TECHNOLOGY: UNTETHERED FROM THE TRADITIONAL OFFICE
CHASE BANK ENTERS THE DAKOTAS WITH NEW BRANCHES
“T he cr ed it belong st ot hema n wh oi sa ctua ll yi nt he ar ena… wh od oe sa ctu all ys tr iv etodot he de eds ;w ho kn ow sg re at en th us ias ms ,t he gr ea td evot io ns ;w ho sp end sh im se lf in aw or th yc au se ; wh oatt hebe st kn ow sint heen d th et riumph of high ac hie ve me nt , an dw ho at th ew or st ,i fhef ai ls , at le as tf ail sw hile da ri ng gr eatl y. ” –T heodor eRoo se ve lt
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Every month seems like a full circle back to the starting line. Just as one issue of Prairie Business moves to production, the reporting for the following issue has already begun.
It seems not long ago that there were stories about construction, energy, and technology, but here we are again.
Yet no matter how many times a theme might be revisited, there is always something new to learn. And at the rapid pace at which some things change, a year around the sun -- or the shorter span of time of only a few months -- might seem like too long a time before revisiting a topic’s changes and trends.
In this issue are highlighted a number of construction projects, an energy topic, and a story about the ways technology, specifically broadband and fiber networks, has modified the office of today and tomorrow.
As Sam Easter reports, one company is “looking ahead to a world that’s increasingly untethered from the traditional office … making tech-sector hires hundreds of miles away from its physical footprint. Pre-pandemic, those jobs would likely be in North Dakota. But now they’re in Washington state, Salt Lake City and the east coast.”
While the trends may be “sweeping through the office” during the pandemic, they also are likely to be here “for the long-haul.”
Technology also continues to enhance the energy industry in all of its many forms, but this month we take a peek at carbon capture and enhanced oil production.
Those things already are happening, of course, but more is in store.
As Joan Dietz, spokeswoman for Basic Electric Power Cooperative, said, as one example: “Dakota Gasification Company’s Great Plains Synfuels Plant has captured more than 41 million metric tons of carbon dioxide since 2000 … a project we are very proud of.”
But what lies ahead? The industry is on the cusp of greater things.
No matter what industry, one thing is for sure: Technology isn’t going anywhere.
Prairie Business is here for the long haul, too, and as the magazine has done for a number of years, it has once again opened the nomination period for its 40 Under 40 list. A link to the rules and nomination form can be found at prairiebusinessmagazine.com. The deadline to submit nominations is Friday, Oct. 15.
As always, thanks for reading!
Andrew WeeksI look forward to hearing from you at aweeks@prairiebusinessmagazine.com or 701-780-1276.
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The technology to capture carbon has been around for a while, but like other technologies it has only gotten better. That technology is a boon across the energy landscape and no doubt in places like North Dakota, which has prime natural real estate to store carbon.
“We have an enormous amount of geologic opportunity in general,” said Charles Gorecki, chief executive officer of the Energy & Environmental Research Center at the University of North Dakota campus in Grand Forks. The center conducts research in the fields of environment and energy and, with its multidisciplinary staff, works with clients in many places to improve efficiencies.
“We have deep sediment in the Williston Basin,” Gorecki said. “If you can imagine, it’s like this big dinner plate. The layers of geology and millions and billions of barrels of oil and water and everything else provide incredible opportunities to store carbon dioxide. The resource potential is gigantic.”
Numberwise, he said it ranges between 70 billion and 250 billion tons of storage.
“To put that into perspective,” he said, “in North Dakota we emit from our point sources, like power plants and things like that, about 30 million tons per year. And so when you’re looking at millions of tons of emissions from point sources, and having billions of tons of storage potential, you can see that can work out quite well.”
It is one of the things that make Gorecki excited about the future of energy in the state and region, noting the success in North Dakota has big dividends for the entire country and, to some degree, around the globe.
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“Our geology has been proven to be able to store approximately 50 years’ worth of every carbon molecule that’s been produced in the United States,” Leiman said. “So there’s a lot of storage, a lot of capacity in amazing geology to facilitate this type of growth.”
But, he said, North Dakota doesn’t only want to store carbon. It wants to use it to its advantage.
“We’re not just interested in storing it, we’re interested in capturing it,” he said. “We want to be effective environmental stewards, to use it for enhanced oil recovery. So instead of using existing technologies, which might use more energy or more water, we see carbon as basically helping us enhance that recovery.”
As the U.S. Department of Energy explains, enhanced oil recovery utilizes natural gas, nitrogen or carbon dioxide that is pumped into the ground. Once there, it expands to push additional oil to a production wellbore or improves its flow rate.
On the other hand, carbon capture is the process of sequestering CO2 at the source of emission before it is released into the atmosphere. Not only does capturing waste carbon help prolong the coal industry, which has faced challenges due to natural gas production, but it is a boon from an environmental standpoint because of increasing concerns about air pollution and climate change.
There already are carbon capture projects in North Dakota with more projects on the books, such as the proposed carbon capture, utilization and storage (CCUS) project in development at the Great Plains Synfuels Plant near Beulah, N.D.
