Oleson & Hobbie
Architects make their mark • Local
economy gains, but manufacturing slows
Also in this Issue: • Schmidt Siding & Window • JBeal Real Estate Group
New Space. New Opportunity. Bringing Ideas To Life.
How did the process get started? We received a phone call from John Makela, the general manager of Creation Technologies, asking if our firm would be interested in developing a new facility for his company.
St. Peter is home to a global company, Creation Technologies, who provides electronics manufacturing services. Their new 50,000 square foot building on the north end of town is a bright, welcoming, open facility that is not only pleasant for the employees, but for the company’s existing and potential clients that visit as well. Why did Creation Technologies choose Robert W. Carlstrom Co. as their developer/contractor? Creation Technologies approached the City of St. Peter with a need for a new state-of-the-art electronics manufacturing services facility. As a result of a longstanding successful relationship with the City of St. Peter, we were recommended as developer / contractor who could fulfill their specific needs.
Shortly after, a meeting was set up with Russ Willie-the St Peter Community and Development Director, John Makela, his team, and RWC with the goal being to define Creation Technologies’ needs and how the parties attending could help them realize their needs. John provided us with the CT story and their philosophy concerning the business that they were in and what they wanted to achieve. We were also given a tour of the existing facility to further understand their needs and processes. Our role at this time was to assemble a team consisting of owners, designers, bankers, attorneys, etc. that would ultimately develop this project according to Creation Technologies expectations. This is a position that we are quite comfortable in, as we have successfully developed similar projects in the Greater Mankato area. When you say develop a project, what do you mean? Development, in this case, entailed land acquisition, financing of the project, design and construction, legal work, and the assembling of an ownership team that would provide Creation Technologies with a new facility for an affordable lease rate.
Creation Technologies needed a new facility for their St. Peter location as their existing building was too small and outdated. We were asked to provide a turnkey package that met the following criteria: · They wanted to lease the building and not own it. · The building had to be 50,000 square feet in size. · Corporate specifications for the facility had to be met. · The lease rate had to meet their budget. · The facility would have to have “curb appeal” due to the fact that many potential clients visit the manufacturing facility. Based on John’s criteria, we had a direction in which we could begin preliminary pricing for Creation Technologies. “Throughout the process RWC navigated the many municipal, legal, and financial issues that are necessary to develop a project such as this.” said John Makela, General Manager of Creation Technologies. The Pricing must have worked out. It did. The pricing had to answer the following questions. First, could RWC construct a building for a cost that would make the lease rates work for CT’s business plan? Second, would there be an acceptable rate of return for the investment team? When we determined that the pricing requirements were met, we were able to sign an agreement to
continue on with the project. An architect was selected based on their understanding of Creation Technologies’ vision. With the architect on board, we had a team that spent countless hours planning the building design and specifications with the architect providing the design work, the client providing the technical expertise and RWC providing pricing and constructability reviews. Creation Technologies had very specific requirements for the integration of their design, engineering and manufacturing processes. Who is the building owner? Part of our role was to create a Pro
“RWC successfully met all of our needs, and most importantly provided Creation Technologies with a showcase facility that was completed on time and had a lease rate that worked with our business plan,” John Makela said. What role did the City of St. Peter play? The City of St. Peter and CT negotiated a selling price for CT’s existing building and agreed to lease the building back to CT for a
RWC successfully met all of our needs, and most importantly provided Creation Technologies with a showcase facility that was completed on time and had a lease rate that worked with our business plan. Forma for this project. With the results projecting a favorable return on investment, we were able to assemble an ownership team consisting of local businesspeople that were interested in an investment opportunity.
period of one year to allow for the design and construction of their new facility. Russ Wille also spearheaded the taxincrement financing (TIF) process, as the TIF would be crucial to making the project a reality.
Once the design process was started and the ownership team had been established, RWC was committed to making its cost projections work. The numbers had to work for the client, the ownership team, and RWC. The bottom line is that it worked out to the benefit of all parties.
Once those agreements were in place, the clock was ticking to have the project designed, bid, constructed, and delivered by the time the lease ended on CT’s existing building. This was achieved successfully.
Relationships beyond project.
the
So where are we today? With regard to Creation Technologies and the City of St. Peter, we have developed a great relationship. We keep in contact with John and if there are any questions or concerns, they are addressed. The quality and service that we offer is reflected in our ability to create and retain business relationships with our clients for a lifetime. We are proud of our accomplishments and understand that this is essential to the successful completion of our clients projects. When you are looking to begin a project, we hope you will contact us and let us begin developing a relationship with you.
For more information please contact RW Carlstrom 507-625-2872 www.rwcarlstrom.com Paid Advertisement
To learn more, call us at 800-729-7575
Corporate Graphics Your Printing Solutions Company 1750 Northway Drive North Mankato, MN 56003 www.corpgraph.com
rporate Graphics
F E A T U R E S January 2013 • Volume 5, Issue 4
■
14
Look back/look ahead
■
28
Oleson + Hobbie Architecture
Architects Eric Oleson and Dennis Hobbie are making their mark on southern Minnesota: Jake’s Stadium Pizza locations, Hosanna Lutheran Church expansion, MSU Carkoski Commons Dining Hall renovation, and others.
Schmidt Siding & Window
Dale Brenke started Schmidt Siding & Window 42 years ago as an accountant, buying part of the business in 1981. Today, he, Jim Hockert and Steve Beetch operate one of the most successful siding and window companies in the Midwest.
The year past saw continued steady recovery in most all of the local business sectors, with retail and vehicle sales strong and banks seeing positive signs. But manufacturing saw a worrisome slowdown late in the year.
■
24
■
30
JBeal Real Estate Group
In 2012, JBeal Real Estate Group celebrated 10 years in business with new digs in the Graif Building. Jason Beal owns the business with his father, Jim Beal, the longtime sales manager. Shannon Beal, Jason’s wife, joined the business as a Realtor a year ago.
MN Valley Business • jANUARY 2013 • 3
D E P A R T M E N T S ■
From the Editor................................. 6 Joe Spear: Another year above average
■
Job trends......................................... 8 Regional, state unemployment information
■
Construction, real estate trends....... 9 Building permits, housing starts, home prices, interest rates
■
22
■ Business Commentary.................... Randy Farrow: Meeting the challenges of health care reform ■
Jack M. Geller: A new conversation on taxes needed ■
Greater Mankato Growth................38 Greater Mankato Day a the Capitol
Retail trends....................................10
■
Agriculture Outlook.........................12
■
Kent Thiesse: A look at farm balance sheets ■
Business updates............................18
3M expects fewer big acquisitions this year, U.S. bank in creases reserves, Johnson Outdoors net income slips, .. and more
Greater Mankato Growth Member Activities . ........................40 Groundbreakings, new businesses, relocations and expansions
Agribusiness trends........................13 Area commodity prices
■
Business informer...........................36 Vehicle, retail, construction trends in the area
Auto sales, retail sales and hotel business ■
Regional Outlook.............................34
■
Greater Mankato Growth CVB .......43 Sporting events are big business
Business memos/ Company news................................44 Coughlan Cos. honored, Paulsen is president-elect of
■
architect group, HickoryTech get contract extension, and more
On the Cover: Architects Eric Oleson (right) and Dennis Hobbie have built notable projects around southern Minnesota. Photo by John Cross
4 • jANUARY 2013 • MN Valley Business
0DNH KHU WKH
:LIH 3DUW\ RI WKH
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
BUSINESS BANKING
www.minnstarbank.com Member FDIC
January 2013 • VOLUME 5, ISSUE 4 PUBLISHER James P. Santori EXECUTIVE Joe Spear EDITOR ASSOCIATE Tim Krohn EDITOR CONTRIBUTING Jack M. Geller WRITERS Tim Krohn Pete Steiner Randy Farrow 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 Karla Marshall sales ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Denise Zernechel DIRECTOR
For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6336, or e-mail kmarshall@mankatofreepress.com. MN Valley Business is published 12 times a year at 418 South 2nd Street Mankato, MN 56001.
