Prairie Business November 2014

32 HEALTH CARE Keeping it Local

Independent health care organizations stress collaboration, local par ticipation for continued success

38

HIGHER EDUCATION Show and Tell

Tour helps manufacturers highlight workforce woes, oppor tunities for educators

EVENTS

2014 Prairie Family Business North Dakota Conference ............................................................Nov. 5 Moorhead, Minn. ........Information: regonline.com/builder/site/Default.aspx?EventID=1610351

South Dakota Chamber of Commerce Annual Economic Outlook Seminar Nov 13 Sioux Falls, S.D. .......................................Information: sdchamber.biz/events.aspx?ViewEvent=595

Economic Development Association of North Dakota Fall Conference Nov 18-20 Grand Forks, N D Information: ednd org

2014 Williston Petroleum Banquet ...............................................................................................Nov. 20 Williston, N.D. ...........................................................................Information: willistonapi.com/Banquet

Falls, Minn

Lake Regional Healthcare Corp

Larry Schulz, CEO of Fergus

-based

PHOTO: ERIC STROM/STROM STUDIO

Raven Industries houses production equipment for one of the world’s largest, seven-layer extrusion lines, a machine which produces liner and cover films used to protect natural resources and prevent the spread of environmental contamination PHOTO: JEFF VEIRE, IMAGERY PHOTOGRAPHY

KRIS BEVILL Editor

kbevill@prairiebizmag.com

As vast as the prairie

When putting together this issue, it struck me (again) how wide the area is we cover and how the topics we address each month can seem equally vast

This month, we take you on a tour of manufacturing facilities in southeastern South Dakota and hear how they continue to struggle to find workers and what leaders there are doing to help re-ignite interest among young people to pursue careers in their industry

We learn from stakeholders in western North Dakota how they are continually building out the fastest growing area in the country and what they think they need to keep up the pace.

We travel to the shores of Minnesota lakes country to get a glimpse into a gargantuan effort to keep communities connected to the rest of the world through the fastest Internet speeds available.

And we visit with health care leaders at independent organizations in western Minnesota, South Dakota and central North Dakota to ask how they are able to compete with large systems and provide the care their residents need during a period of industry reform

The issues are many, but even when the topics seem unrelated there emerges a common theme: collaboration For contributing writer Rob Swenson’s article, “Show and Tell,” he tagged along on a Manufacturing Day tour that brought higher education and economic development leaders to manufacturing facilities to learn how they can collaborate to recruit new workers. Contributing writer Marnie Lahtinen shares how Bakken stakeholders would work to bring amenities to communities with help from state funding in her article on proposed “ surge ” funding In “Getting in the GigaZone,” Bemidji, Minn -based Paul Bunyan Communications CEO Gary Johnson says his company is committed to delivering services to customers that allow them to continue thriving, and he’s willing to work with others to get it done And in “Keeping it Local,” independent health care system leaders say collaboration and a willingness to partner with other systems is the secret to their success

The northern Great Plains is indeed a vast space and those whose ties run deep in the region have an innate sense of independence and pride in their ability to overcome challenges, but we also have an uncanny ability to come together to achieve great things when the situation arises It is encouraging to read so many examples of willing collaboration and thoughtful approaches to complex issues The towns that dot our prairie are widespread, but this issue proves once again that we are one community, willing to work together to make it home

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 PR , Greater Fargo Moorhead EDC; Tonya Joe (T.J.) Hansen, Assistant Professor of Economics, Minnesota State University Moorhead; Brekka Kramer, General Manager of Odney; Matthew Mohr, President/CEO, Dacotah Paper Company;

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

Enterprise value

BY MATTHEW D. MOHR

Entrepreneurs create value through building a profitable ongoing business enter pr ise. How much a business is actually worth is not easy to calculate, but simple in practice to determine

Many factors come into play when deciding what a business is worth to a buyer. Cash flow available to the owner/investor is of primary importance, especially if the purchaser uses the discounted cash flow model of valuation commonly taught in business school Different industries carry greater valuations.

Revenue growth, operating margins and operating expenses compared to revenue have a great impact on the enterprise value. Employee productivity relative to others in the industry, employee longevity and management/leadership retention all factor heavily into a purchase price decision, especially in our region currently

Recently I reviewed a very interesting regional business for potential purchase which carried all the components for success, except one The business had good margins, was profitable and had shown very nice growth and the owner did a good job managing the business, but

unfortunately the owner/manager was interested in retiring relatively soon.

I thought I had a good idea of what the owner expected to sell the business for, which wasn’t terribly out of line But after factoring in the risk and cost of losing the owner/manager, my business valuation was a fraction of what the owner thought the business was worth, and the value to me was actually less than the current assets on hand

Most enterprises are eventually sold or passed down to the next generation in the family Either way, the owner needs to figure out the value of the enterprise before transferring ownership.

My father always said something’s value was only what someone was willing to pay for it A simple formula, but very true in practice What any enterprise is actually worth is subject to debate, but ultimately it’s only worth what someone will pay for it PB

Matthew D. Mohr CEO, Dacotah Paper Co mmohr@dacotahpaper com

The world is a library

BY JOHN GIRARD

Icollect inspiring Native American proverbs I am often amazed how these maxims have passed the test of time and remain sage advice for today’s leaders. One of my favorites, which probably originated from the Lakota people of our region, states: Knowledge is rooted in all things the world is a librar y This adage is almost certainly truer today than even the wise author could have ever imagined

As business leaders are seeking new and innovative ways to stay competitive, many are turning to big data, or perhaps more correctly, they are harnessing the power of data analytics Although this is not a new phenomenon, big data (and the associated tools and techniques) is certainly capturing the attention of leaders around the planet Cover stories in Harvard Business Review, Time magazine, Foreign Affairs magazine and many more are fueling the search for powerful, yet unknown, data anom-

alies Once discovered these mysterious data nuggets often become the basis of a great decision, the spark for innovation, or the catalyst for change.

Some argue big data is exclusively for Fortune 500 companies with petabytes of data and access to unlimited computing power In fact, nothing could be further from the truth. Organizations profit and not-forprofit, large and small, public and private have data that could lead to the next big thing All leaders should consider the merits of big data. Remember, knowledge is rooted in all things the world is a librar y Isn’t it time you start browsing? PB

John Girard Founder, Sagology John@JohnGirard net Twitter: @JohnGirard

Local banks offer dedication, expertise to small business

BY CURT EVERSON

Jeff Plagge’s day job as a banker is to steer the ship as the president and CEO of Northwest Financial Corp of Arnolds Park, Iowa In his other role as chairman of the American Bankers Association, Plagge speaks forcefully and often on behalf of the interests of this nation’s banks and bankers In recent testimony to members of the U S Senate banking committee on the current state of community banking, he stated in part: “The state of our community banks is strong, but the challenges we face are enormous As I travel the countr y in my role as chairman of the ABA, I am constantly impressed by how resilient community bankers are and how dedicated they are to serving their communities ”

As e v idence of that dedication, Plagge cited some results from the FDIC’s 2012 study on communit y banking show ing that communit y banks, w hile accounting for only 15 p ercent of the nation’s banking assets, held 46 p ercent of al l the smal l lo ans to businesses and far ms made by FDICinsured institutions

Viewed through the lens of a recovering economist and banking trade association executive like myself, those numbers are loaded with public policy implications But what do they mean to an entrepreneur with an idea that he or she wants to turn into an economic reality, or to a small business owner who is looking to expand? Here is what I think: If you need capital to realize your dreams, go see your local banker! They know small business.