The Synfuels Plant itself has captured carbon dioxide for the past 20 years, according to cooperative spokeswoman Joan Dietz. “Dakota Gasification Company’s Great Plains Synfuels Plant has captured more than 41 million metric tons of carbon dioxide since 2000 and sent it to oil fields in Saskatchewan to be used for enhanced oil production, a project we are very proud of,” she said.
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continued from page 14
In June, Bakken and Mitsubishi Power Americas said they had entered a partnership to create a world-class clean hydrogen hub in North Dakota to produce, store, transport, and locally capture and sequester carbon. Part of that process was Bakken Energy reaching an agreement with Basin Electric to purchase the assets of Dakota Gasification Co., a subsidiary of Basin Electric and owner of the Great Plains Synfuels Plant.
Accordingly, the Synfuels facility will form the nucleus of a clean energy hub designed to aggressively advance regional, national, and global decarbonization objectives through the development of clean hydrogen applications for the agriculture, power, and transportation sectors.
The proposed project will enable the facility to capture up to 3.5 million tons of CO2 per year and will serve as part of the largest coal-based CCUS project to use geologic storage.
“The Dakota Gasification Company was already an early leader in CCUS, and this proposed expansion is another milestone in our state’s efforts to crack the code on this critical energy technology – the largest coal-based carbon capture project to use geologic storage,” Sen. John Hoeven, R-N.D., said in a statement in September. “We’re able to make progress like this because we’ve been laying the groundwork for geologic storage of CO2 in North Dakota since 2008.”
He said that means not only providing regulatory certainty, but also advancing key incentives at the federal level, including the 45Q tax credit and loan guarantees for project developers.
“This project is just an additional opportunity we are pursuing as we continue to look at multiple paths going forward for Dakota Gas,” Dietz said.
Another carbon-capture proposal is Project Tundra, which has been in the works for a number of years, and is an effort headed by Minnkota Power Cooperative, UND’s Energy & Environmental Research Center, North Dakota Industrial Commission and the Lignite Energy Council. It would install a carbon-capture system at Minnkota’s Milton R. Young Station in Center, N.D.
The proposed $1 billion project would potentially capture more than 90% of the carbon dioxide emissions from coal-burning plants – or the equivalent of taking 600,000 cars off the road, according to information from Minnkota – and be stored indefinitely in rock formations about a mile underground near the facility.
Back over at the EERC, Gorecki is an eyewitness to the technology that continues to improve carbon capture and enhanced oil recovery.
“We’ve been working in industry on how to decrease the cost and increase the capture,” he said. “There’s been a lot of things that have been advanced and … we’ll continue to advance and learn things from projects to drive down that cost.”
Gov. Doug Burgum has stated he wants North Dakota to become carbon neutral by 2030 while retaining the core position of its fossil fuel industries.
But Gorecki said that, in large part, depends on policy. When achieved, the end result will have big dividends felt across the planet.
“I think we’re on the cusp,” Gorecki said. “We have been working
on all of these things to make (carbon capture) more affordable, lower the cost and increase the efficiency from the storage side, and we’ve been trying to figure out how to do it — do the monitoring and ensure containment — in real time or near real time. We’ve made those advances. … We know we can do it, we know we have the technology, but it’s about the economic side having the policy in place.
“If it’s going to happen, now is the time. There are projects … that are moving forward. Projects like Tundra that are moving forward. We’re going to see, I think, a proliferation of the technology, not just deployed in the United States or North Dakota, but we’re going to see that technology deployed all over the world. When we can accomplish those types of things, we’re really going to make change, to provide that reliable, affordable power that the world needs, particularly in the developing countries.”
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By Andrew Weeks
GRAND FORKS, N.D. • Sanford Health is expanding its services in the Greater Grand Forks region with a new clinic in Grand Forks.
The company held a ribbon cutting in August for the two-story, 22,000 square-foot facility that will help meet the area’s growing demand for the health provider’s services, according to Justin Stromme, senior director at the company’s East Grand Forks, Minn., clinic.
Located at 1750 47th Ave., the new clinic sits conveniently next to residents at the Edgewood Vista, a senior living facility, and near a growing neighborhood.
He said the clinic has five providers and about 15 staff members, but will hire additional help as provider care grows. He said it has capacity for 16 providers, a “mix of primary care, specialty care and behavioral health.” Current offerings include family medicine, internal medicine, gynecology and geriatric services.
“Our providers care for all stages of life — from infants and adolescents to adults of all ages, including the elderly,” Stromme said. “Additional Sanford specialists in dermatology, rheumatology, orthopedic hand surgery, oral/maxiollofacial surgery, neurology and neurosurgery will provide outreach visits at the new clinic.”
He said patients also will have access to a new CT scanner at the East Grand Forks clinic and subspecialty services at that location. Sanford has been in the Greater Grand Forks area for about 20 years. The company merged with MeritCare in 2009, which tapped the facilities it owned in the region and spurred new construction projects.
The East Grand Forks clinic currently has 27 providers, representing 14 primary and specialty care services, but Stromme said the company is always looking to grow its services.
JLG Architects was the architect of the new clinic and Northridge Construction was the general contractor.
The clinic has 32 exam rooms, two procedure rooms, and a CT scanner. A feature Stromme is excited about is the Real Time Locating System that will allow patients to check in at the front desk and go right to their exam rooms.
