Progress 2016 Economic Development

Minot Daily News SATURDAY, APRIL 23, 2016 MinotDailyNews.com • Facebook.com/MinotDailyNews

Economic Development

Small town developers look out for community T

By JILL SCHRAMM Staff Writer jschramm@minotdailynews.com

he Job Development Authority in Mountrail County saw its job creation work cut out for it several years ago when oil activity brought hundreds of jobs and people to fill them. Instead, the JDA’s focus has turned to getting businesses started that are necessary to serve that new, larger population.

“We went from ‘let’s bring in some jobs’ to ‘let’s support the jobs,’” said Greg Boschee, Mountrail County commissioner and JDA member.

It has meant working to ensure adequate child care and maintain the small businesses important to a community, such as the new cafe in Plaza.

The JDA helped Katie Newton open Forget Me Not Flower Shop in January 2015.

Newton had been operating a mobile food service in Oregon when the oil boom brought her and other family members to the Bakken. They opened Dynamite Sisters Catering.

When her sister left the business, Newton was unable to find good help so she had to sell the kitchen. She worked a variety of jobs around the area, including at a flower shop for a time.

With the closure of area flower shops, there came to be a gap between Minot and Williston. Newton began saving money and picking up used equipment to go into business herself. A chance encounter with someone familiar with the JDA connected her with the organization, which was looking for small businesses to invest in.

“It was a great help to have them,” Newton said, describing how quickly her business picked up despite another flower shop opening in Stanley about the same time. Having the capital to open with a

TOP: Katie Newton, right, owner of Forget Me Not Flower Shop, and her mother, Pat Newton, left, work April 12 in the shop located on Main Street in Stanley.

Jill SchrammMDN

BOTTOM: Members of the Crosby community join Crosby Kids Daycare in breaking ground for a new daycare center April 12 in this photo from The Journal, Crosby.

Submitted Photo

We went from ‘let’s bring in some jobs’ to ‘let’s support the jobs.’

– Greg Boschee

Mountrail County commissioner and JDA member

large enough inventory was critical.

“It’s really taken off a lot faster than we expected,” Newton said. “The community has supported us and appreciated us. ... It’s cool to provide a service that the community is really grateful for.”

Finding a spot on Main Street in Stanley also was important to her.

“When I first came here, I loved Main Street,” Newton said. “I thought I needed to be on Main Street. Main Street is what keeps these little towns what they are. This is the heart of the town. I think

being on Main Street is a huge advantage to me.”

The Divide County Jobs Development Authority also has had to reposition itself to deal with population change.

Housing had been a focus for a while. Now the concern is child care.

“The biggest thing we have

going on right now is our daycare expansion project,” said KayCee Lindsey, community development director for the JDA. The project is a public-private collaboration to address the child-care needs in the community. A private economic development group and the City of Crosby through its city sales tax are providing a large share of the funding, while grants and donations have also come from other sources, including $10,000 from Minot’s MAGIC Fund.

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Minot Daily News PROGRESS

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Economic Development

Saturday, April 23, 2016

MAGIC Fund:

MLT Vacations remains a major employer in Minot, coming to the city in 2000 after receiving a grant from the MAGIC Fund.

25 years of impact on Minot area economy

he purchase of a snow groomer back impressed with the unique culin 1991 was a turning point for ture, he said.

Bottineau Winter Park.

“There’s a real energy in that Bradley Knudson, general building. It’s something we want to manager, said a $5,000 grant from replicate,” he said.

