Mnvalley 8 14

Custom home builder Mark Deichman.

Photo by Pat Christman

Hot market Apartment construction soaring, home building bouncing back Also in this issue • Judy and Jim Ness, Homestead Realty • Rhino Marking and Protection, Waseca • FPX, formerly Firepond

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F E A T U R E S August 2014 • Volume 6, Issue 11

12

Construction companies are building apartments as fast as they can, with most filling up almost immediately. Home building, too, is on a strong pace.

20

The business that started as Clear With Computers, became Firepond and is now FPX still has a big presence in Mankato.

22

Rhino Marking and Protection Systems in Waseca grew out of a sudden job loss for Scott Landes in 1990 and has become an entrenched player in its industry.

26

Judy Ness started Homestead Realty in 1984 and was later joined by her husband Jim and eventually their son Judd.

MN Valley Business • august 2014 • 5

■ August 2014 • VOLUME 6, ISSUE 11 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Cathy Jones Kent Thiesse Heidi Sampson

PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross PAGE DESIGNER Christina Sankey ADVERTISING Ginny Bergerson MANAGER ADVERTISING sales Jen Wanderscheid Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Denise Zernechel DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383.

For advertising, call 344-6336, or e-mail mankatomag@mankatofreepress.com.

MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street., Mankato MN 56001.

■ Local Business memos/ Company news................................7 ■ Business and Industry trends.........9 ■ Minnesota Business updates....... 10 ■ Construction, real estate trends.. 29 ■ Agriculture Outlook...................... 30 ■ Agribusiness trends..................... 31 ■ Job trends..................................... 32 ■ Retail trends................................. 33 ■ Greater Mankato Growth.............. 34 ■ Greater Mankato Growth Member Activities ....................... 36

From the editor

By Joe Spear

Housing can change a community

R

eading this month’s cover story on the tremendous changes in the regional housing landscape, I return to a discussion in college sociology classes about how physical infrastructure like housing and ultimately neighborhoods can influence the way we see each other and interact with each other.

Rental housing and apartments are on the rise in Mankato. New neighborhoods will spring up around those multiple-family housing units, but that doesn’t mean the single family home is going away anytime soon. It appears, though, that the mix is changing in the direction of more apartments and fewer homes.

A city of Mankato study showed the city will need at least 170 new rental units per year for the next five years.

But it appears local builders are easily exceeding that number and have no problem filling them up.

A new apartment complex by developer Mike Drummer with 102 units near the WOW Zone is full. By the time he finishes another 50 units, it also will be full, he says.

The story is the same for other complexes in town.

The city also estimates it will need 173 new single family homes a year for the next five years to meet the needs of a growing population. But builders say that landscape is changing as well with smaller, more efficient homes with finished basements the trend.

The apartment demand draws from all demographics, it seems, including students, young professionals and empty nesters wanting to downsize.

And the market for single family homes may be hampered a bit by tougher banking requirements, according to the builders.

While apartment living seems to be drawing from a wide demographic, the changing economy appears to have some influence as well. Some builders suggest young professionals may not want to be tied down to a home in a mobile society where job changes happen more frequently.

They also suggest some may be

6 • august 2014 • MN Valley Business

saddled with huge student loan debt and they simply can’t buy a house.

Others suggest the younger generation has just witnessed in the last five or six years a recession that had real consequences for their parents, when housing values plummeted and foreclosures hit near record levels.

These housing trends can change the way a community acts and comes together. When suburbia grew in the late 1960s and 1970s, our sociologist friends would argue our community ties that came from living next to each other in the big city, or in apartments, were severed. People had more space in suburbia. They didn’t interact with their neighbors as much. People had big backyards, pools and fences that blocked the social interaction.

Currents trends suggest we might be going back the other way. As we live closer together in neighborhoods or in new luxury apartments, will our social ties be mended and strengthened? It’s an interesting question.

Maybe this “re-urbanization” is the answer to our splintered politics.

When we get to know our neighbors a little more, get to hear their stories, their struggles, their goals, we might find out there are more things that unite us than divide us.

That would be a good start. We might also find out that we can all benefit by coming together in solving problems in our neighborhoods, cities, state and country.

The housing trends we are seeing in Mankato are likely playing out across the country because the issues driving the housing are the same.

While the big house in the country may have been part of the American Dream we all envisioned, the smaller, convenient and comfortable “flats” in the city may be the more feasible and reasonable American Dream of the next generation. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382 or follow on Twitter at @jfspear.

Local Business People/Company News

■

Ellingson new partner at Eide Bailly

Ben Ellingson has become the newest partner to join the Mankato office of Eide Bailly, a regional certified public accounting and business advisory firm. He was previously in Eide Bailly’s Sioux Falls office.

With more than 14 years of experience Ellingson has provided services to a variety of industries, focusing primarily on non-profit organizations and closely held businesses, with a specialization in the construction industry.

■■■

Carrouth promoted at TBEI

Kari Carrouth

Lake Crystal-based Truck Bodies and Equipment International promoted Kari Carrouth to the newly created position of corporate controller for TBEI and its family of brands.

Carrouth has experience in finance, most recently as the site controller for TBEI’s Ox Bodies in Fayette, AL. Before joining TBEI, she was credit manager at a large heating products corporation and controller for a national clothing brand.

■■■

with an emphasis in industrial sand processing. He comes from A.F. Gelhar in Markesan, WI where he worked as operations manager for the past 11 years, including all daily operational aspects of mining, wet processing, and dry processing.

The Jordan Sands silica sand plant will begin operations this fall.

■■■

Homan joins AmericInn

Trisha Homan has joined AmericInn Hotel & Conference Center as sales & events manager. She will oversee the conference center, including planning and executing events.

■■■

Skilbred promoted at Jordan Sands

Jordan Sands announced that Brett Skilbred has been named director of resource development.

Brett has been with Jordan Sands since 2012 and has led all aspects of environmental review, permitting, and construction planning for the company’s initial mine and processing operation in Mankato. In 2013 Brett was named to the Silica Sand Rulemaking Advisory Panel which is convened by the Environmental Quality Board.

■■■

Gustafson interim VP at MSU

Mike Gustafson has been named interim vice president of the division of strategic business, education and regional partnerships at Minnesota State University.

Gustafson will be responsible for leading a division that engages business/industry and the community in building partnerships that accelerate innovation and enhance economic development, research and cooperative ventures.

■■■

Thrivent’s Jones earns designation

Thrivent Financial consultant Brian Jones earned the designation of Retirement Income Certified Professional (RICP) after completing an intensive three-part course offered by The American College of Bryn Mawr, Pa. Jones serves Christians and their family members in Saint Peter, Mankato and surrounding areas.

To obtain the RICP designation, a representative must complete a courses that focus on various risks and solutions that can impact retirement.

■■■

Jordan Sands hire Pethke

Jordan Sands has hired Tom Pethke as the director of operations.

He spent the last 23 years working in diversified business operations of industry manufacturing and sales,

Norris joins CTS

CTS hired David Norris as a VoIP telephony expert. He has more than 15 years of experience in the field.

Computer Technology Solutions also announced it has achieved the top sales partner for Watchguard Firewalls in the Upper Midwest for 6 quarters in a row. CTS is an Watchguard Expert partner with 8 certified technical professionals and 5 certified sales professionals to serve it’s customers.

Jim Patchin of TS also earned the VTSP (VMware Technical Sales Professional) and Todd Tanhoff earned the VSP (VMware Sales Professional ) certifications from VMware, Inc. Randy Reimers earned the VMTSP (VEEAM Technical Sales Professional and the VMBRS (VEEAM Backup and Replication Specialist) certifications. Todd Tanhoff earned the VMSP (VEEAM Sales Professional) designation.

■■■

Gislason & Hunter attorneys honored

Gislason & Hunter announced that several attorneys have named to the Minnesota Super Lawyers and Rising Star lists: Super Lawyers include Dustan Cross, Michael Dove and Dan Gislason, all in New Ulm. Rising Stars are Matt Berger in New Ulm and Cory Genelin and Andrew Tatge in Mankato.

MN Valley Business • august 2014 • 7

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I&S staff earns designations

I&S Group announces the following accomplishments in professional development for its staff in Mankato: Brent Krohn passed the professional engineering exam and is now a licensed professional engineer administered by the National Council of Examiners for Engineering and Surveying.

Brian Welch also passed the professional engineering exam.