“The Sanford Health Grand Forks Clinic provides the comfort of a neighborhood clinic, along with the variety of services a larger community like Grand Forks deserves,” he said.
The office isn’t what it used to be. And for a lot of workers, it’ll never be the same again.
Take Choice Financial, a banking group headquartered in Grand Forks, N.D. CEO Brian Johnson says the company has doubly adapted through COVID. Just like most offices across the country, plenty of employees have worked from home to stay safe, he said — to manage childcare or tend to whatever else the pandemic demands.
But the company is doing more than staying flexible with its employees. Choice is already looking ahead to a world that’s increasingly untethered from the traditional office, with the company making tech-sector hires hundreds of miles away from its physical footprint. Pre-pandemic, those jobs would likely be in North Dakota. But now they’re in Washington state, Salt Lake City and the east coast.
“But that’s where the pandemic has changed life,” Johnson said. “Just to say — it doesn’t matter anymore.”
Those changes are sweeping through offices as the pandemic crests. But they’re also likely here for the long-haul, as companies around the country pivot to remote work. Last year, Nationwide Insurance pivoted to remote work at offices in at least five states; this year, it announced “work from home insurance” — a package that caters to home offices, “usage-based” car insurance and more.
“We can hire anywhere and make this remote employee (fit) from anywhere, no matter what part of the bank they’re working in or what part of Choice they’re working in,” Johnson said, even calling himself something of a remote employee. “...Whether I go out to Bismarck and spend a day there, or whether I spend five phone calls with Bismarck people on a video phone, it’s changed that dynamic all the way through.”
That shift in the American office — towards online, remote work — portends something huge in coming years. As of this writing, federal leaders are still haggling over exactly what a widely hoped-for infrastructure package will look like. But one version passed by the Senate includes tens of billions in funding for broadband internet, which could expand and accelerate what Johnson is seeing — both in major cities and in growing rural areas around the country.
So it’s tempting to look ahead and see the moves at Choice Financial as merely the beginning of a sea change in how the country lives and works and commutes. Twenty years ago, the internet was a curiosity; 20 years from now, it could completely remake the economy.
And as urban real estate grows expensive, there’s plenty of pressure on workers to ditch pricey coastal living and find somewhere else to grow their careers. A late 2020 report from Upwork, claimed that as many as 23 million Americans were planning to move “as a result of remote work.” It’s unclear how the company, an online freelancing platform, reached the number; but the race is on for communities to capture whatever workers they can.
“The evolution of work to increasingly remote or hybrid formats is a change that was happening before COVID19, but has significantly accelerated,” Joshua Hofer, a community vitality field specialist with South Dakota State University Extension, told the Brookings Register. “...Moving forward, the challenge is for communities to leverage their assets and build places that are attractive to live, play and work in.”
Jon Pederson is chief technology innovation officer with Midco. He sees the development of the internet tracking through a few key stages. First it was a novelty; then it became a luxury; now, it’s a necessity. And for rural areas that don’t have a lot of internet access, it can be an economic bottleneck.
“Some of these smaller cities are struggling with keeping younger kids there and keeping the interest of businesses, and a lot of that is because internet is required,” Pederson said. “If you can bring really good internet, in some cases that’s a great combination — because you get that country living with the kind of connectivity you need.”
Of course, this rush for the internet isn’t expected to help every small community the same way. UND economist David Flynn points out that of course, the jobs that have the luxury of remote work are largely service-sector work. And people who are looking for a more comfortable place for a home office are more likely workers moving from Chicago to Fargo, rather than to a much smaller town.
“It really comes down to a lot of the other amenities that you would expect to find,” Flynn said, from good grocery shopping to schools to local recreation and entertainment.
That’s what it’s like for a large number of people — but there are some unique cases. The Grand Forks Herald reported recently on a news radio professional who commutes to Florida from near Cavalier, N.D. Minnesota Public Radio recalls a crop insurance adjuster who fights through spotty internet service to work long-distance from Walnut Grove, Minn. But better internet would help.
“One of the things we saw with a pandemic is, there’s not a lot of people working from an office,” Pederson added. “Does it matter if you work from a small town or a farm or a city?”
In this brave new world, companies look ahead, often hiring people hundreds of miles from their physical footprint
IMAGE:
ONE PROPOSAL FOR THE PARKING GARAGE IS TO HAVE A SKYWALK THAT WILL ALLOW AIRPORT TRAVELERS AND VISITORS TO ACCESS THE TERMINAL DIRECTLY FROM THE GARAGE. THE DECISION TO INCLUDE THE SKYWALK WILL HAPPEN DURING THE BID PROCESS, AND, IF CHOSEN, IS EXPECTED TO COST AN ADDITIONAL $5 MILLION. IMAGE: COURTESY OF TSP INC.
By Andrew Weeks
SIOUX FALLS, S.D. • It’s exciting for Michelle Klobassa to walk through the Sioux Falls Regional Airport and see her design ideas come to life.
Klobassa is a senior architect with TSP Inc., a Sioux Falls-based architecture firm, which over the years has completed several projects at the airport. Its largest is a four-story, 900-plus-stall parking garage currently in the design phase.
