Prairie Business August 2014

August 2014

Keeping Hunting on Target Pheasant season is make-or-break for many SD communities pg. 24

ALSO Redefining 'Workplace' Coworking spaces encourage collaborations

pg. 28

Elevating Entrepreneurship UND launches School of Entrepreneurship

pg. 22

|INSIDE| August 2014 VOL 15 ISSUE 8

DEPARTMENTS

FEATURES

6 Editor’s Note

BY KRIS BEVILL

Reshaping the “workplace” 8 Business Advice

BY MATTHEW D. MOHR

Value of growth 8 Management Matters

BY JOHN GIRARD

What’s my password?

10 Finance

BY MARK LUECKE

The importance of public/private partnerships 12 Economic Development

BY SLATER BARR

Education a vital economic development partner

Downtown Sioux Falls, S.D., is experiencing a renaissance as the entire community benefits from a strong and growing economy. PHOTO: SIOUX FALLS AREA CHAMBER OF COMMERCE

14 Research & Technology

BY RICH NASER

24 OUTDOORS Keeping Hunting on Target Pheasant season is make-or-break for many SD communities

28 COWORKING Collaboration Central Coworking spaces encourage entrepreneurial collaborations

Incubator programs help entrepreneurs launch, grow 16 Prairie News 20 Prairie People 22 Higher Education Elevating entrepreneurship 34 Entrepreneurship Innovative Incubator 36 Culture

BY THOMAS MCMURTRY

The power of giving EVENTS

38 Tourism

BY SCOOTER PURSLEY

Think 29 Tour ...................................................................................................................................Aug. 6-7 I-29 corridor............................................................................................Information: think29.com/tour/ Health Pitch .......................................................................................................................................Aug. 15 Fargo, N.D. .......................Information: eventbrite.com/e/health-pitch-fargo-tickets-7287229299 Healthcare Management Educational Series..............................................................................Aug. 20 Golden Valley, Minn. .........................................................................Information: dsb-cpa.com/hmes/

Outdoor recreation still plentiful in western North Dakota 40 Talk of the Town Booming all by itself 44 Energy

Business Pitch contest .....................................................................................................................Aug. 22 Barnesville, Minn. ..........................................Information: stoneridgesoftware.com/businesspitch/

46 Energy: Drilling Data

Big Iron Farm Show .....................................................................................................................Sept. 9-11 Fargo, N.D........................................................................................Information: bigironfarmshow.com

48 Business to Business 52 By the Numbers Follow us on Twitter https://twitter.com/PrairieBiz Check us out on Facebook https://www.facebook.com/PrairieBusiness

Hunters are responsible for millions of dollars of economic activity every year in small communities throughout South Dakota.

PHOTO: SOUTH DAKOTA DEPARTMENT OF TOURISM

4

Prairie Business Magazine August 2014

Scan this with your smartphone's QR Reader to visit our website.

Next Month The September issue of Prairie Business magazine will include results from our inaugural Best Places to Work contest. The issue will also highlight how a local manufacturing firm is confronting workforce shortages and the impressive growth of a real estate service provider amid the region's booming market.

|EDITOR’S NOTE|

Reshaping the “workplace” here is a revolution happening in the workplace today and it is redefining what it means to go to work. Millenials crave freedom in the workplace and want to be able to work whenever, and wherever, they choose. Technology enables this to happen, offering anyone with a smart phone and an Internet connection the ability to set up a virtual office. These factors have given rise to a new type of office space-as-a-business industry which is being embraced by entrepreneurs, tech professionals, freelancers and entrepreneurs across the country. It’s called coworking.

The concept behind coworking is to offer an alternative to remote workers, solo-preneurs and startups who otherwise would work from home or set up temporary daily office spaces in coffee shops or other public spaces. Remote workers make up a growing segment of the working population, partly due to the previously mentioned affinity of millenials to avoid traditional office settings and partly due to the realization by some companies that providing office space for their workers is simply no longer necessary or cost effective. Coworking facilities offer remote workers and small startups the chance to rent a space, whether it be access to a communal work area or a designated space within the facility, providing them with a professional workplace as well as the camaraderie of shared office space.

This month, Minneapolis-based CoCo will expand its coworking business to include a space in Fargo.

In “Collaboration Central,” we cover the ins and outs of coworking and why CoCo chose Fargo for its first expansion project. We also check in with Meso in Sioux Falls, S.D., which has been offering coworking spaces for several years and recently came under new ownership. Owners of both facilities say the collaborative atmosphere is the most attractive aspect of coworking for many of their members. In CoCo’s case, collaborations at its workspaces have even resulted in new companies being formed. Company leaders hope to achieve the same results in Fargo, perhaps even fostering collaborations between entrepreneurs in Fargo and the Twin Cities.

If collaboration and shared space fosters new startups, then the newly launched Fargo Startup House is sure to inspire new ventures. The house, located in a north Fargo residential neighborhood, will provide free room and board — and the fastest Internet access around — to six tech startups with the hope that they will grow their business ideas into successful ventures that will improve the world in some way. Picture 24/7 coworking with a splash of dorm life and HBO’s Silicon Valley. Houses similar to the Fargo Startup House have been in play in Kansas City, thanks to the Google Fiber project, for some time and have been well-received.

Projects like coworking spaces and startup houses provide new support to the region’s entrepreneurial community, which is strong and continuing to grow. Further to this effort is UND’s new School of Entrepreneurship, which will launch this fall as part of the university’s College of Business and Public Administration. Bruce Gjovig, founder of the Center for Innovation, which will serve as the school’s practitioner, says the timing has never been better to place emphasis on entrepreneurship throughout the university’s programs. “What a better time to get more people more entrepreneurial thinking than at a time of growth,” he says.

Local entrepreneurs are expected to play a major role in providing training to students of the entrepreneurship school. For details, read “Elevating entrepreneurship.”

Finally, this issue also zeros in on the importance of pheasant hunting to local economies in South Dakota. In many small towns, the start of pheasant hunting every fall is the make-or-break time for businesses ranging from the service industry to retail stores. It is a celebratory time for many communities, but a recent decline in pheasant numbers has state officials as well as wildlife advocacy groups concerned over the future of the hunt within the state. In “Keeping Hunting on Target,” contributing writer Rob Swenson provides perspective on the impact of the sport and upcoming efforts to sustain it.

T

KRIS BEVILL Editor kbevill@prairiebizmag.com

6

Prairie Business Magazine August 2014

KORRIE WENZEL, Publisher RONA JOHNSON, Executive Editor KRIS BEVILL, Editor BETH BOHLMAN, Circulation Manager KRIS WOLFF, Layout Design, Ad Design Sales Director:

JOHN FETSCH 701.212.1026 jfetsch@prairiebizmag.com Sales:

BRAD BOYD - western ND/western SD 800.641.0683 bboyd@prairiebizmag.com SHELLY LARSON - eastern ND/western MN 701.866.3628 slarson@prairiebizmag.com Editor: KRIS BEVILL 701.306.8561

kbevill@prairiebizmag.com

Editorial Advisors: Dwaine Chapel, Executive Director, Research Park at South Dakota State University; Bruce Gjovig, Director, Center for Innovation; Lisa Gulland-Nelson, Vice President, Marketing and P.R., Greater Fargo Moorhead EDC; Tonya Joe (T.J.) Hansen, Assistant Professor of Economics, Minnesota State University Moorhead; Dusty Johnson, Chief of Staff for South Dakota Gov. Dennis Daugaard’s office; Brekka Kramer, General Manager of Odney; Matthew Mohr, President/CEO, Dacotah Paper Company; Nancy Straw, President, West Central Initiative Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 375 2nd Avenue North, Grand Forks, ND 58203.

Qualifying subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid). The opinions of writers featured in Prairie Business are their own. Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.

Subscriptions Free subscriptions are available online to qualified requestors at www.prairiebizmag.com Address corrections Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 Beth Bohlman: bbohlman@prairiebizmag.com Online www.prairiebizmag.com

www.prairiebizmag.com

7

|BUSINESS ADVICE|

Value of growth

BY MATTHEW D. MOHR rowing a business is generally very difficult, even during good times. Our country has struggled through a rough economy the last few years, and business growth has been especially hard and costly.

Of the big publicly traded companies, Wall Street has seemed to favor those with sales growth above profitable enterprises even when the growth was unprofitable. E-commerce giants earn paltry returns but promise gold at the end of the rainbow, yet their valuations are extremely high.

As a shareholder in a closely held enterprise, I was dismayed when the board of directors approved the purchase of a fast-growing web-based seller with a concentrated product offering to a handful of accounts for many millions of dollars. After a short period the closely held enterprise lost accounts but is still trying to keep the web entity alive at a high cost. They can’t afford to take a loss or their balance sheet will become horrifying, so the entity stays alive with a fraction of the business. In this case, the cost of

G

growth has been a disaster (although the business management probably disagrees with this assessment).

A very aggressive business owner I know expressed frustration a few years ago when after growing his business year after year and eventually reaching employment of over 1,000 individuals, his profit after tax didn’t grow much at all. His frustration with lack of profit growth even with increased sales eventually led him to sell the business.

Another recent business analysis I saw exposed a 300 percent growth in sales, but a corresponding 350 percent increase in costs. Eventually the lines cross where the cost of growing volume exceeds the value of the growth.

Growing sales volume is fun and an indicator of success in the market place, but at what cost is the growth worth? PB Matthew D. Mohr CEO, Dacotah Paper Co. mmohr@dacotahpaper.com

|MANAGEMENT MATTERS|

What’s my password?

BY JOHN GIRARD very month or so, there seems to be news of yet another large data breach. Invariably the press release goes something like, “Recently we were attacked by criminals who illegally accessed data we had stored on our servers.” Many organizations, large and small, online and brick and mortar, profit and not for profit, have succumbed to these malefactors.

Predictably, the organization then conducts a sweeping security audit and establishes new security protocols including an enhanced user password policy. This makes sense when you consider that most of us have “weak” passwords that are seldom changed. According to SplashData (www.spashdata.com) “123456” is the most common password, which only recently bumped “password” from the top spot. Number three was the equally original “12345678.” Perhaps the additional two digits added some sense of security.

E

8

Prairie Business Magazine August 2014

Many sites now require passwords with a c0MbinAt!oN of special characters (#$!) , upper/lower case letters, and one or more digits. The resulting passwords are gibberish and impossible to remember. So what to do?

Many people have resorted to keeping lists of passwords, either pen-and-paper or electronic, but there is a much better way. There are several excellent password manager programs available that are either free or very low cost.

These are much safer than any “hidden” list you have and you will never again ask the question “What’s my password?” Take the time now to investigate these important tools — do not wait until you are a statistic — and then recommend that your coworkers do the same. PB John Girard Founder, Sagology John@JohnGirard.net Twitter: @JohnGirard

DAKOTA PARTNERS

at Morris Inc.

Developing and maintaining the infrastructure in the Dakotas and neighboring states at Morris Inc. requires planning and partnering with our associates.

Our manufacturing division utilizes a skilled team of craftsmen and women to build state of the art aggregate processing equipment to create clean high grade materials for use in construction where asphalt and concrete are required.

Morris is also a Terex Powerscreen dealer in the Dakotas providing sales and rentals of mobile crushing and screening equipment as well as recycling concrete and asphalt into new road building material.

Call Jeff Beskar for more information.

001110728r1

605.222.8511

Fort Pierre, SD

Jeff.Beskar@morrisequip.com

WWW.MORRIS-INC.COM

Proven engineering solutions for North Dakota.

Across North Dakota, you’ll find innovative engineering solutions designed by Ackerman-Estvold. Our engineers are experts in transportation and traffic engineering, land planning and development, structural and construction engineering, water resources and GIS. We’re setting the standard for engineering in North Dakota.

701.837.8737 www.ackerman-estvold.com Minot, ND | Williston, ND

www.prairiebizmag.com

9

|FINANCE|

The importance of public/private partnerships

BY MARK LUECKE

he importance of public/private partnerships is never more apparent than in the process of research commercialization, and trying to establish and grow knowledge-based communities. This is especially true in our region where it is a significant challenge to achieve a critical mass of the key success factors required to develop these types of communities, such as market-aligned university research, experienced entrepreneurial talent and early-stage investment capital.