Jim Osborne passed the National and Minnesota land surveyor examinations to become a licensed land surveyor Cody Meyer passed the exam administered by the National Society of Professional Engineers and is now a Level 2, Certified Survey Technician Dallas Willman passed the Interior Design NCIDQ test to become a professional interior designer ■■■

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The city of Mankato Economic Development Authority was named an “outstanding 2014 financial advocate” by the LSS Financial Counseling for helping improve economic justice and advocate for people and families in vulnerable financial situations. The Mankato EDA continues to look for opportunities to help overcome housing barriers for persons with disabilities or large family size through homebuyer education and Section 8 housing choice vouchers to help make affordable home purchases.

Mankato is one of five organizations to receive the honor.

■■■

Fisher finishes Coldwell training

Dain Fisher of Coldwell Banker Commercial Fisher Group graduated from the Coldwell Banker Commercial Emerging Broker Training program. The four-month comprehensive training program is targeted for CBC professionals with one year or less experience in commercial sales/leasing. The program covers the key components of the commercial real estate and is a blend of traditional classroom training followed by live internet classes, self-paced learning, and structured participation of a mentor in the home office.

■

Business and Industry Trends

Agriculture

Crop prices battered

Corn and soybean prices continue a downward spiral in July. Despite relatively poor crop conditions in Minnesota, the USDA has been predicting record corn and soybean crops will come in nationwide. Prices are also pressured by the fact a large stockpile of corn and soybeans remains from last year.

Local cash corn prices were at $3.36 in July, less than half the price they were a year earlier. Corn prices hit a high this year of $4.54 a bushel in April.

Last year’s high for corn was $7.17 in January.

Soybeans fell more than $2 from June to July to $12.15 per bushel. That compares to $15.38 a year earlier.

Soybeans peaked at $14.70 in March of this year.

Last year’s high was $15.38 in July.

Hog prices see big rise

The bad news for crop farmers was good news for hog farmers, who are seeing lower feed prices.

A 185-pound carcass was bringing $132 in July, about $20 more than a month earlier and far above the $78 in January.

While feed prices may be coming down, hog farmers are seeing meat prices rise so fast because of a virus that has killed more than 7 million baby pigs across the country, including in Minnesota.

Pork prices are up 15 percent compared to a year ago and are expected to continue rising.

Porcine epidemic diarrhea virus (PEDv) likely originated in China.

The highly contagious disease has spread to 30 states.

■■■

Energy

Vehicles’ mpg to rise dramatically

Although light-duty vehicle types such as diesel, fullhybrid, plug-in hybrid, and plug-in electric have garnered significant attention in recent years as ways to reduce petroleum consumption and lower consumer fuel costs, standard gasoline vehicles, including those that use micro and mild hybridization, are projected to retain nearly 80 percent of new sales in 2025 and 78 percent in 2040, according to the federal Energy Information Administration.

Several fuel-efficient technologies that can deliver significant reductions in fuel consumption are currently or will soon be available for standard gasoline vehicles. These technologies can enable manufacturers to meet future greenhouse gas emissions and Corporate Average Fuel Economy (CAFE) standards, at a relatively modest cost.

• Electrification technologies such as electric power steering, and micro or mild hybridization (turning off the engine when the car is stopped) • Vehicle technologies such as fuel-efficient tires and aerodynamics • Weight-reduction technologies • Transmission technologies such as aggressive shift logic (controlling on automatic transmission to maximize fuel efficiency) or 8-speed transmission The technologies will substantially increases fuel economy.

For example, in the midsize car, standard gasoline vehicle fuel economy increases will go from around 35 miles per gallon today to 53 mpg by 2025, an increase of about 50 percent.

Vehicle prices should increase less than 10 percent.

Gas prices 8 cents higher than ’13

During this year’s April-through-September summer driving season, regular gasoline retail prices are forecast to average $3.66/gallon, 8 cents higher than last year. Regular gasoline retail prices are projected to fall from an average of $3.68/gal during the second quarter to $3.64/gal during the third quarter as lower refinery margins more than offset higher crude oil prices. EIA expects regular gasoline retail prices to average $3.54/gal in 2014 and $3.45/gal in 2015, compared with $3.51/gal in 2013.

U.S. crude production highest since ’72

U.S. total crude oil production, which averaged 7.4 million barrels per day in 2013, is expected to average 8.5 million barrels in 2014 and 9.3 million barrels in 2015. The 2015 forecast represents the highest annual average level of oil production since 1972.

Less foreign natural gas

Natural gas plant liquids production increases from an average of 2.6 million barrels per day in 2013 to 3 million in 2015. The growth in domestic production has contributed to a significant decline in petroleum imports.

The share of total U.S. liquid fuels consumption met by net imports fell from 60 percent in 2005 to an average of 33 percent in 2013. EIA expects the net import share to decline to 22 percent in 2015, which would be the lowest level since 1970.

Iraq unrest pushes up oil

Unrest in Iraq put upward pressure on world oil prices, helping North Sea Brent crude oil spot prices reach their highest daily level of the year at just over $115/barrel on June 19.

Crude oil spot prices increased from a monthly average of $110/bbl in May to $112/bbl in June.

These technologies include: • Engine technologies such as variable valve timing and lift, cylinder deactivation, turbocharging, and downsizing

MN Valley Business • august 2014 • 9

Minnesota Business Updates

■

■ Davis family wealth: $1.7 billion The Mark Davis family, of Le Sueur and Nicollet counties, has been listed by Forbes as the 130th richest family in America with a net worth of $1.7 billion as of July.

The family’s holdings include Davisco Foods International, Cambria countertops, dairy farms, cheese operations and Sun Country Airlines.

Stanley Davis founded what’s now Davisco foods in 1943, selling butter to U.S. government during WWII. His son Mark began working for the company as a delivery driver in 1959 and started managing its cheese operation a decade later. In 1972, Mark switched the company’s focus to cheese, leading to a boom in sales that has seen Davisco grow into one of Kraft’s largest suppliers.

The wealthiest family in America, according to Forbes is the Waltons, owners of Wal-Mart and Sam’s Club with an estimated net worth of $152 billion. Minnesota’s richest is the Cargill-MacMillan family, worth $43 billion.

The magazine lists 185 families in the country that are worth $1 billion or more

■ Xcel blamed for nuke plant overruns An investigation into major cost overruns in a project to upgrade Xcel Energy Inc.’s nuclear plant in Monticello has found that managers at the utility didn’t have adequate oversight and didn’t fully plan for the complex job of replacing reactor components.

The investigators also found Xcel misleadingly blamed the U.S. Nuclear Regulatory Commission for some costly delays, according to the Associated Press.

Xcel disputes that it is to blame and is expected to file a reply to the investigation next month.

The utility is asking regulators to have ratepayers — not investors — pay for the upgrade.

The project — designed to keep the plant running for another two decades and increase the plant’s power output by 13 percent — rose from an estimated $320 million in 2008 to $665 million when it was finished last year. The final cost could reach $748 million, the largest cost overrun for any Minnesota public utility.

■ ADM adds focus to Asia ADM is realigning its operations and facilities to meet growing demand for its products across Asia-Pacific.

“As populations and incomes across Asia continue to rise, diets are evolving.

With that shift comes an increase in demand for crops and other products from agriculture,” Chairman and CEO Patricia Woertz said in a statement.

10 • august 2014 • MN Valley Business

ADM announced it is building a sweetener and solublefiber manufacturing complex at the port of Tianjin in North China to help meet growing demand in China and Asia.

ADM announced last fall that the company is constructing a facility in Nanjing to produce animal feed premix that can be added to animal rations to promote health and growth. Such premix formulas typically contain vitamins and minerals, amino acids such as lysine and threonine, and other ingredients.

ADM said it is also centralizing its activities throughout Asia-Pacific by moving its regional headquarters from Shanghai to Singapore, which is the hub of the company’s regional merchandising operations.

■ Best Buy pulling out of China Best Buy is reportedly planning to withdraw from the China market and focus on its home market.

Best Buy is considering selling its Five Star Appliance and Best Buy Mobile units, the Wall Street Journal reported, citing insiders close to the matter. The two remaining Chinese operations of Best Buy are valued at $300 million.

Best Buy bought Five Star Appliance, a local consumer electronics retailer with over 200 stores, for $185 million in 2009.

The possible pullout from China is seen by analysts as a move by the company to streamline underperforming operations worldwide and focus on the US home market since company CEO Hubert Joly took the helm in the fall of 2012.

■ 3M transforms Minnesota headquarters

The global headquarters for ‘the 3M company’, located in st. paul, minnesota, has undergone extensive renovations involving a team of architects including Altelier Hitoshi and Peter Ebner and Friends. Each firm had separate responsibilities in the transformation of the corporation’s work environment, which is comprised of four structures linked by a second story walkway.

Specifically, Atelier Hitoshi’s scope included the conversion of the site’s central parking lot into a large plaza, the addition of many open and collaborative work spaces, as well as the redesign of various other public areas such as the employee entrance and café.