I recently witnessed a testimonial about the value of a trusted, knowledgeable banker A husband and wife team who own and operate a grocer y store located in a small bedroom community in southeastern South Dakota were talking about their ever yday

challenges competition from big grocer y stores in a larger neighboring community, working side by side ever y day with the same person you see at dinner each evening, keeping abreast of workplace laws and regulations. These young business owners were ver y much up to meeting those challenges But I was particularly struck by what those folks had to say about the importance of the relationship they had w ith their trusted banker. While they generally u n ders to o d t h e ro l e t h a t U S Sm a l l Bu s i n e s s Administration loan guarantees played in making their financing package work, they were relieved to be able to leave the technical work of securing and managing the contractual elements and technicalities of those guarantees up to their banker. They also placed great value on the personal interest that their banker took in their long term success

Please don’t misinterpret anything I am saying as being critical of the SBA or its programs. SBA programs are a valuable source of capital, providing much-needed risk mitigation for banks and their customers. SBA staffers I have met over the years are good people who continually look for ways to make their programs more customer-friendly But small business owners don’t need to be SBA program experts. That is where the local business banker comes into play

The economic success of communities of all sizes is driven largely by a vibrant small business sector. Business bankers and main street banks have the capital and expertise to foster that success PB

Curt Everson President South Dakota Bankers Association ceverson@sdba com

SD research parks develop regional presence

BY DWAINE CHAPEL

Developing strong partnerships provides key opportunities to economic growth Economic development professionals work on local and regional collaborations. In September, economic development leaders from the University of South Dakota Research Park and the Research Park at South Dakota State University held a joint board of directors meeting in Sioux Falls, S D The spirit of the meeting was to develop a strong relationship between the two parks, the two universities and the South Dakota Board of Regents It was a key first step in developing a strong regional partnership

The team shared with the joint board that during the 2015 South Dakota Legislative session, the first Research Park Day at the Legislature will be held on Feb 5 This event will provide the opportunity to further discuss the importance of research parks as economic development tools It will highlight the importance of the Board of Regents as a driving force behind the continued success of developing a long-term research, science and technology base The research parks will become a place for innovation to be developed and commercialized.

The organizations provided the joint boards with an overview of the research parks’ purpose, histor y, investments and current successes The general purpose and vision for both parks is to create a unique environment to stimulate economic g row th by connec ting universit y resources, research and talent with private industr y Background relating to the development of each park and its current position in time was delivered The discussion outlined the cost of park development to date by the Research Park at SDSU The USD Research Park, being established on 80 acres adjacent to the University Center Sioux Falls campus, is in the final stages of its master plan development

"It makes great sense for our communities and parks to collaborate on these initiatives,” says Rich Naser, USD Research Park president “We have a shared vision to foster innovation to create new high-skill, high-wage opportunities for the current and future generations in our state ”

The USD Research Park has aligned itself w ith the South Dakota Technolog y Business Center, a Sioux Falls technology business incubator, to jumpstart park operations and tackle these key activities. For 10 years the SDTBC has helped companies launch and g row in Sioux Fal ls through programs like its business accelerator and by providing specialized space, flexible lease terms and technology services. The relationship between the USD Research Park and the SDTBC will enhance both organizations’ ability to support innovation-driven economic development in the region

The USD Research Park has built strong local partnerships with the city, Forward Sioux Falls and the university. Both parks also have a strong collaborative relationship with the Board of Regents

The Research Park at SDSU discussed the importance of the local partnership that it has with SDSU, SDSU Foundation, the city, county, state officials, and the local economic development corporation. The park has worked hard in its development of the Innovation Center This community incubator is a similar model to the SDTBC. The Innovation Center has also been an essential tool used to recruit mature businesses into the park It provides space for these PB

Dwaine Chapel Executive Director Research Park at SDSU

Building with transportation in mind

BY STEPHANIE HOFFART

Businesses ser v icing the sustained growth in the Bakken oilfields are finding more and more just how important transportation decisions are in determining overall success. This renewed focus has led investors and partners to invest wisely in largescale connections with roads, rail or both It’s with this direction in mind that the Minot (N.D.) Area Development Corp. is continuing to partner with North Dakota Port Services on the expansion of the Port of North Dakota

At just over 3,000 acres, the overall development is designed to be the largest distribution hub between Seattle and Chicago in Burlington Northern Santa Fe territor y The growing Port of North Dakota provides a service and benefit area of 250 miles in all directions from Minot, covering the space between BNSF locations in Dilwor th, Minn., and Glasgow, Mont

When MADC first announced the port expansion project in Minot a year ago, the calls started coming in from all over the countr y ; calls from interested small- and large-scale companies hoping to find their way onto rail and into North Dakota Located just east of Minot, the expansion project is unique in that its sole purpose isn’t just oil. One of the first businesses taking advantage of this first phase of the expansion has an international footprint, focused on agricultural commodities

North Dakota Port Services’ contractors are moving dirt on the first five lots to be developed, anticipating their availability by summer or fall 2015 These initial lots will be serviced directly by the more than 10,000 linear feet of new track, set to place on the site. This connection br ing s a unique and sorely needed improvement to the region; warehouse and distribution facilities, combined with intermodal container movement, customs clearing

and city-based infrastructure to boot. And 10,000 linear feet of track is just the beginning; full build-out calls for nearly 45 miles of track on the location.

This early phase of expansion would take rail-served property on this side of town from the 150 acres it is today to closer to 350 acres, and growing

Greg Johnson, head of North Dakota Port Services since it began business eight years ago, likes to emphasize the benefits of rail From his perspective, rail-in and rail-out moves product in the most efficient manner possible. He also points out the advantages of the location for the Port of North Dakota in Minot at the intersection of two Class-A Railroads (BNSF and Canadian Pacific) and three major highways (83, 2 and 52).

As the Port of North Dakota is a regional distribution hub, Johnson and MADC work to balance out imports and exports We know that a diversified clientele of value-added agriculture, manufacturing, and consumer products, joined by oil-based products like frac sand, pipe and more will sustain the port for years to come

This innovative solution to a transportation challenge w ill fuel long-term g row th needed to service all business sectors in the region, beyond the boom

In order to further our region’s ability to meet our ever-growing needs, all communities should find a way to best serve the business need, keeping in mind just how important a role transportation plays in the big picture PB

Stephanie Hoffart President/CEO Minot Area Development Corp shoffart@minotusa.com

When complete in 2016, the 36,000-square-foot

UMN Crookston to build wellness center

The University of Minnesota Crookston held a ceremonial groundbreaking Sept. 22 for a 36,000-square-foot wellness center project Construction will begin next year and is expected to be complete in 2016 State funding will provide $10 million toward the project; an additional $5 million will be raised through philanthropic efforts, according to the school. UMN Crookston announced Sept. 22 that Les and June Nielson have donated $1 million for the project in memory of their son, Mitch Lien Nielsen, for which the lobby of the building will be named.

KK Bold celebrates 25th anniversary

Bismarck, N.D.-based advertising agency

KK Bold announced in September its commemoration of 25 years in business with special events for clients and employees at the agency ’ s offices in Bismarck and Minot, N.D.

