 3.5% Driving/moving 3.0% J

2012 March

’09

’10

1,360 2,611 9,228 3,219 2,139 F M A

876 1,885 4,097 2,680 1,661 M J

Source: Freddie Mac

F

Foreclosures:

Minnesota initial unemployment claims Interest rates: 30-year fixed-rate mortgage 2011

J

M

A

M

J

J

A

S

O

N

D

Source: City of North Mankato

Source: City of Mankato

By 5.5% occupation 5.0%

$0

County

Percent change 4.5%’09-’10 -35.6% -27.8% 3.6%-55.6% -16.7% -22.3% J A S O

N

D

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

2012 second quarter 2011 2012 48 10 8 32 13 17 14 10 4

41 13 10 26 13 14 19 16 3

Percent change -14.6% +30% +25% -18.8% 0% -17.6% +35.7% +60% -25%

Source: Minnesota Foreclosure Partners Council J. Malmanger

MN Valley Business • september 2012 • 11

Business Barometers

$10,000

$2,040.9 $2,401.1


Retail/Consumer Spending Vehicle sales 2011

Business Barometers

Sales tax collections

Mankato — Number of vehicles sold 769 2012 915

1,200

$500

1,000

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

$376.4 $364.6

$400

800

$300

600 400

$200

200

$100

0

Mankato 2011 2012

(In thousands)

J

F

M

A

M

J

J

A

S

O

N

$0

D

Source: Sales tax figures, City of Mankato

Lodging tax collections 2011

$50,000

2012

J

F

M

A

M

J

J

A

S

O

N

D

Source: Sales tax figures, City of Mankato

Mankato food and beverage tax

Mankato/North Mankato $39,255 $45,226

2011

$75,000

$45,537 $48,860

2012

$40,000 $50,000

$30,000 $20,000

$25,000

$10,000 $0

J

F

M

A

M

J

J

A

S

O

N

Source: City of Mankato

D

$0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato J. Malmanger

Gas prices-Mankato 2012

2011

$4.00

$3.75

$3.00 $2.00

$3.54

$1.00 $0

J

F

M

A

M

J

J

A

S

O

N

D

2012

2011

$3.75

$3.00 $2.00

$3.56

$1.00 $0

July 19

Aug. 13

Percent change

Archer Daniels

$26.94

$25.93

-3.7%

Ameriprise

$50.38

$54.32

+7.8%

Best Buy

$18.21

$19.48

+7.0%

Crown Cork & Seal

$35.33

$36.60

+3.6%

Fastenal

$44.22

$42.20

-4.6%

General Growth

$17.23

$18.63

+8.1%

General Mills

$38.58

$38.50

-0.2%

HickoryTech

$10.24

$10.67

+4.2%

$1.48

$1.64

+10.8%

Itron

$39.73

$43.90

-10.5%

Johnson Outdoors

$21.07

$21.10

+0.1%

3M

$89.95

$92.40

+2.7%

Target

$61.45

$62.51

+1.7%

U.S. Bancorp

$33.63

$33.18

-1.3%

Wells Financial

$16.60

$17.25

+3.9%

$0.62

$0.65

+4.8%

$29.10

$28.75

-1.2%

Hutchinson Technology

Gas prices-Minnesota $4.00

Stocks of local interest

Winland J

F

M

Source: GasBuddy.com

A

M

J

J

A

S

O

N

D

J. Malmanger

12 • september 2012 • MN Valley Business

Xcel

J. Malmanger


BEAUTY

INTERIORS |

PLANNING

WWW.PAULSENARCHITECTS.COM

ARCHITECTURE | ENGINEERING |

507.388.9811 |

PAULSEN ARCHITECTS

IT’S IN THE DETAILS

We are committed to every building and environment’s success down to the smallest of details. The result is a client experience that exceeds expectations and truly bold design that inspires.

BOLD DESIGN

Beauty is determined by the perceptual experience each detail of a space provides. It is a balance of symmetry and complexity that resonates and pleases. Paulsen Architects’ design team provides that link between aesthetics, function and efficiency. Each interior space we design plays an important, unique role in a building’s overall vision and purpose.


Agricultural Outlook

Drought, ethanol policy pitting farmer against farmer ■ ”It seems that The 2012 drought has brought the Renewable Fuels Standard (RFS) into the forefront. The regulations are managed by EPA and those regulations are quite complicated. The RFS requires that minimum levels of renewable biofuels must be used to blend gasoline in the U.S. Corn-based ethanol is the primary fuel ingredient used. Currently ethanol makes up about 10 percent of the U.S. fuel supply, with just over 13 billion gallons of ethanol per year. The drought has been significantly affecting over two-thirds of the major corn and soybean producing areas of the U.S. The August USDA Crop Report estimated the corn production to be 10.8 billion bushels, which would be the smallest total production since 2006. This compares to a total corn production of 12.3 billion bushels in 2011. USDA projected a national average corn yield of 123.4 bushels per acre, which would be the lowest national average corn yield since 1995. Some experts feel that the national average corn yield could drop even lower, once harvest is completed. The severity of the drought has lead for a call to either temporarily or permanently waive the RFS requirement for fuel blends. The request to waive the RFS requirement is coming from national livestock organizations, members of Congress, governors, food companies, media personalities and others. Most cite the need to feed the corn to livestock, which is part of the U.S. and world food supply, rather than using the corn to produce renewable energy. At the same time, the National Corn Growers Association and several ethanol groups have called on EPA to continue the current regulations, saying that the drought has caused the issues for livestock producers, rather than the RFS requirements. As of the writing of this article, the EPA had not made any decisions toward making variations or granting waivers for the regulations. The corn and soybean market prices have responded to the drought with dramatic market increases. December corn futures prices rose to over $8 per bushel by late July, an increase of nearly $3 per bushel since mid-June, or about a 60 percent increase. The biggest financial impact of the drought will hit livestock producers. The estimated cost of production for pork producers is expected to rise sharply in the third and

By Kent Thiesse fourth quarters of 2012. Based on hog futures prices in late July, many experts are now projecting a loss of about $20$30 per hog marketed in the next 6-9 months. Similarly, the expected sharply higher feed costs are expected to result in large financial losses for the fed cattle and dairy industries in the coming months as well. The higher corn prices have also reignited the “food vs. fuel” debate that was quite prevalent in 2008, when corn prices first rose above $4 per bushel. Many are concerned that consumer food costs will rise rapidly in the next couple of years, and some are concerned with the increasing issue of human hunger. Due to this year’s drought, one difference in 2012 compared to 2008, is that we are not only looking at much higher feed prices, but we are also looking at serious feed shortages in many areas, which is causing liquidation of breeding livestock. The current estimated corn usage for ethanol is about 5 billion bushels for the coming year, which is about 40 percent of the total corn production at a production level of 12.5 billion bushels, which is well above current U.S. corn production estimates for 2012. It should be pointed out that ethanol production has slowed in some areas in the past few months, due to the higher corn costs and tighter profit margins, so total corn usage for ethanol may dip below projected levels. Ethanol supporters feel that ethanol production is unfairly being totally blamed for the high livestock feed costs, and for potential increases in consumer food costs. They cite many other factors that contribute to those cost increases. Ethanol leaders point out that ethanol production also generates approximately 1.7 billion bushels of dried distillers grains, which is a high quality livestock feed source that is fed as an alternative to corn and soybean meal. Many

14 • september 2012 • MN Valley Business

what is needed is some sound analysis on the impacts of the drought on livestock producers and others.” ethanol experts feel that the feed use of the ethanol process is not being properly included in ethanol corn-use calculations. A recent study released by Iowa State University indicated that a partial or full waiver of RFS regulations may not achieve the goal of more corn availability for feed and lower feed costs that some are hoping for. The study indicates that the economics for using ethanol as an oxygenate in gasoline is driven more by gasoline prices and worldwide oil prices, rather than by the RFS regulations. They found that waiving the RFS would likely only have a short term impact of lowering the corn price by about 7.4 percent. The study concludes that as long as ethanol production is profitable, production will continue close to current levels, with or without the RFS requirements. The debate over the RFS regulations is dividing farm organizations and members of Congress, and is pitting farmer against farmer. In some cases, it is pitting farmers against themselves, if they are involved in both the livestock industry and the ethanol industry. It seems that what is needed is some sound analysis on the impacts of the drought on livestock producers and others, as well as on the implications of the RFS requirements. Maybe the conclusion will be that some temporary adjustments are needed in RFS regulations to address the serious situation; however, maybe the conclusion will be that there are better government programs available to assist livestock producers, rather than changing the RFS requirements. MV Kent Thiesse is a farm management analyst and vice president, MinnStar Bank, Lake Crystal. He can be reached at (507) 381-7960 or kent.thiesse@minnstarbank.com


Agriculture/Agribusiness Corn prices — southern Minnesota 2012

2011

$8.00

Soybean prices — southern Minnesota

(dollars per bushel) $7.98

Business Barometers

$12.00

$4.00

$8.00

$7.16

$2.00 J

F

M

A

M

J

J

A

S

O

N

D

$0

F

M

A

M

J

J

Milk prices

185 pound carcass, negotiated price, weighted average

2012

2011

A

S

O

N

D

$101.21

$22.00

$90.00

$20.00

$80.00

F

M

A

Source: USDA

M

J

J

A

S

O

$22.83

$18.00

$90.12

$70.00

Minimum prices, class I milk Dollars per hundredweight

2012

2011

$24.00

$100.00

J

J

Source: USDA

Iowa-Minnesota hog prices $110.00

$12.93

$4.00

Source: USDA

$60.00

$16.61

$16.00

$6.00

$0

2012

2011

$20.00

(dollars per bushel)

$16.00 N

D

$14.00

$17.31 J

F

M

A

M

J

J

A

S

O

N

D

Source: USDA. Based on federal milk orders.