Each year, the United States invests approximately $125 billion in research and development through its university system alone. While this is an impressive number, numerous studies have highlighted the United States’ increasing deficit in research and development investment and an increasing competitive disadvantage in innovation compared with global competitors. For example, China will invest $1.5 trillion over the next seven years on “strategic emerging industries” as part of its Innovation 2020 strategy.

The $125 billion investment by the U.S. generates approximately 25,000 inventions being disclosed by university professors, many of which lead to new patent applications and a smaller number of which lead to license agreements to existing companies. Yet this investment leads to fewer than 750 new startup companies. Therefore, the simple math suggests an investment of $5 million is required to achieve one new invention disclosure, and an investment of $165 million is required to achieve one new startup company. This dismal return on investment is compounded by the historical probability of a startup company achieving sustainable success, which is less than 10 percent according to many studies.

How do we resolve our current situation of investing in research and development to lead the world in innovation, while expecting a sustainable return on investment?

And how do we accomplish this in our region, where resources are limited?

One of our board members teaches a simple framework to assess complex situations such as the one described above: Problem, Alternatives, Solution. With the problem clearly defined — the high risk of investing in research and development to maintain our competitive advantage in innovation — it is important for us to begin looking at the alternatives.

T

10

Prairie Business Magazine August 2014

The public sector (federal and state government) is a leading investor in research and development, and has recently implemented a number of programs to facilitate research commercialization through startup company formation. A good example at the federal level is the National Science Foundation’s Innovation Corps program, which prepares scientists to extend the focus of research beyond the laboratory. At the state level, South Dakota’s Proof of Concept program provides up to a $25,000 investment to conduct research demonstrating technical and economic feasibility of an innovation, enhancing its commercialization.

The private sector (industry) is also a leading investor in research and development, and represents the closest position to the final customer, given commercial scale manufacturing and distribution on a global basis.

Our portfolio companies work with a number of industry leaders to complete early-stage milestones that reduce the risk of new technology.

However, the alternative with the highest probability of success (i.e., the solution) is a combination of alternatives. With the public sector’s investment in research and development through our university system, and the private sector’s position with the final customer that will align research and development priorities with the market, it is important to increase the number of public/private partnerships that occur. These partnerships work collaboratively to reduce the overall risk — the public sector with early-stage investment capacity and the private sector with market alignment and distribution capability.

The AgTech Center for Rural Enterprise in Brookings, S.D., is a perfect example where the public sector and private sector collaborated to construct a 30,000square-foot pilot-scale facility for bioprocessing and aquaculture to reduce our country’s second largest trade deficit in natural resources (seafood) and increase our opportunities for rural development. This public/private partnership is a good example of establishing and growing knowledge-based communities. PB Mark Luecke Managing Director/CEO South Dakota Innovation Partners mark@southdakotainnovation.com

Member FDIC

AS LOW AS

% 1.95

APR*

LOANS We’re ready to make your life better.

Contact us today at 800.423.3344 or visit gatecitybank.com.

34 locations in North Dakota and western Minnesota. *Discounted rate available with automatic payment plan using a Gate City Bank checking account.

2IIHU QRW YDOLG RQ *DWH &LW\ %DQN UH¿QDQFHV RU OLQHV RI FUHGLW 2WKHU WHUPV DQG FRQGLWLRQV PD\ DSSO\

www.prairiebizmag.com

11

|ECONOMIC DEVELOPMENT|

Education a vital economic development partner

BY SLATER BARR

ne of the reasons for the consistent growth of the Sioux Falls, S.D., regional economy, population base and business community has always been our effective partnerships. We work closely with the Governor’s Office of Economic Development, Sioux Falls City Hall and with civic leaders in the surrounding communities, as well as county governments, to create a partnership for progress that has fueled economic success in our area. The integration of resources, energy and prospects has led to synergies that bring companies and families to our region.

An equally vital partner in building a better future for the Sioux Falls area is the education community. Representatives of the Sioux Falls public school district and regional higher education literally sit at the economic development table by serving as members of the Sioux Falls Development Foundation board of directors. Other education leaders participate in task forces, fact-finding groups and committees that shape our economic future. These well-educated and dedicated professionals understand the importance of developing jobs, enhancing diversity and expanding opportunity throughout our fourcounty metropolitan statistical area.

The mission of the regional educational community is to prepare students for the future, whether that future is the next educational step or a meaningful career. That progression towards educational success has serious ramifications in one of the most critical aspects of economic development today — workforce development. In Sioux Falls, our historically low unemployment rate is sometimes misunderstood as representing a limited workforce. The recent experience of Marmen Energy, a Canadian company opening a wind energy tower manufacturing plant in our area, proved that excellent candidates are always avail-

O

12

Prairie Business Magazine August 2014

able for good jobs in the Sioux Falls area. Marmen advertised 200 jobs and received 2,000 applications.

Educational institutions in our region are working directly with companies in creating effective courses of study to meet specific employment needs and ensure students rewarding careers upon graduation. In addition, Sioux Falls developed innovative high school programs, focusing on hands-on courses in one location and technology courses in another, to prepare students for the future.

Education is a factor in attracting new companies, too. Most business executives ask us two key questions that revolve around our educational system. The first is about our workforce learning programs for creating effective, efficient, motivated workers. Second, executives want to know about the educational systems in our area, as a quality of life issue that affects new families. Because education has long been a priority in the Sioux Falls area, we are able to point with pride to institutions that place job preparation at the head of the list of goals, both on the K-12 and post-secondary levels. Working closely with the business community, our institutions of learning are keeping their curricula relevant to the marketplace.

In the same way, innovative education keeps business fresh, as students with new ideas and the ambition to create their own companies drive an exciting and inventive marketplace. As we look to the future and the new businesses that will thrive here, education is a key component of maintaining our momentum as a great place to do business and raise a family. PB Slater Barr President Sioux Falls Development Foundation slaterb@siouxfalls.com

Business Transactions Commercial Law – Litigation Construction Law Oil & Gas Law

TEACHING & LEARNING IS A LIFELONG JOURNEY Offering Master’s Degrees in Early Childhood Education

Instructional Design & Technology Elementary Education

O

English Language Learners

O

O

Curriculum & Instruction

Reading Education

O

Special Education

Discover your graduate program @ gradschool.UND.edu

FIELD OF DREAMS When Bismarck dreamed of a new outdoor sporting and events facility worthy of this vibrant city, the entire community rallied together to create the MDU Resources Community Bowl.

Designed by JLG, the new spectator facility, turf and locker facilities take the fan and athlete experience to a new level and helps the Bowl live up to its name as the city’s most popular gathering spot for more than 300 events a year.

jlgarchitects.com

www.prairiebizmag.com

13

|RESEARCH & TECHNOLOGY|

Incubator programs help entrepreneurs launch, grow

BY RICH NASER

ver the past decade, the South Dakota communities of Sioux Falls, Brookings and Rapid City have developed business incubators to assist entrepreneurs in successfully launching and growing their businesses. By both directly providing entrepreneurial training and by serving as connectors to other resources and activities, these incubators are helping our state’s entrepreneurs thrive in an ever-changing environment. The direct economic impact of these business incubators is both measureable and significant. Today the companies and graduates of the South Dakota Technology Business Center, located in Sioux Falls, employ 673 people at an average annual salary of more than $60,000. In addition, these same companies achieved combined annual sales exceeding $200 million in 2013.

The SDTBC’s Accelerator Program is an example of how public and private resources are being brought together to support entrepreneurship. The goal of the program is to fast-track entrepreneurs’ efforts to bring their unique products or services to market.

Eight companies were competitively selected for the 2014 accelerator program from a pool of more than 20 applicants. The industries represented by these entrepreneurial teams range from software and manufacturing to medical and security technologies, some of which were developed at South Dakota universities. The companies currently participating in this program are: AMI (Antimicrobial Materials) Inc.; Credentialing USA LLC; Picki; ODIN Hunting Products Inc.; The Weston Group; SPACT (Security Printing and Anti-Counterfeit Technology); 7400 Circuits, and Global Thinking Laboratories.

This year’s Accelerator kicked off in May with a three-day business launch boot camp and concludes

O

14

Prairie Business Magazine August 2014

in September when the participants have completed four monthly one-day sessions focused on key aspects of business development and growth.

During the program, the companies learn how to be successful in business from some of the region’s top experts in entrepreneurship, sales, finance, intellectual property, business law and more. They also receive in-kind incubator services at the Technology Business Center for the duration of the program, gaining access to mentors and professional guidance from attorneys, accountants and marketing experts.

In addition to gaining a wealth of knowledge, participants have the opportunity to pitch for up to two $5,000 project grants per company made available by the South Dakota Governor’s Office of Economic Development through a Small Business Administration FAST grant. Companies seeking equity funding also have the opportunity to pitch to angel and venture capital investors.

Through its investment in incubators and programs like the SDTBC Accelerator, Giant Vision, Innovation Expo and efforts to establish angel investment funds, South Dakota has laid a foundation for continued growth in entrepreneurship. While there are many more steps to take in this exciting journey, we are now well underway.

More information about the SDTBC and its accelerator program can be found at www.sdtbc.com or by contacting the center at (650) 275-8000. PB Rich Naser Executive Director, South Dakota Technology Business Center President, University of South Dakota Research Park richn@sdtbc.com

Knowing my

ONLINE

Go paperless.

program is one of the nation’s best feels great.

Think earth friendly by making the switch to an online subscription.

Sign up today to be on the 7000+ subscriber list of people who receive the digital edition a week before the print edition is released.

Simply go to http://www.prairiebizmag.com/pages/subscribe_digital to sign up!

No waiting. No paper.

No carbon footprint.

Be seen. Be heard.

U.S. News & World Report reported that Minot State’s online graduate programs in business and MSU’s undergraduate online programs ranked among the nation’s best online education programs. Recognizing the growing significance of online education, we think you will find our programs affordable and of great value. Go to www.MinotStateU.edu/online or call

Thank you.

1-800-777-0750.

001110510r1

www.prairiebizmag.com

15

Prairie News

Industry News & Trends

United adds Williston-Houston flight United Airlines will begin offering United Express service from Williston, N.D., to Houston beginning Aug. 19 with one daily roundtrip flight on a 50-seat regional jet. Sen. John Hoeven, R-N.D., made the announcement, noting that he has worked closely with Williston leaders and the airlines to expand jet service to the area to support the state’s robust economy.

PHOTO: UNITED AIRLINES

Book offers tips to encourage entrepreneurialism A book recently released by the Center for Rural Entrepreneurship in Lincoln, Neb., offers tools and resources to help economic developers encourage entrepreneurial growth in their communities.

“Energizing Entrepreneurial Communities: A Pathway to Prosperity” is a follow-up to a book published by the center in 2005 which made the case for entrepreneurship development. This second installment on the topic provides examples of communities that have embraced the concept and provides economic developers pathways to increase the impact of entrepreneurialism.

Authors Don Macke, Deborah Markley and John Fulwider make their case for supporting entrepreneurial development in five parts, providing readers with multiple case studies from communities throughout the Midwest and self-analysis quizzes that can be used to help evaluate a community’s current status and develop strategies to encourage entrepreneurial growth. The book also offers tips on identifying and coaching entrepreneurs.

The book is available in paperback and digital editions. For more information, visit http://www.energizingentrepreneurs.org/.

BCBSND, Flint receive PR award Blue Cross Blue Shield of North Dakota and Flint Communications received a Silver Anvil award from the Public Relations Society of America during an awards ceremony held June

16

Prairie Business Magazine August 2014

12 in New York City. BCBSND’s Bolder Shade of Blue campaign earned the award in the Reputation/Brand Management category, which honors companies and their public relations firms for programs designed to enhance, promote or improve the reputation of an organization either proactively or in response to an issue or event. The focus of BCBSND’s campaign was to improve communication, provide better customer service and help explain the complexities of health care and health insurance.