The renovation work transforms the site’s existing central parking lot into a pedestrian plaza. Its design is characterized by a tangram patterning of tiles, with similarly shaped concrete planters, seating, and shade canopies. The surfaces utilize 3M stamark tape, a highly reflective adhesive backed material typically used for roadway markings.

MN Valley Business • august 2014 • 11

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Those with more means are jumping into the housing market in larger numbers, says home builder Mark Deichman.

Housing boom Apartments leading the way in demand

By Tim Krohn | Photos by John Cross and Pat Christman

I

f you build apartments, they will come.

Quickly.

“Everything we build they’ve been leasing up full in three months,” said Joe Seifert, president of Miller Architects & Builders of St. Cloud, which constructs apartments across the Midwest and is building a luxury apartment complex behind Madison East Center.

“I think the younger generation isn’t that excited about owning a home and maybe they’re too strapped with education loans or they want the flexibility of moving around.”

Mankato builder Mike Drummer has been putting up apartments as quickly as he can and demand outpaces supply.

“They rent as fast as we can build them and it’s the same

for everyone. It’s all sectors-- ¬ young professional, college kids, working people coming to town.”

While multi-family housing has been hot for a few years, single-family home builders are also seeing a resurgence in construction, albeit one tempered by new realities.

“The banking is really tight now.

Before the meltdown you needed a dollar to get a loan.

Now money is tight. People need to be realistic about what they want to do,” said Bill Feder of William Feder Homes of Mankato.

Those with more means also are jumping back into the housing market in larger numbers, said Mark Deichman, who builds custom homes.

“There were no custom-home subdivisions built in Mankato since before the recession,” Deichman said.

“We’re doing the first one at Ironwood Estates. We’ll have

Cover Story

14 • august 2014 • MN Valley Business

Deichman says a mix of traditional and modern architecture is hot right now. six estate lots. We’re very excited to do it,” he said of the land on the south edge of Mankato on the former Ironwood golf course and restaurant site.

The demand in the Mankato area shows no signs of letting up. The city updated its housing study last year and found the need for rental units and homes will stay strong.

In the coming five years the city will need to add about 120 new rental units per year and 173 single-family homes per year.

“And we haven’t even gotten all the new jobs (in town) from Fleet Farm and Fed Ex and the Wal-Mart distribution center,” Drummer said. “It could be a great few years ahead.”

One of the biggest potential growth areas for residential construction in the coming years will be on the east side of Highway 22, surrounding the area that was recently identified as the site for a new middle school.

Drummer owns 35 acres south of Kohls and 110 acres north of the school property, all of which is zoned residential.

“Next fall we hope to be doing some building at the same time the school is building,” Drummer said.

“When that full quadrant is full, it will be hundreds of millions of dollars in property value. Think of the propertytax base that will bring.”

He said the area will consist of a mix of apartments nearest the busier roads, some starter homes and some larger homes along the trail and woods in the area.

New realities

As the new home market bounced back, including higher-end homes, custom-home builder Deichman noticed one big change.

“The building environment today is much more realistic.

The biggest thing I’ve seen is we’re not building as large of homes as we used to. We focus on efficient use of space rather than a lot of wide open space,” Deichman said.

“You can have a poorly laid out home of 2,300 square feet but a 1,900-square-foot home that’s laid out better is just as good. If you overbuild, you have to maintain it. You

don’t use it all and you have to pay taxes on it.”

Feder said the tighter post-recession financing isn’t all bad.

“Before the meltdown they were giving loans to people who had no business getting loans,” said Feder, who has been in the business since 1962. (“My uncle owned a lumber yard in Mapleton and I’d go there as a kid and be a pest. He said put a hammer in your hand and help or scram.”)

Still, he said tighter bank regulations are in many cases making it difficult to get loans even for people who have the ability to pay. The biggest problem, he said, is banks’ requirement to find “comps” in the immediate area where someone wants to build. Comps, or comparables, are used to evaluate the recent sales price of similar-size homes in the area to help determine if the loan for a proposed new construction is on target.

Feder said that in many areas years of few sales means finding similar-home sales can be tough.

“I had a farmer who wanted to build a $350,000 home and he had plenty of money and assets and income, but the bank wanted three comps within a few miles and there weren’t any,” Feder said. “Those comps are a big problem.”

To help customers who are qualified but still having trouble getting loans, Feder has turned to doing the financing himself.

“We’re starting to do the construction loans and that way the home buyer is buying an existing home so they can get it at a lower down payment and there’s no comps needed. We’re effectively building a spec home and selling it to them.”

Finished basements, efficiency

Builders say customers are more often asking for finished lower levels in new homes, more energy efficient homes, triple garages and an architectural style that blends traditional and modern.

Deichman said he’s seen a shift into “transitional style” home architecture rather than traditional.

“Transitional is a hybrid between traditional architecture

MN Valley Business • august 2014 • 15

and contemporary/modern architecture. It’s been big on the coast for a few years – it always takes a while to get to Mankato. We’re more conservative.”

He said the style borrows contemporary-design materials such as concrete, stone, steel and enamel, mixed with wood and traditional design.

“We’ve been doing traditional so long it’s fun to work on something a little different.”

Seifert of Miller Architects, whose fifth-generation family firm builds only apartments and commercial properties, said the same design trends are being found there.

“Designs now are using different materials to break the design of the building up, trying not to let them look like barracks. Different colors and materials helps break that up.”

He said the design of the Pond View Heights Apartments on the Kearney property behind Madison East have drawn rave reviews from other customers, who stretch from Montana to Indiana.

“The design on this building seems to be going over well in other places. The underground parking, the little angle to it. The owner wanted to do some more with cultured stones and beefier balconies, not just a flat wall apartment building,” Seifert said. “Being next to the pond helps a lot with the walking path and activity around there.”

Home builders say more people want their basements – now called

16 • august 2014 • MN Valley Business

Left: Bill Feder of William Feder Homes of Mankato. Right: Mike Drummer at property that will be developed around the new school. “lower levels” – finished off at the start, rather than leaving them as a sweat equity project later.

“To finish off a lower level is a fourth of the cost of finishing a main level,” Feder said.

“So instead of three bedrooms on the main floor people will have two on the main and one in the lower level, and maybe an office.”

He said newer furnaces and air exchange systems make it easier to control the temperature in basements.

The finished basements require a focus on keeping the lower level dry. “People say ‘I want a dry basement,” and I say “I want you to have a dry basement even more,’ ” He said the recent years of extreme rain events and basement flooding where it never occurred before has led him to make changes in the sump-pump systems.

“We’re putting in two sump pumps instead of one. One just can’t keep up.”

Deichman, whose been building custom homes for 22 years, said a major change has been all of the automation built into homes.

“The ability to control lights and security, video, audio, curtains -- all from your phone. Five years ago it was one in 10 homes; now almost all have automation.”

He said technology advances and price reductions have made it possible. “What used to cost $100,000 now we can get greater control spending a few thousand dollars. And my 5-year-old can control our home on his phone. He enjoys turning the lights off and on and putting the blinds down,” Deichman said.

“The important thing is having someone who knows what they’re doing putting it in.”

Apartments everywhere

Apartments for everyone from college students and working families to seniors, empty nesters and young professionals continue to proliferate.

Drummer built two phases of 102 units near the WOW Zone that filled up quickly and is beginning the third phase to bring a total of 155 units. “We have a waiting list for that. We’ll be full when we open next April,” he said.

“The St. Peter area is the same thing, with waiting lists there.”

He will begin constructing units on the Marigold site in lower North Mankato this fall, hoping to have half open this year and half next year.

Drummer also is focusing more rental unit construction aimed at workers who will be at places such as the new Wal-Mart distribution center.

“One thing we’re doing is some that look like regular split-levels with an apartment in the basement and one apartment going up the other steps.”

Seifert said the demand for workforce-style apartments is strong in many of the regional markets they build in.

And, he said, college and young single renter complexes are in demand and renters are looking for different amenities than in the past.

“Here in St. Cloud we built two buildings and all the one-bedrooms leased out right away. It doesn’t look like people want to live together with roommates. They’ve been conditioned to have their own space. We’re adding more one bedrooms,” Seifert said.

“All the student housing has four bedrooms and four baths and common kitchen and living area. The days of six kids sharing one bath getting ready for school is done.”

Still a growing portion of apartment construction is focusing on luxury, such as Pond View Heights in Mankato.

“There are a section of people who are getting out of their homes or moving from other apartments who want nicer, quiet places. They want the amenities to hold a party and have an exercise room,” Seifert said. “We have one in Grand Forks with an indoor/outdoor pool, a half basketball court, gym.”

Ground work is under way on Phase I of the Pond View Heights Apartments with an opening date set for March.