The agency launched in 1989 as Kranzler Kingsley Advertising, Marketing and Public Relations and was rebranded in 2010. It provides clients with fully integrated marketing services from its offices in North Dakota and Las Vegas

CTB to expand women’s leadership program

The Center for Technology and Business in Bismarck, N.D., has been awarded a Bush Foundation Leadership Network Grant to expand its women ’ s leadership program throughout North Dakota. The CTB has previously hosted women ’ s leadership development programs in Bismarck and Minot, focusing on improving the personal, professional, community and health leadership skills for women of all ages and backgrounds The Bush Foundation grant will support the expansion of the six-

month program into Fargo as well as one-day workshops in Dickinson, Har vey and the Standing Rock Sioux Nation, as well as a leadership summit for all alumni. For more information, visit http://trainingnd.com/technologytraining/womens-leadership-program

WCI gets grant for Creative Action Network

The Bush Foundation has awarded Fergus Falls, Minn -based West Central Initiative a Leadership Network Grant to provide arts-based workshops for community leaders through its (continued on page 18)

wellness center at the University of Crookston Minnesota will include recreational gym space, workout and fitness spaces, public spaces and a multipurpose room. IMAGE: UNIVERSITY OF MINNESOTA CROOKSTON

Dacotah Paper earns volume distribution award

Spartan Chemical Co Inc , a manufacturer of sustainable cleaning and sanitation products for industrial and institutional markets recently awarded Dacotah Paper Co. the Spartan Top 20 Annual Volume Distribution award for its 2013 performance. Dacotah Paper, a wholesale distributor of food service disposables, janitorial supplies and equipment, and office and health care products, is one of Spartan’s 20 largest customers worldwide

(continued from page 16)

Creative Action Network WCI will collaborate with Springboard for the Arts and the University of Minnesota Extension to provide arts-based workshops for alumni of its West Central Leadership Academy with a goal of forming a network of leaders to help inspire creative action in their communities

Fargo Jet Center spreads wings into Cities market

Exclusive Aerospace LLC, an affiliate of Fargo Jet Center, has expanded its services to the Minneapolis/St Paul market through the acquisition of Premier Jet Center at Flying Cloud airport in Eden Prairie, Minn Exclusive Aerospace will continue to operate the Flying Cloud airport location as Premier Jet Center and will retain

existing personnel

Flying Cloud airport is one of the main corporate airports serving the Cities market, according to FJC

NDSU engineering center to support ND industry

The North Dakota State University College of Engineering has announced the creation of the Center of Quality, Reliability and Maintainability Engineering. The center will allow students and faculty to work with partners in North Dakota’s growing oil, wind, power and manufac tur ing indust r ies to improve product quality and reliability and to optimize maintenance plans, according to the school Member companies will have access to center

resources and receive assistance in design testing and validation, failure and risk analysis, and establishing effective quality systems for manufacturing operations

Early supporters of the center include Tucson, Ariz.-based ReliaSoft, which donated $4,000 to purchase computers for the center and more than $400,000 in workstation licenses for its software, and Denver-based Qualmark Corp., which contributed a $200,000 test chamber designed to test products at the center

Seven local companies have committed a total of $90,000 per year in membership fees to support the center for the next three years, according to NDSU Representatives of member companies serve on the center’s advisory board and help guide the center’s research

From left, Darwin Larson, Spartan Chemical Co Inc regional manager; Keith Bresin, Dacotah Paper Co sales director; Greg Ford, Spartan vice president of sales; Matthew Mohr, Dacotah Paper president, and Sandy Riggs, Spartan divisional manager.

PHOTO: DACOTAH PAPER CO.

With workers in high demand, employers flock to career fairs

Universities throughout the region have reported record numbers of businesses exhibiting at fall career fairs, illustrating the high demand and competition for workers in many industries, particularly in engineering fields

The South Dakota School of Mines and Technology registered 153 companies to attend its career fair on Sept 23, making it the largest career fair in school history Employers represented 28 states and Canada; just 38 of the companies attending were South Dakota companies. Prior to the event, the school estimated 1,200 students would attend the event.

South Dakota State University’s Jerome J Lohr College of Engineering attracted 105 companies, a new record, to its career fair on Oct 7 The previous record, set in 2013, was 86 companies SDSU offers nine engineering majors, all of which were represented by the more than 400 students who attended the event. This year also marked the first time architectural students were invited to the event

Among the firms exhibiting at SDSU’s event were Grand Forks, N D -based AE2S (Advanced Engineering and Environmental Services Inc ), Iowa-based Vermeer and Otter Tail Power Co Many exhibitors were seeking to fill multiple open positions and admitted competition for new employees in this region is fierce. “In certain areas of the country, there is a lot of demand,” says Delvin DeBoer, a former engineering faculty member at SDSU who currently works for AE2S “The company is growing rapidly,” he says “We’re in a continuous hiring mode ”

Scott Omland, left, a plant engineer with Ottertail Power Co in Big Stone City, S D , discusses job opportunities with Jacob Daniels, a senior mechanical engineering major from Russell, Minn., during Jerome J. Lohr College of Engineering’s fall career fair, held Oct. 7 at South Dakota State University. PHOTO: DAVE GRAVES/SOUTH DAKOTA STATE UNIVERSITY

JLG opens Dickinson office, celebrates 25th anniversary

JLG Architects has opened a branch office in Dickinson, N D The new location is the firm’s eighth office The firm was founded in Grand Forks, N.D., 25 years ago. Other offices are located in Fargo, Bismarck, Minot and Williston, N D , and Minneapolis and Alexandria, Minn

Eide Bailly expands to Nevada

Regional certified public accounting and business advisory firm Eide Bailly LLP announced the acquisition of Muckel Anderson CPAs in Reno, Nev., effective Nov. 3. It is Eide Bailly’s first Nevada location Eide Bailly CEO Dave Stende says the acquisition fits with the firm’s strategic plan to grow its presence west of the Mississippi River and into the “intermountain region” of the U S

With the addition of the Reno office, Eide Bailly will have 25 offices in 12 states and nearly 1,500 employees

A&B Business becomes authorized Xerox dealer

Sioux Falls, S.D.-based A&B Business Solutions has joined the family of Xerox Authorized Dealers “We chose to partner with Xerox due to its strong brand name, reputation for excellence in products and services and client support priority,” A&B owner Dennis Aanenson says. “As a Xerox Authorized Dealer, we are excited about our ability to better serve our clients with the industry’s best products and solutions as we expand our presence in the upper Midwest market.”

First International Bank & Trust donates $500K to hospital project

Watford City, N D -based First International Bank & Trust has donated $500,000 to the McKenzie County Healthcare Systems Inc. public campaign for a new health care facility in Watford City. It is the bank’s largest single community donation in its 104-year history

“Health care is critical for this community,” First International Bank & Trust CEO Steve Stenehjem says. “In giving this gift, we really want to encourage others in this community to donate as well ”

The public campaign seeks to raise $15 5 million for the new facility, which will replace Watford City’s current hospital and offer expanded space to meet the needs of the area ’ s growing population.

ND Health Care Review changes name

Minot, N D -based nonprofit organization North Dakota Health Care Review Inc. has changed its name to Quality Health Associates of North Dakota to better reflect its role as an organization focused on collaborating with health care industry members to improve the quality of care provided to North Dakotans QHA is governed by a 10-member board of directors and staffed by more than 20 industry professionals, with expertise in quality improvement methodologies, lean process improvement, health IT and electronic medical record consultation, data analytics, and coding and quality and utilization review.