Going into another year above average
T
he Small Business Administration says 50 percent of small businesses fail in the first five
years. Minnesota Valley Business aims to beat those odds, without a doubt. We will complete our fifth year of business with our August issue. This month’s cover story is one of the reasons we believe we’ve made a successful and profitable magazine. In a word: Information. This month’s feature chronicles once again the business landscape for the Mankato region with some precision. We rely on two-dozen plus local business indicators to draw a picture of the region. In developing a regional business magazine, we knew we had to offer a unique product, something nobody else was doing. We also knew we needed to be able to deliver that product in a credible way. We saw a need for local business information and we knew, from experience, we had the people to deliver it. So, we move forward in January 2013 issue with an analysis of the region’s economy once again. We not only offer insight through our indicators with the hard data, but we also rely on the expertise of business leaders in the Mankato area to tell us what the statistics mean. From that mixing of fact and analysis, we come to the conclusion that things are pretty good. Business in many sectors is moving ahead. Having watched the Mankato economy for two decades, I’m struck most by the growth in retail and the commercial real estate the seems to be following that. Paul Wilke, manager of River Hills Mall, reports several retail sectors up at the mall, some in double digits. Overall, same store mall sales are up 4 percent, somewhat above the national average. Pioneer Bank President David Krause sees that kind of consumer demand show itself in the number of new strip malls and restaurants putting up buildings, and presumably, financing them with local banks. It’s always a good sign when you get retail managers and bankers to be agreeing on economic prospects. Of course, it always helps to know your business. Brandon Scheel, fifth generation family member now running Fargo-based Mankato’s Scheels All Sports, notes much of their business relies on people’s passions: hunting,
6 • jANUARY 2013 • MN Valley Business
By Joe Spear fishing, golf. They may cut back on those during a recession, but they’ll rarely go away. Says Scheel: “What we carry, people aren’t willing to give it up. If they’re golfers, or hunters or bikers, they don’t give up their sport because things are down in the economy.” A spotlight feature on long-time Mankato business Schmidt Siding and Window also shows knowledge of a business’s strengths and exceeding expectations on customer service can go a long way. “Exceed expectations, Create customers for Life!” is a slogan posted around the Schmidt offices and shops. “We want to create customers for life,” says Schmidt President Dale Brenke. Mankato not only has dozens of businesses with acumen like Scheels and Schmidts, but the general economic environment appears to be holding its own. Keys indicators in housing and real estate are on the rise. Only manufacturing seems a bit soft. Experts says it may relate more to the world economy (manufactured goods are often exported) and uncertainty created by Washington debates about the fiscal cliff. (By the time you read this, we hopefully will have crossed the bridge over the cliff ). So we move into our fifth year with confidence that we can continue to supply the information, analysis and inspiration business needs to succeed in Mankato.# MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@mankatofreepress.com
MN Valley Business • jANUARY 2013 • 7
Employment/Unemployment Initial unemployment claims
Minnesota initial unemployment claims
Nine-county Mankato region
Major industry
November ’11 ’12
Construction Manufacturing Retail Services Total*
624 183 57 309 1,773
Percent change ’11-’12
593 256 68 292 1,209
-5% +39.9% -19.3% -5.5% +3.1%
2011
2012
130,000
Minnesota non-farm jobs
2,000
110,000
1,000
M
A
M
-19.3% +17% -11% -3.8% +0.6%
2011
2012
J
J
A
Local number of unemployed
S
O
N
2011
D
2012
Nine-county Mankato region
6,460 6,521
10,000
2,809.5 2,824.0
3,000
120,000
F
10,587 4,310 1,750 8,445 25,092
(in thousands)
128,687 127,831
J
10,499 3,685 1,967 8,781 24,932
Percent change ’11-’12
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
November ’11 ’12
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
0
J
F
M
A
M
J
J
A
S
O
N
D
Minnesota number of unemployed 2011
2012
158,823 155,188
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
October
2011
Unemployment rate
4.4%
4.4%
56,694
56,903
2,618
2,627
2012
Source: Minnesota Department of Employment and Economic Development
8 • jANUARY 2013 • MN Valley Business
J
F
M
County/area
(includes all of Blue Earth and Nicollet Counties)
Number of unemployed
150,000
A
Unemployment rates
Mankato/North Mankato Metropolitan statistical area
Number of non-farm jobs
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 Oct. 2011 Oct. 2012 4.4% 4.2% 5.4% 6.2% 5.3% 4.4% 4.9% 5.1% 5.8% 5.4% 5.4% 8.5%
4.5% 4.5% 5.3% 5.8% 5.2% 4.2% 4.6% 5.2% 6.2% 5.2% 5.2% 7.5% J. Malmanger
Construction/Real Estate Residential building permits Mankato 2011
$10,000
2012
(in thousands) $2,256.2 $5,715.5
Residential building permits North Mankato (in thousands)
2011
$3,000
$2,667.9 $2,811.1
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
J
F
M
A
M
J
J
A
S
O
N
D
Source: City of North Mankato
Existing home sales: Mankato region 2011
2012
250
Information based on Multiple Listing Service and may not reflect all sales
89 151
200 150
Housing starts: Mankato/North Mankato 2011
Includes single family homes attached and detached, and townhomes and condos
2012
40
11 13
30 20
100
10
50 0
$0
J
F
M
A
M
J
J
A
S
O
N
D
Commercial building permits Mankato $9,000
J
F
M
A
M
J
J
A
S
O
N
D
Source: Cities of Mankato/North Mankato
Source: Realtors Association of Southern Minnesota
2011
0
2012
(in thousands) $878.6 $4,401.4
Commercial building permits North Mankato (in thousands) $12,000
2011
$353.2 $212.9
2012
$9,000
$6,000
$6,000 $3,000 $0
$3,000 J
F
M
A
M
J
J
A
S
O
N
D
2011
County
2012 4.0%
5.0% 4.5% 4.0%
3.3%
3.5% J
F
M
Source: Freddie Mac
F
Foreclosures:
Interest rates: 30-year fixed-rate mortgage
3.0%
J
M
A
M
J
J
A
S
O
N
D
Source: City of North Mankato
Source: City of Mankato
5.5%
$0
A
M
J
J
A
S
O
N
D
Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan
2012 third quarter 2011 2012 45 24 6 28 11 9 12 10 6
24 11 14 23 12 13 13 11 6
Percent change -47% -54% +133% -18% +9% +44% +8% +10% 0%
Source: Minnesota Foreclosure Partners Council J. Malmanger
MN Valley Business • jANUARY 2013 • 9
Retail/Consumer Spending Vehicle sales
Sales tax collections
Mankato — Number of vehicles sold 897 2012 820
2011 1,200
$500
1,000
$300
600 400
$200
200
$100
0
$342.1 $391.4
$400
800
Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.
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 $42,736 $44,908
2011
$75,000
$47,973 $62,041
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
$3.19
$3.00 $2.00
$3.19
$1.00 $0
J
F
M
A
M
J
J
A
S
O
N
D
Gas prices-Minnesota 2012
2011
$4.00
$3.22
$3.00 $2.00
$3.17
$1.00 $0
Stocks of local interest
Nov. 19
Dec. 11
Percent change
Archer Daniels
$25.55
$27.24
+6.5%
Ameriprise
$59.74
$61.58
+3.1%
Best Buy
$13.75
$12.03
-12.5%
Crown Cork & Seal
$36.90
$37.39
+1.3%
Fastenal
$41.47
$42.94
+3.5%
General Growth
$18.95
$20.41
+7.7%
General Mills
$40.46
$41.33
+2.2%
HickoryTech
$9.39
$9.49
+1.1%
Hutchinson Technology
$1.60
$1.77
+10.6%
Itron
$40.80
$44.53
+9.1%
Johnson Outdoors
$21.45
$20.91
-2.5%
3M
$89.57
$93.58
+4.5%
Target
$63.01
$61.81
-1.9%
U.S. Bancorp
$32.08
$32.26
+0.6%
Wells Financial
$19.75
$18.75
-5.1%
$0.68
$0.83
+22.1%
$26.14
$27.21
+4.1%
Winland J
F
M
Source: GasBuddy.com
A
M
J
J
A
S
O
N
D
J. Malmanger
10 • jANUARY 2013 • MN Valley Business
Xcel
J. Malmanger
EXCELLENCE IT’S IN THE DETAILS
INTERIORS |
PLANNING
507.388.9811 |
WWW.PAULSENARCHITECTS.COM
PAULSEN ARCHITECTS
As the region’s most recognized and award-winning architectural firm, Paulsen Architects has been transforming the face of Southern Minnesota with excellence in design, innovation and customer service. We are committed to every building and environment’s success down to the smallest of details. The result is an extraordinary experience that exceeds expectations and truly bold designs that inspire.
BOLDNESS
Excellence in its earliest greek meaning was tied to the superior fulfillment of purpose or function. Each environment designed by Paulsen Architects is a combination of the superior fulfillment of aesthetics, usability and environmental responsibility—all focused on positioning our clients for success.
ARCHITECTURE | ENGINEERING |
Income slightly lower, but net worth up
N
et farm income is expected to decline by 3.3 percent in 2012 according to the Department of Agriculture’s Economic Research Service. Total net farm income is estimated at $114 billion, which is a decrease of $3.9 billion from the 2011 record level. However, the 2012 projection is still well above recent income levels of $80.4 billion in 2010, $63 billion in 2009, or $85.1 billion in 2008. The 2012 forecast is about $40 billion above the 10-year average. The USDA is also projecting 2012 total net cash income of $132.8 billion, a decline of 1.4 percent from 2011. The 2012 net cash income would be $49 billion above the 10-year average. The reductions in the 2012 net cash income were associated with reduced crop and livestock production levels that resulted from the drought in many areas of the U.S. The net cash income is based solely on the earnings generated from crop and livestock sales that occurred during 2012, minus the cash expenses during the year while the net farm income is adjusted for values of farm inventories and other farm balance sheet adjustments. Net cash income measures the solvency of a farm business, or the ability to pay bills and make payments on debt, while net farm income measures the increase in wealth from crop and livestock production. Some other highlights from the ERS 2012 U.S. Farm Income Forecast include : • In the past decade total gross farm receipts have increased from about $250 billion in 2001 to just over $431 billion in 2012. • In the past decade total farm expenses have increased from about $175 billion in 2001 to an estimated $334 billion in 2012. • Total crop receipts topped $200 billion for the first time ever in 2011, at $208 billion, and are expected to increase by another 3.8 percent in 2012 to over $216 billion. • Total livestock receipts in 2012 are expected to be $169 billion, which is slightly above the 2011 level of $166 billion. • Total corn used for ethanol production for the 2012 crop year is expected to decline by 10 percent,
reflecting tight corn supplies after the drought; however, 2012 average corn prices are expected to be about $1 per bushel higher than 2011. • Total production of U.S. soybeans will decline in 2012 following the drought, but prices paid to farmers is expected to be about $2 per bushel higher than a year earlier. • Cash receipts for cattle were up for 2012 compared to 2011, due to a large increase in cattle prices, but projected cash receipts for hogs and milk were slightly lower in 2012. Farm expenses rising Total farm cash expenses are expected reach a new record level of $298.5 billion in 2012, an increase of 8.1 percent compared to 2011. The estimated 2012 total cash expenses are 35.5 percent above the 10-year average. The rather large increase in total farm expenses has been driven by significant increases in feed, fertilizer, fuel, and seed expenses, along with moderate increases in repairs and miscellaneous expenses, as well as a fairly large increase in land cash rental rates. Total crop production expenses are expected to increase by 8.7 percent from 2011 to 2012, which is significantly less than expense increase from 2010 to 2011. This is primarily due to a fertilizer price increase of only 2.5 percent in 2012, compared to a year earlier, after an increase of over 30 percent from 2010 to 2011. Total fertilizer expenses for 2012 increased by 5.4 percent, while total seed expenses increased 11.9 percent with the increases being due to a combination of higher prices and increased crop acreage. Total livestock production expenses are expected to increase significantly from 2011 to 2012. Feed expenses are now at an estimated $64.4 billion per year with an expected increase of $9.7 billion or 17.8 percent in 2012. Farmers’ net worth up 6.6 percent The total value of farm assets, both real estate and non-real estate, are expected to be $2.54 trillion at the end of 2012, an increase of 6.7 percent. Total farm business debt is expected to increase from $254.1 billion in 2011 to $265.5 billion by the end of 2012, which is an increase of 4.5 percent. The total farm equity or net worth of
12 • jANUARY 2013 • MN Valley Business
By Kent Thiesse all farms for 2012 is estimated at $2.27 trillion, an increase of 6.6 percent. The increase has been primarily due to increased farm real estate values and reductions in farm debt levels. Total farm estate values have risen from $1.70 trillion in 2008 to an estimated $2.19 trillion in 2012, which is a 29 percent increase in five years. The total farm “debt-to-asset ratio” is calculated at the very low level of about 10.5 percent, which means there is only $10.50 of farm debt for every $100 of farm assets. 2013 looks good The farm income situation looks to remain quite solid for 2013, but it may be difficult to match the high levels of net farm income of the past two years. Preliminary 2013 crop budgets are projecting some moderate increases in farm expenses for seed, fertilizer, and chemicals, as well as continued increases in land rental costs. Anticipated 2013 crop prices have remained fairly strong in recent months but are below 2012 crop price levels, which could lead to lower farm income expectations for 2013. Another concern could be crop production problems in the coming year if widespread drought continues into the growing season. Profit margins for livestock production will likely continue to be tight early in 2013, due to high feed costs; however, livestock profits should improve later in the year with continued strong livestock prices. 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) $7.40
$16.00
$6.00
$12.00
$4.00
$8.00
$5.57
$2.00 $0
J
F
M
A
M
J
J
A
S
O
N
D
$0
M
A
M
J
J
A
S
O
N
D
$20.00
$80.00
$18.00
$70.00
$16.00
$81.31 M
A
M
J
J
A
S
O
N
$22.50
$22.00
$90.00
F
Minimum prices, class I milk Dollars per hundredweight
2012
2011
$24.00
$85.65
$100.00
Source: USDA
F
Milk prices
185 pound carcass, negotiated price, weighted average
2012
2011
J
J
Source: USDA
Iowa-Minnesota hog prices $110.00
$10.58
$4.00
Source: USDA
$60.00
2012
2011
$20.00
(dollars per bushel) $14.21
D
$14.00
$20.25
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
MN Valley Business • jANUARY 2013 • 13
Scheels All Sports, an anchor at River Hills Mall in Mankato, had a very strong 2012.