The owners, Ringheim Family Limited Partnership, have a long history in Mankato, starting with the purchase of Hillside Terrace House and two 12-plexes in 1976 by Loren and Marilyn Ringheim. Expansions followed over the years with a six-plex built on the Hillside Terrace property, building of Lormar Suites, and acquiring the

MN Valley Business • august 2014 • 17

Miller Architects & Builders of St. Cloud is building luxury apartment complex behind Madison East Center.

Crown Apartments.

The Ringheims began working with the Kearney family in 2012 on plans to develop part of a large area behind Madison East. The final design was for three buildings to be constructed in three phases, the first being a 77-unit building, designed and constructed by Miller Architects & Builders, to be followed by two 48-unit buildings.

The new 128,680-square-foot apartment complex features three-stories with one-, two-, and three-bedroom units, upscale amenities including granite countertops, a community room, fitness room, courtyard and underground parking.

The apartments are the first of what is projected to be other development in the area, including retail and office

18 • august 2014 • MN Valley Business

buildings along Victory Drive and a city park. The project also allowed for a permanent connection between Adams Street on both sides of Victory Drive.

Seifert said he expects the other two phases will follow, beginning next year. MV

507-345-5003 1220 WILLOW STREET, MANKATO, MN SANDSTHERMODYNAMICS.COM

MN Valley Business • august 2014 • 19

FPX has modern offices in the historic Brett’s building in Mankato.

Solving Problems:

FPX Goes Beyond Expectations International company began as CWC in Mankato

B

By Heidi Sampson | Photos by Pat Christman

ack in 1983, Jerry Johnson, of Elbow Lake, wanted to figure out a way to do two things.

One was to compete better against John Deere, as Johnson was a salesperson for Ford tractors. Second on his list was to create a system for proposals.

“He figured if he could generate a proposal that would show exactly what his customers would receive from the tractors, as well as what would be included within the sale, he’d have an edge,” said Dave Batt, CEO of FPX. “In 1983, there were no computing systems that did this.”

Johnson’s idea would become the platform for ConfigurePrice-Quote and sales force automation software. Johnson

quickly saw the market potential in his invention, took on a partner, and started a company called Clear With Computers in Mankato, which was the very beginning of FPX. “The reason Mankato became such a hot bed for us,” said Batt, “is that when Clear With Computers was growing, taking on customers like Ford, John Deere, Mercedes and General Motors, they needed to expand operations quickly. Clear with Computers needed more developers, as well as service people.

“Jerry looked to the IT and computing departments at Minnesota State University. He decided to take on summer interns, giving many of them their first jobs.”

In 1997, Clear With Computers gained the interest of

Profile

20 • august 2014 • MN Valley Business

General Atlantic Partners, the largest private equity firm in the world. With General Atlantic’s help, CWC changed its name to Firepond, listing the company with Nasdaq.

On the national market, Firepond recognized the potential in an up-and-coming company, Salesforce.com, which was working to reinvent CRM (Customer Relationship Management) software in the cloud. By the mid-2000s, cloud computing would become a mainstream business.

Acclaim Financial Group, owned by Audrey Spangenberg, bought Firepond in 2009. Seeing a bigger market opportunity, as well as the allure in cloud computing, Spangenberg placed a considerable amount of money into the existing operations to expand its potential growth capacity.

Firepond’s name would alter slightly to FPX, “FP” was used as a way to hold onto Firepond’s heritage, while “X” embraces their ability to go beyond what was known of their previous capabilities. In January of 2013, Spangenberg hired Batt, who’d previously worked for companies like Microsoft, Oracle and Sage.

“Audrey wanted to put together a strategy in which Firepond would go from a product leadership position to a market leadership position,” Batt said. “The first big milestone a new company faces is to generate revenue, which is a compelling concept that gets traction in market. The next big milestone is to achieve technical prowess, so that your product is recognized as one of the leaders.

We are very highly decorated in our product line, holding 100 to 150 patents based on Dave Batt, CEO of FPX inventions we have brought to market. The next big thing for a company is to move into a market leadership position. That’s the tract we are on right now.”

Global Demand

Marketing Services

Batt grew up around the software industry in the ’80s, having graduated from the University of Minnesota. At that time, he recalls many of his classmates wanting to get to the bay area, which was considered the mecca of the software industry.

“The bay area was where all the best and the brightest were,” Batt said. “If you were one of the best, the brightest and you weren’t in that area, people kind of looked at you like ‘what’s your problem.’ ” Batt believes people tend to lose their roots a little bit.

The fact is, there aren’t a lot of software manufactures in Minnesota, beyond FPX that are focused around a big trend in business, cloud computing.

“The fact that we are one of Saleforce.com’s strategic software suppliers, that they come to us, they being salesforce.com, saying ‘we build valuable utility that extends their functionality,’ and that they need us in their ‘ecosystem, that’s a compliment,” Batt said.

“When you turn that into a recruiting tool and say, ‘you could be working at a Saleforce.com ecosystem for one of our Salesforce.com strategic software manufactures,’ people really like that. They would have to go to a market like Chicago, Austin, Boston, San Francisco or LA, in order to get that. Today, they can stay in Minnesota.”

Today FPX has a number of software applications that help small and large companies improve the way they sell products, all the way to handling large and complex transactions for selling and buying systems.

“We help companies accurately configure, price and quote their products and services,” Batt said. “We have applications that automate the whole order capture process. We also have applications that help manage contracts in that they help companies better understand what they are going to be agreeing too. We call this a suite of applications, which we refer to with our catch phrase Revenue Performance Management.”

Revenue Performance Management is a series of four products clients can use to help them book revenue faster, increase the amount of revenue they get per order, as well as ship their products to customers with confidence.

“We are not talking about buying staples to put in a stapler,” Batt said. “We are talking about how to configure a heating and air conditioning system for a 150-floor building in Dubai. In addition to that, what are all of the peripheral services that have to be associated with that project, how are those priced and what is the estimated cost for installing that type of an item? Those are the types of things our products help them do on scale.”

FPX has offices in Mankato, Bloomington, and Dallas.

Their offices in London and Hong Kong help them to serve their global customers more efficiently. Part of their growth strategy as they look toward 2015, is continued rapid expansion. In 2013, their first full year with their newly expanded leadership team, FPX achieved a growth rate of more than 200 percent, which was a tenfold growth compared to the previous year.

“We are nowhere close to saturating our market,” Batt said.

An Employer of Choice

To this day FPX has a very strategic relationship with MSU. FPX brings computer science interns to their company through the summer months, as well as bringing a number of those interns on board as fulltime employees every year.

“We celebrated 30 years this past October,” Batt said. “We have employees who have celebrated over 20, 25, 26 and one gentlemen, who has 30 years of service with this company. To have tenured employees who have been with FPX for decades not just years, to see how excited they are when we bring strategy to some of their best ideas, their inventions, while bringing them to new markets, it’s very fulfilling.”

Another factor that makes FPX an “Employer of Choice,” is their employee volunteer program. The program allows employees to take one day off every six months, which does not count against their accrued time, to volunteer for a charitable organization of their choice.

Growing Up in the Software Industry

MV

MN Valley Business • august 2014 • 21

Rhino Marking and Protection of Waseca.

Waseca firm marks its claim Rhinor Marking shows value of networking inside and outside your industry

By Cathy Jones Photos Pat Christman

I

f you need proof for the theory that you make your own luck, look no further than the story of Rhino Marking and Protection Systems, which has a production facility in Waseca. The company began in 1990 out of a sudden job loss for Scott Landes, and it’s becoming increasingly entrenched in its industry ever since.

The products, buried pipe and utility danger signposts, are not something that the average person thinks too much about on any given day. But everyone can appreciate their lifesaving capabilities. They prevent people from hitting underground gas pipelines,

electrical and cable lines, telephone lines — anything vital that’s buried underground.

“Everything we do is really helping our customers try and save lives, preventing people from digging up pipelines and cables and cutting off 911 or blowing themselves up,” Landes said. Calling 811 before you dig, is “probably the most important message that I can get out.”

Anyone who’s ever dug a new sidewalk or patio, garden or flowerbed, pool or pond knows that it’s the law to call Gopher State One Call to have utilities marked beforehand.

You’ve seen the crews with the handheld

Spotlight

22 • august 2014 • MN Valley Business

detection equipment walking over the yard, in search of it all. They mark it with paint and temporary flags and go on to their next call.

Besides safety, calling 811 also saves people from fines—as it’s potentially very costly to omit calling before you dig—and from very angry neighbors if you take out electricity or water for your block.

Nearly 25 years ago, the company began as RepNet, a sales consultant service for various manufacturers in the “damage prevention and excavation safety industry” as Landes termed it, such as signposts and curb markers.