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

J. Malmanger

Weichert WORKS!

507-625-4606 121 E. Main St. Ste 311 Mankato, MN 56001

Rich Draheim 507.381.0808

Dale Guggisberg

507.381.9292

Dan Hawkes 507.380.1964

Jon Kietzer 507.381.1773

Shawn H. Price 507.384.7771

Christa Wolner 507.3276300

FARM LAND SERVICES 300 St. Andrews Drive, Ste 110 Mankato, MN • 507.345.1111 weichertcommunitygroup.com


Updates: Business news, local relevance

Hutchinson Technology names president

The board of directors of Hutchinson Technology named Richard J. Penn as president and chief executive officer. Penn, 56, succeeds Wayne M. Fortun, who has been appointed chairman of the board. Jeffrey W. Green, who co-founded Hutchinson Technology in 1965, is retiring from the board and from his position as chairman. Penn, who will report directly to the board, currently serves as senior vice president of the company and president of its Disk Drive Components Division. He joined Hutchinson Technology in 1981 and has held a variety of management positions at the company, including vice president of sales and marketing, vice president of operations, and president of the company’s BioMeasurement Division.

Updates

AgStar reports earnings

AgStar Financial Services reported earnings for the period ending June 30. The company reported net after-tax earnings of $48.4 million for the first half of 2012, a $6.4 million increase over last year’s first half performance. “We are pleased to post these results for the first half of 2012. The key agricultural sectors have seen a successful year, contributing to our strong results this year,” said Paul DeBriyn, president and CEO. The increase in earnings is the result of many variables. Some of the contributing factors include favorable interest rates, increased crop insurance sales and a one-time insurance premium refund. In August, AgStar is distributing allocation notices to stockholders from 2011 earnings which total $40.3 million.

Bremer Bank’s hunger donations hit record

Wells Fargo: Too big in loans?

Wells Fargo & Co. controls one out of every three new home loans in the country, an outsize presence that is raising concerns from regulators and lawmakers about risks to consumers and markets. Bloomberg reports that San Francisco-based Wells Fargo and its two nearest competitors, JP Morgan Chase and Minneapolisbased U.S. Bancorp, made half of all U.S. home loans in the first half of 2012. Wells Fargo and U.S. Bancorp are the two biggest mortgage providers in Minnesota. The increased concentration of market power has some analysts and regulators worried. Their concern isn’t that Wells Fargo would misuse its power, but that a strategy shift at the bank away from mortgages could shock the market, since it’s so big. ■

Apple to match discounters price

Apple Inc. retail outlets have been authorized to offer discounts on iPhones to match those offered by wireless carriers and retailers. The company has begun telling retail employees that they may offer discounts of $49 on the iPhone 4S and the iPhone 4 to customers who cite lower prices from other outlets. According to Apple’s communications with employees, the outlets include stores operated by Target, Best Buy and Sprint Nextel. Apple’s move, which was first reported by the MacRumors blog, is an unusual one for the gadget maker. The company does not usually offer price matching for its devices.

During the seventh annual “Taking Action to End Hunger” campaign, Bremer Bank’s $50,000 matching gift was met and exceeded when donations increased nearly 32 percent over 2011. This year’s campaign raised $111,174 — up from last year’s record donation total of $84,614. ■

Johnson Outdoors sales up

Outdoor recreation equipment company Johnson Outdoors reported a 5 percent increase in sales and 10.8 percent increase in net income for the quarter ended June 29, compared with the same quarter last year. Johnson Outdoors reported net income of $9 million for the quarter, compared with $8.1 million for the same quarter last year. That produced diluted earnings per share of 91 cents compared with 83 cents a year earlier. Revenue during the Racine-based company’s third fiscal quarter totaled $128.6 million, compared with net sales of $122.5 million one year earlier. The company reported a 9 percent increase in marine electronics revenue. It said a sharp rise in military sales accounted for an 8 percent upswing in outdoor gear revenue.

16 • september 2012 • MN Valley Business

HickoryTech net income down

HickoryTech reported earnings for the second quarter ended June 30. Revenue totaled $43.9 million, up 9 percent year over year. Net income totaled $1.8 million, down 33 percent from last year and earnings per share totaled 13 cents per diluted share, a 35 percent decrease from last year primarily as a result of larger Telecom network access declines, local service revenue declines, and added depreciation and interest expense overall. For the six months ended June 30, earnings were $4.1 million, a 15 percent decrease over the same period last year, and earnings per share of 31 cents were down 14 percent from last year. Revenue for six months totaled $90.8 million in 2012, a 15 percent increase over the same period in 2011. “Although our Telecom Segment experienced higher than anticipated declines in the second quarter, the emphasis we have placed on growing our business services continues to deliver solid growth as demonstrated by the 37 percent increase in fiber and data revenue providing top line revenue growth,” said John Finke, HickoryTech’s president and chief executive officer.


Complete Auto Repair Foreign & Domestic

Pickup & Delivery Available Emergency Road Service

Serving the Mankato Area Since 1975

257-3730

MEMBER

109 E. LERAY, EAGLE LAKE Located Just 5 Minutes From River Hills Mall

Professional resources to help grow your business AUTOMOTIVE Jerry's Body Shop, Inc. 1671 Madison Ave, Mkto, MN 56001 507-388-4895 www.asashop.org/member/jerrys

STAFFING AGENCY Express Employment Professionals 113 Monroe Avenue North Mankato, MN 56003 507-387-5620 www.expresspros.com

For information on including your service to this directory, please contact

507-344-6390


Special Focus: Keep your business

Antivirus software a “bulletproof vest” By Marie Wood | Photos by John Cross

John Greiner is the information technology manager at Q Computers in Mankato.

Online Resources iT Library at theitlibrary.com offers tips on network security, troubleshooting, IP addressing, antivirus software and more. TechTarget at searchcloudcomputing. techtarget.com offers in depth information on cloud computing, security, infrastructure and cost management. Articles include cloud computing trends, leaders and planning. Training Q Computers offers computer training from beginning to advanced skills. Q Staff can tailor training on software, security and specific business needs. Learn more at quecomputersmankato.com. What’s New? Microsoft has rolled out Windows Server 2012. Updated for today’s small business operations, features include data protection, remote access to your business system from any mobile device and on-premise and cloudbased applications.