Happy new year? Unsteady recovery By Tim Krohn Photos by John Cross and Pat Christman 14 • January 2013 • MN Valley Business
going to happen, it hurts.”
Bob Kill
L
ast year ended and this year starts with many business owners seeing steady recovery, but uncertainty lingers for some. A check with business leaders in various endeavors in the region shows a generally good year in 2012 with retail sales strong, housing prices and sales climbing steadily, vehicle sales up and agribusiness very strong. But in the higher-paying manufacturing sector, a worrisome slowdown began settling in the last half of the year and domestic and international uncertainties are keeping manufacturers nervous. The “fiscal cliff ” worries in December, the unknowns about the cost and regulatory impacts of health-care reform, debt crisis in Europe and a slowing Asian economy all co-mingle to make manufacturers and their customers sit tight. “All these things are outside the control of our clients,” said Bob Kill, president of Enterprise Minnesota, a trade organization of manufacturers. Larry Haberman, president of Mankato-based V-Tek, said that while the elections may have been decided, it didn’t settle a core problem for businesses. “The same party fighting is going on. It’s kind of paralyzed business investments.” He said the effects of a shaky world economy is made worse by the inability of Congress to make decisions. “Once decisions are made, you move ahead, whether you like the decisions or not. But when you don’t know what’s Larry Haberman, president of Mankato-based V-Tek.
Manufacturing worries V-Tek, with just more than 60 employees, makes packaging and equipment tied to the circuit board industry. “Our entire year has been slower than last year,” Haberman said of 2012. “We had a very, very nice year (in 2011) and this year has been a bit of a disappointment.” Part of V-Tek’s business was hurt because they do subcontracting work for companies with government contracts. “I think that because of the government domestic situation, that work virtually came to a standstill, so that was huge,” he said. “And with the problems with the Euro, Greece, Spain — all those things affected our European business. So business was down substantially. Our domestic business was up significantly but not enough to offset it.” Haberman said the start of this year looks more promising, but he’ll wait to see. “We’ve seen a nice uptick for 2013, with some new products and services. We have some nice orders pending. But as we’ve learned, we don’t take them to the bank until they’re accompanied by a down-payment check.” In recent months, Dotson Iron Castings in Mankato and Le Sueur Inc. foundry in Le Sueur told MN Valley Business that they, too, were experiencing a softening in business as their customers took a more cautious approach toward the end of last year. An indicator of the slowdown is the number of first-time unemployment claims filed by laid-off manufacturing workers toward the end of last year. The number of claims, compared to a year earlier, jumped by double-digit amounts — up 20 to 45 percent in the nine-county area in the closing months of 2012. Kill, of the manufacturing association, said their polling of manufacturers around the state last year wasn’t upbeat. “The enthusiasm was off the chart in 2011 but tempered a bit (in 2012). The maybe undeserved optimism of a year-and-a-half ago is clearly tempered.” Still, Kill said a number of manufacturers are having trouble keeping up with orders. And the agriculture and food-
father is the CEO of the company and his brother president.# Paul Wilke, manager of River Hills Mall, said retailers throughout the mall had a strong year. “We are up 4.1 percent over last year’s number through end of October. That’s comparable sales for store open at least 12 months.” He said the all-important Christmas shopping season was also looking stronger than a year ago. Going through the various categories of sales at the mall, Wilke ticked off increases in all categories:
Big tire bikes for snow are popular at Scheels processing sectors of manufacturing continue to be strong. “The common denominator is that the companies that spent the downturn really investing in their business and thinking more externally — on marketing, new customers — they are reaping the benefits.” He said that despite relatively high unemployment rates, many manufacturers are continuing to struggle to find qualified candidates for jobs. Kill said manufacturers are being more conservative as they wait to see the effects of health-care reform — particularly smaller employers. “We have close to 8,000 manufacturers in the state and 5,000 are under 25 employees.” Kill predicts that in the coming six months manufacturing will hold fairly steady — “not shrinking, but no growth.” Consumers not conservative If manufacturers are wary and conservative, shoppers are not. “It’s been a good year,” said Brandon Scheel, manager of Scheels All Sports at River Hills Mall. “Clothing is doing real well, guns and ammunition and fishing are doing very well.” Scheel said selling things tied to people’s hobbies and passions helps. “What we carry, people aren’t willing to give it up. If they’re golfers, or hunters or bikers, they don’t give up their sport because things are down in the economy. They might cut back some, but they do what they like to do.” Scheels has been in its anchor location since 2006. The privately held, Fargo-based chain has 25 stores with its largest in Reno, Nevada. Brandon Scheel is among the fifth generation of Scheels in the company that was founded in 1902. His
Fishing department sales were up last year at Scheels.
16 • jANUARY 2013 • MN Valley Business
• Women’s apparel up 2.5 percent • Teen apparel up 4 percent • Cards, gifts, stationary up 3 percent • Personal care, hair salons up 2 percent • Foods up almost 8 percent (“Our food court is rolling along with Massad’s leading the charge; they’ve had a great year as well as Taco John’s.”) • Home furnishing up 28 percent • Accessories up 11 percent • Jewelry up 12 percent Wilke doesn’t get sales details from anchor stores Target or JC Penney, but said Sears, Herberger’s and Scheels reported higher sales than 2011. And, Olive Garden, located on mall property, was up for the year. The mall also continues to be more than 99 percent leased. “It’s great considering the last four years have been kind of dismal for the economy.”With the mall full, River Hills is hoping to expand outside the mall this year with a strip mall near the front entrance to the mall. Tentatively called River Hills Plaza, the strip mall would cover 20,000 square feet on 2.3 acres. “It’s been vacant for 22 years, so we’re just pushing to do something with it now that we’re so full in the mall. We have a few tenants we’re trying to finalize leases on so we can start construction in the spring.” And Wilke is bullish on other retailers coming to Mankato. “There are still a lot of retailers who are not in our market. It’s good to see them come anywhere in town; it helps us all and keeps (shoppers) from going to Sioux Falls or somewhere else.” Banks see increased activity, regulation Pioneer Bank President David Krause says he liked what he saw last year. “I think 2012 was a good example of how people have gotten used to a new normal. In banking it’s certainly evident there’s a recovery going on, maybe not as big and fast as people would like, but it’s getting better every year.” “2012 was better than 2011 and if 2013 is better than 2012, we’re heading in the right direction.” He points to a number of commercial and multi-family development projects going on in Mankato and North Mankato. “We’re seeing activity with business loans. Just look at how many restaurants have opened in the last 30 days — you see there is some strength in consumer spending.” But, he said, the recent slowdown in manufacturing is a concern. “We’d like to see more activity in the manufacturing sector. Those businesses have such large ripple effects on the economy.” One area that continues to keep banks busy is in mortgage refinancing. “The rates have stayed down and that’s good for everybody,” Krause said. But he said the continued high rate of
David Krause, president of Pioneer Bank refinancing likely also shows that many people are seeking some relief because they are stretched financially. “Certainly, anyone who has a higher rate on their mortgage should be taking advantage of these low rates.” Pioneer Bank is a $275 million financial institution with 70 employees and offices in Mankato, North Mankato, St. James, Mapleton, Elmore and Delavan. The bank is working on an expansion of its North Mankato branch on Commerce Drive that will double its size. It is to be complete in February. Krause said that while commercial and even housing activity in the Mankato area is rebounding, the smaller rural communities the bank serves are facing challenges. “The ag economy has been very good. But retail in those communities is more of a challenge than ever. It’s not just the economy but changes in lifestyles and consumers. That trend will continue no matter the economy.” While business is recovering for banks, they are facing a host of new regulations that Krause said increases costs for banks and customers. “Unfortunately, Washington in particular and the federal regulators are making it increasingly difficult for community banks to function in the manner they’re suppose to function.” The post Wall Street financial meltdown spawned many of the regulations. “The reaction has been to apply more regulation on all banks, even though most of the problems we’ve faced have been from problems by a few large banks and Wall Street. “What’s designed to protect the average bank customer ends up costing that consumer more. That’s too bad. That’s who we should be trying to help, not add burden to,” Krause said. Housing sales, prices up The housing market isn’t red hot but continues to show encouraging signs, said Dick Norland of Midwest Realty in Mankato. “We’ve had some improvement on prices being more solidified and a slight increase in prices.” Norland said the improvement in sales varies from community to community and even within cities. Some areas of town have had real nice improvements in sales. When you look at a larger region, it’s harder to pin down. There are some pockets that have benefited more than others.” Through November of last year, home sales were up 8 percent from a year earlier with 1,554 homes sold in the region. The median price of homes sold rose 9 percent — to $136,000 — from late 2011 to late 2012, but Realtors say higher-priced homes are still moving slowly. MV
MN Valley Business • jANUARY 2013 • 17
Updates: Business news, local relevance
■ ■
Best Buy under a cloud
Best Buy Co. seems to be in serious trouble. The online electronics retailer is already up for sale. Its woes have become worse with a research group saying that sales of consumer electronics had fallen on Black Friday, a day seen as kicking off the shopping season in the United States. There was also a report in the Wall Street Journal that a private equity firm which had been backing a potential bid for the company might be dropping it. Any dip in valuation at this point creates difficulties for the company in being acquired. ■
General Mills a world’s best workplace
General Mills was named to the World’s Best Multinational Workplaces by the Great Place to Work Institute. The ranking results from the world’s largest annual study of workplace excellence and identifies the top 25 best multinational companies in terms of workplace culture. General Mills debuted this year at No. 17 on the second annual list. “As our international presence has grown significantly during the past several years, so too has our focus on globally developing the strong culture, leadership depth and quality workplace experience that we’ve built in the U.S. over decades,” said Mike Davis, senior vice president of Global Human Resources for General Mills. ■
Johnson net income down