Lake Region Healthcare adds exercise tips to walking trail Fergus Falls, Minn.-based Lake Region Healthcare recently opened a Be Fit Circuit on the Lake Alice walking path as part of its commitment to community wellness. The circuit consists of four signs illustrating two exercises for participants to complete in two laps.

Fargo firm attracts $500M acquisition deal Fargo-based Evolution1, a cloud-based technology and payment solutions provider for the health care industry, has agreed to be acquired by WEX Inc. for $532.5 million in cash.

WEX, headquartered in South Portland, Maine, employs 1,400 people and is a multi-channel provider of corporate payment solutions. As part of the agreement, Evolution1 will retain its 300 employees and offices in Fargo, Minneapolis, St. Louis, Mo., and Hartford, Conn. The company will continue to be led by Jeff Young, current

chairman and CEO. For more on Evolution1, read “Evolving with health care” in the May issue of Prairie Business magazine.

Arvig Enterprises expands again In May, Perham, Minn.-based telecommunications provider Arvig Enterprises announced its intent to purchase the operations of the St. Olaf Telecom in Northfield, Minn., from St. Olaf College. St. Olaf Telecom provides telecommunications services to St. Olaf College, Carleton College and businesses in the city. The terms of the purchase agreement were not released.

Northfield is located about 40 miles south of Minneapolis-St. Paul and about 50 miles northeast of Rochester, Minn.

Earlier this year, Arvig acquired Grand Forks, N.D.-based CD Communications, which specializes in phone system sales, installation, network management and other services.

Cornerstone bank announces merger Cornerstone Holding Co., a banking group with offices in Fargo and Grand Forks, N.D., has agreed to merge with New Town, N.D.-based Lakeside Bank Holding Co., effective in late 2014. Cornerstone had $238.2 million in assets as of March 31; Lakeside had $374.2 million.

The merger makes Cornerstone one of the 10 largest financial institutions in North Dakota, according to the bank.

|PRAIRIE NEWS| VCSU Science Center earns LEED certification The U.S. Green Building Council has awarded LEED (Leadership in Energy and Environmental Design) certification to the L.D. Rhoades Science Center at Valley City (N.D.) State University. The center, designed by JLG Architects, is 17.5 percent more energy efficient than other structures. It features low-flow faucets, showers and sensors and dual-flush toilets, which saves 72,000 gallons of water annually, a no-mow lawn and a high-efficiency mechanical system, which reduces air pollution by 25 percent and increases fresh air and airflow by nearly 50 percent.

The center was the first capital construction project for an academic facility at VCSU in 40 years. VCSU is now the fourth higher education institution in North Dakota with a LEED building on campus.

Valley City State University’s L.D. Rhoades Science Center in Valley City, N.D., houses the university’s science and math departments and IT services, as well as the Great Plains STEM Education Center and VCSU’s collaborative nursing program with Dakota College at Bottineau, N.D. PHOTO: JLG ARCHITECTS

www.prairiebizmag.com

17

|PRAIRIE NEWS| Kraus-Anderson, JLG win Watford City high school, event center project

A 160,000-square-foot high school and adjacent 240,700-square-foot event and recreation center are being constructed in Watford City, N.D., to meet the needs of the community’s soaring population. IMAGE: JLG ARCHITECTS

SDSMT reports 98 percent placement The South Dakota School of Mines and Technology’s Career and Professional Development Center has found that the average starting salary for its 2012-’13 graduates was just over $62,000, with a 98 percent placement rate.

Geological engineers had the highest average starting salary — about $70,000 — and reported a 100 percent placement rate.

Beginning this fall, the school will offer a minor in petroleum systems as a way to help meet the needs of the region’s energy sector and continue to attract students to the sector. It will serve as the educational component of a broader Energy Resource Initiative, which will serve upstream and downstream energy industries and encompass a laboratory for petrophysics/geomechanics work.

Avera announces building plan for Mitchell Avera Health and Avera Queen of Peace Hospital announced in June plans to build a three-story medical office building in Mitchell, S.D., with expectations of also building a new hosptital and related facilities on the 30-acre property in the future.

The location, named Grassland Health Campus, was purchased from the Mitchell Area Development Corp. approximately two years ago for $1.6 million. The medical office building will be a 70,000-square-foot, three-story building and is expected to cost $16.5 million. In June, the

18

Prairie Business Magazine August 2014

organization anticipated breaking ground on the facility this month.

BWBR Architects designed the campus concept, which includes multiple buildings, green space, walking space and a greater focus on health and wellness, according to Avera.

GrandStay Hotel to be built in Valley City GrandStay Hospitality LLC recently signed a franchise agreement with VC Lodging LLC, a group of Valley City, N.D., residents, to develop a hotel in Valley City. The property will be operated by Fargo-based Discover Lodging Management Inc. In a press release announcing the development agreement, GrandStay said the hotel will be located near Interstate 94. The company also noted Valley City’s “thriving and robust business community,” which includes John Deere Seeding Group, Eagle Creek Services Software, Valley City Regional Technology Center. Valley City State University is also a draw in the community, having been ranked 2014’s second best regional college in the Midwest by U.S. News & World Report.

NRHA names top 20 US critical access hospitals The National Rural Health Association recently announced the top 20 critical access hospitals in the U.S., as determined by iVantage Health Analytics. Included on the list were Carrington Health Center in Carrington, N.D., Madison Community Hospital in Madison, S.D., and West River Regional Medical Center in Hettinger, N.D.

Kraus-Anderson Construction Co. will build a new district high school and adjoining event and recreation center in Watford City, N.D. The combined project costs are estimated to exceed $100 million. The construction of the high school is a joint venture between KA and Grand Forks, N.D.-based Construction Engineers Inc. Both the high school and event center are designed by JLG Architects.

Construction is expected to be complete in early 2016.

Hospitals were selected based on eight criteria, including: competitive strength, competitive intensity, market size and growth, quality, outcomes, patient perspective, cost and charge and financial stability.

“Our focus has been quality care for the patient and it’s truly gratifying to be recognized nationally for our efforts and success in quality patient outcomes and efficiency,” West River Regional CEO Jim Long said in a statement.

Center for Innovation offers federal grant workshop The University of North Dakota Center for Innovation has received a $90,000 grant from the U.S. Small Business Administration to encourage more North Dakota businesses to participate in the Small Business Innovation Research and Small Business Technology Transfer programs. The center will host a workshop Aug. 13 to explain the programs and provide advice on grant writing. For more information, email tyler@innovators.net.

Eide Bailly acquires Colorado firm Eide Bailly has acquired Fort Collins, Colo.-based Sample & Bailey CPAs, bringing the firm's number of employees to 1,449, including 211 partners. Eide Bailly CEO Dave Stende says the addition of Sample & Bailey compliments the firm’s other locations and provides a gateway into northern Colorado and Wyoming.

Eide Bailly now has 23 offices in 11 states.

|PRAIRIE NEWS|

A technology upgrade at the Xcel Energy Center in Saint Paul, Minn., is expected to be unveiled at the Minnesota Wild’s first home preseason game in September. IMAGE: DAKTRONICS

Daktronics to upgrade Xcel Energy Center tech Brookings, S.D.-based Daktronics has partnered with the Minnesota Wild to upgrade the technology at Xcel Energy Center in Saint Paul, Minn. The upgrade will include a custom HD LED center-hung video board that is nearly six times larger than the current video board as well as new outdoor marquees and ribbon displays.

The new elements will be largely manufactured at Daktronics’ Redwood Falls, Minn., facility. The upgrade is expected to be complete prior to the Wild’s first home preseason game on Sept. 27.

Stanley Consultants selected for NDDOT signage project Global consulting engineering firm Stanley Consultants has been selected by the North Dakota Department of Transportation to assess the condition of all regulatory and warning signs in the Bismarck District that are older than 10 years to determine if replacement is necessary.

Stanley Consultants was founded in Muscatine, Iowa, in 1913 and has since expanded to include locations around the world. The company opened a Bismarck office in 2012 and has since provided transportation services on several local projects. It is currently redesigning intersections on U.S. Highway 83.

www.prairiebizmag.com

19

|PRAIRIE PEOPLE|

Peter Person

Essentia Health CEO to retire

Hoskins named Ulteig COO

Essentia Health CEO Dr. Peter Person announced he will retire in 2015. Person joined the Duluth Clinic as an internist in 1981. In 1995 he was named Duluth Clinic president and in 1997 he became CEO of the SMDC Health System, an integration of the Duluth Clinic and St. Mary’s Medical Center. He continued seeing patients until 2000, when he moved to administration full-time.

SMDC was the first of several successful system integrations Person facilitated during his career, including the formation of Essentia Health in 2004. The largest integration added Fargo-based Innovis Health in 2008. Person has served as Essentia’s CEO since its inception in 2004.

Essentia’s board of directors has launched a national search for Person’s replacement, with a focus on finding a physician with extensive administrative leadership experience.

Jason Hoskins has been promoted to the position of chief operating officer at Ulteig. In this role, he will be responsible for aligning the strategic direction and prioritizing company investments across the technical departments.

He joined Ulteig in 1999 and previously served as market leader, senior vice president, sector leader and, most recently, technical director for the substation. He has a bachelor’s degree in electrical engineering from North Dakota State University.

He will continue to be based in the St. Paul, Minn., office and will report to CEO Eric Michel.

Jason Hoskins

Feil to lead Starion’s Bismarck-Mandan market

Rapid City Regional Hospital names VP, medical affairs

Robert Houser

Dr. Robert Houser has accepted the role of vice president of medical affairs at Rapid City Regional Hospital. In this role, he will provide physician perspective on the administrative team and serve as a physician advocate promoting effective physician, hospital and system relationships.

Houser has been an RCRH hospitalist since June 2008 and currently serves as the co-medical director of hospitalist services.

Jay Feil

First International Bank & Trust promotes Elsner First International Bank and Trust in Fargo has promoted Sean Elsner to assistant vice president. Elsner joined the bank in 2010 and is a commercial and ag lender at its 25th Street branch, where he is responsible for examining, evaluating, authorizing and recommending approval of customer applications for commercial and ag loans.

Schuler joins AE2S

Stacey Schuler

20

AE2S (Advanced Engineering and Environmental Services Inc.) has hired Stacey Schuler as an engineering technician in its Moorhead, Minn., office. She is part of the firm’s water practice and is responsible for drafting plans for various projects, including the Breckenridge, Minn., water treatment plant and the Western Area Supply Project in northwestern North Dakota.

Before joining AE2S, Schuler was a civil engineer on various land planning and underground utility layout projects in Florida. She has more than 20 years of experience as an engineering designer, drafter and technician.

Prairie Business Magazine August 2014

Jay Feil has been named Bismarck-Mandan, N.D., market president for Starion Financial. He has been market president of the Mandan branch for more than 22 years and will now oversee both markets. As market president, he is responsible for the management of all branch locations including staff, financial and sales performance.

Feil joined Starion when the bank opened its Mandan branch 25 years ago. He has 36 years of industry experience.

Sean Elsner

|PRAIRIE PEOPLE|

Nathan Amick

Eric Merck

Ackerman-Estvold welcomes civil engineers Minot, N.D.-based Ackerman-Estvold has hired former interns Nathan Amick and Eric Merck as civil engineers.

Amick joined the firm in 2009 as a part-time intern and served in that capacity for five years. He graduated from North Dakota State University this year with a bachelor’s degree in civil engineering. He currently works in the firm’s water resources division.

Merck joined the firm in 2011 as a part-time intern and served in that capacity until his graduation from NDSU in May with a bachelor’s degree in civil engineering. He currently works in the firm’s transportation division.

Paul Deutsch

Kory Kleinknecht

Derek Spitzer

Ulteig adds 3 to Fargo office Ulteig recently hired Paul Deutsch and Kory Kleinknecht as graduate engineers in civil services and Derek Spitzer as a project manager. All are based in the firm’s Fargo,N.D., office.

Deutsch previously worked as a graduate student design assistant at DOT Support Center in Fargo. He has a bachelor’s degree in civil engineering from North Dakota State University, where he is pursuing a master’s degree in civil engineering.