J

“The Internet is an extremely hostile place. Security is the under-sung portion of it. It’s typically more reactive than proactive with most businesses.”

ohn “Rock” Greiner, information technology manager at Q Computers in Mankato, sets up and manages computer networks for businesses and non-profits. As a troubleshooter, he knows how important it is to keep your network secure from viruses, malicious software and spyware. With hundreds of thousands of viruses, the effects are wide reaching and can range from slowing down your computer to crashing your system. While spyware can be used for statistical collection for marketing or product improvement, it can also be used to mine data to gain information about the user such as email addresses, credit card numbers and log-ins. “The challenge is keeping the networks secure and free of malicious software. The Internet is an extremely hostile place,” said Greiner. “Security is the under-sung portion of it. It’s typically more reactive than proactive with most businesses.” Today’s IT networks usually encompass the phone system, internal computers and mobile devices such as tablets and smart phones. Greiner installs firewalls and antivirus software to protect the system. Still the average antivirus software is only 85 percent effective. At Q Computers, they use the following analogy to explain the importance of antivirus software. “Antivirus software is a bulletproof vest in a war zone,” said Greiner. “While antivirus software cannot prevent everything, it will save you on some levels.” MV

18 • september 2012 • MN Valley Business


computer systems secure The “cloud” is all the buzz, but often misunderstood By Marie Wood

T

he buzz word in IT is cloud computing, but it is often misunderstood and over-marketed. So here are the basics. Cloud computing is an information technology model in which documents and software are stored on an Internet server or “cloud” computer that is not located at a company’s work site. Businesses can rent software and storage space from a cloud computing provider. Users have access to information as long as an electronic device has access to the web. Currently, most companies have their own hardware and software stored physically at their work site. To work remotely, employees use “the cloud” (the Internet) to log-in to the company’s hardware and network. Greiner recommends going “through the cloud” to work remotely by using the Internet to connect to company-owned servers and software under direct control of the business. The difference in cloud computing is that your information and software is stored “in the cloud.” “The cloud should be used only to augment functionality of a more traditional network setup,” said Greiner. “I recommend cloud computing that is developed specifically to a business and owned and controlled by the business.” Q Computers has helped organizations develop cloud systems. Here’s what Greiner tells clients to consider. Q: What happens if I can’t access the Internet? Internet service can still go down or be unavailable. During that time, a business owner and employees cannot access their business systems and documents. A: Q Computers recommends an internal server with backup system so employees can access the business system and documents from internal PCs.

Q: Who owns the data? Cloud computing requires business owners to put their eggs (or data) in someone else’s basket. A: Make sure you possess the intellectual rights to your data so you can get your data back if you choose advises Q Computers. Read the fine print in the license agreement for the cloud-based application. For instance, there are services, such as Dropbox, where a business can put all its documents into one place for employees to access via the Internet. Greiner advises limiting the amount of shared documents available online to keep your network under control. MV

Security tips for your IT system Your IT system will degrade over time if best practices aren’t followed, so employee education is essential. “We can train them in best practices and steer them in the right direction to make users aware of the policies,” said Greiner. 1. Update your software. Run your Windows updates because outdated software provide channels where malicious software can enter. “A good Internet practice is keeping things up to date because holes get exploited,” said Greiner. However, for Adobe, Flash and Java, do not click the automatic updates available through pop-ups from third party Web sites. Modern viruses can be spread this way. “You’ve opened up the back door when you click yes to install,” said Greiner. Instead go to the Adobe web site, a legitimate source, to download the new Adobe Reader. The same goes for Flash and Java. 2. Use caution in opening email. Often infected emails are sent by someone you know, but the subject line may seem strange or there is a link or document that is uncharacteristic.

Other times you may not recognize the sender. “Be careful opening attachments or links in email for things you weren’t expecting,” said Greiner. 3. Keep Internet use to business use. Enforce a policy to keep your employees’ computers only to be used for business purposes. No personal email and Facebook, random searches for recipes or sports scores, and other uses. “When your network is opened up to social and entertainment sites is when typically a lot of problems can begin,” said Greiner. 4. Make an IT Plan. Develop a budget and vision for your future IT needs. Statistically, computers are obsolete in three years. Greiner advises a strategy to rotate out PCs on a regular basis. “Once a business becomes out of date, it’s difficult to compete,” said Greiner.# MV

MN Valley Business • september 2012 • 19


Business Commentary

MSU and Mankato have a strong, unique relationship

I

n October 2011, Minnesota State University, Mankato officially launched its Big Ideas Campaign. While this campaign includes a number of initiatives designed to help the university achieve a new level of greatness on a state and national scale, we also know that for 144 years, the Greater Mankato community has partnered with the university to incubate big ideas and real-world thinking right here at home. The past and future of both MSU and Greater Mankato are intertwined. Certainly, what we do on campus has a direct impact on the economic and workforce needs of our region. With approximately 1,600 employees and 16,000 students, the university’s economic impact has been estimated at nearly $450 million per year. We are already the largest state university based on full-time student enrollment and the second-largest public institution in Minnesota. I believe the reason for our popularity is because students and families quickly learn about the outstanding quality of our education at MSU, as well as the Mankato community’s excellent quality of life. What is unique about our community and campus relationship is that recent data shows more college students live in Mankato than in any other Minnesota city, except for the Minneapolis-St. Paul metro area. This means we have fewer commuters than other campuses. Our students live in the Mankato area, use community services, and work in our stores, businesses, and industry. They volunteer in support of our needs, provide cultural and athletic entertainment, and purchase goods and services. The good news is that we as a university are fully engaged in continuing our growth as we optimistically build the campus capacity to eventually enroll more than 20,000 students. All of this is dependent, of course, on our success in attracting and retaining quality students in a more competitive environment. Therefore, we will continue to plan for building and renovating our physical infrastructure while increasing our faculty and staff base to serve this projected increase in student enrollment. Future growth requires construction and renovation — both of which contribute to the region’s economic stability. This fall, we are opening the Margaret R. Preska Residence Community, a 300-bed facility that features state-of-the-art student living spaces. It was only four years ago that we opened the new 608-bed Julia A. Sears Residence Community. We boast of having the best residential facilities in the state with our new and recently renovated residence communities that house 3,000 students. Additionally, we work closely with the private sector to assist in providing off-campus housing for more than 10,000 additional MSU students. But it’s not only living spaces that we are upgrading. In transforming and growing our campus, we have added new buildings, Ford Hall and the Center of Renewable Energy, and renovated Trafton Science Center, Otto Recreation Center, Centennial Student Union Ostrander Auditorium and Ballrooms, as well as athletic and intramural outdoor

20 • september 2012 • MN Valley Business

By Richard Davenport

“More than 25 percent of our graduates find jobs in the Mankato region.”

facilities. We are currently planning the new Clinical Science Building for construction, hopefully beginning in 2014, and a privately funded Global Solutions Business Building, a part of our largest-ever comprehensive campaign. In planning our campus of the future, we are committed to creating an attractive green campus. MSU has the highest retention rate of first-year students in the MnSCU system, and we are the most sought-after state university in Minnesota in terms of popularity and number of applications received. Therefore, it is important to continuously plan for classroom and housing needs. The investments we make in students’ living and learning spaces are invaluable, because not only do these students live and work in our community while they attend the university, but they provide a pipeline of employees for regional workforce needs. More than 25 percent of our graduates find jobs in the Mankato region. As our students are beginning the fall semester we will disburse an estimated $38 million in financial aid. This money will be spent on tuition, books, food, housing, transportation, medical services, clothing, entertainment, and other living expenses. Much of it will be spent in the Mankato area. Clearly, we have and will continue to have a significant economic and cultural impact on the greater Mankato region. To continue to grow and prosper, MSU needs to build on our current relationships while working to create new partnerships right here in our city and region. One of the highlights every year in Mankato is the Minnesota Vikings summer training camp — a true community-university partnership. This year marked the 47th year that the Vikings have traveled to Mankato for camp. Coach Leslie Frazier recently commented favorably about our campus facilities, employees and the community in welcoming the Vikings. We must continue to build on this partnership and seek new ways of involving the community in providing an even more welcoming environment for the team, fans and visitors, all of whom have a tremendous economic impact on our community. We are committed to making the university


and Mankato a destination. The public exposure we receive cannot be measured in dollars alone. We realize that the children and families who visit training camp could be future university students and residents of Mankato. Although the Vikings come to campus for two or three weeks each summer, thousands of others also visit the university and the greater Mankato area each year for many events held at or in conjunction with the University. It is significant that our website proclaims three benefits of attending MSU to potential students and their families — our great people, our outstanding academic programs and our “vibrant campus in a proud community.� MSU is proud of our service and contributions to the region and looks forward to enhancing and building on our strong partnerships within the greater Mankato area. MV Richard Davenport is president of Minnesota State University, Mankato.