Designs for the structure come with the option to include a skywalk from the garage to the terminal, a nice feature that airport visitors would likely appreciate, especially during the cold months. But with an approximate $5 million added to the cost of the $37 million project, that decision will come during the bid process sometime next year.
“We’re going to take that all the way through the bidding phase and then they’ll kind of make the decision from there,” Klobassa said. “I think in the big picture, from a customer standpoint and a passenger standpoint, everybody would really like to see that skywalk built.”
What is for sure is that the first level of the garage will be for shortterm parking, and the upper three stories for long-term parking. There also will be a number of electric vehicle charging stations. The garage will have a roof, so even the vehicles that are parked on the top floor will be protected from the elements — another boon for travelers returning to their cars in wintry weather.
TSP has partnered with KLJ, which serves as the civil engineer and project manager on the garage, and Kimley Horn, the structural engineer of the project.
After bidding next year, construction will begin sometime in 2023.
“With the airport, the biggest challenge is always figuring out ways to build buildings or do renovations, whatever it is we’re doing out there, and keep passengers flowing through,” Klobassa said. “Airports are open every day. They don’t close.”
As for rewards of the project: “I love to travel, so it’s always fun when I get to go through the airport myself and see the fruits of my labor, so to speak,” she said.
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By Andrew Weeks
Kilbourne Group has several commercial projects in the works in the Fargo area that it says will enhance the area’s quality of life.
The mixed-use developments – named the Kesler, Landing, and Mercantile – all are on track to be completed and open by early to mid-2022.
A number of mixed-use developments have gone up in the region over the past few years or are in various stages of development. Is this a trend?
According to one report by Constructor Magazine, yes.
“Office buildings, shopping malls and centers, hotels, restaurants and other mixed-use developments were already in flux because of market forces, new retail trends and an abundance of innovative technology,” it reported in April. “Those changes have noticeably picked up since the pandemic’s arrival. Until we understand the full extent of
the virus’s impact on our society, the pandemic-driven accelerant of market trends offers valuable insights into the future of mixed-use.”
However, Keith Leier, Kilbourne’s vice president of Development & Construction, said he views mixed-use developments not necessarily as a trend but as projects done out of necessity. He calls it a “common sense approach” that hints at America’s roots.
“The reality is this was being done well before Kilbourne Group or anybody else was doing it in recent years,” he said. “This is the way cities were built. Historically, there were people living and working and playing and doing business, and all of those things, in close proximity to each other. So it is just getting back to our roots a little, going back to things that used to work well.”
He said when a city is done right, it keeps people there throughout the day -- whether to live, work or play. Mixed-use buildings help sustain the energy levels of cities because they are where so much of a day’s activities happen.
“That’s the way to do it and that’s the way cities were built, historically. And so we’re just giving that a nod,” he said. “If you look at
historic Broadway in Fargo 100 years ago, to have retail on the main floor of a building and apartments above was pretty common.”
The thing that is different is the technology used in today’s buildings, such as the integration of smart systems in the units.
“There’s a lot of technology and software driven experiences that we’re starting to implement into our buildings,” he said, which help “both from a user experience standpoint and from a maintenance and operation standpoint; it helps us a lot with monitoring and tracking buildings and the lifecycle of equipment and things like that.”
Here’s a brief look at three of Kilbourne Group’s projects in Fargo:
The company welcomed the groundbreaking of the Kesler in October 2020. It was in the middle of the first year of the pandemic, but that didn’t halt the company’s plans to build the final project of a multi-phase development.
That multi-phased project started in 2016 and is a partnership with the city of Fargo to turn former parkings lots into viable commercial and residential space, according to Leier.
The projects completed so far include the Roberts Commons and Dillard, plus a 455-stall enclosed parking garage.
The mixed-use development includes 9,000 squarefeet of ground-floor retail space for five new businesses, according to information from the company, and underground and first-floor heated parking.
Retail frontage is on both north and south sides, incorporating more “traditional window fronts.” Finally, the Kesler has 109 apartments above the retail development.
The first thing commuters will notice as they approach the underpass on 10th Street is a building called the Landing. “This one is really a nod to what used to be a railyard area,” Leier said, noting that rail cars would park not at a dock but rather on a landing platform. “So that’s really where the name comes from. When you walk into this building, or walk around its exterior, you’ll see some steel and old timber railroad ties. It has a kind of railroad car feel to it.”
It is meant to look “a little industrial,” he said. “It’s the first thing that greets you … the first place you land when coming downtown from one of the main arteries,” Leier said. “We feel like it really sets the mood for downtown and has an energy for what downtown is doing right now.”
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Leier said the Landing has 152 residential units and parking for residents, both enclosed and surface; 5,000 square feet of restaurant space and large outdoor patio; five two-story walk up units with private entrances; and outdoor patios with grilling stations and lounge seating.
The Mercantile, located on Fourth Avenue North and Broadway, is a two-phase project. The first phase was a parking garage, the second a mixed-use development that wraps the garage.
The company said the project includes 367 public parking spaces, 100 apartments, ground floor retail space, and a substation of the Fargo Police Department. A third partner in the development is building nine for-sale condominiums on the north side of the project.
“The aesthetic of this one is much more traditional architecture,” Leier said. “It’s meant to give a strong nod to the surrounding buildings and the historic three- and four-story brick buildings that are adjacent to this.”