Johnson Outdoors said its operating profit grew by double digit percentages on higher revenue for fiscal 2012, but a tax rate adjustment ate into its net earnings. The Racine-based outdoor recreation company said in a statement that pretax income was 63 percent above the prior year, “however a significantly higher effective tax rate in the current year resulted in an unfavorable comparison to prior year adjusted net earnings.” Net sales increased 1.2 percent to $412.3 million in fiscal 2012 due to record sales in marine electronics offset declines in other units. Net income was $10.1 million compared to net income of $32.6 million the prior year. Net income in the previous year benefited significantly from a reversal of the company’s U.S. tax asset valuation allowance. ■
U.S. Bank ups reserves
U.S. Bancorp, the fifth-largest commercial bank in the United States, said it would add to its mortgage repurchase reserve in the fourth quarter, as government-backed mortgage financier Freddie Mac steps up buy-back requests. Freddie Mac and its larger peer, Fannie Mae , have been pressing U.S. banks to buy back soured home loans made between 2005 and 2008. The loans had been bundled into mortgage-backed securities and bought by outside investors, who allege they do not meet guarantees made by the banks when they were sold. Freddie Mac informed lenders it would begin making repurchase demands on mortgages written in 2004 as well. The addition to the reserve will hurt profit by one or two cents per share in the quarter. ■
A better camp stove
Perry Dowst and Dwight Aspinwall had enough of lugging around the extra weight of one-quart cans of gas needed to fuel
18 • jANUARY 2013 • MN Valley Business
their finicky camp stove while backpacking. So Dowst and Aspinwall set about creating a better one. The result was Jetboil, which in less than a decade grew from a small startup company to a leader in the world of outdoor gear. Jetboil was so successful, industry mogul Johnson Outdoors Inc. agreed to purchase the New Hampshire-based company last month. Johnson Outdoors paid $16 million to acquire Jetboil — a tidy sum for two cousins who set out with the modest goal of finding a better way to fire up whatever food they had tucked away in their packs. Dowst and Aspinwall developed a one unit device — a oneliter pot integrated with a wind-protected burner that uses butane cartridges, a fraction of the size and weight of the previous fuel. What really set the product apart though was the FluxRing, a patented component Dowst described as an inverse car radiator. Instead of flushing out the excess heat, the FluxRing gathers and concentrates it on the cooking vessel. That means whatever is in the pot heats up faster and cuts the amount of fuel used in half, Dowst said. ■
Carmakers have record year
Carmakers closed in on a record year in sales. Never before have annual sales surpassed 80 million vehicles around the world, but they were expected to be on track to reach that milepost by the end of 2012. Strong auto sales in the U.S. and Asia this year have helped to offset Europe’s soft economy. Through the end of November, for example, Japanese government incentives had ignited auto sales there by more than 30 percent, according to Minnesota Public Radio. Toyota has rebounded so dramatically, in fact, that it is considered likely to recapture the crown from General Motors as the world’s biggest automaker. At the same time, however, GM and other carmakers have enjoyed a third straight year of solid gains. “Quite honestly, the year has exceeded everybody’s expectations,” says George Magliano, chief economist for the research firm IHS Automotive. Industry-watchers point to easier availability of credit and pent up demand from customers who put off car purchases as they weathered the Great Recession. ■
3M: Fewer big acquisitions
3M Co., the manufacturer of products including Ace bandages and dental braces, expects to make fewer and larger acquisitions in 2013 as the pipeline for targets is now stronger than in the past years. Chief Executive Officer Inge Thulin, who took over in February, reiterated today that the company plans spend $1 billion to $2 billion on purchases next year. 3M also gave a 2013 earnings-per-share forecast range with a midpoint that missed the average analysts’ estimate by 1.5 cents. 3M, facing a recession in Europe and slowing growth in Asia, also reaffirmed its 2012 earnings forecast, lowered in October because of what it called the “current economic realities.” The company spent $900 million on its three most recent deals, including about $670 million net of cash on Ceradyne Inc., a maker of ceramics used in energy, aerospace and defense industries. “You should see as we move ahead slightly bigger than you have seen in the past — and fewer — and they will be more strategically linked to our prioritization,” Thulin said of possible deals on a conference call with analysts. MV
Read us online!
keep them healthy and happy. 507-625-4606 121 E. Main St. Ste 311 Mankato, MN 56001
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.
■
Special Focus: Planning a successful
Business meetings, conventions spur local economy By Marie Wood Greater Mankato has become a viable community for conventions and business meetings. The Greater Mankato Convention & Visitors Bureau helps bring businesses in from outside the area and helps local businesses bring their convention and meetings home to Mankato. “We can save you time, which is a hot commodity these days,” Larissa Mrozek said Larissa Mrozek, senior sales director for the Greater Mankato Convention & Visitors Bureau. Conventions are usually two-day events while business meetings tend to be one-day events. For business meetings, Mrozek helps planners find the facility that’s a good fit. For conventions, Mrozek helps coordinate hotels, special events, meeting space, and trade shows. “The CVB comes into play when you need multiple facilities,” said Mrozek. “Combining meeting space lets us host larger conventions. It puts us on par with Duluth, Rochester and St. Cloud.” The City Center Convention Campus offers accommodations,
entertainment, nightlife and skyways that connect the Verizon Wireless Center, City Center Hotel, Hilton Garden Inn and parking ramps. Hotels in North Mankato and the hilltop area are also convenient options. Still Mankato needs additional convention space. Convention planners keep costs down by bringing in vendors to sell to Anna Thill attendees. That makes trade shows a common component, but the Verizon Wireless Center is often booked with expos, hockey and concerts, Mrozek said. “We turn away opportunities because we don’t have the space. We’re not pursuing some events,” said Anna Thill, president of the Greater Mankato Convention & Visitors Bureau. “The great thing about conventions is they come in the middle of the week so bars and restaurants get business during slower times. The benefits domino the more conventions we have in town.” MV
Convention and meeting sites
Visit www.meetinmankato.com for the complete facility directory. Verizon Wireless Center 507-389-3000 www.verizonwirelesscentermn.com Conventions, meetings, banquets and entertainment. Ideal for groups of any size with a 6,500 seat arena, Banquet/Exhibit Hall, conference rooms and the historic Reception Hall. Hilton Garden Inn 507-344-1111 www.mankatodowntown.stayhgi.com Located in the City Center and Entertainment District, the building is connected via skyway to the Verizon Wireless Center. Five meeting rooms, with a maximum capacity of 50 people, 118 guest rooms, full-service restaurant, covered parking. Mankato City Center Hotel 507-345-1234, www.mankatomnhotel.com Connected via skyway to the Verizon Wireless Center. 4,400
20 • jANUARY 2013 • MN Valley Business
square feet of private meeting space, 151 rooms, full-service restaurant, lounge, indoor swimming pool, and covered parking. AmericInn Hotel & Conference Center 507-345-8011, www.AmericInnMankato.com Within walking distance to Minnesota State University, University Square Mall, and 2.2 miles from Verizon Wireless Center. State-of-the-art audio visual equipment, 101 guest rooms. Country Inn & Suites by Carlson 507-388-3646 www.countryinns.com/mankatomn Located near WOW! Zone and River Hills Mall. Conference center can accommodate up to 500 people or convert to multiple breakout rooms. Audio visual equipment, 101 guest rooms, restaurant attached to the hotel.
convention and business meeting
Convention tips & trends By Marie Wood Larissa Mrozek has helped organizations plan walks and bike rides, casino nights and mystery dinners for their conventions. Local activities include Mount Kato, WOW! Zone, river adventures, winery tours, golf courses and more. “More than ever, people are looking for different ways for attendees to interact and network,” said Mrozek, of the Greater Mankato CVB. Volunteerism is a growing trend in conventions. At one Mankato convention, attendees assembled bikes for kids, which helped build teamwork and made them feel good about volunteering. “It’s that unique experience that they will not forget,” said Anna Thill, president of the CVB. The booking window for conventions has become shorter, which means the Greater Mankato CVB is still booking for 2013. Mrozek has coordinated conventions with only a sixmonth lead time. Here are Mrozek’s tips for planning a successful convention. • Contact the Greater Mankato Convention & Visitors Bureau. The CVB should be your first call when you are planning to host a meeting. The CVB can help identify and gather bids from facilities that best meet your needs. It also has a grant program. Staff can offer registration assistance, plan tours and special events, and show you ways to build attendance. Best of all — the services are free. • Consider hosting your event during the slower times of the year. Facilities may be willing to give discounts on space and hotel rooms during their slower season. For Mankato, April and November are good months to consider. Courtyard by Marriott Hotel & Event Center 507-995-5959, www.CourtyardMankato.com Situated in the River Hills Mall Complex. Flexible meeting space accommodates groups of 400-plus, including a private outdoor courtyard for 350-plus people, on-site restaurant and bar, free wireless Internet.
• Instead of a traditional banquet, try heavy appetizers and hors d’oeuvres. This not only can cut costs, but will encourage attendees to network and move around the room instead of sit at one table during the event. • Whenever possible, have your speakers run through their presentation. Let them test their PowerPoint presentations and the microphones they intend to utilize ahead of time to make sure they have no technical difficulties during the presentation. • Encourage attendees to bring a light jacket or sweater to the meeting. Temperature is the No. 1 complaint meeting planners will hear from attendees. • Try to green up your meeting when possible. Utilize water glasses or bottles that can be reused instead of plastic bottles. Put presentations on jump drives or your website instead of printing them for people that may not use them. If the majority of your participants have smart phones, create an app with the schedule, sponsors and maps of the facility. • To learn more, contact the Greater Mankato Conventions & Visitors Bureau at www.meetinmankato.com. MV
equipment and Internet. Interior walkways link the union with campus buildings. Up to 1,000 rooms available in campus residence halls during summer
Best Western Plus Hotel and Restaurant 507-625-9333, www.bwmankato.com Full-service hotel with 145 guest rooms in North Mankato. Convention space for up to 500, 10,000-square-foot poolside area, on-site restaurant and lounge.
South Central College North Mankato Campus Conference Center 507-389-7370, www.southcentral.edu State-of-the-art John A. Votca Conference Center can accommodate up to 400 guests for meetings, conventions and teleconferences. Catered meals available.
Bethany Lutheran College 507-344-7314, www.blc.edu Meeting rooms equipped with audio visual equipment accommodate groups of 10 to 300. Complete dining service available in many rooms. Campus residence halls house up to 215 people during summer months.