Essentia names Herman CEO

Essentia Health’s board of directors has appointed Dr Dav id Herman CEO and a member of the board. He w ill join the organization in early 2015

Herman, a native of International Falls, Minn., has more than 20 years of experience in health care leadership. He most recently served as president and CEO of Vidant Health, an integrated health care system in eastern North Carolina Prior to that, he served on the Mayo Clinic staff from 1988 to 2011, where he was a professor of ophthalmology He currently serves on the board of directors for the American Board of Ophthalmology and is a member of the board of trustees for the Ronald McDonald House Charities

Herman will replace Dr Peter Person, who announced his planned retirement earlier this year.

Sanford names Mellmer director, clinic operations

Jake Mellmer has been named director of clinic operations for Sanford Health North and Sanford Health South clinics in Bismarck, N D He will be responsible for promoting quality of care and access within each clinic, planning, directory and coordinating administrative functions and overseeing the development and maintenance of clinic policy and procedures. Prior to this role, Mellmer served as human resource representative, environmental services manager and administrative assistant at Sanford Health Continuing Care Center off Collins in Mandan, N D

Jorvig joins Absolute Marketing

Absolute Marketing Group has hired Brian Jorvig as a marketing adviser Jorvig has more than 10 years of experience with local and national clients and has expertise in website optimization, content strategy and branding Prior to joining Absolute Marketing, he served as an online marketing strategist and account manager at Ironclad Marketing in Fargo

CHI St. Joseph’s Health promotes Heidt

Kim Heidt has been promoted to director of human resources at CHI St. Joseph’s Health in Dickinson, N D She joined the organization’s HR department in 2010 and has been involved with St Joseph’s implementation of its current HR and payroll system and its new performance management program Along with her role as HR director, she will also serve on the organization’s senior leadership team. Heidt is a native of Dickinson and holds a bachelor’s degree in business management with a focus on HR from the University of Mary in Bismarck, N D

Olson elected SDAHO board chair

Kent Olson, administrator and CEO of Philip Health Services Inc in Philip, S D , has been elected chairperson of the South Dakota Association of Healthcare Organizations. A North Dakota native, Olson holds a master’s degree in business administration from the University of Phoenix and a bachelor’s degree in accounting from Minnesota State University Moorhead. He joined Philip Health Services in 2006 and has served on the SDAHO board of trustees since 2009

Western State Bank promotes Jacobson

Brad Jacobson has been promoted to president/chief operating officer at Western State Bank. Jacobson joined the bank in 2002 and has since served in a number of roles, including business banking officer, vice president/business banking manager and market president. In 2011, he began overseeing the bank’s locations In his new role, he will continue to oversee the bank’s seven locations as well as provide direction on the overall banking strategy Jacobson is a graduate of North Dakota State University and the Graduate School of Banking of Colorado.

Kent Olson

Dr David Herman

Jake Mellmer

Brad Jacobson

Kim Heidt

Brian Jorvig

Ackerman-Estvold hires Janssen

Shelby Janssen has joined Ackerman-Estvold’s Williston, N D , office as an architectural designer In this role, she will design a variety of architecture projects throughout the region She holds associate degrees in construction management technology and architectural drafting from North Dakota State College of Science in Wahpeton, N D

Karsky named to Graduate School of Banking board

Tim Karsky, president of Choice Financial in Bismarck, N.D., has been named to the board of trustees at the Graduate School of Banking at Colorado Karsky served as commissioner of the North Dakota Department of Financial Institutions from 2001 to 2010, as well as a number of other leadership roles in the banking industry, including chairman and treasurer of the Conference of State Bank Supervisors, instructor at the Dakota School of Banking and member of the FDIC National Advisory Council

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.

Shelby Janssen

Tim Karsky

Daugaard honored as food, ag governor of year

South Dakota Gov Dennis Daugaard was recently presented with the Biotechnology Industry Organization’s 2014 Food and Agriculture Governor of the Year award during the group ’ s livestock biotech summit in Sioux Falls, S D The award was presented in recognition of his leadership and commitment to strengthening the agricultural and livestock biotechnology industries within South Dakota.

“I am proud to say that companies across the biotechnology spectrum have taken notice of what we are doing in South Dakota and have decided to put down roots with us, ” Daugaard said “I am honored to receive this acknowledgement of South Dakota’s commitment to fostering growth in the biosciences, and our state’s support of innovations that help heal, fuel and feed the world.”

DFC Consultants promotes Schaffer

Deb Schaffer, project manager, has been promoted to the DFC Consultants management team She will be responsible for helping set strategy and direction for the company Schaffer has 19 years of experience, four of them with DFC Consultants. She is a Microsoft Certified Trainer specializing in Microsoft Dynamics GP and Microsoft Dynamics CRM

Fronteer announces retirement, new hire

Bismarck, N.D.-based Fronteer Payroll Services Inc has hired Jen Wollmann as sales and account representative She will replace Cindy Weiand, who is retiring.

Weiand has served as sales representative, insurance representative and HR representative for the past 14 years She will continue to act as a consultant through the end of the year. Wollman has more than 10 years of experience in customer service, office management, benefits administration, payroll administration and HR management.

GPM adds 2, expands ND market

GPM Inc. has hired Chad Bannor as an outside sales associate, specializing in the oil and gas industries He is based at GPM’s Bismarck, N D , office. In this role, he will be responsible for business development throughout North Dakota’s oil patch Prior to joining GPM, Bannor was a roughneck for Ensign United States Drilling and a field technician for BOS Solutions.

Mike Krebs has joined GPM’s inside sales team at the Bismarck office He most recently served as an imaging/electronic content management specialist at Fireside Office Solutions in Bismarck

Dennis Daugaard

Deb Schaffer

Jen Wollmann

Chad Bannor

Cindy Weiand

Getting in the GigaZone

BY KRIS BEVILL

Gary Johnson, CEO and general manager of Paul Bunyan Communications, stands in front of equipment used to install the company’s fiber optic network PHOTO: KRIS BEVILL, PRAIRIE BUSINESS MAGAZINE

Bemidji, Minn.-based Paul Bunyan Communications is living up to the size of its mythological namesake. The telecommunications cooperative announced in September plans to provide gigabit (1,000 megabits per second [Mbps]) broadband Internet speed to customers throughout a 5,000square-mile area of northwest Minnesota beginning early next year. When complete, the so-called GigaZone will be one of the largest rural fiber networks anywhere in the country

“We’ve always been committed to giving our region the best possible communication services,” Gary Johnson, Paul Bunyan Communications CEO and general manager, says “When we were formed 63 years ago that meant quality telephone services to areas no other provider would serve Today it means delivering advanced data services and Internet capabilities to our members unsurpassed by any region or any other provider in the country regardless of size or location ”

Give me Giga

Communities and tech-savvy businesses throughout the country have been clamoring for high-speed fiber networks as data demands increase for both consumers and commerce One gigabit is the current Holy Grail of broadband speeds, enabling users to download and upload movies, photos and other data in just seconds (A 50 Mbps connection, which is currently the fastest broadband speed available in most areas, takes several minutes to complete those tasks.) Google Fiber, the Internet giant’s pilot project to deliver gigabit fiber to selected communities beginning with Kansas City, Mo , is probably the best-known gigabit fiber project in the nation, but similar projects have popped up around the country, including elsewhere in our region. The Dakota Fiber Initiative, launched in Fargo in 2013 by techpreneur and investor Doug Burgum, challenged the state of North Dakota to become the most connected state in the nation That initiative and others have moved somewhat slowly, however, as telecommunications providers cite the cost and time required to install high-speed broadband as being prohibitive in the face of uncertain demand for the final product

Paul Bunyan, however, held true to its mantra of providing the best technology available and began laying the groundwork for its massive fiber network years ago The cooperative delivered its first fiber-to-the-home service a decade ago and has already invested $150 million in its fiber network

“We’ve been quietly but aggressively doing this for a long time,” Johnson says.