Minot’s MAGIC Fund played a major MLT, which had been a subsidiary role in being able to make that purof Northwest Airlines, went through a chase. major change several years ago when “Because to that point, we only Delta Airlines acquired Northwest. spent money that we made and inHowever, the travel industry remains come was less than $10,000 a year, much the same, Snedeker said. so very little was going into the “There’s a misconception out there place, and we definitely would not that the Internet has killed the need have been able to buy the groomer,” for travel agents. It’s not true,” he Knudson said. “With the purchase of said. “Getting on the Internet can be that groomer, we were able to go out really overwhelming for people. and till and maintain the slopes in a There’s so much information.” much more usable condition and a People still need travel agents, safer condition.” and travel agents and consumers Having a groomed course allowed need MLT’s expertise, and its advofor a chain reaction of improvements cacy if there is a travel problem, he that has led to the winter park besaid. About 80 percent of MLT’s coming the recreational facility it is business is done through travel today. The number of visitors has inagents. creased from 6,000 to 21,000 a year Not all MAGIC Fund projects and employment has risen to 25 peohave been successes. The city reple at the peak of the season. voked a $1 million equity investWhile that $5,000 investment ment made in the failed Medvision continues to see returns, it is a drop – stated the MAGIC Fund in 1997, but it took several years to in the bucket among the more than recover the $2 million loan. The city Screening Committee in its sued WebSmart Interactive in 2003 $45 million the MAGIC Fund has invested into more than 200 projects in try to get back $230,000 in eco2002-2003 annual report to about 45 communities over its 25nomic incentives. Abacus, ProMark year history. and Dakota Marketing also were losMinot voters approved funding ing propositions in the long run. economic development from a city Some businesses had a hard time sales tax in May 1990, paving the way for the organization of the getting off the ground, such as aviation company Heliplane.

Minot Area Growth through Investment and Cooperation Fund. Bushel 42 Pasta in Crosby lasted about a year. Dakota Halal’s proLater that year, the city approved a $400,000 grant to Choice Ho- cessing plant in Harvey struggled from the start. The slaughter tels, a reservation center that employed more than 400 people at plant re-opened twice under different management, allowing opits peak. Choice Hotels in total received $900,000 in grants and erations to hang on several years before dissolving completely. $116,000 in other assistance through 1998.

“But the Magic Fund’s success must be measured by the sum Choice closed its building in 2011, although it continued to total of its activities, not by a single project,” stated the MAGIC operate a virtual center and still has some employees working Fund Screening Committee in its 2002-2003 annual report. “Like from their homes in the Minot area. a stock market fund, the Magic Fund’s success is fairly measured The 1990s were busy years for the MAGIC Fund. in the aggregate. So measured, it becomes increasingly difficult, In 1996, Sykes received a $2 million grant, plus $770,000 in even for the Magic Fund’s harshest critics, to suggest the Magic other assistance. Sykes, with about 380 full-time equivalent em- Fund is an ineffective economic development tool.” ployees in 2003, had about 200 employees when it closed in Even some projects no longer active saw some degree of suc2009. cess. The MAGIC Fund’s past includes companies that served In 1998, ReliaStar-ING expanded its financial services com- their purpose for a time, such as toothbrush company Oral Logic pany to Minot with a new service center employing up to 600 and technology company Info-Tech. workers at its peak. The company received about $5 million in asAmong MAGIC Fund recipients still hanging shingles in the sistance. In 2012, ING sold the facility to Cognizant Technology region include Rugby Manufacturing, Soaring Eagle Outerwear, Solutions, which continues to operate the northwest Minot cen- Albertson Consulting, Terhorst Manufacturing, Minot Sash & ter. ING became Voya Financial, which reports 94 employees in Door, Central Machining & Pump Repair and Eid Passport, now North Dakota, including 82 in the Minot area. An additional 350 SureID. Cognizant employees work in the state, according to Voya. About The MAGIC Fund returned taxes collected from area shop175 of those employees support Voya’s business. pers back to the smaller communities through support for comIn 1999, MLT Vacations received a $3 million grant to help panies such as Midwest Telemark International. Started by two open its center in 2000. Today the company has about 300 em- entrepreneurs in Mohall, the call center grew to 13 locations, employees, of which nearly 30 percent have been with the company ploying hundreds of workers.

Today, MTI operates four centers employing between 40 and from the start.

“It says a lot about the environment and the culture,” MLT 50 people. CEO Sajid Ghauri, Fargo, said the center makes outspokesman Albert Snedeker, Atlanta, said of the longevity. MLT, bound calls and takes in-bound calls for a variety of clients. The with other offices in Minneapolis and Atlanta, sends all new em- industry is a challenging one because of competition from out-ofployees to Minot for training, and everyone who goes there comes

But the Magic Fund’s success must be measured by the sum total of its activities, not be a single project.

See MAGIC — Page 6

By JILL SCHRAMM • Staff Writer • jschramm@minotdailynews.com

By JILL SCHRAMM • Staff Writer • jschramm@minotdailynews.com

T

Jill Schramm/MDN

Saturday, Page 3 April 23, 2016

North Dakota ranks third in national economic report BISMARCK – North Dakota ranks third in a new national report that compares each state’s economic competitiveness.