Cover Story

Richard Davenport, president of Minnesota State University

Government stimulus Public spending has broad effects on area’s economy

By Tim Krohn | Photos by John Cross and Pat Christman 22 • september 2012 • MN Valley Business


M

John Ripke, president of Bolton & Menk in Mankato

Rick Straka, VP of Finance & Administration at MSU

Of the city’s $85 million budget, about $20 million annually is paid out in construction projects with more going to a variety of vendors for services and supplies. At Minnesota State University, Vice President of Finance & Administration Rick Straka looked up local businesses that received contracts in 2011. “Just the vendors with a North Mankato or Mankato address, there were 600 vendors for approximately $5.5 million,” Straka said. “That would range from a $100 honorarium stipend to speak to a class to a major construction project.” When major construction projects are done on campus, the figure rises substantially. Public spending in the private economy is a major benefit, particularly in this area with large universities and sprawling state hospital complexes in St. Peter. And local businesses don’t just benefit from local public spending. At engineering firm Bolton & Menk, municipal clients come from across Minnesota, Iowa and other states. “About 75 to 80 percent of our business is with municipalities. We have a full range of engineering services,” said President John Ripke. The federal government’s reach into the economy ranges from spending on roads and airports to military contracts at area manufacturing plants. “Military contracts account for 15 to 20 percent of our business,” said Sarah Richards, president and CEO of Jones Metal Products. “We will feel the effects of military (budget) cuts.” Nuclear submarine parts Workers at Jones Metal have been fabricating steel battery boxes that will be installed on nuclear submarines. Don’t ask to take a look at them, however. New federal International Traffic in Arms regulations place tight

MN Valley Business • september 2012 • 23

Cover Story

ankato City Manager Pat Hentges goes through a list of budget items, ticking off some major ones that benefit private businesses. There’s maybe $10 million a year of road construction projects that go to various contractors and subcontractors. Add about the same amount for building construction and renovations. There is more than $100,000 paid to HickoryTech for technology services and hundreds of thousands of dollars that pass through Najwa’s Catering for catering civic center and other city events. Then there’s a long list of lesser but significant spending. About $60,000 a year to Red Feather Paper for various cleaning supplies. About $30,000 to American Linen. Paragon Printing will take in about $60,000 a year for printing jobs. Napa Auto about $25,000. C&S around $30,000. The Free Press will get $50,000 for publishing city legal ads and other advertising. And the list goes on. “We try to do as much local as possible in Mankato and North Mankato,” Hentges said. “When we get quotes, we always require competitive quotes and we have a strong bias to do those locally.”


Cover Story

Welder Don Jensen at Jones Metal Products in Mankato requirements on all contractors and subcontractors. “Everyone who works on the process or the drawings has to be a proven U.S. citizen or get special clearance,” Richards said. Military contracts also bring extra paperwork and inspectors. “There’s a lot more work up front. The specifications are a lot more intense. The military lost a (nuclear) sub in the ‘60s, so they dot every i.” Jones Metal has to assemble welding procedures for each item and send it in for approval. Once they build something, “destructive” testing is done to make sure the piece holds up. “So if we need to make 20 items, we make 22 because two go in for destructive testing.” Inspectors — who can’t be associated with Jones Metal — are also on hand to check projects at various stages of assembly. “We’re a second-tier contractor. The primary contractor will have an inspector come in. They’ll be here for two or three weeks — they become a regular fixture.” Despite some extra hoops to jump through, Richards is happy for the work. “Our economy depends a great deal on the military and government in general. It definitely makes a difference,” she said. “We have the advantage of being woman-owned and operated. Our customers need a certain percentage of their suppliers to be women or minority-owned or operated companies.” Richards has been watching the debate over military spending more closely than most. “It’s amazing how quickly it affects the chain. It takes 10,000 people five years to build one nuclear sub. There’s a big impact from military spending.” Serving communities Bolton & Menk started in St. Peter in 1949 and moved to Mankato in the ‘60s. Today the firm, with nearly 300 employees, has 12 offices throughout Minnesota and two in Iowa. While they have some commercial customers, they’ve chosen to focus almost exclusively on serving municipalities and counties. “From water supply and treatment, to airports, wastewater

24 • september 2012 • MN Valley Business

treatment, water drainage and transportation, we have the full line of services,” Ripke said. Their clients range from towns of 100 up to Minneapolis. “We grew up in Greater Minnesota, so that’s where we have a real broad base of clients. Most are from Mankato size down to Sherburn size.” Prior to the recession, Bolton & Menk was helping cities plan and manage fast-paced growth in residential and commercial development. While new home and commercial development hit the brakes in 2008 and 2009, Bolton & Menk felt the biggest impact in 2010. “Cities weren’t asked to do projects because no developers were doing anything, and they were dealing with developers going belly up and defaulting on their agreements,” Ripke said. “In 2010, with cuts to local government aid, rural cities realized they had to still take care of their infrastructure, but they weren’t looking as much to outside assistance like ours as they had in the past.” While municipal projects were delayed, they eventually had to be done. “They looked at what they could afford and needed to do. They started doing projects again, but they weren’t the size of the projects they did before.” In response, Bolton & Menk increased marketing efforts to broaden their client base. That included opening a Maplewood office in 2009, adding to their presence in the metro area. In 2010 they opened an office in Baxter and opened offices this year in Rochester and Spencer, Iowa. Aging municipal facilities and increased environmental restrictions mean cities need new or upgraded facilities and more specialized experts from Bolton & Menk and similar firms. “There have been challenges with arsenic and radium and the lower allowed levels. We’ve had to do more of those over the years.” Sewage treatment plants that had been built in flood-prone areas also forced many municipalities along the Minnesota and other rivers to build new plants. Designing a new plant in St. Peter — where floods had often overwhelmed the old plant — was a major achievement for the


Jones Metal Products President and CEO Sarah Richards

firm. The $32 million 10-year project used an advanced technology process first developed in Europe and was one of the first to utilize it in the United States. The project won a Grand Award from the American Council of Engineering Companies. Cities are also focused on more sustainable infrastructure and resource use.

MSU’s long reach “There’s a huge interaction between the university and the community,” Straka said. “We rely on the community and believe we have a large economic impact on the area.” The last formal economic impact study, done in 2007, estimated MSU’s impact at $307 million. A figure that is probably about $400 million now, Straka said. That impact includes direct and indirect economic impacts. MnSCU, which operates the state’s universities and colleges, pegged direct-spending economic impact for the entire MnSCU system at $1.1 billion in the 2007 study. The study concluded there was another $2.4 billion in economic impact created annually through enhanced productivity of the workforce due to training at system colleges. The biggest direct spending at MSU is for ongoing maintenance and repair and new construction. Straka said that while larger construction firms from outside the region may get the bid on projects, they generally use a variety of local subcontractors. The university also has a number of ongoing contracts that add up big. “We have a lot of refuse so that’s a big contract. There’s a lot of technology up here that needs to be serviced. There’s office supplies and many other things,” Straka said. While many contracts are done statewide by MnSCU to save money, and others go to firms outside the Mankato region, many others stay local. “The $2 million or less projects, we’re more likely to see local vendors. With the $20 million or $30 million projects, it’s more likely to be a bigger regional firm.” In the last five years, MSU spent about $50 million on construction and renovations, including the Leonard A. Ford Hall wing on Trafton Science Center, the Preska and Sears student housing complexes and major renovations in the Student Union. Major projects coming up include the imminent demolition of Gage tower dormitories and a planned $28 million clinical science building in 2014. Straka said other things tied to the university also have an impact. The Small Business Development Center at MSU, overseen by the state, served 373 local small business clients in 2011, leading to 22 new business starts and creating or retaining 523 jobs. Events such as Vikings training camp boost the local

MN Valley Business • september 2012 • 25

Cover Story

Bolton & Menk did the engineering work on one of North Mankato’s water towers

“The reuse of treated waste water is being discussed more and more.” Ripke points to the city of Mankato sending its treated water to the Calpine power plant, where it is treated further and used to cool equipment. “You’ll see more of that as treated water is used for irrigation or some other process. It can become an asset that would attract industry to a community.” Ripke, who’s been with the firm since 1973, wouldn’t have imagined some of the specialties now needed at Bolton & Menk to meet new environmental and social needs. “We even have an archeologist on staff because of the cultural surveys that have to be done.” The firm often hires interns from the MSU geology department to help on artifact digs on sites slated for development to check for the presence of Native American or other important artifacts. “One of our clients is the Mdewakanton Sioux at Mystic Lake. They are very concerned about the cultural resources of any area they impact.”


Government spending contributes directly to the Gross Domestic Product, so a change in government spending is reflected one-to-one by a change in GDP; a one dollar decrease in government spending is one dollar fewer contributing to the economy. Taxes, however, contribute to GDP through their impact on personal income. An increase in taxes reduces the amount of income an individual has to spend on goods. Most people don’t spend all of their income — they save some of it. Therefore, a tax increase is reflected less than a one-to-one change in GDP and have a lesser economic impact compared to spending cuts, Minnesota 20/20 argued. MV

Cover Story

Bolton & Menk won a national award for its work on the St. Peter Waste Water Treatment facility. hospitality industry. And having 15,000 students brings lots of spending to the private sector. “We have beds for 3,000 students. So that’s some 12,000 beds that students rent, supporting landlords and rentals,” Straka said. “It’s a partnership. We wouldn’t be here as we are if the city wasn’t so great, and I think we’ve improved the city.” Political debate Spending by local, state or national government invariably becomes a political issue, as the level of spending is largely dependent on how much is collected in taxes. The issue arose last year as the state dealt with a budget deficit: Gov. Mark Dayton argued that increasing taxes on high-income earners would be better for the economy on a whole compared to sweeping budget cuts proposed by Republicans. An article by Minnesota 20/20 argued there is an economic basis for asserting that an increase in taxes will have less negative impact on the economy when compared to a decrease in government spending of the same magnitude.