An additional $25 million is expected to be invested over the next three to four years as Paul Bunyan builds out its GigaZone, beginning in Bemidji early next year and expanding outward into the surrounding region. Residential and business customers within the zone will have the option of choosing from broadband speeds ranging from 250 Mbps to the coveted 1 gigabit per second, and while Johnson admits it’s difficult to predict how many will immediately sign up for gigabit speed, he expects it will become increasingly popular as broadband demands continue to grow in coming years

Bob Fitzgerald, director of operations at Kraus Anderson’s Bemidji office, says his office currently has 50 Mbps broadband and intends to upgrade to gigabit speed as soon as it’s available. “Faster Internet capabilities will allow our team to process, upload and download information at a much faster rate than is currently possible, thus saving time And today, more than any other period in our society, time is money, ” he says.

In his comments delivered during an event at Paul Bunyan headquarters to unveil the GigaZone, Bemidji State University President Richard Hanson commended the company for “driving a stake into the future” of Bemidji High-speed Internet

access will allow BSU the capacity to continuing expanding its online courses, the opportunity to collaborate with others and the ability to more easily recruit newcomers to the community, he said

About 200 of the university’s approximately 1,200 courses are currently offered online, but it expects to increase its online/distance education offerings in the future as demand increases from both off-campus and on-campus students.

Economic Development Tool

The GigaZone is also expected to become a huge recruitment tool for economic developers in the region. Dave Hengel, executive director of Greater Bemidji, told attendees of Paul Bunyan’s GigaZone unveiling that every prospective new business he meets with asks about high-speed broadband availability

“There is no doubt we have that now, ” he said. “I’m looking forward to sharing this with every company I know throughout the state and nation.”

Hengel says the definition of economic development and what it means to be a prosperous community has changed dramatically in the last decade, largely because of technology, and the GigaZone offers Bemidji the opportunity to thrive “Because of technology, companies and talent can locate virtually anywhere, so the central question for us is this: Why Bemidji? The GigaZone is clearly central to my response now, ” he says. “Why Bemidji? Because we happen to have the best fiber optic network of any region in the nation ” PB

Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag.com

Paul Bunyan Communications’ GigaZone will offer 1 gigabit Internet speed to customers within a 5,000-square-mile area of northwest Minnesota. IMAGE: PAUL BUNYAN COMMUNICATIONS

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Keeping it Local

I ndependent health care organizations stress collaboration, local par ticipation for continued success

BY KRIS BEVILL

Lake Region Healthcare Corp., based in Fergus Falls, Minn., is an independent health care system with the goal of becoming Minnesota’s preeminent regional health care partner PHOTO: LAKE REGION HEALTHCARE CORP.

Consolidation has become a growing trend in the health care industr y as providers rework how they care for patients in the face of rising operating costs and new regulations Large systems are getting larger and independent providers are becoming fewer, which can leave one to wonder whether the days are numbered for remaining independent hospitals, particularly in rural regions like the nor thern Plains. While the going may be tough, leaders of area independents say they can continue to thrive in the changing health care environment because they serve a vital role for their communities, and stress that the support they receive locally and from other providers means they’re never alone

Larr y Schulz, CEO of Fergus Falls, Minn -based Lake Regional Healthcare Corp , is a staunch advocate for the continued independence of LRHC and says it can be accomplished through careful planning and local leadership He attributes recent consolidation in health care to a desire to distribute the increased risk being placed on providers through the Affordable Care Act, but says consolidation isn’t the only way to minimize risk

“There are different ways to accomplish the same thing,” Schulz says “In our case, we feel that working very closely with our board of directors, who are really invested in the community, collaborating with our physicians, who are very interested in our community, and working closely with our communi-

ty as a whole we all support each other in that growth ”

LRHC has been able to counteract increased risk by taking its own calculated risks and providing alternatives, strategies which Schulz says have already produced successful results. Dialogue with the community has led to the establishment of a community garden to promote healthy diets for residents and an initiative to demonstrate an innovative rural health model and expanded services When LRHC set out several years ago to open a cancer center in Fergus Falls, the local community stepped up to provide all of the $10 million needed to bring the project to life

Thanks to local support and leadership, LRHC continues to expand its services and try innovative approaches to health care The organization recently began building a new, larger clinic in Fergus Falls, which is set to be complete late next year The organization also teamed up with local doctors, investors and businesses to launch a health insurance provider called Lakes Area Community Healthplan The goal of the health plan, which focuses on the greater Fergus Falls and surrounding lakes area, is to help lower the cost of health care for small businesses and help providers and employers understand each side’s issues and challenges, says Schulz.

“I think it’s up to the entire community to work together,” he says “How do we keep people well to start with so that we can reduce the total cost of care, not just the cost of health care? If we can keep people healthy to start with there will be less sick days so the company can be more productive those sorts of things ”

Boards Matter

Health care leaders say local boards of directors play a key role in the success of independent health care organizations because they allow them to better meet the needs of the community and stay abreast of looming challenges.

“They are our connection to the community to make sure that this entity is meeting the community’s needs,” says K.C. DeBoer, CEO of Jamestown Regional

Medical Center in Jamestown, N D “We are a part of the community and the community is part of us. We will only be successful as long as Jamestown is successful I think having a good board at an independent community hospital is the secret ”

Connie Krapp is the chairwoman of JRMC’s board of directors and says she is humbled by her role with the organization “Anything that I can do to enhance the medical services that we ’ re able to provide is rewarding,” she says

Krapp also views the board’s role as being a conduit between the medical center and the community it serves in order to better provide for its patients Likewise, she credits the community for fully supporting JRMC and its role as an independent provider “It’s the pride of the community and they don’t take that lightly,” she says

Local input has proven vital in guiding some independent organizations’ long-term success Electronic health records (EHR) systems are a huge capital investment for health care organizations and can be simply out of reach for smaller providers, leading them to consolidate with larger systems in order to comply with the regulatory requirement.

This is not a concern for Watertown, S Dbased Prairie Lakes Healthcare System, however, because board members there had the foresight to recommend implementing an EHR system in 2002, well before many providers even began considering them

“We were very much an early adopter,” says CEO Jill Fuller “We were able to put the capital investment into it, it’s working well for us and we continue to develop it. In fact, we ’ re moving on to the next phase of building a data warehouse so we can do the data analytics we need for more clinical integration and showing payers and the public that we have really good outcomes ”

Independent, Not Alone

Fuller says another benefit of being independent is the ability to partner with multiple entities, regardless of affiliation.