In its annual report called “Rich States, Poor States,” the American Legislative Exchange Council found North Dakota is among the best states in implementing “progrowth” economic policies, according to the North Dakota Department of Commerce.

“This competitive index shows that North Dakota continues to take the right steps to keep taxes low, to support our workforce development and to advance many other important progrowth policies that enable businesses to thrive and our economy to grow and diversify,” North Dakota Commerce Commissioner Al Anderson said.

The American Legislative Exchange Council bases its economic competitive index on 15 equally weighted policy variables, including regulatory policies and tax policies. North Dakota’s strong performance included high rankings for low property tax burden, low debt service, effective tax policy and a low income tax burden.

Utah received the top ranking, followed by North Carolina.

Town

Continued from Page 1

The community broke ground April 12 on a new center that will more than double the capacity of the current center, with the ability to serve up to 96 children.

Just as the daycare is important to business recruitment and retention efforts, the renewal of an existing city sales tax is important to economic development efforts. Voters will determine the fate of the sales tax in June.

“It’s helped a majority of the businesses downtown and in the county and surrounding areas,” Lindsey said of the tax. We have used that fund for interest buydown, matching funds with the Bank of North Dakota programs. It would be a shame for it to go away.”

Passage of the sales tax is important to an incentive package being developed to recruit skilled trades people. A number of business owners and trades people in the community are reaching retirement age, and new people must be found to step into their roles. The incentive package includes tuition assistance or start-up assistance to people willing to bring trade skills to Crosby for at least three years.

Also through the JDA and Renaissance Zone, a group of pharmacists received help in purchasing an existing pharmacy and gift shop, preserving the only drug store within 60 miles of Crosby. The tax incentives of the Renaissance Zone also are helping a new computer repair/set-up business and new owners of a local restaurant.

Boschee said the risk with economic development efforts in small towns is always present.

“It’s not one of those deals where everything you do succeeds,” he said.

“You don’t want to throw money away but you have to try. It’s fun when they succeed. It makes you feel good.”

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Economic Development

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Economic Development

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Economic Development

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Jill Schramm/MDN

SureID, formerly known as Eid Passport, operates in the former downtown YMCA building that the company acquired and remodeled after receiving assistance from the MAGIC Fund in 2010.

MAGIC

Continued from Page 2

country centers and more recently from better-paying jobs in the oil patch, which has made it difficult to retain workers.

“But we are still holding tight,” Ghauri said. “It’s a tough market for us, but we are still trying to keep afloat. The main goal is to bring as many jobs back to these local, small commu-

nities as we possibly can.”

Creating jobs for the small towns was the purpose of the founders in 1990, and that hasn’t changed, he said. The quality of the small-town worker is an MTI asset that foreign companies can’t match, he said.

Over the years, the focus of the MAGIC Fund has changed with the local economy.

For the past decade, there has been a push to-

ward value-added agriculture and the creation of an ag park. Minot Milling and the Port of North Dakota, the intermodal facility, are just outside the bounds of the park. Inside the park, AGT Foods is undergoing a $30 million expansion.

AGT’s MAGIC Fund roots go back to 2007, but various purchases of the property have made for name changes over the years.

When oil activity was heating up in 2008, the

MAGIC Fund provided a $600,000 incentive package to Pure Energy Services to locate in the Great Plains Energy Park. Pure Energy was acquired by FMC Technology, which retains the presence in the energy park, along with Pumpco Energy Services and Magnum Trucking. Halliburton maintains facilities there, although not in active use.

In 2010 when child care began to be a greater concern, the MAGIC Fund gave

GARRISON

$135,000 to Child Care Resources & Referral to expand and strengthen the childcare workforce.

In more recent years, the MAGIC Fund has directed more of its money into land acquisition and infrastructure development for the energy park and value-added agricultural park, including the intermodal facility. It assisted with construction of the 55th Street overpass, infrastructure at the airport and the downtown parking

ramps.

The last major business incentives were $700,000 to Midwest Milling in 2012-13 and $800,000 to pipe manufacturer United Poly Systems in 2013.

Frustrated by delays, United Poly Systems eventually passed on the assistance and redirected its efforts into a new Albuquerque plant.