And, he said, it has more of a traditional and elegant feel to it with moldings and cornices and some of the color palettes that are used. “It’s just a little bit more refined ... and give nods to the traditional beauty of architecture that’s up and down Broadway.”
Its name gives a nod to the four-story brick Fargo Mercantile Co. building that opened in 1909 and was demolished in 1966.
Leier said there is a lot of energy downtown and these buildings help that momentum.
“People are gravitating towards that and it’s becoming a really cool experience,” he said of the area. “There’s momentum there and we’re always looking to continue and better that momentum and to keep the city on a strong trajectory for recruiting people to come here.”
FARGO, N.D. • Chase Bank, a JPMorgan Chase company headquartered in New York, has entered the Dakotas market with new branches in Fargo and Sioux Falls.
In August the company opened a branch in Fargo, with a second planned to open in October. A third is on track for a December opening, also in Fargo.
The same day it opened its first branch in Fargo it opened its first branch in Sioux Falls, S.D., with more planned there as well, completing branches in all of the lower 48 states, said Market Director Andy Gahan.
Each Chase branch is roughly 3,200 square feet, includes 24-hour drive-thru ATMs, and offers full-service banking and financial guidance. He said the entry into the Dakotas market was by customer demand, a positive approach for any business to have.
Gahan said the branches in Fargo may be the first to open in North Dakota, but that doesn’t mean they’ll be the last. More likely will be planned down the line.
“We’re always looking at and researching areas,” he said. “We do have a customer presence throughout the state, but we’re going to start with these three and get more information on where our customers are at, where they’re calling from, and where we can best service our customers as we grow. … I think we’re going to learn a lot about where those next sites should be as we grow here in North Dakota.”
He said as the company’s presence deepens in the state and region, it opens opportunities to grow relationships with local hospitals and universities.
“We’re gathering a lot of information and learning as much as we can about the most important markets,” he said. “These first three branches will give us a lot of insight as to where the demand is and where people need our advice.”
Gahan said the same strategy will be used in South Dakota.
Besides traditional banking and drive-up ATMS, the branches each offer financial advice, which, according to Gahan, comes in all types of inquiries from customers. Some want to know how they might grow their capital, others seek help on how to leverage their savings.
No worries, he said. Anyone can come into a Chase branch and get the financial advice they seek. What’s more, they can do it more privately than perhaps they could at other banking institutions, because the new branches have private offices instead of cubicles for its financial advisors. He said it was another request the company listened to from its customers.
The buildings are “very modern,” Gahan said. “What stands out
in my mind is, (they each) have the look and the feel of a modern piece of architecture, not necessarily of a bank. We’ve gotten a lot of feedback from our clients, and I think what really stands out is the use of private offices. Our customers were expecting cubicles to be everywhere, but they all have private offices in our branches. And I think, just the nature of our business, people do prefer that office setting versus the cubicle setting. It’s much different than maybe what our classic thoughts are of a branch.”
Gahan said he is excited to have branches in the Dakotas. The reception and hospitality from customers, whom he says the company tries to treat like family, has been encouraging.
When the first branches opened the same day in August in Fargo and Sioux Falls, company Chairman and CEO Jamie Dimon visited the ribbon cuttings.
According to Gahan, Dimon assured the attendees that as the last two mainland states to welcome branches of the bank, he was “saving the best for last.”
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Ibelieve it is safe to say that no one could have predicted the types of market swings we would see over the past 18 months since COVID first shut down our region in March 2020. There have been bright spots and low spots to be sure, and where exactly things may go in the next 18 months is far from guaranteed.
History can be a helpful guide to look to the future, however, so let us examine what has happened locally across three of the major markets we closely monitor.
Much has been written nationally about the “end of the office” given the high number of employees still working from home, more employers offering flexible work schedules, etc. Certainly, the pandemic has had an impact on the office market here in the Fargo-Moorhead region, much like it has across the country. Since March 2020 for example, total office inventory for lease is up 10.7%, unique listings are up 8.3%, and overall leasing volume is down.
While those are tough results, the picture is not all doom and gloom, however. For example, the volume of monthly office leasing activity has been steadily increasing since February 2021. Also, average asking rents are UP since COVID hit, driven largely by an increase in new Class A inventory hitting the market.
These are positive signs, yet the road to recovery in the office market is going to be a longer, slower ride than some may like. We stand at just over 1.2 million square-feet of office space for lease in the metro as of early September, which represents over four years of inventory at current leasing volumes. I expect the local office inventory to continue climbing at a moderate pace for a few more quarters at a minimum.
Without question, the industrial market has been the Belle of the Ball since COVID hit and it has shown no signs of slowing down. The forces behind the explosion in demand for warehousing and distribution space are not going away anytime soon it seems.
It was about this time of year in 2019 when industrial inventory hit a high of 1.5 million square-feet for lease. Fast forward to July of this summer when we hit a low point of just under 700,000 square-feet for lease. By our best estimates, this represented a vacancy rate of around 2% metro wide, a number this market has not seen in a very long time.
Not surprisingly owners and investors have taken note and new industrial projects are now coming out of the ground, leading to a new trend of increasing industrial inventory. We knew these projects were coming and that inventory would start to rise, so one should not take this spike as a sign of trouble. As leasing demand continues to be incredibly strong, we are bullish these new industrial projects will find tenants sooner than later.