Rasmussen College 507-625-6556, www.rasmussen.edu Meeting space equipped with audio-visual equipment accommodates up to 75 people. Availability varies based on student class schedules.
Centennial Student Union, Minnesota State University 507-389-2223, www.mnsu.edu From an intimate round table for 10 to a three-sectioned ballroom for 900, all meeting rooms offer audio visual
Kato Entertainment Center 507-625-7553, www.katoballroom.com Historic 1950s ballroom hosts groups of all sizes for banquets, meetings, dances and events. Staff caters food for up to 1,200. Banquet center offers breakout rooms for up to 225 people.
MN Valley Business • jANUARY 2013 • 21
Changes in health care drive changes Mankato Clinic
W
ith the passage of the Affordable Care Act or Obama Care as it’s more commonly known, the US health care system received a wake up call that health care reform is here to stay. While some elements of the bill are controversial such as the insurance mandate and the costs associated with expanding coverage, there are also elements that make sense like the incentives to develop more effective care models that improve the quality, access and affordability of heath care. At the Mankato Clinic we’ve been anticipating these changes for the past several years and have been working to prepare our organization to meet the new challenges. During our strategic planning process back in the spring of 2009, we accepted the fact that the incentives were changing and the new system would reward organizations that could demonstrate success in improving overall health and achieving better clinical outcomes while also increasing efficiency and lowering costs — a pretty tall order. While a number of physician-owned groups have responded to these challenges by merging into larger systems, our group is still committed to the idea that independence allows us to make decisions locally with the best interests of our patients and the community in mind. However, we also recognized that to stay successful we needed to make some fundamental changes and really focus our organization on improving value for our patients. As we embarked on this journey we realized early on that we didn’t have adequate systems in place to measure performance in strategically important areas such as clinical quality, patient satisfaction and staff engagement. The decision was made to invest in better measurement systems that now include an ongoing patient satisfaction survey, an annual staff and provider engagement survey and expanded clinical quality reporting down to the provider level in addition to other performance metrics. There’s an old saying “you manage what you measure” and we’ve found that to be very true. We’ve seen steady improvement over time as we’ve focused on a few key areas that for us include Care, Service, People, Financial Health, Growth and Community. We created a monthly scorecard around these key areas to heighten staff awareness and create momentum. As an example of success, we were very proud this past year when our Lake Crystal and Mapleton Clinics were recognized in Consumer Report Magazine as having some of the highest quality of care scores in the entire state. Having performance data available was a key first step but using that data to drive change is an even greater challenge. Sharing information in a transparent manner has not been part of the culture in health care as in other industries and that’s starting to change. Starting with our board and other physician leaders in the organization we began sharing provider specific performance data and gradually have rolled that out to the entire clinic. This would be akin to an annual performance review for each of our clinical providers where they can see their individual results for quality of care outcomes, patient satisfaction and other measures of overall effectiveness. Although we met some resistance initially, we have found over time that transparency has been accepted and has definitely helped raise overall performance.
22 • jANUARY 2013 • MN Valley Business
With the increasing pressures to i m p r o v e quality, service and efficiency we needed to give our staff some new skills and tools to tackle these challenges and help them work smarter. In May 2010, we established a relationship with South Central College to provide education and training around the LEAN process improvement methodology. With the help of a grant through the MN Job Skills Partnership we have been able to provide basic training to all staff and more advanced training to select groups within the clinic. We have a number of active project teams working on a variety of process improvement opportunities in both clinical and non-clinical areas. An example of a recent project was developing a new process for handling patient phone calls in a more streamlined and service oriented manner. Using the LEAN methodology the team mapped out the current process and identified opportunities to eliminate unnecessary steps and get our patients needs met with fewer transfers and less time on-hold. Our goal is to engender continuous process improvement as a regular part of our day to day work at the clinic. One of the opportunities we are currently focused on is redesigning how care is delivered to achieve better clinical outcomes and increased patient satisfaction while also being good stewards of our healthcare resources. This involves forging a new type of relationship with patients; one of partnering with them to improve their health and helping them to reach their health goals. Using a team based approach and harnessing the data now available after four years on our electronic medical record, providers and staff will work to proactively reach out to patients, ensuring timely follow up and preventative care, providing health education and using evidence based guidelines to achieve desired outcomes. Our new patient portal system is growing in terms of enrollment and provides a new means of communicating with our patients and providing them with access to their health information. The goal is to improve the health and quality of life for our patients which over time will also achieve savings for the system overall. Although we still have a lot of hard work ahead of us to meet the challenges of health care reform, we feel good about the foundation we’ve been building along the way. The Mankato Clinic has served this area for nearly 100 years now, and we want to be here helping people for another hundred. MV
By Randy Farrow
Randy Farrow is CEO of the Mankato Clinic.
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
MN Valley Business • jANUARY 2013 • 23
From left: Dale Brenke, Steve Beetch and Jim Hockert.
Schmidt Siding and Window:
Seamless service, windows of opportunity
By Pete Steiner Photos by Pat Christman
T
rue story: A man came in on a chilly November day, telling his wife that cleaning the rain gutters was his least favorite chore. His hands were wet and cold from clearing the soggy leaves and other debris, and he’s just thankful he made it through another year without injuring himself up on that ladder. Next summer for his birthday, his wife gave him
24 • jANUARY 2013 • MN Valley Business
Gutter Helmet. The man behind the desk smiles. It’s not the first time Dale Brenke has heard this story. The president of Schmidt Siding and Window says, “Of all the products we sell, Gutter Helmet is the one people come in and say, “I’m so happy we got that!”” One man came in on crutches, telling Brenke
he’d intended to install the unique water management system before he went up to clean out leaves. But he hadn’t gotten around to it, and now here he was with a broken leg. No more risky ladders for him. He wanted to place an order right away. Brenke sings the praises of his company as he leans forward in his chair in the cozy office that’s filled with fishing and golf memorabilia. “You asked if I had 45 minutes to talk? Heck, I could talk about my company for 45 hours! I’m a salesman, you know.” He actually started with the company 42 years ago as an accountant, fresh out of the Army and commercial college. Then in 1981, he and Gary Schmidt bought the company from Gary’s father, Robert J. Schmidt. Gary Schmidt sold his share to Jim Hockert and Steve Beetch in 2003, although Schmidt’s still active as a salesman. Making it seamless In 1971, after more than two decades in business, Robert Schmidt had moved his company to its present location, the former Heil’s Grocery Store at Fifth Street and Madison Avenue in Mankato. The original brick structure has been added onto several times. Soon after Brenke and Gary Schmidt took over the business in 1981, they bought their first seamless gutter machine. Five years later they acquired the ABC Seamless Siding franchise, and Gutter Helmet was added in 1989. Today 30 percent of their business is siding, about 25 percent is windows, roofing (including 50-year-warranty steel roofs) accounts for 20 percent, while their most popular
product, Gutter Helmet, represents about 15 percent of business. Keeping them for life In one warehouse off of Fifth Street (there’s a second warehouse on Third Avenue), 900-pound rolls of steel siding coil sit on pallets. It takes about two of those to side an average house. Dale proudly points out to a visitor the slogan posted on every door: “Exceed expectations, Create customers for Life!” “We want to create customers for life,” Brenke stresses. “We want them back!” Several hundred customers typically flock to their annual open house, donating a buck for lunch, which the company then forwards to a charitable cause. They’ve been everywhere If you turn on the radio in 2013, you might hear a parody of an old Beatles’ song. Pete Matejcek, a salesman for Schmidt, is also a talented musician. The company got great feedback a couple of years back when Matejcek rewrote the old Hank Snow classic, “I’ve Been Everywhere, Man,” rhythmically fitting in the name of nearly every town and village the company has served in a 60-mile radius from Mankato. With Schmidt poised to celebrate its 64th anniversary this year, Matejcek is expected to rewrite Paul McCartney’s lyrics — “Will you still need me, will you still feed me, when I’m 64?”
xxxxxxxxxxxxx
Tony Tarjeson fashions siding at Schmidt Siding & Window.
MN Valley Business • jANUARY 2013 • 25
Bob Bohnert varnishes window frames. An infamous storm Schmidt Siding and Window employs about 60 people. That’s more than they had on June 28, 2010. That was the day of the mega hailstorm that damaged thousands of area houses. “The day of infamy,” Brenke calls it. “It was a huge driver of business. Our leads doubled. It did drive us nuts dealing with insurance companies. At one point, we had 339 siding jobs on our schedule at one time.” With only five siding crews on board at the time, the company had a six-month waiting list. Another bad storm last summer hit Lafayette, North Mankato, Le Sueur, Le Center and New Prague. The wait’s not quite as long this time: ÒIf you bought siding today, we can’t get to you (for three months),” Brenke says. “That’s a problem. Although it’s a good problem. We have hired more people (because of the storms), but you can only get so big. We don’t like to lay anyone off. We like skilled, long-term employees. We don’t like to subcontract. We prefer to use our own people.” That philosophy has stood the company well. They’re the sixth largest home improvement company in Minnesota, according to a leading trade magazine.They’re the No. 1 ABC seamless steel siding dealer in the country. Per household, they’re the top Gutter Helmet dealer in the nation, and they annually finish in Qualified Remodeling Magazine’s top 500 exterior remodeling contractors in America. The company was named to the Mankato Area Business Hall of Fame in 2009, its 60th anniversary year.
26 • jANUARY 2013 • MN Valley Business
“It’s our people” Every business had to find ways to deal with the Great Recession, and Brenke says they began to diversify into new products such as decorative exterior stone and solar shades. Walking into the showroom, he lovingly runs his hands over the contours of a new type of door the company’s now selling. It’s all fiberglass, made by the Amish in Ohio, and Brenke demonstrates the fit and the latch that are precise as clockwork. “Expensive,” he smiles, “but Quality, with a capital” — top of the line!” When 38 percent of a company’s business is repeat customers, you assume they’re doing something right. “It’s our people,” Brenke says. “All of the production managers have been here 25 years.” The average foreman has more than a decade of service. Brenke hands a visitor a copy of a book, Jaynie Smith’s “Creating Competitive Advantage.” The book addresses the question, “Why should I do business with you, and not your competitor?” Then Brenke goes to a stack of survey cards. Every one of the company’s nearly 2,000 customers each year is asked if they’ll fill out a short survey. Almost half of those cards are returned, and last year, only 21 had any negative comment. “That’s a 99-point, 537 percent favorable rating. I read every comment,” he says. One customer said, “The world would be a better place with more workers with their attitudes.” That got printed on a banner for the company party. MV
COMING NEXT ISSUE... Look for the next edition of the MN Valley Business coming February 2013 featuring Workplace Wellness Programs and how to get the most out of them. The Definitive Business Journal for the Greater Minnesota River Valley Call to advertise in our upcoming issue. 507-344-6336 kmarshall@mankatofreepress.com
MN Valley Business • jANUARY 2013 • 27
Dennis Hobbie (left) and Eric Oleson founded Oleson + Hobbie Architecture in 2010.