Midwest Milling’s project is expected to go forward this year. It has been waiting on site and rail development.

North Dakota

DEVELOPING DAKOTA: Minot Daily News PROGRESS

Saturday, April 23, 2016

Economic Development

Page 7

State takes role in promoting economic growth D

By JILL SCHRAMM

Staff Writer • jschramm@minotdailynews.com

istracted briefly by an oil boom, North Dakota’s economic development focus is back on track.

The emphasis on diversification and value-added industry that has been primary since the oil bust and agricultural downturn of the 1980s hasn’t lost relevance, according to Bank of North Dakota President Eric Hardmeyer.

“But when you have a boom like we had, that tends to take a lot of energy and oxygen,” he said. With the oil industry slowdown, the Bank of North Dakota is regrouping and examining how to update its economic development programs to accomplish its diversification mission.

“North Dakota had been working its way down that path pretty well. Because of that, we are in a better place than we were in the ’80s and ’90s certainly,” Hardmeyer said. “We have a much more diversified economy today.”

He sees more valueadded projects developing on both the agriculture and energy side in the future. In terms of state support programs, restructuring may have to occur to deal with the new paradigm of today’s economy, he said.

Hardmeyer said bank officials are re-examining existing programs and visiting with community and economic development leaders around the state “to really understand

“Now is one of those reflection points, where you really take a look at what you have and say, ‘Are we meeting all the needs?

What does it look like now?

What should we have in place?’”

— Bank of North Dakota President Eric Hardmeyer

the issues that they are dealing with and to proactively deal with them by coming back with maybe a slate of programs designed to take on the new economy.”

“Now is one of those reflection points, where you really take a look at what you have and say, ‘Are we meeting all the needs?

What does it look like now?

What should we have in place?’” Hardmeyer said.

“We are out there right now really trying to get the lay of the land,” he added.

“We have been directed by

Future metropolitan area?

Minotʼs growth trend has the city on course to achieve metropolitan status within the next four years, according to North Dakotaʼs census director.

Kevin Iverson, who manages census data in the North Dakota Commerce Department, said Minot could achieve the designation of a metropolitan statistical area sometime between 2017 and 2020. Minot is designated as part of a micropolitan area that inKevin cludes Ward, Renville and Iverson McHenry counties. For a micropolitan area to become a metropolitan area, there must be a core city with a population of 50,000.

The last estimate from the U.S. Census Bureau showed Minot with a population of 47,997 as of July 2014. Estimates also show Minotʼs micropolitan area grew by 1,855 residents from July 2014 to July 2015 to 79,814. The 2015 population estimate for the city of Minot hasnʼt yet been released.

One of the advantages of a metropolitan designation is the amount of statistical data that becomes available for planning and other uses.

Fargo, Bismarck and Grand Forks are metropolitan areas.

Iverson also noted that North Dakotaʼs economy of the past several years has drawn younger people to the state and encouraged more youth to stay, causing the average age in the state to drop by more than two years to just under 35 years in 2014. That has meant more young families, a demand for child care and crowded schools, especially at the younger grades.

Even with the slowdown in oil activity and tougher times in agriculture, estimates are that North Dakota gained about 17,000 people through natural increase and in-migration in 2015.

The Commerce Department reported the slowdown in oil activity and drop in agricultural commodity prices contributed to a $2 billion hit to North Dakotaʼs Gross Domestic Product between 2014 and 2015. Officials say thatʼs a small decline in what has been a $55 billion economy. In comparison, North Dakotaʼs GDP in 2005 was about $25 billion.

the Industrial Commission to go out there and begin that work, so we have. We have started that work with the idea we are out in front of this. If we need new programs, new money, we at least have an idea of how to go forward with a legislative agenda.”

A program that has been a mainstay since the 1990s has been PACE, which is geared value-added and manufacturing jobs. The state followed up with Flex PACE to provide assistance beyond just manufacturers and job creation and respond more to what communities believe are essential services. The state also has beginning entrepreneur and venture capital programs that have been successful.

Each of the state’s various business assistance programs have had an impact, and that’s especially true of those that have been around a while, such as the North Dakota Development Fund, said Paul Lucy, director of economic development in the North Dakota Commerce Department.

“It has been kind of a stalwart program,” he said of the Development Fund.