On a larger scale, such as for utilities companies or gas pipelines, the posts are more permanent and made of fiberglass or tough Rhino Poly plastic to hold up to years of abuse from weather without fading and are printed with UV-resistant ink. It might seem like an obvious improvement, but it was a real innovation to make a post that’s triangular so it could be read from all sides.

Even though its business fits a very targeted niche, it serves many different industries with its products, such as local utilities, gas and oil companies, community governments (hydrant markers), excavators, telecommunications companies, highway construction companies, surveyors, and the cable company.

When he started out managing the sales reps for the different manufacturers, “I swore the one thing I wasn’t going to do was get into manufacturing,” he said. Things progressed, though. The company sold 355,000 posts in 2013 and may be looking in 2015 at expanding again. The last expansion was two years ago. The second extrusion line, up and running in June, will require the company to have more warehouse space yet again.

It began very simply. In 1997, his friend from college, attorney Perry Berg, suggested using contract workers from the Waseca Area Senior Citizens Center, which appealed to Landes, figuring that small-town workers are less expensive while being more reliable because of their work ethic. They assembled fire hydrant markers, packaged them, shipped them out and inventoried parts. For a few years it worked really well — until they outgrew the space and their availability.

“They were just fabulous,” Landes said. “It seemed like they were all ex-farmers so they could do anything. They were incredibly industrious and they had great attitudes. It was really great to work with all the seniors for all those years.”

The next step was leasing space from what was the EF Johnson building while they built their own location. “I think their building is over 100,000 square feet, and what they did for us — this is the great part about smaller towns too — out in the middle of this massive, huge, open facility, they took some of that plastic barricade tape, made a big 5,000-foot square and said, ‘This is yours.’”

Landes also had good things to say about Jobs Plus and MRCI contract workers, which the company has also used, starting in 1999. Some seniors still worked for the company after the expansions, but fewer wanted to stand for long periods of time. In the early 2000s, the company began extruding the posts themselves at the facility in Waseca.

Among the company’s growth over the years has been targeted diversification. The company’s business also includes safety training and marketing materials. An annual resource guide’s print run is three-quarters of a

million copies. This year the business has begun promoting Locator Safety Awareness Week as well. A big part of its foray into safety education has come through putting on industry trade shows and meetings.

Back in the business’s formative years, Landes wrote a regular column for Underground Focus magazine, so when the opportunity arose to purchase its trade show in 2003, it was a natural fit for the salesman. The show had been a regional, outdoor demonstration-type show, with maybe 500 attendees, but now, 15 years on, it’s grown to a full conference with educational sessions, networking opportunities for people in the industry and a trade show of manufacturers of the marking products. It’s held annually, and attendance is up to about 2,000, with folks attending from around the world. Reps from Australia joined people from five other countries at the conference this spring.

Also on the trade show front, for about 10 years the company has been putting on the Common Ground Alliance annual meeting and recently started working on CGA’s Canada trade show as well. Landes and a couple of other employees also serve on committees for the U.S. part of the organization.

“In this day and age when so much stuff is social media and online,” Landes said, “getting people together where they all can talk and learn from each other is a really big deal. That’s helped grow our Rhino product a lot and helped grow the industry.”

Between the offices in Bloomington for Rhino and Infrastructure Resources (the trade show sister company), the production facility and customer service people here, the company has about 35 employees. It still also uses six to 10 contract workers due to the seasonal nature of its production needs.

The company’s products, from the marker posts to the conferences to the training videos, all support each other.

“The magazine and the excavation safety guide give us a lot of marketing muscle to promote the conference as well as the Rhino products,” he said.

Being connected with people in his industry and being able to meet with them has brought growth opportunities, but that’s true on a more local scale as well.

He attends a business group once per month, and that has led to partnering on two new products, one with a Minnesota manufacturer of stretchy wire (for use in equipment that locates the underground cables and lines and doesn’t break) and a Minnesota software company (on an app that people can use in the field to document any accidental hits of wires or pipes).

“You can always call somebody to bounce off an idea,” he said of the benefits of belonging to a multi-industry networking group. “I’m not an expert in everything, but we have experts in our group, everything from finance to manufacturing to marketing. If you have a particular issue, you know somebody you can trust who knows your business a bit.”

To anyone growing a business, he advised to stay thinking of the long-term, because nothing happens suddenly. “Find a way to take the time to keep learning from others,” he said. “As soon as you stop learning from other people, then you’re going to learn everything the hard way. It’s way easier to learn it from somebody else and a lot less expensive.” MV

MN Valley Business • august 2014 • 23

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24 • august 2014 • MN Valley Business

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MN Valley Business • august 2014 • 25

Residential 24/7

Prior to getting into the real estate business, Judy and Jim Ness were high school science teachers.

Home is where the family is Homestead Realty a family firm

By Heidi Sampson Photos by Pat Christman

P

rior to becoming an agent at Homestead Realty, Judy Ness and her husband, Jim, were high school science teachers. They had been teaching in the Twin Cities and eventually in New Ulm. When they decided to come back to the Winnebago area, there were no teaching positions available. Jim went into business for Judy’s family, while Judy became an agent at Homestead Realty, a company her father had owned but had never worked in himself.

“We started Homestead Realty in April of 1984,” said Judy, Owner and Broker of Homestead Realty. “The very first thing that happened, I got pregnant with our third child,

Judd. So, I often say, ‘Judd has been selling real estate his whole life. He was there on day one.’”

For most of the first 20 years, Judy operated a one person real estate office. Occasionally, she had assistance, a part-time agent, but for most of those years she was alone. In 2003, Judd, a college freshman at Minnesota State University, approached his mother with professional direction in mind for his life. He wanted to get into the real estate business.

“I told him no,” said Judy. “Don’t do that. If you are going to be in real estate, you have to finish your education first.”

All In The Family

26 • august 2014 • MN Valley Business

By 2004, Judd received his Realtor license and went on to finish his education. In 2005, Judy opened an office location in Mapleton. Angie Jenkins, a native of Mapleton, became the third full-time realtor. Jim, Judy’s husband, was also licensed to sell real estate in 2005.

“We have been a very small family owned operation,” Judy said, “although, the nonfamily team members are absolutely critical to our success. We would not be where we are today, without them. They are our extended family.”

In November of 2012, Homestead Realty opened its third office location in Mankato. Over the years, Homestead Realty has grown to 10 agents, a part-time bookkeeper and a fulltime maintenance person.

“Real estate has changed over the years, we now work in an area,” said Judy.

“When I started 30 years ago, I only sold homes in Winnebago. If somebody came to me and said they wanted to list a house in Blue Earth, I would tell them I can’t do that. It’s too far away but today, we cover a very wide area of south central Minnesota.”

MVB: What is Homestead Realty ’s business philosophy?

Judy: 100 percent of our success is related to the quality of people we have working within the Homestead Realty team.

It’s not me. It’s not even the three of us. It’s who we have as a team. I never envisioned us being this size, but I’ve always had the attitude that there is always room on our team for the right people. By the right people, I mean those who buy into our company culture, our core values.

Those core values have Homestead Realty started in 1984 always been, being good at what we do, honesty and integrity, and good customer service.

MVB: How do you divide up your time and duties?

Judy: We work together. On visionary things or big decisions, the three of us usually try to make the decision.

The company is actually in my name, I’m the owner of the company but whenever we have a big decision, we have a family meeting. I think part of the reason why we work well together, is that we each have our own niche area.

Jim: Judd handles the foreclosed properties. I do most of the commercial and business properties. I also take care of our rental properties. Judy’s managing and has her own

portfolio of residential properties. Most of the rest of our agents are doing primarily residential properties.

MVB: What do you enjoy most in the real estate business?

Jim: Although a lot of our work is deal driven, we are also helping others to fulfil their dreams, whether that be the home they’ve always wanted or moving up to a different home. Home ownership is a big part of the American dream. We help people to achieve that.

MVB: What is an average day like in the real estate business?

Jim: Controlled chaos.

Judy: That’s a good way to describe it. Usually, I come to the office with an agenda saying this is what I need to get done today but rarely does it happen that way. People walk in the door, you get phone calls, or you have transactions that need attention. This is definitely not an 8 to 5 job.

Judd: I spend most of my days checking properties, making sure foreclosed houses are maintained and not getting any worse, that nobody has broken into a foreclosed property or moved back into them, as well as making sure that they are not taking on water in the basement. I’m also working with homeowners to get them relocation assistance, and I’m reporting back to the banks. I’m mobile all day long. For me, it’s not unusual to put on 225 miles in one day.

MVB: What is Homestead Realty’s plan for the future?

Judy: I do a lot of teaching with our buyers and sellers.