Prairie Lakes is committed to providing specialty care for approximately 87,000 people within the 10-county area it serves, but the medical center in Watertown is about 100

K.C. DEBOER

LARRY SCHULZ

miles away from the nearest large health care system So Fuller says Prairie Lakes teams with both of the closest large providers Sanford Health and Avera as well as critical access hospitals in its area, to bring in primary care providers from large systems and to

send out its own specialists where needed

“Our philosophy is that people should get health care as close to their own home as possible,” Fuller says “They should be able to choose their doctor.

“We like to say we ’ re independent but we ’ re not a stand-alone hospital,” she says “I think if we were isolated and in our own little world, our challenges would be incredible because we wouldn’t be keeping up with best practices But we ’ re not stand-alone ”

Schulz agrees that collaboration is a must and says LRHC is continually in contact with other independent providers as well as systems. “We continue to visit with others to talk about what we can do to strengthen not only our organization, but how do we best serve the people in our area? We do that with [independent providers]. We collaborate with our physicians all the time We also partner with systems We think that’s one of the secrets to our success is our willingness to collaborate and partner with others for those things that make sense and are in the best interest of our patients ”

Challenges Ahead

As health care demands continue to grow, independents in the region are continuing to recruit new doctors and must compete with larger systems for staff. Schulz says recruitment is always challenging, but some physicians are drawn to smaller systems and

Jamestown Regional Medical Center, like many independent health care providers, credits its success in part to a strong local board of directors

PHOTO: JAMESTOWN REGIONAL MEDICAL CENTER

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appreciate having a close connection to the community. LRHC has grown its number of doctors from 46 to 80 over the past few years “Those who come here love it and tell their former colleagues and classmates,” he says DeBoer says he believes independents must be proactive in making their presen ce k n ow n i n order to su cce s s f u l ly re c r u i t , p a r t i c u l a r ly t h ro u g h m o der n media channels “You have to get with the times and use the tools that out there things that I don’t use on a regular basis, but that my kids do,” he says.

He also stresses culture as a recruitment and retention tool “One of the nice things about being an independent is that our culture is our own and it has grown over time,” he says “People are proud to work here because this is their hospital and their community.”

The health care reform environment will no doubt change the way success is measured at facilities, giving more weight to the cost at which care is delivered and the quality with which it is delivered Fuller believes Prairie Lakes will continue to meet the criteria necessary to succeed, noting that the organization’s costs have already traditionally been lower than larger providers and that she believes the quality is as good or better than others. Schulz and DeBoer also believe their organizations can remain independent, so long as they continue to make sound financial decisions and embrace partnerships and collaborations with providers large and small

“Our vision is to be Minnesota’s preeminent regional health care partner,” Schulz says “‘Partner’ is a key word in that We want to partner with our medical staffers, partner with our community, partner with our education organization, and partner with other providers where it makes sense ” PB

Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag com

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Show and Tell

Tour helps manufac turers highlight workforce woes, oppor tunities for educators

BY ROB SWENSON

In 15 years, South Dakota’s Show place Wood Products has grown from an ambitious vision among friends into a prominent national brand of cabinetr y. The company ’ s manufacturing plant on the north edge of Harrisburg, just a couple miles south of Sioux Falls, employs about 400 people and produces more than 500 cabinets a day. Fifty other employees are stationed elsewhere around the United States

The employee-owned company, which has more than 900 dealers, would like to keep growing

“We’re looking to expand,” says Paul Sova, president and CEO of Showplace But finding enough good workers threatens to be a major challenge, he adds

A new factory, which would be located across the street from the existing Showplace plant, is planned However, Sova and other company leaders, like executives in other manufacturing and construction businesses, are worried about the limited supply of workers in the area.

Showplace was one of four stops on a recent tour hosted by South Dakota Manufacturing and Technology Solutions, a nonprofit office in Sioux Falls that operates under the Small Business Development Center at the University of South Dakota

• Raven Industries Inc in Sioux Falls

• A Journey Group construction job site in Sioux Falls

• DeGeest Steel Works in Tea

Executives with all four companies expressed concern about the area being able to attract and retain enough workers to help businesses grow and prosper

“There are a lot of businesses in South Dakota that would like to expand,” says Jan Matthiesen, vice president of human resources at Raven Industries “It’s going to take a village to solve our workforce needs ”

Raven is a publicly traded company. It is widely known for making large balloons for some of the largest parades, festivals and entertainment parks in the world. But the manufacturer also makes electronicpositioning and information-management products, high-performance plastics films and sheeting, and other high-tech products

Peg Canter, a senior recruiter at Raven, says hiring challenges are nearing crisis levels, partly because of the low unemployment rate in the Sioux Falls area

The unemployment rate in the four-county Sioux Falls metropolitan area was 2 9 percent in August

Approximately 400 people currently work at Harrisburg, S D -based cabinet manufacturer Showplace Wood Products. The company wants to expand but leaders are concerned workers will not be available

PHOTO: CHAD COPPESS

The Workforce and Career Exploration Tour was designed to expose counselors and principals at middle schools and high schools in the Sioux Falls area to opportunities for good jobs that exist in the local manufacturing and construction sectors. About 45 educators attended the tour.

In addition to Showplace, stops on the daylong educational tour of businesses in Sioux Falls and other communities included:

Another problem is that high school students feel pressured to attend four-year colleges rather than explore technical job opportunities that require less education, Canter says

Career counselors in area schools might have outdated perceptions of manufacturing and construction jobs, says Linda Beck Halliburton, vice president of Beck & Hofer Construction in Sioux Falls

Deb Shephard, former president of the Lake Area Technical Institute in Watertown, S.D., says during a panel

discussion that South Dakota has a unique problem: Technical schools and state universities compete for students rather than work together in the best interest of the students.

Technical schools in South Dakota are governed by school districts, and public universities are governed by the state Board of Regents

Business executives agreed that the two, post-secondary school camps need to work closer together

Meanwhile, companies in the manufacturing sector are making special efforts to retain as well as attract employees. Showplace, for example, staffs its employee fitness center with a half-time trainer.

The DeGeest Steel Works plant, despite only having 27 employees, equips its break room with 14 microwave ovens so that no one has to wait in line to heat their lunch.

The break room at the DeGeest plant also has a 60-inch TV and four computers that employees may use Workers also may check the Internet on their own mobile devices because the entire plant has wireless access.

The 38-year-old company moved into a new, 80,000-square-foot plant a year ago, and the company owns several additional acres of land to accommodate possible future growth

Employees at DeGeest make parts out of metal for other businesses, using equipment such as computerized, million-dollar laser cutters The average worker at DeGeest Steel Works earns more than $60,000 per year, including benefits.

“We’re trying to grow, and we ’ re trying to find people to help us grow, ” says Scott DeGeest, president of the family-owned business "We're looking for more technical school help "

The SDMTS educational tour also stopped at a $22 million expansion that Journey Group is building for the Avera Prince of Peace retirement complex in Sioux Falls Journey, which is known locally as Sioux Falls Construction, is one of the largest construction companies in the region

Anywhere from 100 to 300 construction workers from Journey and 25 subcontracting firms might be working on the 120,000-square-foot expansion at Prince of Peace at any given time

“If you ’ re willing to work and be patient as a laborer, you can work your way up, ” says Wayne Bauer, project superintendent with Journey “If you work hard, you can get to the top, no matter where you start ”

Bauer, who has decades of experience in the construction industry, has a college degree in microbiology. But he worked in construction as a young man, liked it and stuck with the business after he graduated from college

Suzy Ries, who teaches career exploration, at Baltic (S D ) High School, was among the educators on the tour. She hadn’t realized the extent of the hiring-related challenges facing employers, she says

“I think there’s a lot of pressure put on kids to know what they want to do when they get out of high school,” Ries says

She thinks it’s OK for young adults to take time off and explore different job possibilities before launching on a firm career path

“I don’t think everyone needs to go to college It’s an expensive experiment,” Ries says.