“The Development Fund is a gap financing program.

As companies or projects are looking for financing, many times there’s a variety of different reasons you may not be able to get all the financing with a typical commercial lender.

The Development Fund can come into those projects and fill a gap.”

Tax incentives and programs that target investors can’t be overlooked, he added.

“Those programs that motivate the private sector to invest in those entrepreneur companies are programs that we might not see immediate results in terms of significant impact, but I truly believe that longterm for the state of North Dakota, those are some of the critical programs that we really need to have in the state,” Lucy said.

Tax credits are another way the state supports businesses, including breaks on sales tax for equipment purchases and for increasing manufacturing automation to stay competitive. Expanding opportunities and creating demand for more skilled labor through automation results in higher wages, Lucy said.

North Dakota already has risen from 38th among states in per capita income to ninth in 2015, down somewhat from sixth place in 2014, according to the Commerce Department.

The state’s 5.1 percent income growth from 20072015 led all states by far.

Job training programs, another form of state assistance, have been used ex-

tensively by businesses to find employees for those more skilled, better-paying jobs.

“Any business that comes into the state, what’s the biggest question they ask? Can we get the workforce? We have more people exiting the workforce than we have coming into it in the state,” said Kevin Iverson, state census director.

North Dakota has a large number of baby boomers and a correspondingly small percentage of youth in their teens to replace boomers when they retire.

During the time those teens were born, North Dakota was experiencing an outmigration of the young people who were starting families. That will require an in-migration of workers, beginning in about 2020 to 2022 to cover that gap, Iverson said.

Lucy said North Dakota’s core industries, particularly in energy and agriculture, are so important that the state will be relying on them for decades, if not centuries. At the same time, diversification helps survive down times, and North Dakota has seen new ideas and companies coming forward that would not have been dreamed about 25 or 35 years ago, he said.

It is in tough times that the state sees more innovation and value-added projects, he said.

“If North Dakota wants to continue to grow, have a strong economy, the key to that success will all hinge on our ability to continue to diversify,” he said.

“There are a number of new things happening across the state. It’s really an exciting time for North Dakota.”

Hardmeyer agrees these post-boom years can be exciting.

“This has been painful in a lot of ways, but I think we are really set up for a really bright future,” he said.

“With the infrastructure in place, the fact that we know how to get the oil and all the gathering systems, I think we are in a really good place now to move forward with new initiatives.”

Minot Daily News PROGRESS

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Economic Development

Saturday, April 23, 2016

Academy helps young entrepreneurs bring ideas to life

Shannon and Casey Schmidt visit April 7 with Chuck Barney, left, director of the Severson Entrepreneurship Academy, about a new business venture.

Jill Schramm/MDN

C

huck Barney has watched many dreams unfold as director of Minot State University’s Severson Entrepreneurship Academy.

The academy provides enterprising students with databased insight into a potential business idea, and then offers resources to ensure a successful launch.

“I get a lot of really interesting, unique things,” Barney said of the ideas that come his way. “You have these young people coming in, and they are so excited and they are so energetic.”

Some students aren’t sure what kind of business they want to start.

They just know they want to be self employed. Other students know exactly what kind of business they want to run and simply seek help in getting off to a successful start, Barney said.

“We help them put together a business plan or help them crunch the numbers to help them make decisions. We don’t make any decisions for them, but we help them distill all the information and help them make logical, fact-based decisions based on the numbers they think they can do and the numbers they have identified,” Barney said.

Shannon Schmidt of Minot sought out the academy last February. Her goal is to establish a preschool/daycare center adapted to work with children with autism spectrum disorders. The entrepreneurship academy is helping her to make that dream happen.

“The reason I am so interested and passionate about this is we have a son with autism spectrum disorder,” she said. “We found, in our community, that we do not have a great amount of services to utilize.”

She and her husband, Casey, have a 4-year-old son who saw many of his services end when he turned 3. At that age, limited special education through the school system often is all that is available.

Health insurance typically doesn’t cover speech and occupational therapy, and a state program through Medicaid is able to help fewer families due to a recent budget cut.

“This center that I want to create will fill a great need for people and put a lot of people’s minds at ease,” Schmidt said.

Her center would give families a daycare option that doesn’t exist for children with autism spectrum disorder. The center will be able to take siblings, providing after school and summer care.