I’m educating them about the process but I’m at a point in my career where I want to focus on training

and management.

Jim: From here, our physical growth will be with agents and not locations. But, that is also part of our unique blend. If we have people moving from Mankato to Mapleton of vice versa, we have a real knowledge base with agents in each area. If someone says, ‘I got a job. We are looking to sell our house in Winnebago and move to Mankato,’ we can say, ‘We will get this house sold, here’s who you are going to work with on finding a new place to live.’ I think we are more holistic in what we can offer verses referring them to another company or agency, we can refer them internally. MV

MN Valley Business • august 2014 • 27

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28 • august 2014 • MN Valley Business

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Rising Star Mankato Office

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Construction/Real Estate Residential building permits Mankato 11000

(in thousands)

- 2013 - 2014

- 2013 - 2014 (in thousands)

3000

$5,087

8250

Residential building permits North Mankato

$2,050

$1,812

$1,548

2000

5500

1000

2750 0

J

F

M

A

M

J

J

A

S

O

N

D

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

177 242

- 2013 - 2014 250

M

A

M

J

J

A

S

O

N

D

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

Housing starts: Mankato/North Mankato - 2013 - 2014 22 9

30

150

20

100

10

50 J

F

M

A

M

J

J

A

S

O

N

D

Source: Realtors Association of Southern Minnesota

0

J

F

M

A

M

J

J

A

S

O

N

D

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

(in thousands)

- 2013 - 2014

$76,470

Commercial building permits North Mankato

- 2013 - 2014 (in thousands)

2000

$30 $1,028

1500 1000

$2,674

500 J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato

— 2013 — 2014

5.5 5.0

4.1%

4.5 4.0

4.4%

3.5 J

F

M

Source: Freddie Mac

0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of North Mankato

Interest Rates: 30-year fixed-rate mortgage

3.0

F

40

200

80000 70000 60000 50000 40000 30000 20000 10000 0

J

Source: City of North Mankato

Existing home sales: Mankato region

0

0

A

M

J

J

A

S

O

N

D

Foreclosures: 2013 Year End County

2012

2013

Percent change

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

126 37 46 98 42 49 58 57 17

101 19 27 70 25 43 39 36 24

-20% -49% -41% -29% -40% -12% -33% -37% +41%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • august 2014 • 29

■

Agricultural Outlook

By Kent Thiesse

Corn, soybean prices crash in light of big national crop

M

uch of the attention in early portion of the summer relative to Minnesota agriculture has been focused on delayed and prevented planting, flooded farm fields, and behind normal crop development. While these factors may lead to significant reductions in crop production in portions of the state, the biggest financial disaster to corn and soybean producers in 2014 may be the very rapid decline in corn and soybean prices that occurred in late June and July. Recent USDA reports are indicating expectations for very good to excellent 2014 national corn and soybean yields, as well as supply levels of corn and soybeans that far exceed usage levels, leading to a build-up of grain stocks.

Based a the July 11 report, the 2014-15 corn ending stocks show a projected increase to near 1.8 billion bushels by September of 2015, which would be the largest corn carryover level in many years. This projection is based on 83.3 million harvested corn acres in the U.S. for 2014, and a record corn yield of 165.3 bushels per acre. Some marketing analysts feel that the USDA estimate for the 2014 national corn yield may be too conservative, given the excellent condition of the corn crop in most areas of the country. USDA is now projecting 2014-15 yearly average corn prices to average $4 per bushel, which could be too high if national yields increase.

Earlier, a June 30 report listed total corn stocks available on June 1 at 3.85 billion bushels, which is a 39 percent increase over the 2.76 billion bushels in June, 2013.

USDA is estimating average corn price for the 2013-14 marketing year to be near $4.45 per bushel, which compares to $6.89 per bushel for 2012-13.

Meanwhile, soybean acreage for 2014 will reach a record level, with 84.1 million acres being harvested.

USDA has projected a record soybean yield of 45.2 bushels per

acre in 2014, which if achieved, would lead to a record soybean production of 3.8 billion bushels in 2014.

USDA is now estimating soybean ending stocks at the end of the 201415 marketing year to be at 415 million bushels, which would be among the highest levels ever. 201314 soybean ending stocks are estimated to be at 140 million bushels.

USDA is estimating the average soybean price from September 1, 2014 through August 31, 2015 to average $10.50 per bushel, which again could drop even lower with better than expected 2014 yields.

USDA is now estimating the 201314 yearly average soybean price to end near $13 per bushel, which was well above the July cash price, and compares to $14.40 per bushel in 2012-13.

Both “old crop” and “new-crop” corn and soybean prices have reacted in a very “bearish” fashion to the crop acreage trends, as well as the identified levels of grain stocks.

Chicago Board of Trade prices for December corn futures closed at $3.84 per bushel on July 11, which is a drop of $1.14 per bushel from May 9. December 2014 corn futures in mid-July were at the lowest level since they were posted by CBOT, and have dropped by nearly 25 percent since late April of this year.

CBOT nearby cash futures prices dropped from $5.05 per bushel on May 9 to $3.99 per bushel on July 11.

Local cash prices for “new crop” 2014 corn dropped below $3.30 per bushel at many locations in the Upper Midwest following the July report, which is well below the “breakeven level” for most corn producers. The local cash corn price on July 11 for “unsold 2013 corn had dropped below $3.50 per bushel at most locations in Minnesota, which compares to near $4.75 per bushel in early May. USDA estimated that Minnesota farmers still had approximately 245

30 • august 2014 • MN Valley Business

million bushels of corn in on-farm storage as of June 1. Most analysts feel that a large percentage of the 2013 corn bushels that were still in farm storage were probably not priced, which probably resulted in a large loss of financial opportunity to those farm operators.

Soybean futures prices on the CBOT have also dropped quite dramatically since the June 30 crop report. CBOT soybean futures for “new crop” 2014 soybeans closed at $10.75 per bushel on July 11, following the report. This compares to $12.33 per bushel on June 23, prior to the USDA Acreage Report, and represented a drop of $1.58 per bushel in less than three weeks.

While the dramatic drop in corn in soybean prices in 2014 may be a bit extreme, a seasonal decline in grain market prices after July 1 is not that unusual. For over two decades prior to 2007, corn and soybean prices usually declined from mid-summer until after harvest, unless there were weather problems that caused a reduction in crop production for the year.

Starting in 2007, we entered an era that included a rapidly growing corn ethanol industry, increased world demand for grains, and various weather problems. This combination lead to several periods of very strong grain prices from 2007 to 2013, and resulted grain markets not following the normal seasonal pattern in many of those years. Now, with supplies of corn and soybeans likely to increase, 2014 could be the beginning of a time period that grain market patterns are more similar to the pre2007 years, as compared to recent years.

Not everyone is disappointed to see the lower grain prices. Livestock producers, ethanol plants, and other grain processors are all seeing very strong profit levels, as a result of the lower cost of grain inputs. MV Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com

Agriculture/Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2013 — 2014 8 6

— 2013 — 2014 20

12

J

F

M

A

M

J

J

A

Iowa-Minnesota hog prices

S

O

N

D

0

M

A

M

J

J

A

S

O

N

D

Minimum prices, class 1 milk Dollars per hundredweight

— 2013 — 2014

25.2

$132.18

112

23.4

98

21.6

84

A

M

J

J

A

S

$20.73

19.8

$97.81 M

F

$24.66

126

F

J

Source: USDA

Milk prices

185 pound carcass, negotiated price, weighted average

— 2013 — 2014 140

J

$12.15

4

$3.36

Source: USDA

70

$15.38

8

2

(dollars per bushel)

16

$6.76

4

0

Soybean prices — southern Minnesota

O

N

D

Source: USDA

18.0

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.

C. Sankey

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Olivia 800.545.6227

www.ummc.co New Hope 877.535.4914

Faribault 866.332.8211

Three time award winner 2011 - 2012 - 2013

Mankato and Surrounding Areas Mark: 507.779.6639

VICTORY VIEW OFFICE SUITES NORTH VICTORY DRIVE MANKATO, MN

South Central Minnesota Toll Free 800-450-6625 www.Wilcon-Construction.com MN#8761

EEO/AA

MN Valley Business • august 2014 • 31

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major May Industry ‘13 ‘14 Construction Manufacturing Retail Services Total*

118 198 51 218 585

Percent change ‘13-’14

117 206 51 157 531

-0.8% +4% 0% -28% -9.2%

Major Industry

May

Construction Manufacturing Retail Services Total*

‘13

‘14

Percent change ‘13-’14

2,217 2,818 1,112 5,014 11,261

2,289 2,587 1,156 4,765 10,797

+32% -8.2% -4.7% -5% -4.1%

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.