In many cases, a two-year degree may suffice, she says

Amy Lupkes, a counselor at West Central High School in Hartford, S D , says that potentially good work opportunities exist for high school graduates who pursue technical training or jobs.

“I think there’s a mindset that you need a four-year education, but you don’t always need that,” she says

The Sioux Falls Development Foundation, says that with only about

800,000 residents, South Dakota has to be especially effective in developing its workforce.

Business development officials across the state are keenly aware of the workforce challenges and are trying to address them, she says “There are 1,000 little things going on ”

For example, Dan Kippley, a business development representative with SDMTS, pointed out that the governor has challenged local groups to come up with creative ways to address hiring challenges The state is putting up $1 million to co-fund the best plans.

One partial solution mentioned by Sova and other executives is to attract more prospective workers to South Dakota from other parts of the United States and the world

Dakota Roots is among the ongoing state programs designed to help grow South Dakota’s workforce Dakota Roots is an online service designed to link job opportunities to people interested in living in the state. The program claims to help bring hundreds of new workers to the state each year.

The tour of employers in the Sioux Falls area is another example of action being taken at the local level to combat the worker shortage Organizers of the tour were pleased with the event.

“I thought it went extremely well,” says Wes Kelly, center director for SDMTS “There was very good communication between the manufacturers and the educators.” PB

Rob Swenson Contributing writer RobSwensonMediaServices@gmail

City of change

M inot, N.D., continues to expand, adapt to new size, demands

BY KRIS BEVILL

Not so many years ago, Stephanie Hoffart was concerned her children would one day have to leave their hometown of Minot, N D , to find careers. Today, the city’s ever-increasing population, thriving business climate and near-zero unemployment numbers are clear signs that a shortage of career opportunities is no longer a concern for Minot

“That has definitely changed,” Hoffart says. “We have over 5,000 (available) jobs that we know of in the Minot area we need people ”

North Dakota’s fourth largest city has been gaining people rapidly in recent years, although apparently not enough to sate the area ’ s appetite for workers The U S Census Bureau reported the city had a population of about 41,000 people in 2010 Best-guess estimates now place the Magic City’s population at around 55,000, with some predicting it could easily swell to 80,000 within the next five years

Airport Improvements

A 100,000-square-foot terminal under construction at Minot International Airport will dramatically increase the space available for planes and travelers. The project is expected to be complete by early 2016.

Rapid and sustained growth doesn’t come without its challenges, of course, and the Minot Area Development Corp has made it a mission to stress quality of life enhancements to retain its new residents Availability of air travel ranks among those comforts, and work has been ongoing to expand the Minot International Airport to better accommodate a growing number of passengers

Construction has begun on a $43 7 million project to build a new, much larger airport terminal. The new terminal, which is being financed mostly through state and local

funds, will increase the number of gates from two to six and will be nearly 100,000 square feet larger than the current terminal rivaling Fargo’s Hector International Airport in size, according to airport director Andrew Solsvig. The new terminal is anticipated to open in early 2016, but Solsvig says it could be ready sooner “The goal is to open before the holidays, but if we can’t get everything completed then we’ll open in January 2016,” he says.

After experiencing a dramatic spike in passenger numbers in 2012 and 2013, passenger traffic through the airport this year has been flat and down slightly some months compared to last year. In September, 35,000 passengers traveled through the airport, compared to 35,889 last September In September 2011, about 27,000 passengers used the airport.

Solsv ig attributes the leveling off of passenger traffic to expanded jet ser v ice offerings at the Williston, N.D., airpor t, which he calls “the Williston factor.”

“ They’re competitive and their location w ith the rest of the Bakken oil fields puts them in a prime position, whereas Minot is on the eastern front,” he says “However we have excellent access, too, and more markets for both the business and leisure traveler ”

Despite increased offerings at other Bakken hub airports, Solsvig anticipates double-digit growth at Minot’s new terminal due in part to amenities such as ample available parking thanks to a new 800-space parking lot A hiccup in carrier availability was experienced this fall when Frontier Airlines pulled its service from Minot, but Solsvig says the airline indicated it may return in the

PHOTO: BOB LINDEE, CITY OF MINOT

spring In the meantime, the airport is working with other providers to offer additional flights. He stressed that Frontier’s decision to pull out of Minot appeared to be part of a restructuring decision to focus on East Coast markets rather than lack of demand as the airline suggested. “When you ’ re filling a plane 92 percent full, that’s pretty good,” he says “That’s higher than industry standard ”

Disruptive Home Building

A lack of housing, specifically affordable housing, has plagued Minot throughout its recent period of rapid growth and one farmerturned-developer has set out to be the change that he says Minot’s real estate market needs.

Nathan Smith entered into real estate in 2011 when his farmland was used as the Federal Emergency Management Agency’s temporary housing site after the Souris River flooded the city and left hundreds homeless As it became clear that a lack of affordable housing meant many of the people utilizing FEMA trailers wouldn’t be able to transition into permanent homes, Smith took an interest in developing that land further with a primary goal of cre-

ating a community that people could afford to live in and would be proud to be a part of.

“There’s out-of-state developers that are coming in and aren’t delivering what our community needs,” he says “They’re building only to the highest, high-end market $350,000-$500,000 homes I had the opportunity to sell the land but I really wasn’t comfortable with the buyers, and that’s how I started in the developing game ”

Smith is turning 550 acres of land, including land previously used for FEMA housing, into a master-planned community known as 55th

Crossing Designed by Minot-based engineering and architecture firm Ackerman-Estvold, the plan calls for 400 single-family homes, 670 duplexes and a 350-pad mobile home park as well as ample green space, a school and various commercial properties. Smith expects the community to house approximately 2,000 residents when fully complete, which he says could take up to seven years

“We’re truly trying to develop an area of Minot that is a really nice place to live and is based on price points people can afford,” he says “I want an area that I’m involved with [to be] something that I’m not going to be embarrassed about in the future.”

Smith created a development firm known as Heartland Developers LLC and has begun building duplex units, which will range in price from $160,000 to $200,000 Infrastructure has also been installed to prepare lots for sale to home builders at price points that will allow them to sell single-family homes for $250,000 or less, which Smith hopes will disrupt Minot’s currently overinflated real estate market

“I’m not just trying to come in a little bit less than my competitors. We’re trying to come in substantially less and truly change the market,” he says “I don’t feel the city can grow unless somebody tries to solve this problem the affordability and that’s what we ’ re trying to do ”

Major Employers Keep Growing

Minot’s largest employer, Trinity Hospital, would no doubt be among the businesses that could benefit from more affordable housing as it continues to grow and recruit new workers to the community The organization, which serves a number of communities in central North Dakota, has increased its number of doctors from 110 to 180 in the past three years and currently employs about 2,800 people, most of whom work in Minot

“We’re still tr ying to recruit more, ” says Randy Schwan, Trinity Hospital vice president “That’s our biggest challenge is recruitment, not only of physicians but also other care providers.”