A holistic approach Oleson + Hobbie Architecture making its mark
By Marie Wood Photos by John Cross
A
rchitects Eric Oleson and Dennis Hobbie are making their mark on southern Minnesota: Jake’s Stadium Pizza locations, Hosanna Lutheran Church expansion, MSU Carkoski Commons Dining Hall renovation, and others. Currently, they are transforming the Nichols Building into the VINE Adult Community Center. “I think there’s an economic value building through us because we’ve been involved in a lot of renovations throughout town so we can see the things that can be a great value to the owner,” Oleson said. Oleson and Hobbie founded Oleson + Hobbie Architecture in 2010 and work in an office suite above Jake’s Stadium Pizza. They have a project manager/design technician and interior designer on staff. The firm is built on the values of faith, community pride and environmental responsibility. Oleson has been an architect in Mankato since joining KSA Architects in 1997. In 2001, Oleson recruited Hobbie, a classmate from North Dakota State University, to KSA. Both are deeply involved in the community and their churches. Eric is a civic leader, serving on several boards and committees. “Giving back is a major part of what we do,” Oleson said. Oleson and Hobbie also established a Mankato branch for R.L. Engebretson of Fargo. When the firm chose to focus on
28 • January 2013 • MN Valley Business
North Dakota, Oleson and Hobbie had local projects to maintain and the know-how to manage a firm. “Both firms gave us valued experience to start what we did,” Oleson said. Oleson and Hobbie make a complementary team. As the public relations arm, Oleson is a rare communicator that truly listens to clients and committees of sometimes 30 or more people. In return, he brings experience in planning, designing and building municipal, educational, retail and liturgical facilities. “In the beginning, when we’re working with clients, we’re sponges. We take their ideas and visions to create an environment that’s inspiring and engaging. We take a holistic approach,” Oleson said. Both Oleson and Hobbie are involved in the process from planning to construction. Together they are building their business through repeat clients and referrals. “We both have different talents and strengths. I enjoy the production, drawing, detailing and how every piece will go together,”said Hobbie, who leads the design teams, operations and human resources. “You need both of those skills to be a successful business. That’s why we’re a good fit.”
work and their style of blending the new and old. “They have designed the Nichols Building so that it fits in with Old Main, the Courthouse and the Government Center. It’s simple, minimalist, but very functional,” said Pam Determan, executive director of VINE Faith in Action. Oleson + Hobbie have gone “above and beyond” to understand our needs and the need of the nonprofit world to do more with less, which often resulted in practical and inexpensive solutions, Determan said. VINE’s vision is to create a student union for adults. The top floor offers amazing views and will serve as an event center for community and private events. Other features include a cafe, warm water pool, fitness center and an adult respite center. Construction will begin early this year, starting with the roof and building envelope to increase energy efficiency. The building also will be refaced for a contemporary look. Construction of the interior will be phased through 2013 as VINE and community partners take residence. Oleson + Hobbie will lead the project every step of the way. “I’ve come to appreciate their integrity. They’re normal salt of the earth people. They live out their faith in their business,” Determan said.
Project Manager Eric Sahnow (left) reviews blueprints with architect Dennis Hobbie. Faith Churches have become a focus of their practice. They have completed projects in their own churches: Hosanna Lutheran Church and Bethel Baptist Church. Oleson and Hobbie also have renovated and expanded churches in New Ulm, Sleepy Eye and Janesville. They have completed projects on centuries-old churches and renovated churches built in recent decades. Currently they’re designing a $5 million church in Orange City, Iowa. “We really enjoy working with church groups, focusing on places that inspire,” Oleson said. For the $2.3 million expansion of Hosanna Lutheran Church, Oleson and Hobbie integrated a two-story addition with the existing church and created a 750-seat sanctuary, twostory entry area and classroom expansion. A cafe called Sacred Grounds offers a meeting place for worshipers and committees. With churches moving toward open and contemporary worship styles, renovations, additions and new churches tend to welcome members to come as they are, provide more flexibility in worship and encourage children involvement, Oleson said. “Oleson was involved from beginning to end. He listened carefully to our needs and wants and worked tirelessly to design a building that would enhance our ministry,” said Dave Zellar, Hosanna Lutheran Church administrator. Community Transforming the Nichols Building into the VINE Adult Community Center is a project where the experience in rehabbing buildings and designing community places come together for Hobbie and Oleson. VINE Faith in Action chose Oleson + Hobbie because leaders were impressed with their
Responsibility Oleson and Hobbie have built a strong reputation in sustainable building, energy efficiency, and adapting and reusing buildings. “That’s been our philosophy from day one, to utilize green technologies and sustainable systems in all our buildings. That’s just good practice as an architect,” said Hobbie, a LEED-accredited professional. Oleson and Hobbie have completed many updates to MSU residence halls. When MSU converted from disposable to reusable to-go containers, the entry to Carkoski Commons Dining Hall needed to accommodate the drop off of dirty containers, washing and storing containers, as well as student flow. “Hobbie provided several design options, ultimately creating a solution far better than any he had found in his research,” said Cynthia Janney, MSU director of residential life. “We’ve been using this space for a semester now, and it functions extremely well.” Often the most economical solution is the rehabilitation of yesterday’s buildings with today’s technology. Reusing is also environmentally friendly and projects may be eligible for Investment Tax Credit incentives. “Mankato people are looking to refurbish and reuse. There’s a sense of restoring our history and keeping our culture, who we are, without tearing anything down,” Oleson said. MV
Interior designer Jessica Osnes shows samples to architect Eric Oleson.
MN Valley Business • January 2013 • 29
Jim Beal (left), Shannon Beal and Jason Beal.
Business, community, family Beals work together, give back together By Marie Wood Photos by John Cross
I
n 2012, JBeal Real Estate Group celebrated 10 years in business with new digs in the Graif Building in downtown Mankato. Jason Beal, a real estate broker with construction and remodeling experience, designed and built out their new offices this summer. “There’s a spectacular energy down here for me,” Jason said. Jason owns JBeal Real Estate Group with his father, Jim Beal, a Realtor, longtime sales manager and former Eagle Lake mayor. Shannon Beal, Jason’s wife, joined the business as a Realtor a year ago. Shannon also handles advertising, human resources, public relations and administration.
30 • January 2013 • MN Valley Business
Together, they have made community involvement a priority: Greater Mankato Growth, Young Professionals, CityArt Walking Sculpture Tour, Children’s Museum of Southern Minnesota, Kiwanis Holiday Lights and more. “Our passion for the community is very important. It’s going to be there for many years to come. I got that from him,” said Jason nodding to his dad. “We like to give back. We plan events where our agents can get involved,” Shannon said.
Minnesota Valley Business: Why did you go into business together? Jason: In the beginning when I started JBeal Homes, he was actually with a competitor. We found in the past that it was hard not to work together. We decided it would be better to work together. Jim: As a family, it makes sense to be on the same team rather than competitors. We decided to join forces. MVB: Do you make a good team? Why? Jason: Yes. We play off each other in different ways. He’s more nurturing and I’m more about working. Jim: We are very independent. We come from two different schools. Most of the time we travel on two roads side by side. I’m on one road and he’s on another. Sometimes we have to come together to talk business, philosophy, people. Jim: We are very independent, but we have the same objective. MVB: Jason, what are your dad’s strengths? Jason: He’s extremely dedicated and detail oriented. I rely on the support staff for that. He’s worked in corporations for years, so he’s used to structure and methods. I learned as I went — the rules were as I made them up. Jim: He’s very personable, very hard working. We always put family first, but if we were going to a movie and a client called, we’d do the movie later. Jason: We go the extra mile because we have the support at home to do that. MVB: What is your business philosophy? Jason: Our business plan from day one was to have a good name and build longevity. Our clients say “so-and-so told me to call you because you took care of them.”
Jim: Our business is based on referrals. We treat our customers how we would want to be treated. We don’t recruit agents. Our agents have the same philosophy as we do. They come to us. We’ve kept a good group of people working with us. Shannon: Even agents who aren’t Beals are family to us. MVB: What are your different roles and duties in the family business? Jim: He was in the business before me so he trained me. He’s the broker so he’s the one that’s responsible for all the agents. I go to him on a daily basis about the things we should do in real estate. People get that backwards. Really, I work for him. He’s my mentor. Jason: Ultimately, I have oversight of all transactions, agents, problems and what not. Jim: My biggest responsibility is to the clients. I do some bookkeeping. His mother is our company bookkeeper. Jason: He spends more time with agents — face-to-face time and lunches. With advertising, we’re both involved, but Shannon coordinates that. She has really good ideas about advertising. MVB: What have you learned from each other? Jason: Should I start when I was 2 or 3? He has a good sense of control and calm. When things don’t go right or the way I wanted, I get excited. I want solutions very fast. His communication is really good with his clients, that fatherly nurturing. He will talk to anyone at any time. At first I thought it was odd, but it turns out it’s one of the best gifts as a salesperson. Jim: The gift of gab. The world is full of people that are friends you haven’t met yet.
The Beals say commitment to the community is a priority.
MN Valley Business • January 2013 • 31
Long time Realtor and sales manager Jim Beal. MVB: Shannon, how do you like working with your husband and father-in-law? Shannon: Jason and I work really well together. I now have an appreciation for what he does more than when I worked a 9-to-5 job. I have a better understanding of why he can’t make it home for dinner or has to show a house on Saturday. I’ve stayed late to write up offers. When he gets a call on a Saturday to show a house, I say go forth and prosper. Jason: We’re a deadly pair when we show houses together. Shannon’s background is in mortgage and titles. And she has a creative eye when we show homes. Jim: We balance each other. She tips the scale to get things done. Shannon: I’m the third vote.
Shannon: At the end of the transaction, you have happy people. MVB: What does the future look like for JBeal? Jason: My plan’s always just to sell, sell, sell. Shannon: To continue what we’re doing. Jason: We want to keep on the path we’re on. I’ve diversified into commercial property and management so we’ll see growth there. Jim: Age-wise, I’m close to retirement, but I don’t want to retire. With this business, I can just keep doing what I’m doing every day. . MV
“Our passion for the community is very important. It’s going to be there for many years to come. I got that from him,” said Jason nodding to his dad.
MVB: What do you like best about the real estate industry? Jason: The variety. You get to meet a lot of great people. You’re not tied down to a desk. There’s flexibility with day care needs and school concerts. We don’t miss a lot.
