Growing Town on the Prairie Brookings experiences economic growth beyond SDSU

BY ROB SWENSON

A$70 million agricultural processing plant is being built without much fanfare near the thriving, eastern South Dakota college town of Brookings, S.D. Brookings-based Novita Nutrition LLC is building the plant to produce a highly digestible form of corn protein meal for dairy cows.

The $70 million figure includes the cost of equipment and $3.5 million in initial working capital. Construction began last spring about 2 miles east of Brookings, near the smaller town of Aurora. Concrete has been poured, and steel has been erected. The plant is scheduled to begin operations in the third quarter of 2016.

Novita will use distillers grain — a byproduct of the corn used by ethanol plants — to make high-performance feed. The plant also will extract corn oil from distillers grain. The plant will produce about 12 rail cars of meal and one rail car of corn oil per day. It will employ 30-40 people, says Don Endres, CEO and cofounder of Novita.

Construction of the Novita plant is one of several recent signs of entrepreneurial success in Brookings, which, with 23,000 residents, is South Dakota’s fourth largest city.

Despite its relatively small size, Brookings has a strong history of business success, particularly in manufacturing, with local companies such as scoreboard and display maker Daktronics Inc. and storm door maker Larson Manufacturing serving national markets. Other prominent companies with plants in Brookings include 3M Co., Twin City Fan & Blower Co., Falcon Plastics Inc. and Bel Brands USA.

Now, a fresh wave of technology-driven enterprises is taking root in the Brookings County community.

“The support and infrastructure that Brookings has is second to none,” Endres says. “We have not only the research here and the workforce, we also have investment funds.”

In addition to Novita, other recent examples of entrepreneurship thriving in Brookings include Prairie AquaTech and Medgene Labs, two relatively new and growing businesses that spun out of research at South Dakota State University, which is a key to much of Brookings’ economic success.

Prairie AquaTech converts commodities such as soybean meal into high-quality protein used to feed fish and other animals. Medgene focuses on research and vaccine development to prevent the spread of infectious diseases in food animals.

Mark Luecke serves as the CEO of both Prairie AquaTech and Medgene. He is also the managing director and CEO of South Dakota Innovation Partners, a venture capital firm in Brookings and Sioux Falls that helps researchers and research institutions start businesses by investing capital and business expertise.

Luecke attributes much of Brookings’ recent success in business development to strong leadership. Three leaders from different community sectors stand out, in particular, he says. They are:

• David Chicoine, president of SDSU. Prior to being named president in 2007, the South Dakota native worked for more than 30 years for the University of Illinois. He spent his last six years there as vice president for technology and economic development.

• Van Fishback, business and civic leader. The Brookings native is the vice chairman of First Bank & Trust and of Fishback Financial Services, a regional banking system. He is also an investor in emerging businesses.

• Al Heuton, executive director of the Brookings Economic Development Corp. He has been in the position for more than 10 years. He previously was the executive director of the Panhandle Area Development District in Nebraska.

“When you’ve got three important leaders like that, it makes it very easy to do business entrepreneurially in a community like Brookings,” Luecke says.

Brookings also has some veteran business leaders that continue to contribute to the community’s economic well-being, Luecke says. They include Al Kurtenbach, the cofounder and former CEO of Daktronics, and Dale Larson, chairman and former CEO of Larson Manufacturing.

RTI LLC is another recent example of successful entrepreneurial activity in Brookings. RTI was established 21 years ago by four professors from SDSU. Last April, the company broke ground on a supplemental 21,000-square-foot facility that will be used for veterinary research and environmental and food safety testing.

The company will retain its existing work space in the city-owned Research and Technology Center.

Rollie Nevins, the COO, was brought in three years ago to help RTI grow. The company presently employs about 25 people. It has received strong support in its expansion efforts from local and state development agencies, SDSU and city business leaders.

“They’re very inclusive and willing to share ideas, whether it’s a business expanding or somebody starting a business,” Nevins says. “It’s a great community. Exciting things are happening.”

Not all of the community’s recent economic growth has been ag-related. Last year, for example, Discovery Benefits of Fargo expanded its operations to Brookings to accommodate business growth. The company, which provides employee-benefit services, employs approximately 50 people in Brookings and expects to add more.

Brookings recently was named one of 25 communities in the nation that will receive a $50,000 federal grant to help entrepreneurs get into business quickly. The goal of the program administered by the U.S. Small Business Administration is to enable entrepreneurs to apply for all the permits and licenses they need in one day.

The grant award was the result of a national Startup in a Day competition. President Barack Obama announced the winners in August.

Heuton says that after grant rules have been clarified, Brookings will launch a website to help entrepreneurs file applications quickly. Brookings’ history of entrepreneurship probably helped the community win one of the 25 grants, he says.

Brookings opened the first business incubator in South Dakota in the early 1980s, and in 2007 opened the state’s first research park, according to the BEDC. Last year, the organization hired a full-time entrepreneurship coordinator. Beth Knutson holds the job.

Fishback says high-tech businesses can be just as successful in the Upper Midwest, along the Interstate 29 corridor, as they can in the Silicon Valley or Boston area. Brookings lacks the population density of the Twin Cities or even Sioux Falls or Fargo, Fishback says, “but it’s a pretty prolific area in terms of ideas. There’s a lot of creativity going on.”

The researchers, engineers and entrepreneurs that SDSU produces is a big plus, he says. In addition, Brookings is located along the I-29 corridor, has a good supply of water and business leaders who are active in the community.

“We wouldn’t have the success we have had without the people at the university and people like Don Endres,” Fishback says. “Good ideas are hard to find. You’ve got to have that spark or you’re going to spend a lot of time staring out the window.”

Chicoine says getting the right people to run and advance new businesses is the biggest challenge for new companies in the Midwest. “It was hard in Illinois. It’s harder in South Dakota,” he says.

If a startup business has good technology and a good team, it can find capital, Chicoine says. The biggest challenge is getting the right team, he says.

“We’re sort of growing our own. That’s good, but it’s slow,” Chicoine says. “You put the right structure and organization in place, and get the right people, and you have good outcomes.” PB

Rob Swenson Contributing writer RobSwensonMediaServices@gmail.com