Landscapers work on installing a sprinkler system outside MSU’s newest residence hall, Preska Hall.

President Davenport says projects like Preska Hall put money into the local economy.


Advancing Business for a Stronger Community

Greater Mankato Growth

Raising Awareness of Greater Mankato Anyone who’s lived in the region for a while knows how much Greater Mankato has grown over the years. In 2008, Mankato-North Mankato was officially designated a Metropolitan Statistical Area (MSA), putting it in the same category as all other metros across the country with populations more than 50,000. Today the Mankato-North Mankato MSA, which includes all of Blue Earth and Nicollet counties, is a vibrant regional center with a population nearing 100,000. And yet, many political and business decision makers from throughout the state and country still see Greater Mankato as a sleepy outpost in the hinterlands of southern Minnesota. And still others are not very aware of our community at all. Greater Mankato Growth (GMG) is taking aggressive steps to increase the awareness of our dynamic marketplace, and to be successful it will take the entire business community working together. Three key areas of focus include: Community Marketing, Business Promotion and Public Affairs. 1) Community Marketing – GMG is working diligently to get the word out about our marketplace, utilizing a variety of mediums, with the most significant being the website greatermankato.com. GMG’s recent enhancements to this site not only make it a better tool for businesses, but also a place to showcase the many assets of our marketplace. All of GMG’s community marketing efforts, from advertising to media relations, drive traffic to this website. The business community can be instrumental in magnifying these efforts by linking to the Greater Mankato website and utilizing the same ads we use to promote Greater Mankato, which are available at greatermankato.com/ads. 2) Business Promotion – Recently the region received two important recognitions. In May, NewGeography.com put us in the top 25% in the nation for Job Growth, and in June, Forbes ranked the Mankato-North Mankato MSA 11th in the nation on their list of Best Small Places for Business and Careers, among metropolitans having populations less than 250,000. These types of rankings put our region on the state and national radar. Businesses here can also help increase the positive reputation of our marketplace when they receive recognitions. Each year GMG and its affiliates recognize outstanding businesses and professionals at the Greater Mankato Business

Awards & Hall of Fame (information at the bottom of page 29. Many businesses also receive national recognition for being leading performers or among the best in their fields. When businesses seek out industry recognitions, they not only elevate their company, but the community as well. “It’s time for us to set aside our Midwestern modesty, and make some noise – if not for the benefit of your own business, then for the marketplace as a whole,” said GMG President & CEO Jonathan Zierdt. “Because while these individual recognitions are significant, when grouped together collectively they send a clear message about the strength of Greater Mankato.” 3) Public Affairs – In July, the GMG Board of Directors approved a plan to invest an additional $390,000 over the next three years to increase the region’s public policy presence in St. Paul and throughout the state. The plan includes hiring a dedicated position responsible for working with current area lawmakers, as well as communicating with legislators and other influential state leaders the attributes and needs of Greater Mankato. And while GMG is increasing its efforts in the public affairs arena, individual business involvement will continue to be critical. “By raising their individual voices, our businesses can provide lawmakers and leaders with the full spectrum of thoughts and ideas coming out of our marketplace,” said Zierdt. Whether through community marketing, business promotion or public affairs, increasing awareness of the unique assets of our region benefits business and the entire marketplace. “Raising the stature of Greater Mankato cannot be done by one organization alone. It will require a communitywide effort dedicated to increasing awareness of our marketplace, so that Greater Mankato can assume its rightful place among other regional centers,” concluded Zierdt.

Chamber of Commerce and Economic Development

507.385.6640 • greatermankato.com


2011 in Pictures growth in Greater Mankato NEW BUSINESSES

Las Fronteras Authentic Mexican Grill & Cantina 503 Belgrade Avenue, North Mankato

Nakato Bar & Grill 253 Belgrade Avenue, North Mankato

OTC Computer Solutions 1850 Adams Street, Suite 534, Mankato

Southern Minnesota Surgical, Inc. 223 Belgrade Avenue, North Mankato

Ziegler Cat 2145 Howard Drive West, North Mankato

Nominations due by September 28 Nominate a deserving business or professional for one of the 14 awards that will be presented at the Greater Mankato Business Awards & Hall of Fame on November 13! For information and nomination forms, visit greatermankato.com/business-awards-hall-fame.* Photos By Sport Pix MN Valley Business • march 2012 • 29

Greater Mankato Growth

Edward Jones – North Mankato 340 Belgrade Avenue, North Mankato


Member Activities Upcoming Member Events

5:00 - 7:00 p.m. September 4 October 2 November 6 December 4

Charter Business CliftonLarsonAllen Mankato Brewery U.S. Bank City Center

Greater Mankato Growth

2012 Business After Hours Sponsored by

July Business After Hours at Mankato MoonDogs

7:30 - 9:00 a.m. September 19 October 17 November 14 December 19

HickoryTech Paulsen Architects, Inc. Pathstone Living Rasmussen College

2012 Business Before Hours Sponsored by

July Business Before Hours at Abdo, Eick & Meyers, LLP

Business After Hours and Business Before Hours gives representatives from GMG member businesses at the Engaged Level or higher an opportunity to get together with one another to exchange ideas and learn about each other’s businesses. For information on these and other member events visit greatermankato.com/events.

30 • september 2012 • MN Valley Business


Cavalier Calls on the Newest Greater Mankato Growth members

Lisa Tscherter’s Kitchen & Catering 930 Madison Avenue, Mankato

Orion Search Group 6600 France Avenue South, Suite 468, Edina orionsearchgroup.com

Rehm Insurance & Financial Services 150 St. Andrews Court, Suite 130, Mankato rehmins.com

Rodeway Inn 111 Lind Court, Mankato rodewayinn.com

Sunstone Creative Group 11 Civic Center Plaza, Suite 111, Mankato sunstonecreative.com

The Gretchen Rehm Agency, Inc. 150 St Andrews Court, Suite 120, Mankato agents.horacemann.com/GretchenRehm

One of the many benefits available to GMG members is the opportunity to take advantage of exclusive marketing opportunities. Check out what’s still available for 2012 and make plans for 2013.

2012 marketing opportunities are available on a first come, first served basis. To take advantage of the many great opportunities to promote your business yet this year, visit greatermankato.com/2012-marketing-opportunities. 2013 marketing opportunities come out in early September and members who sign up online by November 1, 2012 will have the best chance of getting the ones they want. All online sign-ups will be collected through midnight November 1, with a drawing held on November 2 for those marketing opportunities where demand exceeds supply. Confirmations of the opportunities each business has committed to will be emailed in early November, after which time all remaining marketing opportunities will be available on a first come, first served basis. To get in the running for the 2013 marketing opportunities you want by signing up online by November 1, visit greatermankato.com/2013-marketing-opportunities. MN Valley Business • september 2012 • 31

Greater Mankato Growth

Member Marketing Opportunities


Make a Connection!

One of the greatest benefits of being a Greater Mankato Growth member is the connections made with others in the business community, and “Business Connection” makes it possible for members to connect in a whole new way. At its core, it’s a social media community, but created just for GMG members with more flexibility than traditional social media platforms. Think of it as a virtual networking tool just for GMG members – one you can utilize 24 hours a day, 365 days a year. All employees from GMG member businesses can… 3 Post information and updates on your business 3 Start discussions on topics important to business 3 Promote events at your business 3 Add photos and videos of your business 3 Connect directly with other members Media relations professionals form GMG member businesses can also… Post business news releases and articles about your business via the “News Post” feature, which once approved appear on Business Connection, as well as GMG’s Website, Facebook page and Twitter feed.

Greater Mankato Growth

The best way to learn about all the benefits of Business Connection is to try it – so sign up and login today at GMGBusinessConnection.com.

Look for...