Trinity Hospital has been leasing apartments to provide transitional housing for new employees, but Schwan says the organization has recently been able to reduce the number of apartments it holds and is weaning itself off property management. Still, to combat housing and worker shortages, Schwan says the organization must continue to come up with creative strategies to recruit and retain employees That challenge is likely to continue as the organization grows A new, larger, hospital is planned and land has been purchased for the project But Schwan says he expects it could be three years before construction begins.

Not Just Oil

While Minot’s current growth in population and new business is owed primarily to its position on the eastern edge of North Dakota’s oil region, leaders including Hoffart, who recently moved into the role of president and

Crews excavate ground at what will be part of 55th Crossing, a master planned community under construction in Minot, N.D.

PHOTO: ANNE KNUTSON-TOEDTER

CEO at Minot Area Development Corp., want to ensure that its future will not be dependent on the energy industry alone Energy and agriculture are the community’s two primary industries, and Hoffart says the MADC will continuing supporting those industries as well diversifying into other areas. Manufacturing is one target area, according to Hoffart, mainly because the Bakken’s energy resources can be used to produce a large number of products “Minot would be a good place for a plastics plant or an ethane plant,” she says

In mid-October, Hoffart says a modular home manufacturer had agreed to set up shop in the MADC’s 800-acre agriculture park near the Port of North Dakota, but she could not release the name of the company. Other tenants at the ag park include United Pulse Trading, which is planning to expand its facility, and Midwest Milling.

The modular home maker was attracted to the park because of its close proximity to rail and Hoffart expects other manufacturers and value-added ag companies will show similar interest as space at the park becomes available

“We haven’t been hitting it real hard yet,” she says. “It’s been a couple-year process, but we think that once people see the rail moving and businesses in there it will entice other ones quickly.”

The MADC is also working to expand its Great Plains Energy Park to accommodate more energy companies. Six tenants fully occupy Great Plains Energy Park 1, so a second park is being established east of that location on 250 acres Hoffart says the Great Plains Energy Park 2 will be geared toward oil companies and suppor t companies that don’t require immediate rail access.

“I’m happy to know that we ’ re going to continue to diversify, we ’ re going to continue to have a good quality of life for people and I think [growth] can only be good things for Minot,” Hoffart says “I’m happy to know that there are good jobs out there and there are good people here, and we want to keep those people.” PB

Kris Bevill Editor, Prairie Business 701-306-8561, kbevill@prairiebizmag com

Proposed ‘surge’ funding means more business for Bakken

BY MARNIE LAHTINEN

Ag ro u p o f Re p u b l i c a n s e n a to r s f ro m

we s ter n Nor t h D a ko t a re cen t ly proposed an $800 million funding “ surge ” to help allev iate the infrastructure demands for oil and gas producing counties

Surge supporters are eager to get the funding approved before the 2015 construction season is underway The $800 million will come from the Strategic Investment and Improvement Fund, according to the legislators, and would be passed early in the legislative session to give communities time to plan

The funding breaks out as follows: $475 million to oil-producing counties and cities; $140 million to the three hub cities (Williston, Dickinson and Minot); $35 million to schools in oil-producing counties; $150 million to statewide counties and cities for roads (excluding oil-producing counties)

Area business owners are assessing how the proposed legislation would affect their way of doing business in the Bakken

Brett and Trisha Erdmann, ow ners of New

Leaf Development, have real estate developments and hotels in Williston, Watford City, New Tow n and Belfield

The Erdmanns believe the surge could provide resources for these communities to invest in longterm planning, which would ultimately create a need for further business opportunities

“These folks need help with infrastructure planning, and they could use this money to hire the big horses to come in and help them,” says Brett Erdmann “To get good employees, you have to be able to offer them a place to live that they can afford ”

And while Erdmann believes that the housing shortage is improving, he feels the surge money would spur more development and make affordable rents and leases easier to come by.

“A lack of basic amenities also limits the ability to recruit quality staff to live in oil-producing communities,” he says “People are eating breakfast, lunch and dinner at the C-store. There is a lack of good, wholesome meals It’s not sustainable This money will spur more development ”

Teddy's Residential Suites in New Town, N.D., shown here under construction in mid-October, is one of several projects being developed in the Bakken by New Leaf Development PHOTO: MARNIE LAHTINEN

Earlier this year, U.S. Census Bureau estimates showed that North Dakota’s population reached an all-time high of 723,393 residents, an increase of 22,048 from the previous year ’ s estimate Two North Dakota counties ranked among the nation’s fastest-growing counties with a population of 10,000 or more. Williams County was ranked as the fastest-growing county in the nation; Stark County ranked fourth Both lie in the heart of the Bakken

“City and county employees, along with emergency service volunteers, are stretched thin,” says James Ruud, partner in Bismarck-based construction company Edling Electric “The $800 million is well-deserved and needed out there. These communities need this additional funding to help identify safety issues and immediate stressed services whether it is hiring fulltime EMT positions or updating infrastructure, this funding will help ”

Ruud, whose company does construction projects across the Bakken, points out that while the surge money has obvious economic benefits for businesses, it also “benefits individuals in the Bakken if it creates a safer and better place to live and work ”

North Dakota’s growth challenges were highlighted in a recent study conducted by engineering and planning solutions firm KLJ. In a presentation at the recent Energy Development and Transmission Committee conference at the state capitol, KLJ outlined five-year projections for oil production, citing significant socio-economic pressures related to the sustainability of oil and gas production for the state, as demands for public infrastructure and public services increase

The study states, “If these demands go unmet, according to the report,

it could ultimately influence oil output in this region. Employment in the petroleum sector will shift from temporary oilfield development workforce to long-term permanent employment, placing demands on housing supply”

KLJ anticipates that “each county in the study area has the potential to increase in population, with some counties exceeding a 30 percent increase. The national average for manageable growth is 1 5 percent annually”

Area business leaders agree that infrastructure development is vital for the future.

“Infrastructure has to continue to be built at a pace that keeps up with the growth in order for development to continue,” says Steve Hammers, president of Colorado-based Hammers Construction. “There are big costs to this that need to be shared across industries.”

Hammers suggests that surge funds can be put to use developing a Regional Development Board

“This salaried board could help these towns plan for growth, and help community leaders gain knowledge to make good decisions,” Hammers says “Experienced developers, construction managers, bankers and city planners could sit on this board, and equip locals with the knowledge to plan for future development.

“I’ve been all over the Bakken, in these small towns,” he says “They are feeling the pinch, but don’t have the resources to keep up with the growth ” Legislators hope to have the funding bill signed by Gov. Jack Dalrymple at the end of January PB

Marnie Lahtinen Contributing writer MarnieLahtinen@gmail.com

BakkenEagle FordHaynesvilleMarcellusNiobraraPermianUtica

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Minot

Wednesday, November 12th

The Grand Hotel 11:00 a.m. – 1:30 p.m.

Bismarck

Thursday, November 13th

Ramada Bismarck 11:00 a.m. – 1:30 p.m.

Fargo

Wednesday, December 3rd

Ramada Plaza & Suites 11:00 a.m. – 1:30 p.m.

Tickets $20 and available at all Gate City Bank locations or at the door.

Eat the soup. Keep the bowl.

100% of the proceeds support the March of Dimes mission to save babies and fight prematurity.