By JILL SCHRAMM

Staff Writer • jschramm@minotdailynews.com

We don’t make any decisions for them, but we help them distill all the information and help them make logical, fact-based decisions based on the numbers they think they can do and the numbers they have identified.

–Chuck Barney

director, Severson Entrepreneurship Academy With the help of the academy, Schmidt is putting together her business plan and entering the project with a lot more confidence.

“I don’t have a business background. I didn’t know what next step to take,” she said. Although she studied up, it’s working with the academy that has made that research relevant, she said.

Her husband, Casey, who runs his own construction company, brought some business knowledge to the project. He also knows enough about the ups and downs of business to have trepidation about starting a new venture, so he welcomes the expertise of the academy.

The academy has been able to help with issues specific to the proposed center, including how to set up as a nonprofit and determine expenses and revenue. Barney said the academy allows students to draw on MSU’s academic resources in areas such as law, accounting, marketing and graphic arts. The academy strives to engage MSU students with the entrepreneurs, which benefits both the business and the students.

“That’s what is important to me is involving the students,” Barney said. “They get to apply what they are learning in the classroom in a real-world situation. That’s where learning really occurs.”

When the Souris Valley Animal Shelter was mulling ideas for a new revenue stream, the academy brought in students to determine whether a kennel would be a feasible option for the shelter’s vacant garage. Jay Hight, a contractor and center advisory board member, donated the services of his company’s architect and recruited in-kind donations of material and labor, which put the project’s financial picture into the black.

Randy McDonald said the board approved the proposal and will be moving forward with the project.

“By starting with the Entrepreneurship Club, we have managed to make it so building this kennel and opening the doors will come at zero cost to the animal shelter,” he said.

MSU’s Entrepreneurship Club attracts students from academic fields beyond those associated with

business. For instance, an art student might join the club to gain business acumen that would be useful in starting a graphic arts studio.

The Severson Entrepreneurship Center started in 2010 with a $1 million donation from alumnus Clint Severson and Conni Ahart.

Last February, they donated another $2 million. The state through its Higher Education Challenge Grant Program has matched a portion of those funds.

Minot Daily News PROGRESS

Saturday, April 23, 2016

Page 9

Economic Development

MADC makes strides in agricultural parks

Submitted Photo

Crews have already begun the process of getting land prepared for new tenants at the agricultural complex.

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By PHIL TORRES

Staff Writer ptorres@minotdailynews.com

he Minot Area Development Corp. is making great strides in developing its agricultural complex.

Stephanie Hoffart, president of MADC, said the group plans to add one or two more value-added companies to its parks by this fall.

The Value-Added Agricultural Complex/Port of North Dakota expansion will welcome 65 new employees via Alliance Grain Trading.

AGT Food and Ingredients is one of the largest suppliers of value-added pulses, staple

foods and food ingredients in the world. They buy lentils, peas, beans and chickpeas from farmers around their 40 facilities located in Canada, the United States, Turkey, Australia, China and South Africa and ship its products to over 120 countries around the globe. This partnership makes sense, since North Dakota is ranked number one in 15 commodity crops.

The strategic advantage of the port of North Dakota is that it will be the largest distribution hub between Seattle and Chicago in the BNSF territory.

The rail improvements will accommodate United Pulse Trading’s expansion and Mid-

west Milling’s new construction into an oats and barley plant, similar to its existing plant in Stanley that has been trucking products.

The port has been an ongoing project for numerous years and this year it’s officially ready for new businesses. In fact, AGT Foods is undergoing a $30 million expansion out at the port.

“They should be able to seamlessly get their product out,” said Hoffart.

These transformations were implemented to save cost and time for the new suitors.

“The idea was getting the land prepared to show them the advantage of having the rail right here,” said Hoffart.

MADC’s impact from 20102015 include investing $66 million in infrastructure, supported six businesses and securing 516 jobs. Additionally, Minot’s total building permits from 2010-2014 average nearly $210 million per year, further increasing the town’s value.

In addition to ag-related companies, MADC is seeking out companies that want to capitalize on byproducts of the oil industry. Companies like plastics plants, refineries and ethanol facilities that create pellets that can be used to make pipes instead of simply disposing of them.

“Why shouldn’t we capitalize on it as well,” said Hoffart.