Jonathan Zierdt’s column

Greater Mankato growth This Month published on the 15th of each month in The Free Press 32 • september 2012 • MN Valley Business

Professional Development Opportunities Below are just some of the professional development opportunities coming to Greater Mankato this Fall. For information on these, as well as all the other events and employee education resources in our region, visit greater mankato.com/professional-developmentemployee-education. Disney’s Approach to Quality Service September 24 8 a.m. - 4:30 p.m. Minnesota State University-Mankato and Greater Mankato Growth are teaming up to bring Disney to Greater Mankato at MSU’s Centennial Student Union Ballroom. This daylong customer service training is for businesses who want to uncover some of the secrets to Disney’s success. Learn how to deliver world-class guest service by attending to details to create a consistent, successful environment for both employees and customers. This unique customer service training is recommended for any business manager or employee who wants to enhance their customer satisfaction and service approach. Fall Lunch-n-Learn Series October 4, November 1, December 6 11:30 a.m. – 1:00 p.m. This series of short training sessions for business professionals is presented by South Central College Center for Business & Industry and hosted by Greater Mankato Growth at 1961 Premier Drive. Held over the lunch hour, Lunch-nLearn will feature various timely topics that will enhance business success and employee growth. Women’s Leadership Conference November 7 – 8 The YWCA Women’s Leadership Conference at the Verizon Wireless Center is for every woman and for those whose success depends upon women. Leaders, emerging leaders, employers and entrepreneurs are all encouraged to attend. Featured speakers include Sonia Choquette, New York Times best-selling author, trainer, storyteller; Dorothy Bridges, Sr. VP of the Minneapolis Federal Reserve Bank; Rebecca Driscoll, Principal, Keystone Search; Margaret Anderson Kelliher, MN High Tech Association; and Patti Kelly, Financial Associate with Thrivent Financial of Saint Peter.


Mankato Marathon – Bold Changes for 2012 By Christine Nessler Marketing & Leisure Sales Director runners will be able to gather in one place to share a meal and share in the pre-race experience together. The pasta feed will run from 4:00 to 7:00 p.m. New Dates - The weekend’s events have switched to a Saturday-Sunday format. The KidsK, 5K and the expo will be held on Saturday afternoon and evening. The 10K, Half Marathon and Marathon will all be held on Sunday morning. New Courses for KidsK and 5K - The KidsK and the 5K have been moved from Sibley Park to Minnesota State University, Mankato with the intent of keeping the start lines close to the expo for the ease of participants and families. “Having the expo, pasta feed and all the start lines at MSU really makes the weekend’s activities more convenient for the runners,” said Waltman. The third annual Mankato Marathon takes place on October 20 to 21. This accredited race is a qualifying event for the prestigious Boston Marathon and is projected to have a third year attendance of 5,000 runners. For more information on the 2012 Mankato Marathon and a detailed scheduled of events visit mankatomarathon.com or call 507.385.6660.

Greater Mankato Growth

The Mankato Marathon has taken some bold new steps for 2012 including a new look, new venue for the expo, new approach for the pasta feed, new dates and new courses for the KidsK and 5K. New Look - Red Door Creative, a creative design agency in Mankato, created the marathon’s new look. The tagline “Bold Race, Exceptional Place” gives the marathon a more edgy feel that helps it stand out from other Midwest races. We know our race is Bold and Mankato is Exceptional, with our race showing growth the past two years. We want to keep this momentum going so we continue to grow. New Venue for Expo - The 2012 Scheels and New Balance Sport and Health Expo will be held at Minnesota State University, Mankato in the Myers Field House from Noon to 8:00 p.m. on Saturday, October 20. The expo offers runners access to exhibitors and vendors ranging from sporting goods to specialty items. There are also sports organizations and service providers who can offer varying services to athletes. Bring the kids – the MSU- Rock Climbing Wall will be open along with other fun kid’s activities. “MSU has been so great to work with,” said Maureen Waltman, Mankato Marathon Coordinator. “We are really excited to bring this event on campus, so we can showcase what an amazing asset MSU is for the community.” The expo also includes the Orthopaedic & Fracture Clinic Speaker Series from 2:30 to 8:00 pm, featuring bold headliner speaker Joan Benoit Samuelson at 7:00 p.m. With the whole world watching, Joan Benoit Samuelson was the first ever gold medalist for the Women’s Olympic Marathon in 1984. She still serves as an inspiration for runners and athletes of all ages around the world and will continue to inspire with her talk “There is no Finish Line.” New Approach for the Pasta Feed To add to the excitement of the Pasta Feed, the Mankato Marathon is hosting the event right on campus. Thousands of

The Greater Mankato Convention & Visitors Bureau (CVB) is an affiliate of Greater Mankato Growth (GMG), operated as an LLC under GMC.The CVB is dedicated to the important work of attracting and servicing visitors to Greater Mankato.

MN Valley Business • september 2012 • 33


Mobile Internet is an equalizer

Regional Outlook

F

or a number of years now I have touted in this column the importance of the Internet and the digital tools it provides both Minnesota businesses and residents. These tools not only allow businesses to increase their productivity and market share, but they allow 24/7/365 access to an increasing variety of public services; provides new access points to higher education; telemedicine and greater personal and community connectivity. On a large scale the Internet has allowed businesses and communities to have a global digital visibility; and on a small scale it can provide new tools for a local church to maintain a connection with its congregation all week long and not just on Sundays. It is truly a remarkable technology. However, the reality is that the Internet is only a useful tool to those who connect with it; so it is not surprising that researchers and government agencies have continually monitored Internet adoption and diffusion across the country since the beginning of the 21st century. Today, according to a variety of reliable sources including the U.S. Bureau of the Census and the PEW Internet and American Life Project, we can say with a degree of confidence that approximately 80 percent of all American adults use the Internet, with the overwhelming percentage connecting through a broadband connection. In fact, according to a recent study by Connect Minnesota, more than 95 percent of Minnesota households have access to a broadband connection and more than 70 percent of Minnesotans purchase a broadband connection. At the same time studies have consistently found a number of subgroups lagging substantially behind the Internet adoption curve. These subgroups include residents who are 65 and older; residents whose annual household income is less than $30,000; adults living with disabilities; and residents of color. However, the Internet landscape has been changing substantially in the past few years and one has to wonder if these changes have been truly reflected in many of these statistics? For example, today we know that almost 90 percent of the adult population owns a cell phone and that

■ ”The increasing adoption of mobile Internet appears to be an equalizer that needs to be better understood.” By Jack M. Geller, Ph.D an increasing percentage of those cell phones are Internet-enabled. Yet for years researchers (including myself ) conducted surveys with the opening questions being, “Do you have a working computer in your home?” and if so, “Is the computer connected to the Internet?” For up until now the assumption has always been that the primary appliance that people use to connect to the Internet was the computer. However we simply can’t make that assumption anymore. In fact since the creation of the iPhone, the popular phrase “There’s an app for that” increasingly reflects the adoption of mobile devices worldwide and the change in the way people connect to the Internet. However, for many government agencies this change has yet to fully sink in, as some still do not consider mobile broadband a true broadband connection. For some the issue is the connection speed, as they see mobile Internet connections as generally slower than most terrestrial-based connections such as Cable and DSL (which is true). But for me the issue is the functionality of the connection; and if I can smoothly stream a Netflix video to my phone, how can you tell me that I don’t have a broadband connection? Further, as the major mobile carriers (Verizon, AT&T and Sprint) begin to deploy wireless 4G technology with connection speeds of 12Mbps and faster, it will soon become self-evident that mobile broadband simply can’t be ignored. But most important to this discussion is the impact of mobile broadband on

34 • september 2012 • MN Valley Business

some of those sub-groups that have traditionally lagged when measuring broadband adoption. For example, a recent study from the PEW Internet and American Life Project reports that White, Black and Hispanic Americans all go online wirelessly at the same percentage. And when looking specifically at Smartphone ownership, Black and Hispanic Americans actually report slightly higher rates of ownership than White Americans. In fact, very similar results were recently reported by Connect Minnesota where they found no difference in the adoption of mobile Internet among White and Black Minnesotans and that Hispanic Minnesotans substantially surpassed the statewide adoption rate (48 percent vs. 39 percent). Similar findings were found among low-income Minnesota families with children. The point is that the increasing adoption of mobile Internet appears to be an equalizer that needs to be better understood. The recognition that the adoption of mobile Internet devices seem to be more widespread across a broader set of demographic and socioeconomic groups than terrestrial-based Internet is a welcome finding as the Internet has the potential to “lift all boats.” Accordingly, the sooner we recognize this reality the better. MV Geller is professor & head of the Arts, Humanities & Social Sciences at the University of Minnesota Crookston. He also serves as director of the federally funded EDA University Center at UMC. He can be reached at gelle045@umn.edu


Community Group

300 St. Andrews Drive, Suite 110 Mankato, MN • 507-388-1111

www.weichertcommunitygroup.com

*Limited time offer. A three-year Service Order Agreement is required. Two months free promotional offer available on services outlined above (excluding equipment purchase, rental or lease). The promotion applies only to on-net services. Two months free offer has a total services value of $5,000 ($2,500 per month). Promotional credits are applied on the first and seventh month of the service contract. Installation credit has a value of up to $500 per on-net location and is based on standard installation rates. Does not include taxes, surcharges or regulatory fees. Not redeemable for cash. Promotional offer may not be available in all markets. Other restrictions may apply. ADV006


Up and Coming Anders Björling and his late wife, Janet, started Swedish Kontour in their home 50 years ago.