Kleinknecht previously served as a student design assistant for the North Dakota Department of Transportation Support Center. He has a bachelor’s degree in civil engineering from NDSU. Spitzer worked previously as a project manager for D&M Industries in Fargo. He holds a bachelor’s degree in hospitality and tourism management from NDSU and a master’s degree in project management from the University of Mary in Bismarck.

www.prairiebizmag.com

21

|HIGHER EDUCATION|

Elevating entrepreneurship UND becomes one of first public universities to establish School of Entrepreneurship

BY KRIS BEVILL ntrepreneurs often describe their craft as a passion that’s just in their blood. And while successful entrepreneurship certainly requires a dose of innate qualities such as passion, courage and attitude, the practice of entrepreneurship also includes skills which can certainly be learned, and taught. Beginning this fall, students across the University of North Dakota’s campus will have the opportunity to learn those skills and apply them in their chosen fields of study through the newly established School of Entrepreneurship.

UND is only the second public university in the nation to establish a School of Entrepreneurship, joining Oklahoma State University and three private universities. The school was approved by the State Board of Higher Education earlier this summer and will be support-

E

University of North Dakota finance students utilize the university’s Lanterman Investment Center in the College of Business and Public Administration. PHOTO: CHUCK KIMMERLE/UNIVERSITY OF NORTH DAKOTA

22

Prairie Business Magazine August 2014

ed by a $50 million endowment over time, according to the university. The school will be part of the College of Business and Public Administration (CoBPA) and will focus on providing hands-on entrepreneurship learning to students in all areas of study and provide greater visibility to programs associated with entrepreneurship, which is expected to help attract more high-quality students and faculty as well as additional fundraising opportunities.

The Center for Innovation will serve as the school’s outreach and practitioner arm. Bruce Gjovig, founder of the Center for Innovation, says one of the center’s duties will be to find entrepreneurs to team up with the school’s students and share their knowledge. “We want to engage our entrepreneur students with startups and companies all over North Dakota and northwest Minnesota,” he says.

|HIGHER EDUCATION| Practice Makes Perfect Like any craft, the best way to learn entrepreneurship is from a practitioner, and good practitioners are the best teachers. Gjovig says the ideal entrepreneurship practitioner to mentor students will possess an “opportunity mindset” — someone who is able to recognize an opportunity and then organize a plan to capture that opportunity. Along with that quality come leadership skills and a willingness to work hard. “It’s passion, it’s energy, it’s leadership … it certainly also takes courage,” he says.

Gjovig believes entrepreneurs will participate in the School of Entrepreneurship because they understand the transformational quality of the practice, and, because they are naturally philanthropic, they will be willing to help the next generation of entrepreneurs succeed. Also, he points out that the school’s entrepreneur students can provide the extra help that is always in need at new business ventures.

About 900 UND students were enrolled in one entrepreneur class in 2013-’14 and more than 400 were enrolled in more than one class.

Gjovig believes those numbers will grow over time as the School of Entrepreneurship

grows, but stresses that because the purpose of the school is to promote entrepreneurship throughout every major, enrollment numbers in the school alone will not determine its success rate.

“Our goal is not necessarily numbers as much as quality,” he says. “We want to have the best practitioners in entrepreneurship come out of the university experience as possible.

One of the goals, quite frankly, is to turn the entrepreneur genius on in many of the areas where it also can have a real impact on their field of study.”

Long Time Coming Gjovig has been pitching the idea of an entrepreneurship school to higher education officials since 2007. “When you’re changing education, it can be a slow process,” he says.

“But we’re there and we’re delighted that we are there.”

Thomas DiLorenzo, UND vice president for academic affairs and provost, agrees that the time is right for the entrepreneurship school to launch. “At this important time in the history of the state, with so much economic

opportunity to be developed, it is imperative that the skills and innovative thinking possessed by entrepreneurs be leveraged by the university,” he says.

The university anticipates creating 14 School of Entrepreneurship faculty positions over time — half of which would be endowed positions for practicing entrepreneurs. Dennis Elbert, longtime dean of the CoBPA, became one of the new school’s first professors when he stepped down from his role as CoBPA dean this summer to accept an endowed professor role at the entrepreneurship school. He says moving entrepreneurship from a department to a school will elevate the status of both the program and the university.

“This will enhance opportunities for our students and leverage the success of the Center for Innovation,” he says. “This next step allows us to be on the true forefront of entrepreneurial education.” PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

Become More with an AACSB-International Accredited Master of Business Administration

Advance your career with an MBA through the University of South Dakota.

Choose the general MBA or specializations in Business Analytics or Health Services Administration.

Learn more at www.usd.edu/cde/onlinemaster-of-business-administration.cfm Available online or on campus in Vermillion, S.D. DIVISION OF CONTINUING & DISTANCE EDUCATION 414 E. Clark St. | Vermillion, SD 57069 605-677-6240 | 800-233-7937 www.usd.edu/cde | cde@usd.edu

The University of South Dakota’s Beacom School of Business has been accredited since 1949. USD’s MBA program has been accredited by AACSB since 1965.

www.prairiebizmag.com

23

|OUTDOORS|

Keeping Hunting on Target Pheasant season is make-or-break for many SD communities

BY ROB SWENSON eginning in mid-October, thousands of hunters from around the United States will converge in Winner, a small town in the rolling farm and ranch country of south-central South Dakota.

Hunters flock annually to the Tripp County community to pursue the celebrated ring-necked pheasant, renew friendships and have fun.

Winner, population approximately 2,900, is among several

B Nearly 983,000 pheasants were harvested in South Dakota in 2013, down from a record of 2.1 million in 2007.

PHOTO: SOUTH DAKOTA DEPARTMENT OF TOURISM

24

Prairie Business Magazine August 2014

|OUTDOORS| communities in South Dakota and other states in the region that periodically claim the title “pheasant hunting capital of the world.”

South Dakota, as a whole, is the real pheasant hunting capital. Even in down years, South Dakota typically has more pheasants than any other state.

“The numbers bear out there is no place even close to what we have in South Dakota,” says Tony Leif, director of the Wildlife Division of South Dakota’s Game, Fish and Parks Department.

Nearly 983,000 pheasants were harvested in South Dakota in 2013, which by historic standards was a down year in a series of concern-raising off years. In the record year of 2007, more than 2.1 million birds were shot.

For recreational as well as economic reasons, state government, the advocacy group Pheasants Forever and others are taking steps they hope will improve the pheasant population in the long term.

Hunting the wily ring-neck is a big deal in much of South Dakota. It’s a popular social activity that contributes significantly to the state’s economy.

Statewide, pheasant hunters spent nearly $141 million in 2013, according to GF&P estimates. The spinoff benefit of the money rippling through the economy to be spent again makes the overall impact even greater.

The local impact of hunting varies from community to community, but it’s especially noticeable in smaller towns.

“Many of those small communities really try to roll out the red carpet. That’s the comment I always hear from hunters – how welcome they feel,” Leif says.

Communities throughout the eastern half of the state, such as Aberdeen, Chamberlain, Redfield and Howard, also are known as pheasant-hunting hotspots. The state’s largest city benefits significantly from hunting, too.

Teri Schmidt and her staff at the Sioux Falls Convention & Visitors Bureau festively welcome thousands of pheasant hunters each year at the Sioux Falls Regional Airport. The annual welcoming event began nearly two decades ago with one table and a chair. Now there are about 15 booths and a waiting list of businesses that would like space in the lobby of the airport for the two days before the start of the season.

“Although the hunters don’t hunt pheasants in Sioux Falls, the hunting season has a huge impact on our community,” Schmidt says. “We know literally thousands of people fly into Sioux Falls during hunting season. We know hundreds of cars and vehicles are rented and used during pheasant hunting.”

Many hunters also stay overnight and shop in Sioux Falls, too. Schmidt especially enjoys helping hunters find “guilt gifts” for the wives and girlfriends that they left behind to go hunting.

Community Impact Winner is the hub of Tripp County, which attracted more than 5,400 nonresident hunters in 2013, according to the GF&P data. That was more than any of the state’s other 65 counties.

More than 1,900 South Dakota residents also hunted last year in Tripp County.

Together, resident and nonresident hunters harvested nearly 59,000 pheasants in the county. In the process, they spent about $9.3 million.

Isabel Diaz manages the Warrior Inn, one of a half-dozen motels and hotels in Winner that welcome hunters. The 39-room inn will board more than 1,000 guests during this year’s season, which will run from Oct. 18 to Jan. 4, 2015.

Opening weekend, especially, is “crazy good” for Winner, Diaz says. “It’s a big thing around here. Really big,” she says.

Tony Naatjes, manager of Gary’s Gun Shops in Winner and Sioux Falls, says roughly a third of the stores’ business can be attributed to pheasant hunting. In addition to shotguns and shells, the stores sell a variety of hunting accessories.

“When there’s a lot of birds, everyone wins. When there’s not, we all fight for scraps,” Naatjes says.

Pheasant hunting is Winner’s primary tourist attraction and the main reason that many people visit town, says Karla Brozik, executive director of the Winner Area Chamber of Commerce.

“That is our bread and butter around here,” Brozik says. In addition to motels, hunters keep more than 20 rural lodges in the area busy through Thanksgiving, she says.

Other businesses enjoy increased business, too.

“The food places are always packed during hunting season. It’s usually a 30-minute to an hour wait,” Brozik says.

Regulations allow hunters to shoot up to three male pheasants a day and possess up to 15 roosters after five days of hunting. Out-ofstate hunters are allowed two, five-day hunting stints. They pick the dates in advance.

To encourage more hunters to return to the Winner area after an initial hunt early in the season, the Winner Chamber started the December Sharpshooter Classic. Twenty, sixmember teams pay $1,500 per team to participate in a four-hour hunt, which this year will be held Dec. 13. Land to hunt, a box of 25 shells, and two meals are provided.

Resident as well as non-resident hunters participate. This will be the fourth year of the special event, which sells out every year. This year’s 20-team quota was filled July 2, Brozik says.

In the past few decades, hunting has developed into a significant business opportunity for many farmers, ranchers and landowners in rural South Dakota.

Cody Jorgensen, along with other members of his family, farm about 10,000 acres and have 8,500 acres of rangeland in the Winner area. They also run a hunting lodge near Ideal, the Lazy J Grand Lodge, which sleeps 42 people.

Agriculture isn’t just about raising cattle and growing crops any more, Jorgensen says.

It’s also about taking advantage of commercial opportunities such as hunting.

“We’re just so blessed to have wild pheasants in our area,” he says.

Helping the Habitat The importance of the pheasant to South Dakota is symbolized on the commemorative state quarter issued by the federal government in 2006. The coin shows the image of a pheasant flying above the four presidential faces of Mount Rushmore.

The Ring-Necked Pheasant was designated South Dakota’s state bird in 1943, even though it’s a species not native to the United States. Pheasants were imported to South Dakota from China more than a century ago, and the state’s habitat proved to be a good fit for the birds.

Pheasants are tough and resilient, Leif says. The availability of good nesting areas is a

www.prairiebizmag.com

25

|OUTDOORS|

State officials and pheasant boosters are actively seeking ways to preserve pheasant habitat and reverse the bird’s population decline in South Dakota. PHOTO: SOUTH DAKOTA DEPARTMENT OF TOURISM

crucial factor in annual bird numbers. The attractiveness of government land-conservation programs significantly impact the bird habitat. Crop prices also are a factor. The higher the price farmers are offered for crops, the more tempted they are to put fringe land into production.

Exceptionally harsh winters can take a temporary toll on pheasant numbers, too.

“Hunting seasons have little or no impact on future populations. The reason is that you only need a few roosters for a whole bunch of hens,” he says. Hunters are only allowed to shoot roosters.

Pheasant boosters have been concerned about the steady decline of bird numbers in South Dakota since 2007, and they are trying to reverse the trend.

Gov. Dennis Daugaard created a Pheasant Habitat Work Group in December.

The panel is expected to pass along recommendations in late August to help improve habitat on public and private land. Group members won’t discuss the specifics of possi-

26

Prairie Business Magazine August 2014

ble proposals until they have finished work on their report.