The retail market has shown similar trends to the office market, yet has its own set of opportunities and challenges in the months and years ahead. After seeing a significant rise in retail inventory for the first nine month of COVID, inventory levels have started to come down consistently since the start of 2021.
Not all the inventory decrease has been driven by leasing activity, however, as some owners have decided to pause their marketing efforts or in some cases have sold vacant buildings that have yet to come back on the market for lease (a trend in the office market as well).
That is not to say leasing activity has been poor in the retail market, as 2021 has seen a huge improvement in total SF leased year-to-date when compared with 2020. Roughly 136,000 SF of retail space has been leased YTD through properties listed on the multiple listing service, as opposed to only 75,000 SF through the same period of 2020. The retail market is certainly improving, but we are not out of the woods in this space yet.
NOTE: All statistics in this article are derived from properties being actively marketed on the Fargo- Moorhead multiple listing service. Properties for lease or sale by owner are not represented in these figures.
Andy Westby is the president and managing broker for Goldmark Commercial Real Estate Inc. in Fargo, N.D.
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With strong support from the business and education community, the North Dakota State College of Science Alumni Foundation has started work on a project that was first considered about seven years ago.
Construction of the NDSCS Career Innovation Center, a $20 million project that aims to boost the workforce needs of the region, got underway in early July.
Located along 64th Ave. S. in Fargo, the center will open either in late 2022 or early 2023, according to school President Dr. John Richman. The roughly 58,000 square-foot facility will house academic clusters in the areas of agriculture, arts and communication, business, construction, engineering, health science, information technology, manufacturing, and transportation.
Richman said the center is beneficial for NDSCS students, but also will serve a variety of other “learners” in the area, including those in grade school.
“The way I describe it is, it’s one facility, one lab space, one set of equipment that is going to be utilized by a lot of different populations,” Richman said.
“Elementary students will be able to come to the facility to have career day, then as junior high age students they can come back to the facility to do career exploration, and that career exploration would be a hands-on type project. Then, as a sophomore in high school in North Dakota, they can begin to take post-secondary or dual-credit courses. Those students that have identified a career
FARGO, N.D. • Those looking to start their own business have a new resource in Fargo.
The Innovation Studio inside the NDSU Startup Incubator, located at the North Dakota State University Research and Technology Park, opened in August and provides space, technology and collaboration. The latter being perhaps the most important, said Brian Kalk, the park’s executive director.
The RTP opened in 1999, but Kalk said he’s surprised that many people still have never heard of it. The Innovation Studio elevates the facility and aims to help those with progressive business ideas bring them to life.
The Innovation Studio, some 8,000 square feet, was funded with $1.5 million from the U.S. Economic Development Administration and another $500,000 from local contributions. It houses a metalworking area, textiles lab, digital fabrication, woodworking and an electronics lab.
“At a lot of universities, we’re starting to see what’s called maker space, where you’ve got collaboration areas, where you’ve got metal shops with woodshops with textiles with 3D printing,” he said. “NDSU has those kinds of capabilities but they’re scattered around campus, and so we wanted to create one of those at the tech park.”
As the name suggests, the center is meant for those with innovative ideas, not necessarily for someone who already has a business or whose ideas do not stretch beyond the basics. If someone is looking to start a coffee shop, for instance, the center probably wouldn’t work for them — unless there was something technologically differ-
ent about the new coffee shop. The center then might be interested in learning more about the idea, Kalk said.
“If there is something innovative that you’re doing, or doing something new to create more jobs in the marketplace, things like that,” he said. “It’s not carte blanche.”
The fruition of the center includes community partnerships, such as with Midco, one of the permanent tenants of the center. There’s even a room called the Midco Collaboration Room, so named because of the company’s financial contribution and the technology it provides for it.
“It’s open to the tenants of the park, it’s open to NDSU students, and is used by faculty,” said Erin Ostler, Midco’s vice president of business sales.
She describes it like this: “It really enables collaboration across the world, because of the actual technology that was installed. It’s a nice big area where we can open garage doors and have events, or just use it as a meeting room. Anybody can use it.”
Ostler said Midco is appreciative and excited to be part of the innovation center, and looks forward to seeing great ideas come to life through its use.
She said, “It’s ... where businesses, even students that are coming out of the university who are focused on technology, can have a home without having a lot of overhead expense and can work together with other businesses to find ways to succeed.”
path as a sophomore, or maybe as a junior or senior, can start their career academic training pathway, so they can get to that final degree in a more timely fashion and in a more portable fashion.”
Richman said the school has been operating a facility with similar offerings for the past 25 years, but the new center will enhance and expand those offerings.
“It’ll be much larger and better designed, so we can provide more academic program areas, more academic clusters and just what we’re able to do. … Think of apprenticeships. Think of customized training, employers who need their employees trained. Think of new Americans improving their English skills and getting a skill in either allied health or manufacturing; all of those populations are being served today in our existing facility, but we’ll be able to broaden the scope of offerings. We’ll be able to increase these student opportunities with this new facility.”