Staying power Swedish Kontur started in home 50 years ago By Jean Lundquist Photos By John Cross

36 • september 2012 • MN Valley Business


S

Swedish Kontur Imports was started almost immediately upon their return to St. Peter, Björling recalls, in the lower level in their home. While Björling when to work at Gustavus, Janet ran the store. “She was the soul behind the store,” he says, saying the store and their three daughters were her focus. The items they offered initially mirror what the store offers now, Björling says. “We sold high-quality crystal, textiles, jewelry, dinnerware and giftware, just like now.” The store has expanded into nonperishable food items since then, carrying Scandinavian coffee, cookies and chocolate. “A good customer is coming in to make abelskivers, a Danish pastry, right here in the store (this fall).” High-quality Orrefors crystal has been a staple in the store since the beginning. “Starting Oct. 2 this year, the Orrefors people are bringing art glass for a special showing at the store. By coincidence, it will be while the King (of Sweden) is in St. Peter to visit the college,” Björling says. The store had regular hours while it was in their basement, “but sometimes if people saw we were home, they’d stop in to shop,” Björling says. It wasn’t long before the store had outgrown their house and was moved into their garage. That early success seemed to prove the naysayers were wrong. “They said St. Peter was too small for a store like this,” Björling says. But success continued, and soon they decided to move to a storefront location on Minnesota Avenue. The first storefront was across the street from the existing

High quality crystal has always been a fixture at the store.

MN Valley Business • september 2012 • 37

Up and Coming

wedish Kontur Imports has been a fixture in St. Peter since 1962. That means the store has been open for 50 years with Anders Björling, a founder and owner, still at the helm. Björling came to the United States from Sweden as a young man. He traveled on a student visa and came to study business administration at Gustavus Adolphus College in St. Peter. It was there where he met his wife, Janet, who hailed from Iowa. It was a condition of his visa that after he graduated he return to Sweden for at least two years. “It was tough for her language wise,” Björling says of his wife Janet’s transition to Sweden, but they had agreed before leaving that they wanted to return to the United States to live. It was by chance, Bjöling says, that the couple landed back in St. Peter when he was offered a job at Gustavus Adolphus College four years later. When they knew they were coming back to St. Peter, the Bjölings started to talk about a need they had noticed in the college city — there was no place to find quality Swedish or Scandinavian items. Björling says he and his now late wife went shopping and found several items to ship to St. Peter, in addition to the items they packed and brought with them. Inspired by a design magazine in Sweden called Kontur, they named their store Swedish Kontur Imports. “Kontur means shape, or form, in Swedish,” Björling says.


Up and Coming

Swedish Kontour carries an array of Scandinavian items form coffee to dinnerware. location at 310 South Minnesota Ave. Swedish Kontur Imports moved into the current location when Bjorling bought the building that had housed the Faust Drug Store from Bob and Lila Faust. “Bob went on to work as a pharmacist at another store, but Lila sort of came with the building. She was a great benefit. She was with us for many years,” Björling says. Björling credits the success of Swedish Kontur Imports to great customer service given by great employees. “It’s wonderful customer service. We have many repeat customers and have become a destination store. We draw from Iowa, Mankato, and the Twin Cities.” A perk that has been offered to customers since the beginning is free gift wrapping. “It hasn’t changed. People see that white box with a blue ribbon, and they know they are about to open a quality gift,” Björling says. Another specialty item available only at Swedish Kontur Imports is photography by Björling. There is a gallery of the photos available online, but they are not sold via the Internet. Björling has had a long interest in photography that goes back to his childhood in Stockholm. He has a Nikon F that hangs on his wall now, as he has moved to mostly digital photography. His favorite subjects are nature and wildlife. Björling has traveled the world in search of special photographs. In September he will travel to Brazil, to the world’s largest wetland. “I’m hoping to catch the jaguar,” Björling says, but notes the excursion will likely provide a bounty of birds, other wildlife and scenic vistas to photograph.

38 • september 2012 • MN Valley Business

Björling says he also used to travel to Sweden on buying trips, “but now all those companies send people to us.” He still travels to Scandinavia annually. “We used to have strictly Swedish goods,” Björling says,” but now we carry items from all of Scandinavia. They are all compatible.” Keeping up with trends has contributed to the success and longevity of the store, Björling believes. In the 1970s, Swedish Kontur Imports had a heyday selling clogs, for example. “One Saturday, we sold 52 pairs of clogs,” Björling recalls. “Now, we’re one of the few places you can still find clogs.” Another trend in which Swedish Kontur Imports led was cross-country skiing. “Twenty years ago, we sold the skis, mountings, bindings and did the fittings.” Because the sport was relatively new in the area, Björling taught a cross country skiing class at Gustavus. Then came two winters with no snow, coupled with the fact that the equipment was widely available by that time, and the decision was made to discontinue the sales. As for being a small, independent store in business for 50 years, Björling says: “It blows my mind. I can’t imagine it’s been that long.” MV


If you’re looking for a ďŹ nancial partner who’s tuned into your business, count us in. We take the time to know you – and your needs – and ďŹ nd the best ways to help you get where you want to go. There’s a Bremer banker near you with the financial resources to help, and the power to say “yes.â€? Talk to a Bremer business banker today.

COUNT US IN.

.BOLBUPt #"/, 

#SFNFSDPN .FNCFS'%*$Ăœ#SFNFS'JOBODJBM$PSQPSBUJPO"MMSJHIUTSFTFSWFE


Profile

Wendy Schmidt started Creekside Boutique in Kasota until moving to Mankato’s Trail Creek Commercial Center on Highway 22.

Fashion niche Creekside Boutique started as small shop in Kasota

By Marie Wood Photos By John Cross omen want to wear the current fashions, but by age 25, most women don’t want to see themselves coming and going. That’s the boutique clientele, and Creekside Boutique offers them distinctive clothing and complete outfits right down to the shoes on their feet. Since 2006, Wendy Schmidt, owner of Creekside Boutique on Mankato’s hilltop, has operated her store on three fashion principles: quality, fit and uniqueness. Schmidt and her team of six fashion consultants can outfit women from size 2 to 18. A limited number of pieces are available in each size. “I love your styles. They’re so cute and unique” is a common refrain from Creekside customers, said Schmidt of Mankato. With River Hills Mall close by, Schmidt said she isn’t hurt by the competition because women come to Creekside looking for items and brands they can’t find in the retail chains and department stores.

W

40 • september 2012 • MN Valley Business

Karla VanEman, broker/owner of American Way Realty in Mankato, is a loyal Creekside customer. Her favorite brands are Nik + Zoe and Not Your Daughter’s Jeans (NYDJ). Schmidt calls VanEman when the new lines arrive. “It’s not the same clothes as you see in department stores. Wendy knows her clientele and when she goes to market, she looks for things that women around here would wear,” VanEman said. Schmidt, an early childhood and special education teacher for Mankato School District, comes into Creekside Boutique after her school day and on weekends. During the summer, she works daily at the boutique. “I’ve always had the desire to have my own business. I’ve always loved fashion and this seemed like a good fit,” Schmidt said. So Schmidt started small. From 2003 to 2006, she operated Creekside Boutique in leased space at Beyond the Pines in Kasota. Her shop, the size of a double garage, was open


Profile

Creekside Boutique focuses on brands not readily available elsewhere locally. Thursday to Sunday, March to December. That’s how she learned to run a boutique. In 2006, she bought into Trail Creek Commercial Center on Highway 22 because she thought it was smart to own her own space. Plus she could design it how she chose, keep the Creekside name, and maintain her St. Peter customers. “It just felt right,” Schmidt said. Current For fall, Creekside fashion consultants predict tunic tops paired with skinny jeans or leggings for cool days. The draped look is back and the Comfy USA Line with its modern knits is a hot seller. And colored jeans could be your pop piece if you go for a deep red. “Being contemporary is about your state of mind, not age,” said a Creekside fashion consultant. Creekside’s top sellers are Tribal, Not Your Daughter’s Jeans (NYDJ) and Nomadic Trader clothing lines. From sophisticated to casual, all brands offer high quality, style and a good fit for women. Accessories from scarves to jewelry complete the look. Shoe lines include Clarks, Born and Ryker, but they also carry FLY London with its wedged rubber platforms. FLY

Wendy Schmidt

Owner, Creekside Boutique London can’t be found Early childhood teacher elsewhere in town. Zonta Fashion Show participant “Fly London Supports community fundraisers are cute and edgy, but Masters in education, MSU again very comfortable,” Originally from Worthington Schmidt said. She heads to the Northstar Fashion market in the Twin Cities at least five times a year to buy for the boutique. There’s about a six-month lag time between ordering and receiving the seasonal lines. Jeanine Sargent, Creekside fashion consultant and former owner of Chlos Connection, which she operated in the Madison East Center for 10 years, enjoys working in the shop and joins Schmidt on the buying trips. “It’s wonderful. She gives us the freedom to do the things we do well. We always have fun when we go to market,” Sargent said. At market, Schmidt and Sargent make appointments with vendors from Chicago, St. Louis and across the Midwest. They view the news lines and choose the merchandise. They make a conscious effort to find clothing made in the USA and Fair Trade products. “You pick out what you think your customer would want,” Schmidt said. “We’re always looking for new brand names because you have to keep it fresh.” MV

MN Valley Business • september 2012 • 41


All in the Family Jim & Jan Downs with sons Joel and Jake (right) operate Pagliai’s Pizza in Mankato and the NaKato Bar & Grill in North Mankato.