The 13-member work group includes farmers, outdoors enthusiasts, government officials and others. The panel is chaired by Pam Roberts of Pierre, who held cabinet-level positions for five governors before retiring from state government in 2013.

“I’ve been proud with the way the group has responded. It’s gone well,” Roberts says.

Meanwhile, the national nonprofit group Pheasants Forever also is stepping up its efforts to help. The organization, which has 140,000 members nationwide, is in the process of opening a regional office in Brookings, S.D. The presence of South Dakota State University and related wildlife and agricultural resources were factors in locating the new office in Brookings.

Dave Nomsen, vice president of government affairs for Pheasants Forever, is moving from Minnesota to Brookings — where he attended college and formerly taught at the university. He is taking on the additional title

of director of the regional office.

Obviously, the pheasant population is an issue of critical importance to South Dakota, Nomsen says. However, the issue also is important to Pheasants Forever, which considers South Dakota prime pheasant country.

Increasing habitat will not hinge solely on renewing interest in federal, land-conservation programs, Nomsen says. The state also needs to do more, and he’d like to see businesses help.

“The key to all of this is the focus on habitat. In my view, there isn’t a single farm or ranch in the state that couldn’t benefit from pheasant-related conservation of some type,” Nomsen says.

South Dakota won’t have a good forecast of pheasant numbers for the coming season until brood counts are made in late summer.

“There is reason for optimism, with the habitat conditions we have and the winter we had,” Leif says. PB Rob Swenson Contributing writer RobSwensonMediaServices@gmail.com

Don’t miss what Pierre has to offer!

• Millions of pheasants

Join our PA Faculty in North Dakota The state’s economy is healthy.

So is its health care education!

The position includes good benefits and access to state-of-the-art simulation technology.

• Over 700 job opportunities

See job description at med.UND.edu/physician-assistant/job-opportunities.cfm.

• Record-setting growth in housing options • Dynamic retail market, Menard’s coming in 2015 • New elementary school in 2015

LIVE, WORK & PLAY in Pierre

New building

Photo courtesy of SD Tourism

Coming in 2016

www.pedco.biz 001110742r1

PHOTO COURTESY OF JLG ARCHITECTS

“

”

This new building will be a significant factor in our ability to help educate the health care workforce necessary for the health and vibrancy of North Dakota’s growing population.

- UND President Robert Kelley

UND

SCHOOL OF MEDICINE AND HEALTH SCIENCES

Proud to Contribute to North Dakota’s

ABILITY TO EDUCATE THE HEALTH CARE WORKFORCE

OBERMILLER NELSON ENGINEERING

BUILDING SYSTEMS CONSULTANTS FARGO | ALEXANDRIA | BISMARCK | GRAND FORKS STRENGTH IN ENGINEERING

www.prairiebizmag.com

27

|COWORKING|

Collaboration Central Coworking spaces encourage entrepreneurial collaborations

BY KRIS BEVILL hat would happen if entrepreneurs, tech professionals, creative types and remote workers from different companies and backgrounds abandoned the traditional office layout, closed up their temporary coffee shop corner offices and gathered instead in a shared space to work individually and/or communally? The concept, known as coworking, has been a growing trend in communities across the globe for several years and is expected to continue to increase in popularity as mil-

W CoCo Fargo is located in downtown Fargo, N.D., in a 6,000-square foot-space above the Kinghouse Buffet restaurant. The coworking space is able to accommodate 100 members, according to the company. PHOTO: COCO

28

Prairie Business Magazine August 2014

|COWORKING|

Coworking spaces like CoCo's massive space at the Minneapolis Grain Exchange offer an alternative work environment to traditional office spaces or home offices. PHOTO: COCO

lenials, entrepreneurs and forward-thinking companies embrace the modernity and relative affordability of renting coworking space instead of traditional office real estate.

A 2013 report by the Commercial Real Estate Development Association credits cowork-

ing for revolutionizing today’s idea of workplace, from a place where people go to complete assigned tasks during a specific time of day to a space where people from different professions congregate to work separately and/or communally in an open-door setting at any time of day.

The report charts the evolution of innovative workplaces, from the first incubator in Batavia, N.Y., in 1959 to innovation centers, accelerators and, in 2006, coworking centers. The report notes that this evolution, and eventual revolution, of the workplace concept could not have occurred without technological advancements. Today’s technology offers workers mobility like never before. Gone are the days of landlines and rigid office hours, replaced instead with cell phones, video conferences and instant messaging. Related to this is the emergence of a generation of workers who expect instant access to all information, which lends itself well to the nodoors, no-set-hours style of working that coworking centers embrace.

“As a result of these technological and social forces, within the past five years the coworking concept has emerged to meet the needs of independent innovators and small businesses — and has become the largest of the innovation workplace movements,” the report’s authors say. “This highly versatile concept has taken innovative workplaces to the next level by offering a membership-based workplace solution that provides independent workers with

www.prairiebizmag.com

29

|COWORKING|

Meso offers coworking spaces in a modern atmosphere in downtown Sioux Falls, S.D. PHOTO: MESO

both a community and a place where they can focus on productivity.”

According to the report, more than 2,000 coworking spaces had been established worldwide by early 2013, 700 of which are located in the United States. In MinneapolisSt. Paul, CoCo (short for “coworking” and “collaborative space”) is responsible for three of those spaces. The company opened its first coworking center in uptown Minneapolis in 2010 and has since expanded to include locations in lower St. Paul and, most recently, a massive 20,000-square-foot space at the Minneapolis Grain Exchange.

30

Prairie Business Magazine August 2014

CoCo Comes to Fargo This month, through a partnership with Fargo, N.D.-based Emerging Prairie, the company will open the doors to its first coworking facility outside of the Twin Cities. CoCoFargo will be housed in a 6,000square-foot space above a Chinese buffet restaurant in downtown Fargo, providing space for up to 100 members to collaborate, cowork and create.

CoCo cofounder Don Ball says the opening of the Fargo space comes after three years of consideration and a convincing

grassroots recruitment effort by the Greater Fargo Moorhead Economic Development Corp., the Kilbourne Group and Emerging Prairie. He says the company had also explored expanding to other markets in the vicinity of Minneapolis, but none impressed like Fargo in terms of energy, enthusiasm and the commitment of people eager to grow the community. “Fargo just punches above its weight,” he says. “... It’s a town that’s just ready to explode. All you have to do is show up and give all the people with the energy venues where they can be together more often and work on projects more often.”

|COWORKING|

▶ Flexible and convenient for working adults ▶ Both online and on-campus classes ▶ Exciting new offerings in business & healthcare administration

▶ Nationally accredited programs ▶ Award-winning faculty ▶ Individualized instruction & mentorship ▶ Graduate certificates

Learn more: mnstate.edu/graduate graduate@mnstate.edu 218.477.2134 Minnesota State University Moorhead is an equal opportunity educator and employer and is a member of the Minnesota State Colleges and Universities System.

The company announced its Fargo space on June 25. It immediately signed on two members. By early July, six members had been enrolled. Ball expects the coworking space to primarily attract young “solo-preneurs,” which also make up the majority of the company’s Twin Cities membership, but says the spaces attract an “interesting mix of people.”

Membership fees for the Fargo space start at $70 per month for single-day access each week and increase in cost according to the frequency of accessibility desired, up to $350 per month for 24/7 access. Group memberships are also available and are targeted toward small startups.

www.prairiebizmag.com

31

|COWORKING|

As part of the partnership with Emerging Prairie, CoCo will manage the coworking space while Emerging Prairie will host various events and meetups at the facility. “We believe that a collaborative work space improves the work experience for people, especially entrepreneurs,” says Emerging Prairie cofounder Greg Tehven.

“Our new partnership with CoCo is an important step toward increasing innovation, collaboration and entrepreneurship in the region.”

And because CoCo embraces a “member of one, member of all” concept, Ball expects CoCo’s expansion to Fargo will create new opportunities for exciting collaborations between Fargo and Minneapolis-area members as they travel to and from the company’s multiple spaces.

“We’ve found that even in the Twin Cities that people will go to different locations for different reasons and we’ve always imagined that across the region that could happen,” he says. “When some of our members find out the incredible talent pool that’s in Fargo, I think they’re going to come looking for help with their projects.

And, I hope the Fargo people will take their show on the road to the Twin Cities.”

CoCo has also been designated as one of Google’s seven Tech Hubs, which Ball says brings additional opportunities for its members to collaborate with others throughout the country and participate in Google-sponsored events.

CoCo already boasts several successful startups spurred to fruition by its collaboration-inducing atmosphere. Ball is especially proud of a young tech company called Spark Devices, which designed a WiFi development board that enables the user to connect any number of household devices to the Internet. The company was born through the collaborative efforts of two CoCo members, who met at the space and combined their individual software and hardware expertise to bring the idea to life. Ball says the company recently closed a

l s m

32

Prairie Business Magazine August 2014

successful Kickstarter campaign and will soon outgrow its space at CoCo.

Family-like Atmosphere in Sioux Falls While CoCo Fargo is believed to be the first coworking space in North Dakota, the coworking concept was introduced to South Dakota several years ago with the launch of Meso in Sioux Falls. Kim Bartling was a member of coworking space Meso when its owners decided to close the facility in 2013. She liked the coworking concept so much that when she learned of the plans to close the facility, she found a partner and bought the company to keep it alive. “I was more productive in this type of environment than I ever was when I had my own enclosed office,” she says.

Meso is located on Phillips Avenue in downtown Sioux Falls, which Bartling describes as the most coveted block for business in the city. The space offers a “funky looking” modern atmosphere with access to parking, a board room, kitchenette, consultation rooms, secure entry and technology capabilities for webcasting and other business activities. Individual membership rates range from $125 per month to $275 a month depending on the services desired. All members are granted 24/7 access to the space. Group memberships are also offered.

The users of Meso’s space vary from professional types, including a real estate agent and an attorney, to creatives, including graphic artists and photographers, according to Bartling. Most members are millenials, and none are over the age of 50.

Bartling says educating the community about coworking has been the most difficult part of owning the space and she continues to spend much of her time informing people of the concept. “We’ve had a little bit of a challenge getting people to understand how it works,” she says, adding that some people find it difficult to envision a workspace without cubicles and

other traditional office trappings. “Do we have cubicles? Yeah, but nobody’s just sitting in them working,” she says. “We’re often talking to each other, showing each other our work. We become kind of our own community. It’s not isolated in any sense of the word.”

Meso is still working to become sustainable, and now it will share the Sioux Falls alternative workspace market with another type of workspace provider.

Luxembourg-based Regus, which claims to be the world’s largest provider of flexible workplaces, recently opened a facility in Sioux Falls in the CNA Building. On its website, the company describes its Sioux Falls business center as being “ideal for forward-thinking businesses” and says its location near Interstates 90 and 29 offers members convenient access to the rest of South Dakota and beyond. Regus offers amenities including office space, meeting rooms, a business lounge and “day offices” at the Sioux Falls facility. The size of Regus demands a decidedly more corporate structure for memberships and access, however, and accessing details about membership options or the company in general is notably challenging.

Bartling says she doesn’t believe Meso and Regus are competitors, simply because of the obvious differences in their business models. “That’s like comparing a mom and pop grocery store to Walmart,” she says. “We have a completely different vibe, certainly a different price scale. It’s just a different animal than what we offer.”

Still, she is also a firm believer that commerce creates commerce and that the presence of a global firm such as Regus will help draw attention to coworking and alternatives including Meso. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

If your computer isn’t talking to your printer...

And your printer isn’t talking to you...

Maybe you should be talking to us. www.abbusiness.com 1-800-477-2425 www.prairiebizmag.com

33

|ENTREPRENEURSHIP|

The Fargo Startup House is so far fully funded by Miguel Danielson, second from left, but has received support from a number of local groups and companies, including the Greater Fargo Moorhead Economic Development Corp., Emerging Prairie and 702 Communication. PHOTO: KRIS BEVILL

Located in a north Fargo neighborhood dubbed the Cathedral District, the Fargo Startup House will soon serve as a temporary home for six technology startups.