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

Local non-farm jobs

Minnesota Local non-farm jobs

- 2013 - 2014

Nine-county Mankato region 125,468 126,376

30000

(in thousands)

2000

10000

1000

00000

J

F

M

A

M

J

J

A

S

Local number of unemployed

O

N

D

- 2013 - 2014

Nine-county Mankato region 10000

J

F

M

A

M

J

J

A

S

Minnesota number of unemployed

O

N

D

- 2013 - 2014

155,790 138,231

150000

5,308

6000

100000

4000

50000

2000 0

0

200000

6,197

8000

2,851 2,885

3000

20000

- 2013 - 2014

J

F

M

A

M

J

J

A

S

O

N

D

Mankato/North Mankato Metropolitan statistical area

Unemployment rate Number of non-farm jobs Number of unemployed

2013

2014

3.8% 55,992 2,223

3.4% 56,903 1,975

Source: Minnesota Department of Employment and Economic Development

32 • august 2014 • MN Valley Business

J

F

M

A

M

J

J

A

S

O

N

D

Unemployment rates Counties, state, nation

(includes all of Blue Earth and Nicollet Counties) May

0

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

May 2013 3.9% 4.4% 5.3% 5.9% 4.8% 3.6% 4.3% 5.5% 5.1% 4.6% 4.5% 7.3%

May 2014 3.5% 4.2% 5.2% 5.1% 4.1% 3.1% 3.8% 4.8% 4.9% 4.0% 4.6% 6.1% C. Sankey

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

836

1200

- 2013 - 2014 $357

$364

400

800

300

600

200

400

100

200 0

(In thousands)

500

769

1000

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

Sales tax collections Mankato

J

F

M

A

M

J

Source: Sales tax figures, City of Mankato

J

A

S

O

N

D

Lodging tax collections Mankato/North Mankato

0

J

F

M

A

M

J

J

A

S

40000

$32,184

51000 34000

20000

17000

10000 J

F

M

A

M

J

J

A

S

O

N

— 2013 — 2014 $3.69

4 3 $3.55

2 1 J

F

M

A

M

J

J

A

S

O

N

D

Gas prices-Minnesota — 2013 — 2014

5

$3.65

4 3 $3.47

2 1 0

J

F

M

A

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato

Gas prices-Mankato

0

0

D

Source: City of Mankato

5

$44,366 $55,300

68000

30000

0

D

- 2013 - 2014

85000

60000

$37,728

N

Mankato food and beverage tax

- 2013 - 2014 50000

O

Source: Sales tax figures, City of Mankato

M

J

J

A

S

O

N

D

Stocks of local interest

June 9

July 15

Percent change

Archer Daniels

$45.11

$47.54

+5.4

Ameriprise

$117.51

$122.30

+4.1

Best Buy

$29.50

$28.71

-2.7

Crown Cork & Seal

$50.46

$51.10

+1.3

Fastenal

$13.75

$16.09

+17

General Growth

$50.57

$44.99

-11

General Mills

$23.63

$24.08

+1.9

Eventis

$55.05

$52.93

-3.9

Hutchinson Technology

$2.19

$2.09

-4.6

Itron

$40.13

$40.52

+1

Johnson Outdoors

$26.27

$24.32

-7.4

3M

$144.98

$145.06

+0.1

Target

$56.83

$60.71

+6.8

U.S. Bancorp

$43.31

$43.30

-0.1

Wells Financial

$25.30

$26.00

+2.8

Winland

$0.80

$0.75

-6.2

Xcel

$30.77

$31.54

+2.5

Source: GasBuddy.com C. Sankey

MN Valley Business • august 2014 • 33

Advancing Business for a Stronger Community

Putting us on the Map Working to raise the regions visibility

Greater Mankato Growth

Greater Mankato Growth (GMG), the regional chamber of commerce and economic development corporation… when you hear those terms, what comes to mind? Membership? Networking events? Business Development? Much of what Greater Mankato Growth does to Advance Business for a Stronger Community is visible within our community. But what you don’t see is Greater Mankato Growth working every day to bring attention, business and talent to the region.

In 2010, the Greater Mankato marketplace became a federally designated Metropolitan Statistical Area (MSA).

With this designation, the marketplace automatically gets invited to sit at “the big kids table” but being new, we often still have to jump up and down or wave our hands maniacally to get a glance from others. Once they take notice, the abundance of offerings the new kid on the block has to offer is undeniable.

To make certain that business and political leaders have Greater Mankato on their radar, GMG works to raise the regional visibility through public affairs, business development and marketing efforts.

PUBLIC AFFAIRS Our elected officials have the power to make decisions about critical issues impacting the vitality of our members and our regional marketplace. That’s why in 2012, the GMG Board of Directors made a significant

34 August 2014 1 •• JANUARY 2013 • MN Valley Business

commitment to a new initiative to expanded work in public affairs and brought on board its first ever full time Director of Government & Institutional Affairs. Since 2012, GMG has made tremendous strides in raising the visibility of our MSA among state leaders and enhancing our policy presence at the Capitol. GMG strives to represent our region’s interests by ensuring businesses have the ability to be effective advocates on their own behalf as well as the opportunity to speak with a unified voice on public policy issues that allow our region to grow and thrive.

BUSINESS DEVELOPMENT From the Regional Economic Development Alliance (REDA), to site selector visits and a new membership with the World Economic Development Alliance (WEDA), existing and new business development work is bustling in our community. If you drive around Greater Mankato you can see the record setting investments being made in business and infrastructure.

REDA exists to work as a tool to develop and secure new business prospects for the entire marketplace. The partners of REDA know that we all individually bring different strengths but collectively we can experience greater success. The alliance is made strong through its partners: Eagle Lake, Lake Crystal, Le Sueur, Madison Lake, Mankato, North Mankato, Saint Peter and Blue Earth County.

GMG has hosted one to two site selectors for visits over the past few years and plans to double the visit volume in the next few years. Site selectors are professionals whose job is tasked by new or exisiting businesses to look for the perfect place for their operation to locate to - so the business not only gets the right facility but also gets located in a place that offers what they require for accessability, talent, cost effectivness, supply chain access and quality of life for their employees. By hosting site selectors we are able to let them experience the culture, something that can’t be done on paper or through any digital medium.

The newest effort to gain greater visibility in the attraction of new businesses to Greater Mankato is membership with WEDA. WEDA is working for us by representing our communities at more than 10 trade shows a year, providing direct contacts to businesses who want to build facilities as well as market our assets across social media and digital avenues.

One of the most exciting accomplishments for the region is the wave of state, national and international media in the marketplace, wanting to be a part of the attention we have been receiving. This last year, Greater Mankato Growth has been interviewed and published in Minnesota Business Magazine, Heartland Real Estate Guide, Business in Focus Magazine and Minneapolis / St. Paul Business Journal – and asked to take part in bushCONNECT. Earlier this year, GMG released The Way to Grow, the first ever video promoting the region, from livability to education and business climate, this covers it all.

The video is being heavily promoted to targeted audiences both inside and outside the marketplace.

Also, accompanying the video is a printed/digital booklet, carrying the same name that is even more encompassing of the marketing and available on the GMG website as well as in office.You can access both at greatermankato.com/way-to-grow.

MARKETING From talent access, to a low cost of doing business, to a livable community and more, Greater Mankato has a plethora of accolades and assets to promote.

Greater Mankato Growth is diversified and strategic in marketing its assets to the business audience using both traditional and digital advertising outside the marketplace in publications and websites such as Site Selection Magazine and Global Trade Magazine to Google and social media advertising.

abundant

TALENT

The Way to Grow video and booklet are widely used and distributed in order to get in front of key decision makers.View both at greatermankato.com/way-to-grow.

waiting just for you...

FIVE COLLEGES

THE WAY TO GROW.

GRADUATING 5,000+ ANNUALLY

FIFTH LOWEST COST OF

DOING BUSINESS AMONG ALL MIDWEST MSAS

TENTH

BEST PLACE FOR BUSINESS & CAREERS 2013 FORBES RANKING

TENTH

BEST PLACE FOR BUSINESS & CAREERS 2013 FORBES RANKING

DOING BUSINESS AMONG ALL MIDWEST MSAS

greatermankato.com 800.697.0652 triley@greatermankato.com

#1 GDP GROWTH IN THE STATE OF MINNESOTA

Be a part of one of the newest, highest ranking and vibrant MSAs in the Midwest. Greater Mankato, Minnesota is an ideal location with direct access to major highways, rail and air. Our regional investment in infrastructure can meet your business and logistical needs. Greater Mankato also offers multiple opportunities for new construction which can accommodate a manufacturer or distribution facility. Even with all these outstanding facility resources, we know that’s not all you need.