Time for a new conversation on taxes
N
ow that both the November elections and the November budget forecast are behind us, the political dynamics associated with the 2013 legislative session is much clearer. The evaporation of GOP influence across all levels of state governance was admittedly a bit surprising. However, what was not surprising was the rhetoric from both parties regarding their reaction to the November economic forecast projecting an upcoming biennial budget deficit of $1.1 billion. While representatives of both parties were quick to agree that such a deficit was much more manageable than the $5 billion deficit faced two years ago, their respective solutions were predictably routine. Almost immediately after the forecast was released Republican voices were emphasizing that the current biennial balance of approximately $1 billion was a “surplus” and that there was no need for any tax increases. Equally predictable was DFL Gov. Mark Dayton’s call for higher income tax rates on Minnesota’s top earners; a call he has made since his 2010 election. To say that we need a new conversation about taxes in this state is obvious. How else can you explain such rhetoric? First, suggesting that Minnesota has a budget surplus is like your brother-inlaw telling you that he received a $500 raise and therefore has more money to spend, all the while ignoring the fact that he still owes $20,000 on his credit card. Similarly, calling for higher income taxes on the rich (or anybody) simply exacerbates Minnesota’s already disproportionate dependence on the income tax. So before both parties stake their ground on these all too-familiar positions, can’t we try to change the conversation? One idea that has been around for quite a while, but seldom seriously addressed is the notion of broadening the sales tax base. The arguments for changing the conversation in this direction are two-fold; and from my perspective compelling. The first is that since the establishment of the sales tax in 1967, our Minnesota economy has fundamentally shifted from one that produces “goods” to one that delivers “services.” However, the current sales tax is primarily imposed on the purchase of goods and not the delivery of services.
This means that each year as our economy continues to transform, the sales tax becomes less relevant and effective. Such deliberate policy decisions to exclude certain goods or services from the collection of sales tax is often called a “tax expenditure,” and Minnesota has plenty of them. But the decision to exclude many consumer and business services is a big one. According to a study by the Public Strategies Group in 2009, the inclusion of many consumer and business services currently exempt from the sales tax could yield up to $2 billion in additional revenue per year. In light of the fact that the projected biennial budget deficit is $1.1 billion, isn’t such a change in conversation worthwhile? The second reason for looking more closely at these tax expenditures is that while the appropriated general fund budget must be debated and approved line-by-line by legislators and signed by the governor every biennium, once these tax expenditures are approved by the legislature they remain in place until the legislature intentionally modifies or repeals it. In simple terms, this means that after being passed these tax expenditures go on “auto-pilot” and remain in place for decades without any legislative discussion or review. Is this really the best way to legislate tax policy? Of course the high profile “poster child” for such sales tax exemptions is the one on clothing; an exemption that many suggest is woven into the cultural fabric of Minnesotans. But the truth is that there are many sales tax exemptions that no one would ever want to change; such as the sales tax exemption on prescription drugs, groceries, and yes clothing. But just because we can agreed on a variety of such exemptions is not a rationale for ignoring a thorough review of the more than 200 such tax expenditures currently in statute (yes over 200!). For example, do we really still need a sales tax exemption on newspapers and magazines ($65 million); an exemption
34 • January 2013 • MN Valley Business
By Jack M. Geller, Ph.D on telecommunications equipment ($26 million); or an exemption on farm machinery ($36 million)? My point here is not to specifically pick on these exemptions, but rather to point out that collectively these special tax breaks add up to more than $11 billion in revenues not collected. And as noted above, once enacted these tax exemptions they tend to go on autopilot. Could a thorough review of all these tax expenditures by the Legislative Auditor lead to the elimination of at least one out of every ten of these exemptions? Now that would change the conversation! 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
■
Business Informer
Housing
Foreclosures jump The number of foreclosures in the region jumped considerably in most counties in the third quarter of 2012. The local increase came while foreclosures fell 10 percent in Minnesota (down 12 percent in the Twin Cities and down 7 percent in Greater Minnesota). Faribault County saw foreclosures jump 133 percent, from 6 in the third quarter of 2011 to 14 in the 2012. Nicollet County had a 44 percent increase in foreclosures, from 9 to 13 in the third quarter of 2012. Blue Earth County had a decline of 47 percent, with 24 foreclosures in the third quarter of last year compared to 45 the same period a year earlier. Brown County, too, saw a decline of 54 percent and Watonwan stayed unchanged.
■■■
Agriculture Grain up again
After falling in November, grain prices jumped up again in December. Soybeans were selling for $14.21 per bushel locally, up 80 cents from the month before and up more than $3 from a year earlier. Corn went up to $7.40 per bushel in December, compared to $7.15 in November and up $1.90 per bushel from the previous December.
Hog prices jump Hog prices responded to higher feed costs, rising $10 from November to December, to $85.65 for a 180 pound carcass. That’s about $4 higher than December of 2011. Hog prices hit a high of nearly $95 last summer.
■■■
Energy
Crude continues fall The West Texas Intermediate crude oil spot price was expected to average $89 per barrel in December. The price is expected to average $88 per barrel in 2013. The forecast rests on the assumption that U.S. real gross domestic product (GDP) grows by 2.1 percent in 2012 and 1.8 percent in 2013, while world oil-consumption-weighted real GDP grows by 2.7 percent and 2.4 percent in 2012 and 2013, respectively.
Pump price relief U.S. monthly average regular gasoline retail prices fell from $3.85 per gallon in September to $3.45 per gallon in
36 • January 2013 • MN Valley Business
November, as crude oil prices fell and the gasoline market transitioned from summer-grade to lower-cost winter-grade gasoline specifications. Projected national average regular gasoline retail prices average $3.63 per gallon in 2012 and $3.43 per gallon in 2013.
House heating costs to rise Average household fuel heating bills this winter will be higher this winter than last winter, primarily because of the return to roughly normal winter temperatures east of the Rocky Mountains compared with last winter’s unusual warmth.
U.S. oil production: 20 year high U.S. total crude oil production to average 6.4 million barrels per day in 2012, an increase of 0.8 million barrels per day from the previous year. Projected domestic crude oil production increases to 7.1 million bbl/d in 2013 — the highest annual average rate of production since 1992.
Natural gas inventory level Natural gas working inventories, which reached an all-time weekly record in early November, ended the month at an estimated 3.8 trillion cubic feet, almost equal to the level at the same time last year. The Henry Hub natural gas spot price, which averaged $4 per million British thermal units in 2011, will average $2.78 in 2012 and $3.68 in 2013.
World oil supply loosen Global oil markets loosened in the fourth quarter of 2012 relative to the same quarter a year earlier. Projected world liquid fuels production increases by 0.1 million bbl/d from the third quarter to the fourth quarter of 2012 as members of OPEC continue to produce more than 30 million bbl/d of crude oil and non-OPEC countries recover from unplanned outages and scheduled maintenance. Global inventories should build during the first half of 2013, mostly due to continued growth in U.S. and other non-OPEC supply.
Coal use stays down Coal consumption in the electric power sector totaled 829 million short tons in 2012, the lowest amount since 1992. Lower natural gas prices to electric generators have led to a significant increase in the share of natural gas-fired generation. Power sector coal consumption should grow by 5 percent in 2013, as higher natural gas prices lead to a reduction in natural gas-fired generation. Coal production declined by 6 percent in 2012 as domestic consumption fell. Production will increase slightly by 1 percent in 2013.
Electric prices up The nominal U.S. residential electricity price rose by 1.2
percent during 2012, compared with an increase of 1.6 percent in 2011 and an average annual increase of 2.4 percent during the previous five years. Residential prices during 2013 are projected to rise by 1.6 percent to an average of 12 cents per kilowatt-hour.
Renewable use falls After growing by 13.1 percent in 2011, total renewable energy consumption declined by 2 percent in 2012. This decrease is the result of hydropower production falling. The decline in hydropower from 2011 to 2012 more than offsets the projected growth in the consumption of other renewable energy forms. Renewable energy consumption increases 3.7 percent in 2013 as hydropower is projected to grow by 1.1 percent and nonhydropower renewables grow by an average of 5 percent. Solar energy continues robust growth, although the total amount remains small.
CO2 up this year After declining by 2.2 percent in 2011, fossil fuel emissions further decline by 3.2 percent in 2012. This decline is followed by an increase of 1.8 percent in 2013.
Professional resources to help grow your business AUTOMOTIVE Jerry’s Body Shop, Inc. 1671 Madison Avenue Mankato, MN 56001 507-388-4895 www.asashop.org/member/jerrys
MEDIA The Free Press Media 418 S 2nd Street, Mankato, MN 56001 507-625-4451 www.mankatofreepress.com
For information on including your service to this directory, please contact
Read us online!
507-344-6390
MN Valley Business • January 2013 • 37
Advancing Business for a Stronger Community
Make your Voice Heard on March 20 - 21
Greater Mankato Growth
Greater Mankato Growth is again coordinating the largest citizen advocacy event from our region at the State Capitol. This is the fourth consecutive year a delegation of business and community leaders from Greater Mankato are traveling to St. Paul to let lawmakers know about the Greater Mankato region’s importance to the state’s economic vitality. This year’s Greater Mankato at the Capitol has been expanded and will be held over the course of two days on March 20 and 21. “The expansion of this event is indicative of our overall stepped up efforts in the public policy arena,” said GMG President & CEO Jonathan Zierdt. Earlier this year the GMG Board of Directors approved an aggressive three year plan to increase the organization’s year round activities in government and institutional affairs, which included a significant financial commitment and the hiring a full-time director to oversee the work (see page 41). Participants in this year’s Greater Mankato at the Capitol will have the opportunity to: • Rally in the Capitol Rotunda • Meet with legislators from across the state • Participate in issue focused forums with state executive
branch leaders • Network with colleagues and state leaders at an evening reception at the DoubleTree Hotel St. Paul Downtown “Business participation is absolutely critical to the success of Greater Mankato at the Capitol and all of our efforts throughout the year to raise awareness of Greater Mankato among those making and influencing public policy. Whether you know a little or a lot about government affairs, this event provides a great opportunity to join with your neighbors and make your voice heard,” said Zierdt. For complete details on how your business can get involved in this important event, contact Patrick Baker at 507.385.6657 or email him at pbaker@greatermankato.com.