PHOTO: KRIS BEVILL

Innovative Incubator Fargo Startup House offers free room, board to aspiring tech-preneurs iguel Danielson hopes that a certain unassuming four-bedroom, two-bathroom house on 9th Street North in Fargo may one day be known as the place where some of the world’s most impactful technology companies got their start. The Fargo native recently purchased the property and is using it to launch the Fargo Startup House, a dorm-type setting where selected tech entrepreneurs from around the world will live rent-free for six months while they develop their companies.

The house is a bootstrap project for Danielson, an intellectual property attorney and founder and managing member of

M

34

Prairie Business Magazine August 2014

Danielson Legal LLC, who says he wants to help foster Fargo’s entrepreneurial tech community and support the development of useful technology.

While the financial responsibilities of the house are his, Danielson has the backing of a diverse support network to help realize his vision. He brought in a local designer to update the space and, most importantly for this purpose, collaborated with 702 Communications to wire the house with super-fast 1 gigabit fiber Internet connection.

International creative firm Misfit Inc. has partnered to assist with the tenant application process and marketing efforts.

Applications for the initial round of house residents were accepted throughout July and the first class of six participants is expected to move into the house in early September.

Participants will be selected based on their talent and skills as well as the potential impact of their company.

Executives from Microsoft, Arthur Ventures, Misfit Inc. and several local tech firms have agreed to serve as mentors for accepted house members. Dr. Susan Mathison, owner of Catalyst Medical Center and staunch supporter of local entrepreneurs, will provide her services as wellness mentor.

Digital media and events company Emerging

|ENTREPRENEURSHIP| Prairie, which Danielson also co-founded, and the Greater Fargo Moorhead Economic Development Corp. have also provided support for the project.

“This opportunity represents one of the first accelerator-type concepts in the Fargo Moorhead region,” GFMEDC President Jim Gartin says. “Coupled with the recent coworking announcement by CoCo and other entrepreneurial endeavors, the Fargo Moorhead region is positioning itself as the epicenter for nascent technology development in the Great Plains.”

The concept of the Fargo Startup House is similar to other next-generation incubators that have sprung up in Kansas City in response to the Google Fiber project — Google’s experiment to see what happens when it provides 1 Gigabit fiber Internet connections to the entire community. A unique neighborhood known as the Kansas City Startup Village has formed for young technology companies to take advantage of the high-speed Internet access and includes such places as Homes for Hackers, which offers three months of free rent, utilities and Google Fiber to tech startups. PB

Entrepreneurs Wanted

Put your ideas to work.

The NDSU Research and Technology Park is changing the way you do business. We help entrepreneurs and start-ups in high-tech industries gain a foothold and move onto solid financial and operational ground.

At the same time, we enable established companies to advance their research and development initiatives with: • Technology innovation, commercialization, licensing and joint venture opportunities • Entrepreneur Program - comprehensive business assistance, market research, educational events, mentoring and networking • Financing, venture capital and strategic partnerships • Access to talent

RESEARCH AND TECHNOLOGY PARK

FOR MORE INFORMATION www.ndsuresearchpark.com CONTACT NDSU RESEARCH AND TECHNOLOGY PARK 701.499.3603 | brenda@ndsuresearchpark.com

www.prairiebizmag.com

35

|CULTURE|

The power of giving

BY THOMAS MCMURTRY

uring a casual meeting with a department of transportation, we discussed initiatives the safety director was leading and the challenges he faced. One challenge he described stayed with me long after our discussion. His superiors desired a way to view crash data and identify the worst road segments in the state, but his staff was overwhelmed with data processing.

I recognized an opportunity to assist. I requested three years’ of crash data from his staff and started mapping each crash location in my free time. I presented my data, and we talked about ways to improve the process. Continuing to help with the project was going to take more time then I had, but the department of transportation recognized value in it. They ask me to compile a plan and they would compensate me for my work. That began a three-year process of building and refining the state’s first Safety Index.

The simple act of gifting time and talents came back as a benefit.

D

Giving Pays The concept that giving pays seems counterintuitive. How can giving something away for free yield more in my pocket? The answer is because it builds trust. We have more confidence in people we trust and are more willing to work with them.

However, the dividends from giving may not manifest themselves immediately. It often takes longer to see the reward in being a giver. In “It’s a Wonderful Life,” George Bailey made many selfless acts of giving throughout his life with little or no reward, but in his moment of need, the whole town supported him. We never know how giving to others now will benefit us or our organization down the road.

Giving Helps Last spring, I met with the economic development director of a town in Wyoming. She informed me they had been awarded a grant to fund an update to its master plan and she would be assembling a

36

Prairie Business Magazine August 2014

request for proposal (RFP). Although reluctant at first, she eventually accepted my offer to give her several examples of recent RFPs for similar master plan updates. I shared four examples including two from the same state, which she used to draft her RFP. This story, however, does not end with a compensation for me or my company. Another firm was awarded the project, but I still believe that sharing the RFPs was the right thing to do. And even knowing the outcome, I would do it again.

It is important giving be done without the expectation of recompense. It poisons the gift and can strain the relationship if a gift is expected in return. I helped the town with the RFP because it felt good, and I had no expectation that KLJ would be awarded the project. Giving is not a strategy; it is a way of life.

Learn to be a Giver We should think about this principal every day, especially with clients. But we can’t think about it as pro bono work or giving work away for free. It is precontract work and is setting us up for future success by building trust.

It is important for us to strive to be better givers.

It may be difficult to think of things or ways we can give to others now, but it’s surprising how many opportunities exist. We should all find something we can offer to someone or something we can do to help a client or coworker today. I believe all of us will find that the time we dedicate to giving is rewarding.

I am lucky to work for a company with a giving culture. I work with so many people who volunteer and who are willing to spend extra time helping each other. I believe you will find the time you dedicate to giving to be rewarding and it will make us all better.

Thomas McMurtry Business Development Specialist KLJ thomas.mcmurtry@kljeng.com

DON’T MISS IT!

Prairie

2014

Business BEST

50

COMPANIES COMING IN THE SEPTEMBER ISSUE OF

PRAIRIE BUSINESS.

www.prairiebizmag.com

37

|TOURISM|

Outdoor recreation still plentiful in western North Dakota

BY SCOOTER PURSLEY

id you know there is more to western North Dakota than oil, gas, trucks, pipelines and booked-up hotels?

Listening to media reports from various sources in that last few years, one might be led to believe that these five staples are all that’s out there; that the once scenic country has been completely overrun and that it’s best for travellers to pull up to the Missouri River and stop.

That’s simply not true.

Western North Dakota is filled with opportunities for adventure. Try the new boat rentals at Lund’s Landing near Ray or Sakakawea Sunset Lodge/Tailrace Adventures near Riverdale. For golfers, there are top-ranked courses like The Links near Ray and Bully Pulpit near Medora, both offering unique lodging nearby. If you pre-

D

fer to enjoy the scenic wonder from the back of a horse, Badlands Trail Rides near Killdeer offers rides and cabins with stunning views of the Killdeer Mountains.

One of the first things visitors consider when traveling is lodging availability. With hotel/motel occupancy rates in Williston now hovering in the 60 to 70 percent range and new properties recently opening, travelers generally do not have issues finding lodging like they did in the days before the Bakken boom. Others, like those looking to rough it along the 140-mile Maah Daah Hey Trail, can pitch a tent in the Badlands and watch the stars dance across the night sky before rising early to hike, bike or ride horse along the epic singletrack.

The Maah Daah Hey Trail cuts a path

Lund’s Landing Marina & Lodge offers boat rentals on Lake Sakakawea. PHOTO: NORTH DAKOTA DEPARTMENT OF COMMERCE, TOURISM DIVISION

38

Prairie Business Magazine August 2014

|TOURISM| through the heart of the Badlands. The initial trail was 96 miles from the north unit of Theodore Roosevelt National Park near Watford City to Sully Creek State Park at Medora. An additional 40 miles was opened to the south this summer from Sully Creek to Burning Coal Veins Campground near Amidon.

“We are very excited about the southern extension of the Maah Daah Hey Trail,” said Mike Jensen, North Dakota Tourism Division’s outdoor promotions manager. “This section of trail will take people into parts of the North Dakota Badlands that few get to see, like wooded areas in the southern Little Missouri Valley, also close to sites such as Bullion Butte, columnar cedars and the burning coal veins” The trail, already labelled an EPIC Ride by the International Mountain Biking Association before the extension, can be enjoyed by outdoor enthusiasts of all ages as the trail varies in difficulty.

Those looking for a little less-strenuous activity can enjoy a night of great dining, live entertainment and luxury accommodations in Medora, or visit Fort Union and Fort Buford near Williston on the Montana-North Dakota border. Medora is known as a gateway to the south unit of Theodore Roosevelt National Park.

Visitors can drive the wildlife loop within the park and come back to town for the Pitchfork Fondue and Medora Musical in the evening.

Then they can bed down in the Rough Riders Hotel downtown.

At Fort Union, visitors park in Montana and enjoy the one-time fur trading outpost on the banks of the Missouri River in North Dakota. At nearby Fort Buford, see where legendary Sitting Bull surrendered to the U.S. Army after the Battle of the Little Bighorn, then visit the adjacent Missouri-Yellowstone Confluence Interpretive Center to learn about history in the area where the two great rivers meet in North Dakota.

The newly extended Maah Daah Hey Trail offers scenic trails at varying degrees of difficulty.

PHOTO: NORTH DAKOTA DEPARTMENT OF COMMERCE, TOURISM DIVISION

Scooter Pursley Information Specialist North Dakota Department of Commerce Tourism Division jpursley@nd.gov

www.prairiebizmag.com

39

|TALK OF THE TOWN|

Booming all by itself Sioux Falls experiences boomtown feel without energy production

BY ROB SWENSON

ioux Falls, S.D., gains about 10 residents a day — a rate of growth fueling a high level of construction of apartments and other residential complexes.

The development of multifamily residential facilities is extremely active and an interesting trend, says Mike Cooper, director of the Sioux Falls Planning and Building Services Department.

“The number of apartment units permitted so far this year is double the number of single-family houses,” he says.

Cooper and other officials attribute the popularity of apartments to job growth and an influx of young adults who would rather rent a place to live than buy a house, at least initially. However, retirees also are a factor in the growth of multifamily residential facilities in South Dakota’s largest city.

Job growth and the overall economic success of Sioux Falls were among the factors that prompted CNN to feature Sioux Falls recently in a televised series about five cities “where America works.” The segment

S

The Falls of the Big Sioux River are the namesake for South Dakota’s largest city. PHOTO: SIOUX FALLS AREA CHAMBER OF COMMERCE

40

Prairie Business Magazine August 2014

about Sioux Falls was the second in the series, following a story about Houston.

Mayor Mike Huether says the CNN story by Fareed Zakaria gives Sioux Falls the kind of international attention that money can’t buy. “CNN provided us a knockout story, and we’re really, really pleased by it,” he says.

Huether considers Sioux Falls as a boomtown — one without resources such as oil. He traces the modern era of the city’s growth back to the early 1980s when Citibank, now known as Citi, moved a major credit card center from New York to Sioux Falls.

However, the CNN story focused heavily on Raven Industries Inc., a high-tech manufacturing company whose products include high-altitude military surveillance balloons and the floating likenesses of pop-culture characters featured in the annual Macy’s Thanksgiving Day Parade.

Development Details At the end of 2013, Sioux Falls’ population was (continued on page 42)

|TALK OF THE TOWN|

www.prairiebizmag.com

41

|TALK OF THE TOWN|

The 12,000-seat Denny Sanford Premier Center is expected to open this fall.

PHOTO: SIOUX FALLS AREA CHAMBER OF COMMERCE (continued from page 40)

162,300. The population of the four-county metropolitan area was 241,300.

Evan Nolte, president and CEO of the Sioux Falls Area Chamber of Commerce, agrees that new jobs are driving the steady growth of the city.

“I believe that our job growth coming out of the recession is coming back quite significantly,” Nolte says. “We are seeing a lot of different economic indicators on the increase.”