Expanding the family business Pagliai’s owners resurrect NaKato Bar & Grill By Tim Krohn Photos By Pat Christman

J

im & Jan Downs never intended to own restaurants. Other than Jan’s stint as an A&W carhop, neither of the St. James natives had any food service experience. But in 2001 a real estate agent they knew suggested they consider buying the longtime Pagliai’s Pizza in Mankato. Jim had started Quest Marketing the year before — a business they still own and operate — but the pizza business appealed to them. Their son Jake was attending St. Cloud State University — and delivering pizzas — at the time and transferred to Minnesota State University to

42 • september 2012 • MN Valley Business

help out at Pagliai’s. Son Joel was in high school and also worked at the shop. The family had no plans for expanding in the food-service business, but this spring found themselves the owners of Bobby Joe’s Pub in North Mankato — a bar and grill they renovated and recently reopened as the NaKato Bar & Grill. They knew the owner of the Bobby Joe’s building and were aware he was thinking of selling at some point. “Three years ago we talked about it, but he wasn’t ready and we forgot about it,” Jim said. Then, the same real estate agent who did the


MN Valley Business: How did you decide who did what at Pagliai’s and now at the NaKato? Jan: It took years to figure out what niche everyone would fill. Jim: I handle the financial end and the advertising and Jan pays the vendors and other things. The boys focus mostly on the evenings and nights, and we mostly focus on the days. Jan: We’re passing more of it on to them. They’re owners in it, too. Jake: My job is running around to both places, wherever I’m needed. Joel: I work in the kitchens. There’s not much rest anywhere.

Jan: At the NaKato, we open at 7 a.m. for breakfast and stay open until 2 a.m. There’s a lot more inventory. It’s a lot different.” There’s a lot of maintenance. We have two old buildings. It’s not if something’s going to break, it’s when something’s going to break. MVB: You reopened the NaKato in just 2 1/2 weeks. That’s a pretty tight deadline. Jan: We had five good contractors in here. They really worked hard. Jake: They were literally sweeping the last dust out the back door when people started walking in the front door. MVB: You have a lot of staff, a lot of part-time help at both places. Is it tough finding and keeping good help. Jan: There are a lot of college students. We have had really good luck with good help. Jake: That’s the key to make it all work is to have a great staff. Jim: Tony Dell is the manager at the NaKato and does a great job and Cheryl (Rueda) has been managing at Pagliai’s forever. We’re very lucky. MV

MVB: What’s different from running the pizza shop and the NaKato. Jim: Pizza’s simpler, easier to make.

The Downs did an extensive renovation of the former Bobby Joe’s Pub before reopening as the NaKato.

All in the Family

Pagliai’s deal called recently and said the owner wanted to sell and he hoped they’d be the buyers. “We felt a lot more comfortable doing it, having the experience now,” Jim said. They gave the bar the NaKato name, one it had previously carried. “We love the history and keeping that name. It’s been a bar since 1945,” Jim said. Now parents and sons go between the two businesses, finding their places in the operations.


Business Memos/Company News

Brenda Beltz

Beltz, Monnens promoted at Pioneer Bank Brenda J. Beltz has been named chief technology officer and Kate R. Monnens has been named vice president, operations at Pioneer Bank. Beltz becomes the bank’s first chief technology officer. She began at Pioneer Bank in 2001. She has led the bank’s IT department for the past 11 years. Monnens has a 16 year career with Pioneer Bank. She has served as an assistant vicepresident since January of 2011.

Turk named a Super Lawyer Jim Turk, of Blethen, Gage and Krause, has been named as a Minnesota Super Lawyer in alternative dispute resolution. Super Lawyers selects attorneys using a multistage process in which peer nominations and evaluations are combined with independent research. Turk is often called upon by other attorneys to serve as a mediator or arbitrator to resolve personal injury, construction, commercial Jim Turk and estate disputes. ■■■

■■■ Kate Monnens

Eide Bailly makes promotions Eide Bailly has promoted Chris Austin to senior manager; and Brian Haley and Eric Plath to managers. Austin has more than eight years of public accounting experience providing tax services to individual and corporate clients. He specializes in the financial institution and manufacturing industries. Chris Austin Haley serves in the audit department and has five years of experience providing services to a variety of industries and standard non-public companies. Plath has more than five years public accounting experience providing tax Brian Haley Eric Plath services to individual and corporate clients. He specializes in individual and corporate agricultural tax issues. ■■■ Wiesen rejoins Paulsen Architects Former intern Jeremy Wiesen has joined Paulsen Architects as a project architect. Wiesen began his career as an intern in 2008 after he graduated with his Master of Architecture from North Dakota State University. For the past two years, he worked with a large firm in Minneapolis focusing on projects throughout the United States and Jeremy Wiesen Canada. As a project architect, Wiesen is responsible for initial planning and schematic design phases throughout design development and construction document preparation.

44 • september 2012 • MN Valley Business

Gay joins Carlson-Tillisch Carlson-Tillisch announced the addition of Tami Gay as director of operations at Carlson-Tillisch Eye Clinic. She has more than 20 years experience in the eyecare industry as a certified optician and manager. ■■■ Prunty gains professional certification Greg Prunty, of Paulsen Architects, recently passed the Principles and Practice of Engineering Examination administered by the National Council of Examiners for Engineering and Surveying earning him his professional engineering license. Prunty is a civil and structural engineer who joined Paulsen Architects in 2008. His responsibilities include calculations of engineering fundamentals, computer engineering analysis, drawing preparations, shop drawing review and project quality control. ■■■ Reitman named Super Lawyer Mankato attorney Phlip R. Reitman has been recognized as a Minnesota Super Lawyer. He was noted for his work in workers’ compensation law representing injured employees. He has practiced law for 35 years. Fewer than 5 percent of Minnesota attorneys are named to the list. ■■■ HickoryTech names Lopez VP HickoryTech Corp. hired Dimas Lopez as vice president of product marketing who will oversee product development, product management and marketing functions. Lopez has 20 years of experience within the telecommunications industry and most recently served as the director of product management at AT&T.


Thill gains certification Anna Thill, Greater Mankato Convention & Visitors Bureau president, received her certification as a Certified Destination Management Executive through Destination Marketing Association International. Thill is the first CVB President in the CVB’s 30 year history to earn this certification. CDME is recognized by the industry as its highest educational achievement. ■■■ Bright Pixel Design opens Designer and digital illustrator Matt J. Borowy has opened Bright Pixel Design in Saint Peter. With 16 years of experience and a variety of software tools, Bright Pixel Design can develop a vision for a building or home into a realistic image or set of plans. Services include, architectural visualization, 3D modeling, residential design and CAD drafting. www.brightpixeldesign.com ■■■

To submit your company or employee news. e-mail to tkrohn@mankatofreepress.com Put “Business memo” in the subject line. Call or e-mail Associate Editor Tim Krohn at tkrohn@mankatofreepress.com or 344-6383 for questions.


Public Partnership Throughout our 40 year history, I&S Group has a strong history of teaming with public entities to create public spaces, critical infrastructure, and lasting facilities. Particularly in lean economic times, innovative and cost effective solutions are critical for the efficient operation of our communities. Our creative team of professionals is ready to serve you. I&S Group —a proud partner with our communities. Learn more at www.is-grp.com.

WWW.IS-GRP.COM "3$)*5&$54t&/(*/&&34t1-"//&34t-"/%4637&:034t4$*&/5*454

GROUP One firm - start to finish ™


MN Valley Business