The talent the region offers is a cut above the rest. The marketplace graduates 5,000+ students annually and their work ethic can’t be beat.

In fact, more people graduate and want to stay in the area than our businesses can hire. So come and see why we are The Way to Grow!

Existing Distribution Centers: Frito-Lay, Johnson Outdoors, True Value, Pepsi, Jack Links Breaking Ground in 2014: Wal-Mart Distribution Center, FedEx Ground

greatermankatobusiness.com 800.697.0652 - triley@greatermankato.com

Examples of materials used to promote greater mankato outside of the regional marketplace.

Greater Mankato Growth continues to assist the region in gaining attention around business, talent and overall appeal as the ideal area to live, work and do business in.

If you have any questions on the articles, ideas or contacts for business development opportunities, please contact Tom Riley, New Business Development Director at triley@greatermankato.com or 507.385.6650.

MN Valley Business • august 2014 • 35

Greater Mankato Growth

FIFTH LOWEST COST OF

Growth in Greater Mankato NEW BUSINESS

NAME CHANGE

Alive After 5 Family Video 551 Belle Avenue, Suite 300, Mankato

MD CPA’s & Advisors 220 East Main Street, Suite 200, Mankato

15th ANNIVERSARY

GRAND REOPENING

Primrose Retirement Community 1360 Adams Street, Mankato

ProBuild 1631 Stadium Road, Mankato

RIBBON CUTTING

Alive After 5, presented by Schell’s Brewery and an event of the City Center Partnership, takes place every Thursday in August from 5 – 8 pm. Gather with your friends and co-workers at Jackson Park in City Center Mankato for live music, food and beverages.

To keep up on the latest events from the City Center Partnership, like them on Facebook, facebook.com/Mankato.

CityCenter.

MUSICAL LINEUP August 7 – Holy Rocka Rollaz – An upbeat 4 piece 50s swing band August 14 – Davina and the Vagabonds – New Orleans style jazz/blues band August 21 – Chad Pfeifer – hometown new country sensation from Janesville

Greater Mankato Growth

August 28 – Church of Cash – Midwest’s best Johnny Cash tribute band Water’s Edge 501 North Riverfront Drive, Mankato

Engage with other Businesses through Grow Minnesota!

Are you interested in learning more about businesses in the community through one-on-one visits? Join the Grow Minnesota! team. Grow Minnesota! is a state-wide program founded in 2003 by the Minnesota Chamber of Commerce to support existing businesses throughout the state. Through the program, business development staff from Greater Mankato Growth (GMG), along with area officials from the Regional Economic Development Alliance (REDA) and the state, conducts face-to-face visits with leaders from area companies. You will have the opportunity to visit with three or more businesses and thank them for having their business in our community. To learn more and apply today, visit greatermankato.com/grow-minnesota.

36 august 2014 1 •• JANUARY 2013 • MN Valley Business

This free event for thousands of college students will feature community information, business products and services and volunteer and employment opportunities from local businesses and non-profit organizations. This is the perfect opportunity to promote your business or find new prospective employees and interns. Registration as well as sponsorship information can be found on Greater Mankato Growth’s website greatermankato.com/campuscommunity-fair.

5:00 - 7:00 p.m.

August 5 September 2 October 7

Thomas Tree & Landscape Chankaska Creek Ranch & Winery Schwickert’s Tecta America

2014 Business After Hours Sponsored by:

June Business After Hours hosted by Bolton & Menk, Inc.

SEPTEMBER 4

MINNESOTA STATE UNIVERSITY, MANKATO

7:30 - 9:00 a.m.

August 20 September 17 October 15

Jake’s Stadium Pizza Primrose Retirement Community Old Country Buffet

2014 Business Before Hours Sponsored by:

June Business Before Hours hosted by Willow Brook Senior Cooperative

Greater Mankato Growth 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.

MN Valley Business • august 2014 • 37

Navigating through greatermankato.com Resources available on Greater Mankato Growth’s website, greatermankato.com

RELOCATION

There are a number of reasons why Greater Mankato makes the perfect place for both your family and your career relocation.You’ll find the services you can expect in a major metro and the charm of a closeknit community. Information on location, exceptional education, superior healthcare, abundant activities, cost of living index calculator and more can be found on Greater Mankato Growth’s website: greatermankato.com/ relocating.

Greater Mankato Growth

- 10th in the nation on Forbes 2013 list of Best Small Places for Business and Careers among metropolitans having populations less than 250,000

Cavaliers Cavalier Calls on the Newest Greater Mankato Growth Members

Limb Lab 1400 Madison Avenue, Suite 212, Mankato limblab.com

Modern Woodmen Fraternal Financial 430 South Broad Street, Suite 140, Mankato modern-woodmen.org

- #1 Low Cost of Doing Business in Minnesota - Top 17% nationally - 8th in the nation on NerdWallet’s 2013 list of best places for Work-Life Balance based on hours worked per week, daily The Tailwind Group 530 South Front Street, Suite 100, Mankato thetailwindgroup.com

38 august 2014 1 •• JANUARY 2013 • MN Valley Business

nkato rs

Visit Mankato Can Help Welcome New Employees

By Kathryn Reeder, Brand Manager for Visit Mankato

The Mankato – North Mankato MSA consistently leads the state in private sector job growth. And it doesn’t appear to be slowing down with many construction projects in the works.

This means a lot of new employees will be recruited to the Mankato area.

Showing new employees that you are excited about them and their presence in the Greater Mankato community gets them excited about you and your business. Below are 10 “beyond traditional” ideas for a warm welcome to your new employee, provided by Sam Kashy, Director of Business Development and Strategic Alliances, Tandem HR.*

2. Print their business cards and have them waiting on their desk for their arrival.

3. Leave a welcome basket on a new employee’s desk. Items do not have to be expensive (snacks, beverages, company logoed t-shirt or mouse pad, small welcome gift, etc.)

4. Host a welcome breakfast or lunch with the employee’s department.

5. Ensure the work space is neat and orderly without left-over clutter or

business products to give your employee a taste of Greater Mankato.

6. Leave a small pile of basic office supplies on the desk and allow the employee to pick the rest of the supplies that will allow them to organize their office space the way they feel is most efficient. Include a company directory and any other important company documents with the supplies.

7. Get the full department to sign a welcome card.

8. Create a training schedule so the new employee knows what to expect.

Do not pack it so full that they are unable to take breaks and soak in the new knowledge, but do not leave gaping holes where employees can get bored.

9. If your company uses social media, consider welcoming the employee on the company page.

10. Allot some time for the new employee to spend with their direct supervisor on the first day.

If possible, a personal welcome from the President and other upper management is a nice touch.

Greater Mankato Growth can assist in this department as well – selling Gift Baskets with a variety of local

When welcoming employees to the Greater Mankato area, it is vital to communicate Mankato’s plethora of activity and charm.Visit Mankato is here to help with the tools and locally branded items for your business to make your newest employee’s relocation to Mankato an impeccable experience. Combining branded company gifts with branded Mankato items shows a direct, positive relationship between the community and its businesses. Welcome new employees to the scenic Minnesota River Valley with a welcome basket full of Mankato goodies, ranging from the 2014 Visitor’s Guide to biking and hiking maps to dining and entertainment gift cards. Top it off with one of Visit Mankato’s new T-shirts, hooded sweatshirts, key chains, coffee mugs or post cards.

Stop by Visit Mankato’s Visitor Center in the Mankato Place Mall to top off your employee welcome baskets, or call 507.385.6660 to have items aside for you.

Sam Kashy’s online article can be found at: smallb-usinessadvocacycouncil.org/ blogpost/small-business-advocacycouncil/2013/8/create-unique-first-daynew-hires

MN Valley Business • august 2014 • 39

Greater Mankato Growth

1. Create welcome signs in the reception area for the new employee.

papers from previous employees.

(507) 625-4171 | www.bolton-menk.com

Bullchicks Restaurant

We listen.

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

MEDICAL Mankato Clinic 1809 Adams Street Mankato, MN 56001 507-385-4075 www.mankatoclinic.com

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

Our People have listened carefully to our clients and communities for over 50 years. After all, our Process begins with lending an ear.

507-344-6390

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Competitive pricing and flexible financing options Working capital lines of credit Long-term financing for equipment and real estate Conventional and SBA 504 options

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40 • august 2014 • MN Valley Business

COLE NELSON 507.385.4511

NICK HINZ 507.385.4534

cnelson@frandsenbank.com

nhinz@frandsenbank.com

CA071114

We mean business when it comes to helping you grow your business!

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As each project becomes reality, we are proud to observe the lifestyles of the new residents who are enjoying their exceptional community and celebrating their successful choice of living options.

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