Around 400 students are served daily in the current facility, according to Kim Nelson, executive director of the Alumni Foundation. The groundbreaking of the new center — in what once was a cornfield — happened in early July, she said. The site is 15 acres and will be able to better accommodate a larger and more diverse set of individuals.
“There are a variety of other individuals being served throughout the community within the high schools and this will allow us to bring those facilities together to enhance efficiency and effectiveness of course delivery,” Nelson said.
Besides around 25 private donors, some $10 million has been raised from public entities through federal grants and local government pledges, including a $1.5 million Economic Development Administration grant.
Richman said there are many things to look forward to with the new Career Innovation Center, but primarily its central focus is to enhance the workforce needs of the community. He said there already has been exceptional collaboration among many partners, and looks forward to that continuing even after the center opens.
“What I’m most excited about is the collaboration that we have seen since day one,” he said, referring to city, county and state leaders as well as superintendents from area school districts. “We couldn’t have done this by ourselves.”
He said the community is very well aware of the workforce challenges, and believe the center will help meet those challenges.
“This is going to help. It’s not going to solve the workforce issue, but it’s going to help to make the workforce situation bet-
ter,” Richman said. “And their enthusiasm to join us to make sure that this happens, to provide support, to give dollars, that’s what excites me.”
He knows the results might not be noticed immediately, but within a few short years he believes change will be recognizable.
“It’s going to be great for students, providing more opportunities,” he said. “It’s
going to be great for the workforce and the companies here; and it’s going to be great for the state of North Dakota with the economic enhancement that will be created for a better workforce.”
The Center for Special Surgery, a $28 million project located next to Enclave’s new home office, is underway in West Fargo. The center broke ground in August and will be completed in June 2023.
According to Enclave, the developer of the project, the facility will have a three-story, 90,000 square-foot medical office building that will be home to an Ambulatory Surgery Center, its network of physicians and multiple clinics, including an urgent care center. The building is connected to a 30,000 square-foot ophthalmology center that completes the Class A medical campus.
The first floor will have hotel accommodations for traveling patients, three build-to-suit tenant spaces (4,565 sf), on-site pharmacy, designated drop-off and pick-up zones, and access to an outdoor terrace (28,445 sf).
The second floor will include an Ambulatory Surgery Center (ASC) – same-day procedure center complete with six operating rooms, post-anesthesia care unit and pre- and post-op recovery space, reception area and staff office (26,264sf).
The third floor will have tenant space, community seating area and conference room (28,284 sf).
Other amenities include five build-to-suit tenant spaces ranging from 4,425 to 11,135 square-feet on floors one and three. There is ample staff and visitor parking, with heated sidewalks and covered canopy drop-off and pick-up zones.
The company describes it as a modern outpatient surgical facility with fully-equipped operating rooms and private recovery space. As such, “the ASC will perform surgical procedures at a fraction of the cost of what hospitals do, saving patients healthcare costs while providing equal to or above level care. The physicians at the ASC are uniquely positioned with greater autonomy, resulting in enhanced care and a personalized approach for patients.”
The ASC will be utilized by the area’s leading physicians and serve a wide audience that include, but not limited to: Ear, Nose and Throat; Orthopedics; Ophthalmology; Neurosurgery and Spine; Plastics and Hand.
Once complete, the medical campus will be the most advanced private surgery center in the region and the largest between Bismarck and St. Cloud, according to Enclave, caring for up to 200 patients in a single day. The ASC alone will be home to more than 50 team members in year one.
Once fully leased, the medical office building will support the employment of 116 team members in year five and together with the connected ophthalmology center, the entire facility will accommodate 154 employees by year five; 2003 in year 10. The facility will draw patients from a 100-mile radius.
Enclave is overseeing development and construction, but other partners include BWBR as the architect, and KLJ Engineering, Sandman Structural Engineers and Obernel Engineering.
Prairie Business
MAHNOMEN, Minn. • ICON Architectural Group is excited about a commercial branch it designed for United Valley Bank in Mahnomen, Minn.
The $3.6 million project started in May 2020 and was completed this past July, with final accessories and decor to be completed in October.
The single-story branch is 6,269 square-feet and includes eight private offices, two open offices, a receptionist area, three teller lines, and one teller drive-thru station.
Amenities for customers include a mobile banking iPad station, beverage/coffee bar, fireplace with a TV surrounded by lounge chairs, and private viewing room for their safety deposit boxes. Amenities for employees include lots of natural light, ergonomic and attractive furniture, Midwestern-based artwork, a large break room and kitchen space, wellness room, private back entrance, meeting room for larger group closings to avoid needing to be inside of their offices, hidden copy and file room for their use, large boardroom, and a separate office/work space for tellers.
There also are amenities for the local community such as afterhour access and rental abilities for large events with access to kitchen and restrooms. ICON describes it as “a beautiful multi-purpose space with a lot of natural light and technology provided.
“The interior of the project is branded with modern takes on the bank’s logo, colors and mission statement, while including custom photography and signage paying tribute to the city of Mahnomen. Using a mix of materials and bringing some of the exterior stone in creates an overall cohesive design with a timeless palette.”
According to ICON, the Mahnomen branch already has the highest ATM usage of all United Valley Bank branches. By moving the location from Main Street to across the road from the very popular and busy casino, its ATM transactions will likely triple due to having lower ATM fees than the casino ATMs with their open 24-hour drive-thru.