The number of paid workers in the Sioux Falls metro area increased from 141,500 in May 2012 to 145,200 in May 2013 and to 146,100 in May 2014, according to the South Dakota Department of Labor and Regulation.

Financial services, health care and retail are longtime cornerstones of Sioux Falls’ economic foundation. But industries such as manufacturing are growing, and a healthy agricultural sector helps stimulate regional demand for products, services and construction.

From January through mid-June of this year, the four biggest construction projects permitted by the city were residential projects.

The largest was for Dakota Pointe, a 276-unit apartment complex with an estimated construction value of nearly $26 million. The complex is being developed near a new Costco store in the southcentral part of the city.

The second largest is a $20 million expansion of Prince of Peace, an apartment, assisted living and nursing home complex in southeastern Sioux Falls.

42

Prairie Business Magazine August 2014

The value of residential and business-related construction reached a record high of $588.2 million in the city in 2013, based on estimates in building permits. This year probably won’t bring a new record, but it could be the city’s second-best year, even with a relative lack of large commercial projects, Cooper says.

A new Walmart might end up being the largest commercial construction project in Sioux Falls this year. Two new Walmarts — the city’s third and fourth — are being developed.

New Amenities In addition to jobs, adding high-quality amenities is important to the city’s growth, officials say.

“Those amenities are really important to people. If you don’t have them, you’re not going to be able to compete,” Nolte says.

The new Denny Sanford Premier Center, a 12,000-seat community events center scheduled to open in September, is one of the newest additions to the quality of life in Sioux Falls.

Other recently added facilities include the Sanford Sports Complex, which includes a multicourt basketball facility and a fieldhouse. Enclosed hockey and tennis facilities are under construction. Meanwhile, the city is making plans to build an indoor swimming pool. PB Rob Swenson Contributing writer RobSwensonMediaServices@gmail.com

The world The world has has changed. changed. <RXU ƃQDQFLDO DGYLFH VKRXOG WRR The right partnership can give you one of the most powerful tools The right partnership can give you ofFinancial the mostAdvisor, powerful tools in backed UBS Yourone today—confidence. investing create you tobacked work with willFinancial research and resources, world-class byinvesting in today—confidence.

Your UBS Advisor, your advice.

Because in plan that offers clear direction and relevant by world-class research and resources, will work with you to create marketplace, in today’s confidence rebuild tothat order Because in and unpredictable relevant advice. clear direction offers plan your you need to surround yourself with a team you can count on.

MBI Energy Services North Dakota |Pennsylvania |Wyoming |Texas

order to rebuild confidence in today’s unpredictable marketplace, you need to surround yourself with aWealth team you can count on.

Management Schilling UBS Financial Services Inc.

Schilling Wealth Management

Vicki A. Schilling UBS Financial Services Inc. First Vice President–Wealth Management vicki.a.schilling@ubs.com Vicki A. Schilling

First Vice President–Wealth Management 726 St. Joseph Street vicki.a.schilling@ubs.com Rapid City, SD 57701 605-399-4081

Street 726 St. Joseph 800-658-2228 Rapid City, SD 57701 ubs.com/team/schilling 605-399-4081 800-658-2228

Advice you can trust starts with a conversation.

ubs.com/team/schilling Advice you can trust starts with a conversation.

As a firm providing wealth management services to clients, we offer both investment advisory and brokerage services. These services are separate and distinct, differ in material ways and are governed by different laws and separate contracts. For more information on the distinctions between our brokerage and investment advisory services, please speak with your Financial Advisor or visit our website at ubs.com/workingwithus.

UBS Financial Services Inc., its affiliates, and its employees are not in the business of providing tax or legal advice. Clients should seek advice based on their particular circumstances from an independent tax advisor. ©UBS 2014. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. 7.00_Ad_5.5x8.5_8O0401_SchV

:H ZLOO QRW UHVW

As a firm providing wealth management services to clients, we offer both investment advisory and brokerage services. These services are separate and distinct, differ in material ways and are governed by different laws and separate contracts. For more information on the distinctions between our brokerage and investment advisory services, please speak with your Financial Advisor or visit our website at ubs.com/workingwithus.

UBS Financial Services Inc., its affiliates, and its employees are not in the business of providing tax or legal advice. Clients should seek advice 7.00_Ad_5.5x8.5_8O0401_SchV based on their particular circumstances from an independent tax advisor. ©UBS 2014. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC. 7.00_Ad_5.5x8.5_8O0401_SchV Created Dimensions 5.5 x 8.5”

12/16/10

Inks Publication

Insertion date(s) Case number Request number Last revision Revision initials April 1, 2014 4:55 PM Associate 7.00_Ad_5.5x8.5_8O0401_SchV

Created

12/16/10

Last revision

April 1, 2014 4:55 PM

Dimensions Inks Publication Insertion date(s) Case number Request number Revision initials Associate

cmyk – – – D-UBS-287309A5 PM Elyssa

5.5 x 8.5” cmyk – – – D-UBS-287309A5 PM Elyssa

701-575-8242 | mbienergyservices.com

001065448r1

:H ZLOO QRW UHVW

Pushing for more pipe Pipeline projects pile up as Bakken crude, gas production increases

BY KRIS BEVILL

North Dakota’s crude oil pipeline capacity is expected to reach more than 780,000 barrels per day by the end of 2014, according to the North Dakota Pipeline Authority. PHOTO: KLJ

44

Prairie Business Magazine August 2014

bout 150 industry members and federal state and local officials gathered in Bismarck, N.D., June 24 for the second Governor’s Pipeline Summit, held at the Bismarck State College National Energy Center of Excellence. The summit was attended by representatives from some of the region’s biggest players in the pipeline industry, including WBI Energy, Enbridge, Alliance Pipeline, ONEOK and TransCanada, as well as newcomers looking to make an entrance into the bustling Bakken region, which continues to struggle against lagging infrastructure necessary to transport the approximately 1 million barrels of crude now being produced each day.

Gov. Jack Dalrymple commended pipeline developers for their work to this point in his welcome remarks, noting that the state’s crude oil pipeline capacity will reach 783,000 barrels per day by the end of the year, compared to just 286,000 barrels per day in 2009. But he also pressed those developers to continue- expanding the state’s infrastructure to gather natural gas at the wellhead in order to reduce flaring and to pursue larger pipeline projects to transport crude to markets outside of the state.

“We have made tremendous progress in expanding our interstate oil and natural gas pipelines as well as our in-state gathering systems, but we must continue to develop pipeline systems that safely move our energy resources to more markets and reduce the flaring of natural gas,” he said.

Several large pipeline projects have been proposed that, if realized, would increase the state’s oil takeaway capacity to about 1.4 mil-

A

|ENERGY|

lion barrels per day by the end of 2016. Among them, Enbridge’s recently approved Sandpiper line, which includes a lengthy stretch running from Tioga, N.D., to Clearbrook, Minn., capable of hauling 225,000 barrels of crude per day, and Energy Transfer Partner’s 320,000 barrelper-day Bakken Pipeline, which it says would run from the Bakken to Patoka, Ill. Brent Secrest, vice president, crude oil, for Houston-based Enterprise Products Partners, unveiled his company’s proposed pipeline during the governor’s summit, noting that while his company is not yet a major player in the region, it is bullish on the Bakken’s long-term crude output potential. The company is proposing to construct a 1,200-mile pipeline stretching from Stanley, N.D., to Cushing, Okla., which is home to some of the largest oil storage capacity in the U.S. and is a clearing point for WTI (West Texas Intermediate) contracts. The proposed pipeline would haul 200,000 barrels of crude per day and could be complete by the end of 2016, Secrest said.

In his presentation on Bakken trends, KLJ CEO Niles Hushka predicted accelerated investments in infrastructure as outside investors continue to realize that the Bakken is a long-term play. He also noted that companies are willing to spend “disproportionate amounts of capital” to transport produced water, perhaps in response to safety concerns and the high cost of cleaning up produced water spills. That has opened up the opportunity to test new materials that are better able to handle produced water, such as nylon 6/6, which KLJ is currently testing and expects to be deployed sometime this year.

For engineering firms, Hushka says the push for additional pipelines presents opportunities and challenges as firms try to keep up with the pace of development. “Pipeline engineers are impossible to find these days because demand far exceeds supply,” he says. To cope with the shortage, he says firms are shifting engineers with similar experience into pipeline work and training them as fast as possible to design and observe the construction of pipelines. PB Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

www.prairiebizmag.com

45

-well oiloil production perper rigrig -well production

1,250

August-2013 August-2013

|FEDERAL DRILLING -well per -welloiloilproduction production perrig rigDATA|

August-2014 August-2014

1,000

-well gas production perper rigrig -well gas production

production productionthrough throughAugust August

August-2013 August-2013

August-2014 August-2014

August-2013 August-2013

August-2014 August-2014

-well -wellgas gasproduction productionper perrig rig

750

Oil +6

750750

August-2013 August-2013

August-2014 August-2014

July

barrels/day 500500 month over month

barrels/day

from one

750 750 Bakken 250250 month New-well oil/gas Sroduction per rig 500 500

thousand cubic feet/day 3,600 Niobrara Niobrara Permian Permian 3,000

barrels/day

new-well gas production per rig barrels/day Legacy production change production change 600 0 0 oiloil

thousand barrels/day barrels/day Bakken Eagle Haynesville new-well oilFord production per rigMarcellus Bakken Eagle Ford Haynesville Marcellus Bakken Bakken

thousand cubic feet/day 2,400 3,600 Niobrara Niobrara Niobrara Niobrara

Eagle Ford Eagle Ford Haynesville Haynesville Marcellus Marcellus

new-well gas production per rig oiloilproduction productionchange change

0 0

400

Permian Permian 1,800 3,000 Permian Permian 1,200

2,400

July

527 519

Gas +8

thousand cubic feet/day month over month

thousand cubic feet/day

0

0 Eagle Ford

Haynesville

Marcellus

Bakken

0

Eagle Ford

rig count

Haynesville

Marcellus

oil production change

2008

0

2009

2010

0 2011

2012

2013

2014

0 0

rig count gas gasproduction productionchange change

August-2013 August-2013 (30) oil production change

August-2014 August-2014

(30)

August-2013

thousand barrels/day thousand barrels/day (20)(70)

2008 2009 2010 2011 2012 vs.2013 August-2013 August-2014 August-2013 August-2014 Indicated2007 monthly change in oil production (Aug Jul)

2014

(40)

30 30100 45(80) 45 25 252007 4040

2008

2009

2010

2011

2012

2013

2014

20 20 3535 50 15 15 3030 10 10 2525 Indicated change in oil production (Aug vs. Jul)

Eagle EagleFord Ford Haynesville Haynesville

barrels/day

August-2013 August-2013

Oil production

Marcellus Marcellus

Niobrara Niobrara

Permian Permian

month August-2014 August-2014

Net Legacy Production change production from August-2013 August-2014 August-2013 August-2014 change new wells

Jul 1,095 800 Mbbl/d

Aug 1,112 Mbbl/d

400

-100

+20

2011

2012

2013

2014

barrels/day 2008

Haynesville

Marcellus

Niobrara

Permian

cubic feet/day Production

-72

+20

Net Aug Legacy change 1,319 production from 1,299 Bakken Ford Marcellus Niobrara Permian Bakken Eagle Eagle FordHaynesville Haynesville Marcellus Niobrara Permian MMcf/d change new wells MMcf/d

100

-200 -200

August-2013

-300 -300 50

August-2014

Bakken Bakken Eagle EagleFord Ford Haynesville Haynesville Marcellus Marcellus

August-2013 August-2013

Niobrara Niobrara

Permian Permian

month August-2014 August-2014

million cubic feet/day 800 16,000 400 14,000

2010

2011

2012

Net Legacy Production change production from August-2013 August-2013 August-2014 changeAugust-2014 new wells