Greater Mankato at the Capitol in 2012
Chamber of Commerce and Economic Development
507.385.6640 • greatermankato.com 38 • January 2013 • MN Valley Business
growth
in Greater Mankato
New Business DayBreak Internet Café 251 Bunting Lane #101, Mankato
New Business Goodwill - Mankato 2024 Adams Street, Mankato
New Location Mankato Ballet Company 731 South Front Street, Mankato
New Location Miracle Ear Center 111 Star Street, Mankato
Ribbon Cutting – Children’s Museum of Southern Minnesota “Tree of Forts” 121 East Cherry Street, Mankato
In 2012 the Greater Mankato Growth Ambassadors helped 68 businesses and organizations mark milestone moments. MN Valley Business • January 2013 • 39
Greater Mankato Growth
New Business Bryton Electronics 251 Bunting Lane #101, Mankato
Member Activities Business After & Before Hours
5:00 - 7:00 p.m. January 8 February 5 March 5 April 2 May 7 June 4 July 2 August 6 September 3 October 1 November 5 December 3
Pub 500 The Stationary and Gift Store by Carlson Craft Children’s Museum of Southern Minnesota Minnesota State University, Mankato – Intercollegiate Athletics AAA Travel and Jersey Mike’s Subs Mayo Clinic Health System Abdo, Eick & Meyers, LLP I&S Group Courtyard by Marriott Hotel & Event Center Spherion Staffing & Recruiting Bethany Lutheran College ECS-Your Wiring Pros
2013 Business After Hours Sponsored by
7:30 - 9:00 a.m. January 16 February 20 March 13 April 17 May 15 June 19 July 17 August 21 September 18 October 16 November 20 December 18
Waste Management Jordan Sands, a Coughlan Companies Business Primrose Retirement Community Mankato Ford – Quick Lane Tire & Auto Alliance Insurance Agency Corporate Graphics Commercial Farmers Insurance Agency Laurels Edge Assisted Living South Central College First National Bank Minnesota J. Longs for Men Pioneer Bank
2013 Business Before Hours Sponsored by
Greater Mankato Growth
Right on the Corner, Right on the Coverage, Right on the Price
November Business After Hours at Mankato Brewery
November Business Before Hours at Pathstone Living
Business After 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 more information on these and other member events visit greatermankato.com/events
40 • January 2013 • MN Valley Business
Welcome to our two newest GMG employees
Save the Date! Greater Mankato Growth Member Annual Meeting
Thursday, March 14 greatermankato.com/ annual-meeting
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.
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. 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.
Shannon Gullickson began serving as Greater Mankato Growth’s Talent Programs Director in October. As Director, Gullickson is chiefly responsible for two programs: the Greater Mankato Young Professionals and Greater Mankato Leadership Institute. “I am excited to share my passion for Greater Mankato with today’s current and future leaders,” said Gullickson. “I am looking forward to facilitating quality learning and business connections for participants in the Young Professionals and Leadership Institute programs.” Shannon came to Greater Mankato Growth with more than 20 years of extensive leadership experience in non-profit and for-profit organizations, most recently serving as Director of Business Development for Coldwell Banker Commercial Fisher Group of Mankato for six years. Prior to that, she worked for the Greater Mankato Chamber of Commerce for 13 years, serving in a number of capacities including directing the Greater Mankato Leadership Institute. Shannon’s direct experience working for an organization similar to GMG, along with her related experience in other business and community organizations will ensure the continued excellence of the Leadership Institute and the growth of the Young Professionals program. Patrick Baker Director of Government and Institutional Affairs Patrick Baker took on the role of Director of Government & Institutional Affairs in November. In this newly created position, Baker serves as the relationship manager on behalf of the Greater Mankato area and will work with area lawmakers, as well as with legislators and influential leaders from across the state, to raise awareness of our regional center and its importance to the state. “As one of the state’s premier communities, the Greater Mankato area has a great story to tell. I am confident that by forging strong partnerships among business leaders, community stakeholders, elected officials and other leaders, we can collectively see to it that the Greater Mankato area achieves the visibility and respect it deserves with decision makers in St. Paul and throughout the state,” said Baker. Prior to joining Greater Mankato Growth, Patrick worked as a Legislative Associate for the Education and Workforce Committee of the National Governors Association in Washington, D.C., where he was responsible for representing the views of the nation’s governors on federal education and workforce issues before Congress, the White House, federal agencies and stakeholder groups. Originally from Mankato, Patrick is excited to be returning home to work with area leaders and the business community in raising the profile of the Greater Mankato region.
MN Valley Business • January 2013 • 41
Greater Mankato Growth
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
Shannon Gullickson Talent Programs Director
Greater Mankato Growth
Cavalier Calls on the Newest Greater Mankato Growth members
Buster’s Sports Bar & Grill 1325 Madison Avenue, Mankato bustersbar.com
Clarity Computers LLC claritycomp.com
Impulse Dance 546 Grant Avenue, North Mankato impulsedancemankato.com
Kabobs Skewer and Drink 530 South Front Street Suite 200, Mankato kabobsmankato.com
United Commercial Upholstery 310 Ash Street, Nicollet ucuinc.com
Visiting Angels 530 North Riverfront Drive, Mankato visitingangels.com/mankato
In 2012 the Cavaliers made 52 visits to welcome new members to Greater Mankato Growth. 42 • January 2013 • MN Valley Business
Sporting events mean big money for Greater Mankato By Christine Nessler, Marketing & Leisure Sales Director
Mankato Marathon contributed an estimated $1.5 million to Greater Mankato’s local economy. available weekends and hotels to help ensure the best possible experience for them while they are in Greater Mankato.” In managing an events and tournaments calendar, the CVB is able to help Greater Mankato benefit from all tournaments rather than turning business away. This includes filling slower periods in the year, seeking out new business opportunities, assisting groups who are interested in starting new events and prioritizing the best business opportunities during priority periods in the calendar year. An initiative for the CVB in 2013 is the creation of a new events commission. This commission would be charged with maximizing the use of our current facilities and researching comprehensive facility options. Overall, the events commission would continue what the CVB is currently doing with event management and take it a step further. The events commission would also have a role in event development and management, along with bringing outside events into Greater Mankato. To find out more about the events commission or bringing a tournament or event to Greater Mankato, contact Josh at janderson@greatermankato.com or 507.385.6663.
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 • January 2013 • 43
Greater Mankato Growth
This year promises to be another exciting sporting year for Greater Mankato. Each year there seems to be an increase in the number of sporting teams that need space for their tournaments and events. If 2012 is any indication of the demand caused by sport-related tournaments and events, we have another big year ahead of us. CVB Event Sales Director Josh Anderson assisted with 44 tournaments and events brought into Greater Mankato with a total of over 26,530 participants. That doesn’t include all the spectators that come along to enjoy the events. Many participants and The 2012 spectators need a place to stay, a place to eat and usually a place to shop. You can almost hear the cash flowing into our local economy. Event highlights for the CVB include Senior Games and the Mankato Marathon. In 2012 Senior Games, May 31 to June 3, brought in 300 athletes. The Mankato Marathon, October 20 and 21, brought in more than 4,100 participants and 6,000 to 8,000 spectators. Even though Greater Mankato has experienced a wonderful year, there are still a lot of opportunities to fill the calendar with even more events. Being in Minnesota and not having adequate indoor facilities for large tournaments, the community sees a slow period for tournaments and events during the cooler months. This period typically lasts from November to March. This means that a lot of events are piled on top of each other during the summer. The CVB works hard to manage the calendar as groups try to schedule their events or tournaments so that hopefully they can be spread throughout the seasons as much as possible. “We never want to turn away any business,” said Anderson. “So I do my best to help event and tournament planners find
Oleson & Hobbie adds interior designer Oleson & Hobbie Architects of Mankato added interior designer, Jessica Osnes. She graduated from the accredited Interior Design program of South Dakota State University. ■■■ TBEI hires marketing manager Truck Bodies & Equipment International has hired Nicole “Nikki” Kyle as marketing manager. Lake Crystal-based TBEI is a manufacturers of dump truck bodies, hoists and truck and trailer equipment, including the Crysteel brand. Kyle has 15 years experience, most recently with Iowa Mold Tooling.
Nikki Kyle
member of AIA Minnesota since 1995. Founded in 1857, AIA is the professional association for architecture. ■■■ HickoryTech gets contract extension HickoryTech Corp. has been awarded a two-year contract extension to provide Internet, data, VoIP and video conferencing services to 64 schools and cooperative education agencies within a distance-learning network spanning across a 12-county region in south central Minnesota. SOCRATES (South Central Regional Area Telecommunications Systems), a program of the South Central Service Cooperative located in North Mankato, provides schools with data and video connectivity that allows for innovative instruction techniques and educational experiences for students and educators.
■■■
■■■
Coughlan Cos. honored North Mankato-based Coughlan Companies was honored at the Minnesota Keystone luncheon for its generous contributions to the community and outstanding corporate giving program. Gov. Mark Dayton was the speaker at the event. Coughlan was honored in the medium sized businesses category. Keystone was started in 1976 by companies that gave at least 2 percent of their pre-tax earnings back to the community. ■■■ Paulsen elected president-elect of AIA Minnesota Paulsen Architects President and Principal Bryan Paulsen has been elected as presidentelect for the board of directors of the American Institute of Architects Minnesota Minneapolis Chapter for a one-year term starting this month and will become president in 2014. Paulsen was originally elected to the Bryan Paulsen board in 2007 and served as secretary in 2009-10. He has also served as a member of the government relations committee. Paulsen founded and leads Mankato-based Paulsen Architects, a full-service architecture, engineering, interior design and planning firm. Paulsen Architects has been a
Weir launches new website James R. Weir Insurance Co., of Mankato and Edina, has introduced a new website featuring the personal, non-profit and business insurance solutions it has offered since 1967 (weirinsurance.com). ■■■ Campbell earns insurance designation Jessica Campbell from Great River Insurance has earned the Specialist Transportation and Risk designation from Great West Casualty Co., which provides insurance to the trucking industry. To receive the designation, candidates must complete 12 courses and pass written exams after each course.
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.
Want to grow your market share?
Let us help you understand your local market and build your brand equity. Contact your Free Press consultant today for solutions.
507-344-6364 - advertising@mankatofreepress.com Located at 418 South Second Street, Mankato, MN 56001
Business Builder Program 44 • January 2013 • MN Valley Business
MN Valley Business • January 2013 • 45
Better Site Design
R The site upon which your facility is built is often seen as simply a place to park. However, at I&S, we see it as the first opportunity you have to convey the values of your company to your client. A well designed and beautiful site conveys a sense of the care and attention to detail you put into your product. At I&S Group, our team of landscape architects, engineers, and architects understand this, and strive to design a cost effective site that provides efficient access and parking while expressing the personality of the client and reflecting the values of the setting. Find out more about the advantages of I&S at www.is-grp.com.
WWW.IS-GRP.COM "3$)*5&$54 t &/(*/&&34 t 1-"//&34 t -"/% 4637&:034 t 4$*&/5*454
GROUP One firm - start to finish ™