The site layout also makes it easier for farmers and guests to bring larger trucks into the parking lot with designated oversized vehicle parking and bypass lane versus having to find spots on Main Street to accommodate their vehicle size.
What is something business related you and your team have done over the past year that you’re most proud of?
Keely Schlichting VP Mortgage Production Manager Bank Division Bell Bank Mortgage Fargo, N.D.
In May of this year, we unveiled Bell Moving Forward. The program provides affordable lending opportunities to traditionally underserved and/or under-qualified communities. Unfortunately, not everyone has enough savings to use toward a down payment on a home. What’s worse is that many families are paying more to rent than to own a home. Bell Moving Forward is designed to target this problem. Bell Moving Forward allows qualified families with low to moderate income and credit scores in the low 600’s to purchase a home with as little as 1% down. In a short time, we’ve already helped 10 families in the area either purchase or refinance a home. Bell Bank not only designed the program, but also services and underwrites it. Another perk of Bell Moving Forward is that each applicant receives a required homebuyer education course to establish a budget. It allows buyers to see all of their monthly costs and how the mortgage payment will fit into that budget. With Bell Moving Forward, we are getting families into homes who thought it wasn’t possible. Not only is that something we’re proud of, but it feels really good to know we’re impacting lives through this groundbreaking program.
The Red River Regional Council has a small and fierce team that is 200% invested in supporting the businesses and communities in northeastern North Dakota, however needed. Over the past year, we have been focused on disaster recovery and resiliency planning due to impacts of COVID-19. For this work, we have been able to increase staff capacity, enabling us to complete more than 100 one-onone interviews with business owners/managers to learn more about their impact, current issues, and opportunities as the foundation to our planning. We have hosted three community conversations around the survey findings and featuring business owners with 170 attendees and more than 1,400 online engagements. We are hosting numerous lively conversations about growth in rural North Dakota that will result in strong action plans. We are in the process of launching a regional destination/ community development action plan with Roger Brooks, a national facilitator with 35 years’ experience in assisting communities in becoming high quality places to live, work, and play.
Dawn Mandt Executive Director Red River Regional Council Grafton, N.D.
This past year I took a career leap. I started my own consulting company and I also joined Dale Carnegie of North Dakota and NW Minnesota. I’m proud of myself for making a career change, but I am also very proud of the organization I’m joining. I have a great passion for influencing and training people and the Dale Carnegie organization allows me to continue doing that through their variety of programming. We get to build powerful people skills all while giving back to our local communities. But what makes me the proudest of this organization is in the past year they recently paused as a team and wrote a fresh set of goals for our next fiscal year. The team is small but mighty and the company is thriving. They recognized the importance to pause and to set the company’s vision for us. They invested in team building and made sure each employee was heard.
I believe in the importance of organizations needing to check in with their North Star and at Dale Carnegie we did that. The owners made sure we’re aligned with our business solutions as a team and are all enthusiastic about the next year’s goals.
Deidre Hillman Training Solutions Consultant & Certified Trainer Candidate
Dale Carnegie of North Dakota and Northwest Minnesota
Bismarck, N.D.
President
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At KLJ our Branding and Communications team includes a number of individuals with diverse skill sets that require thoughtful creativity, collaboration, and great attention to detail. With that said, over the last year, our team has successfully adjusted to a dispersed work environment that allows us to not only work effectively, but also helps us maintain that high level of creativity from a marketing standpoint on both internal and external projects. Additionally, we have added new team members in remote environments that allows flexibility and a work-life balance that we have found many of our team members appreciate.
Total nonfarm payroll employment rose by 235,000 in August, following increases of 1.1 million in July and 962,000 in June. Nonfarm employment has increased by 17.0 million since April 2020 but is down by 5.3 million, or 3.5%, from its pre-pandemic level in February 2020. Employment in professional and business services increased by 74,000 in August 2021. Since February 2020, employment in professional and business services is down by 468,000, with over half the decline in temporary help services.
U.S. airlines carried 61.4 million systemwide (domestic and international) scheduled service passengers in June 2021, seasonally adjusted, according to the latest numbers by the Bureau of Transportation Statistics. The airlines carried 10.9% more passengers, seasonally adjusted, in June of this year than in May and 302% more than in June 2020, but 20% fewer than in pre-pandemic June 2019. BTS reported 56 million domestic passengers and 5.5 million international passengers on U.S. airlines flights in June.
From June to July 2021, the number of job openings was up 749,000 to 10.9 million, the highest level since we started tracking job openings in December 2000. Job openings nationwide increased in several industries, with the largest increases in education and health services (+281,000). Within education and health services, health care and social assistance increased by 294,000 job openings over the month, while educational services decreased by 13,000 job openings.
The unemployment rate declined by 0.2 percentage point to 5.2% in August 2021. The number of unemployed people edged down to 8.4 million, following a large decrease in July. Both measures are down considerably from their highs at the end of the FebruaryApril 2020 recession. However, they remain above their levels before the COVID-19 pandemic (3.5% and 5.7 million in February 2020).
Source: U.S. Bureau of Labor Statistics
Source: U.S. Bureau of Transportation Statistics
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