Eagle Ford

Haynesville

2014

2007 8,000

2008

Marcellus

Niobrara

Permian

month

0

2013

Aug 1,319 MMcf/d

0 Bakken

cubic feet/day 10,000

month 2009

Jul 1,299 MMcf/d

2009

2010

2011

2012

2013

2014

U. S. Energy Information Administration | Drilling Productivity Report 6,000 Bakken Bakken

Eagle Ford Eagle Ford Haynesville Haynesville Marcellus Marcellus

Niobrara Niobrara

Permian Permian

400 400

0 0 Ford Bakken Eagle Eagle FordHaynesville HaynesvilleMarcellus Marcellus Niobrara Niobrara Permian Permian 4,000 Bakken 2,000

600

U. U. S. Energy Information Administration |Marcellus Drilling Productivity Report S. Energy Information Administration | Drilling Productivity Report Bakken Eagle Niobrara Permian Bakken EagleFord Ford Haynesville Haynesville Marcellus Niobrara Permian

200

Prairie Business MagazineAdministration August 2014 | |Drilling U.U.S.S. Energy EnergyInformation Information Administration DrillingProductivity ProductivityReport Report 0 2007

2008

-200 -300

Eagle Ford

barrels/day Jul -100 -300 -300 -100

0 12,000

200

00

2010

100 0

August-2014 August-2014

Natural gas production

600

1,200

2009

200

0

thousand barrels/day barrels/day

0 400400 2007

August-2013 August-2013

-72

cubic feet/day

0

400

cubic feet/day 15(70) 300 100 100 300 100 10(80) 02007 0 200 2008 5200

0

Net Aug Legacy Production change 1,112 production from 1,095 Bakken Ford Bakken Eagle Eagle Ford Haynesville Haynesville Marcellus Marcellus Niobrara Niobrara Permian Permian Mbbl/d change new wells Mbbl/d

Bakken Bakken

(40)

300

00 -200 -200

5 5 0

800

(700)

August-2014

(700) (700) cubic feet/day 45 million (70) (20) 40(80) (30) August-2013 August-2014 August-2013 August-2014 2007 monthly 2008 2009 2010 2011 2012 (Aug 2013 vs.2014 35Indicated change in gas production Jul)

0 50 100 -100 -100Bakken 100

2020 thousand barrels/day Jul

050 0 barrels/day barrels/day

August-2013

30 300300cubic feet/day million 25(50) 200200 20(60)

thousand barrels/day barrels/day 45(50) 45 40(60) 40 Indicated change in oil production (Aug vs. Jul) August-2013 August-2014 August-2013 August-2014 35(70) 35 thousand barrels/day

0 0 800 800

(600)

2012 August-2014 2013 2014

Indicated monthly change in gas production (Aug vs. Jul) (10) (60) August-2013 August-2014 August-2013 August-2014

August-2014

(30)(80)

800800 1,600

(500)

feet/day

0 (50) (600) (600)

Indicated change in in oilAugust-2013 production (Aug vs.

Jul) Indicated monthly change oil production (Aug vs.

Jul) (10)(60) monthly August-2014

2,000

(400)

gas production change August-2014 August-2013 August-2013 August-2014

(40)

0 (50)

2,400

(200)

barrels/day (700) (700) (500) (500)

(40)

0150 15 100 1010 55

(100)

(300)

Bakken Bakken Eagle EagleFord Ford Haynesville Haynesville Marcellus Marcellus Niobrara Niobrara Permian Permian (200) 0(200) 02007 2008 2009 2010 2011 2012 2013 2014 (75)

(600) (600) (400) (400) (20)

(20)

(125)

0

(10)

(10)

(100)

Permian

Niobrara Niobrara Permian Permian Bakken Ford Bakken Eagle Eagle FordHaynesville HaynesvilleMarcellus Marcellus Niobrara Niobrara Permian Permian

(25)

(300) (300) (100) (100) (100) gas production change (400) (400) (200) (200) feet/day August-2013 2007 2008 2009 2010 2011 0(500) (125) (500) (300) (300)

2007

Niobrara

Legacy production change Legacy gas production change 0 0 gas million cubic feet/day million cubic feet/day new-well gas rig Bakken Eagle Haynesville Marcellus Bakken EagleFord Fordproduction Haynesville per Marcellus

(50)

(75)0

Permian

thousand barrels/day Bakken Eagle Ford Haynesville Bakken Eagle Ford Haynesville Marcellus Niobrara Niobrara Permian Permian new-well gas production perMarcellus rig

(50) (100) (100)

600

Niobrara

Legacy 0 oil 0 production change

600 barrels/day barrels/day 1,800 300 (25) 0 0 Bakken Eagle Ford Haynesville Marcellus Niobrara Permian Bakken Eagle Ford Haynesville Marcellus Niobrara Permian 2008 2009 2010 2011 2012 2013 2014 0 0 2007 1,200 200

100

46

August

Bakken

0 0 Bakken Bakken Eagle Ford Haynesville Bakken Eagle Haynesville Marcellus Marcellus new-well oilFord production 250 250 New-well oil/gas Sroduction per rig per rig

500

Monthly 500 additions Monthly from one additions 250 average rig

516 August 510

2009

2010

2011

2012

2013

2014

00

Bakken Bakken

Eagle EagleFord Ford Haynesville Haynesville Marcellus Marcellus

Niobrara Niobrara

Permian Permian

SOURCE: U.S. DOE ENERGY INFORMATION ADMINISTRATION 0 2007 2008 2009 2010 2011 2012 2013 2014

PRAIRIE BUSINESS

|BUSINESS TO BUSINESS| We’re setting the standard for engineering in North Dakota.

NATIONAL PERSPECTIVE. REGIONAL EXPERTISE. TRUSTED ADVISOR.

701.837.8737 www.ackerman-estvold.com Minot, ND | Williston, ND

kljeng.com

To Advertise: John Fetsch 701.238.9574 Brad Boyd 1.800.641.0683 Shelly Larson 701.866.3628

jfetsch@prairiebizmag.com bboyd@prairiebizmag.com slarson@prairiebizmag.com

BEYOND

THE BOARDROOM MAKE YOUR NEXT EXPO BEYOND SUCCESSFUL ͳͲͲǡͲͲͲ Ǥ Ǥ ϐ ǡ ͷ ǡ ͳʹ ǡ Ǥ Ǧ ǡ ǡ Ǧ Ǧ Ǧ Ǩ ǡ ͹ͲͳǤ͹ͻʹǤͳʹͲͲǤ Alerus Center-Beyond Remarkable aleruscenter.com | 701.792.1200 | 1200 42nd St. So. Grand Forks, ND 58201

48

Prairie Business Magazine August 2014

REACH MORE THAN 110,000 READERS EACH MONTH WHEN YOU ADVERTISE WITH PRAIRIE BUSINESS AND

Focus on your business, because CenturyLink has your data and voice solutions covered.

TALKING POINTS!

Prairie Business, a monthly magazine, and Talking Points, a weekly newsletter, focus on the businesses in the Dakotas and Minnesota that drive the regional economy, including agriculture, energy, health care, construction, architecture and engineering, higher education and more.

Introducing CenturyLink® Business Business class solutions that increase productivity while lowering operating costs.

• Traditional and IP-based voice services and advanced features • Dedicated High-Speed Internet • Advanced data network solutions • Voice and network equipment from industry leading partners

Subscribe to the free digital edition of Prairie Business and sign up to receive Talking Points at www.prairiebizmag.com.

• Cloud services including hosted servers, software applications, web development platforms, remote backup of data and more

Also, for daily business news, go to www.prairiebizmag.com.

To find out more about CenturyLink, for business services, call 800.603.6000 for cloud services, call 855.459.5121

To advertise: Brad Boyd 800.641.0683 Shelly Larson 701.866.3628

Business Prairie

northern plains business resource

©2013 CenturyLink, Inc. All Rights Reserved.

The name CenturyLink and the pathways logo are trademarks of CenturyLink, Inc.

w w w. p ra i r i e b i z m a g. co m

www.prairiebizmag.com

49

|BY THE NUMBERS|

| SPONSORED BY

|

Oil Producing

Average Daily

Wells

+1,886

10,658* Apr. '13 8,772

Permits

Apr. '14

1,001,149* Apr. '13 793,852

+207,297

*All time monthly high

Average Rig

Total

Production (barrels)

Apr. '14

+31

Apr. '14

Count

233 Apr. '13 202

+6 218, May 2012

370, Oct. 2012

Price

Gas Apr. '14

per barrel

$85.68 Apr. '13 $87.85

-2.18

+275,549

1,133,742* Apr. '13 861,193

(% Flared)

+7

*All time monthly high

All time monthly high:

Coal

Gas Apr. '14

(MCF/day)

Apr. '14

(Thousand Short Tons)

29% Apr. '13 29%

+63

All time monthly high:

$136.29, July 2008

188 Apr. '13 186

All time monthly high:

All time monthly high:

*All time monthly high

Apr. '14

Apr. '14

2,210 Apr. '13 2,311

All time monthly high:

36%, Sept. 2011

2,924, March 2004 *EIA Original Estimate data (data since 2002)

Interest Rates

Employment

7

Effective federal funds rate 10-year treasury constant maturity rate

6

Percent

5 4 3 2 1 0

Jan2000

Jan2002

Jan2005

Jan2007

Jan2010

Gas Captured/Sold April 2014

19%

Jan2012

Jan2015

UNEMPLOYMENT RATE Apr.-13 Apr.-14 North Dakota

2.5%

3.0%

397,440

Bismarck MSA

2.5

2.6

61,565

60,823

Fargo MSA

2.8

3.5

119,846

117,634

Grand Forks MSA

3.5

3.9

52,021

51,874

1.4

1.5

22,492

20,722

Jamestown MiSA

2.6

3.2

10,815

10,614

Minot MiSA

2.9

3.3

35,542

34,948

Wahpeton MiSA

3.1

4.0

11,712

11,655

Williston MiSA

0.8

0.9

37,790

35,450

South Dakota

3.7%

3.9%

437,075

430,929

Rapid City MSA

3.7

3.9

65,582

64,753

Sioux Falls MSA

3.3

3.4

131,980

129,675

Aberdeen MiSA

3.3

3.2

22,541

22,704

Brookings MiSA

3.2

3.2

18,942

18,599

Huron MiSA

3.4

3.3

9,606

9,525

Mitchell MiSA

3.2

3.3

13,141

13,059

Pierre MiSA

2.8

2.9

11,941

11,765

Spearfish MiSA

3.9

4.0

12,479

12,229

Vermillion MiSA

3.6

3.6

7,231

7,213

Watertown MiSA

3.7

3.7

18,647

18,229

Minnesota

71% 17%

7% Gas captured and sold

due to challenges or constraints 19% 17% Flared on existing gathering systems Flared due to lack of pipeline connection 64% 64%N.D. PIPELINE AUTHORITY SOURCE:

19%

3.3

3.6

11,485

11,344

4.7%

5.2%

2,860,415

2,822,110

Duluth MSA

5.9

6.3

136,926

136,738

Minneapolis-St. Paul MSA

4.1

4.8

1,794,933

1,778,712

Alexandria MiSA

3.9

4.8

20,088

19,753

Bemidji MiSA

6.4

7.2

20,760

20,512

Brainerd MiSA

7.0

7.7

43,102

42,881

Fairmont MiSA

4.7

5.4

9,943

9,928

Fergus Falls MiSA

5.1

6.2

29,304

28,393

Hutchinson MiSA

5.3

6.3

18,662

18,203

Marshall MiSA

3.9

4.5

14,488

14,203

Red Wing MiSA

4.4

5.1

24,386

24,128

Willmar MiSA

4.7

5.1

23,615

23,146

Winona MiSA

3.8

4.3

28,078

27,883

Worthington MiSA

3.5

3.9

10,995

10,951

Data provided by David Flynn, chair of the University of North Dakota Department of Economics. Reach him at david.flynn@business.und.edu.

50

Prairie Business Magazine August 2014 64%

387,870

Dickinson MiSA

Yankton MiSA

10%

EMPLOYMENT Apr.-13 Apr.-14

water | transportation | municipal | facilities

We believe in simplicity.

We believe in setting the bar even higher.

We believe in doing what we say.

Thank you for believing in us.

Celebrating three years of different.

ApexEngGroup.com