The idea was getting the land prepared to show them the advantage of having the rail right here.

— Stephanie Hoffart Minot Area Development Corp. president

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Economic Development

Saturday, April 23, 2016

Minot's Renaissance Zone

helps revitalize downtown area T

By PHIL TORRES

Staff Writer • ptorres@minotdailynews.com

he Magic City’s vision for the Renaissance Zone is to transform the district where utilization of commercial, residential and industrial resources are maximized while maintaining the historic attractiveness of the area and quality of life attributes of the city as a whole.

To qualify, the zone must have both residential and commercial properties, falling in line with the national trend of live-work-play that’s being ushered in by millennials.

Several of the activities that qualify as a project include: purchase, rehabilitation, new construction, leasehold improvements and public utility infrastructure.

The city’s goal for this plan is to develop and structure a renaissance zone that will facilitate development, redevelopment and rehabilitation of the area, encourage mixed use development, promote the return of economic vitality to the area and create a thriving city center which will become a commercial, residential

and recreational destination for residents and visitors to the city.

The objectives of the city, the Renaissance Zone Review Board and City Planner’s office will be to offer financial incentives, various tax exemptions and credits that will enhance desirable economic, residential and recreational opportunities through capital investment within the zone. Sybil Tetteh, assistant city planner, said the zone program is used to “put more equity into buildings,” with the idea being new buildings equal new jobs.

The vision, goals and objectives established in this plan are consistent with the city’s Comprehensive Plan, last updated in 1995. The goals and objectives for the Central Business District, which encompasses a majority of the proposed renaissance zone, include things like provisions for adequate parking for businesses, keeping the area clean and welllit and encourage the preservation of historical buildings.

Denise Lindbo, owner of Gourmet Chef downtown, agrees with the See DOWNTOWN — Page 11

MAIN and ABOVE: Minot's downtown area is transforming into a livework-play environment thanks to the Renaissance Zone initiative.

Photos by Phil Torres/MDN

Minot Daily News PROGRESS

Saturday, April 23, 2016

Page 11

Economic Development

Phil Torres/MDN

Minot's downtown area is transforming into a live-work-play environment thanks to the Renaissance Zone initiative.

Downtown

Continued from Page 10

goals of the CBD. “It’s a lot more appealing to go to a remodeled building,” said Lindbo.

The program is in place to revitalize communities in the state and encourage development through tax incentives. It is a tool

to help cities revitalize their communities, which Minot has been doing since the 2011 Souris River flood. By offering both state and local tax incentives for 5 years, both residents and business owners are provided with an incentive to invest in the community.

The program is unique in that cities develop handcrafted development plans that address each

city’s specific goals.

The size of the zone is dependent upon the size of the city applying for the Renaissance Zone. For communities with a population under 5,000, a Renaissance Zone may consist of an area of up to 34 connected blocks. For communities of more than 5,000 population (like Minot), the defined area may ex-

ceed 34 blocks up to a maximum of 49 blocks, based on one additional block for each additional 5,000 in population.

A Renaissance Zone can be a helpful tool for community redevelopment and economic investment if properly developed, implemented, and managed. It is crucial that a request to designate a Renaissance Zone is not looked

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Economic Development

BOTTINEAU

Construction is underway for the new grain elevator in development in Bottineau, set to begin shipping by 2017.

Saturday, April 23, 2016

Submitted Photo

to become a destination for grain

A

By PHIL TORRES

Staff Writer • ptorres@minotdailynews.com

new division of an international agricultural buyer will be opening it’s doors in Bottineau this fall, bringing with it new jobs.

Paterson Grain is a division of Paterson GlobalFoods Inc., a family-owned group of companies with clients and ongoing ventures in Europe, Asia, Australia, and the Americas.

With the base of operations located in Winnipeg, Manitoba, they operate approximately 40 sites across the Canadian prairies, including nine high-throughput inland export terminals.

The company, founded in 1908 by Canadian entrepreneur Senator Norman M. Paterson, will be making a $20 million investment.

Shane Paterson, corporate development officer, said they plan to have 8-12 full-time positions available between the three openings. They plan to grow their capacity, which would create an additional 4-5 more jobs.

“We think it’s a great town,” said Paterson.

The choice of Bottineau is two-fold: Paterson generally chooses to build by towns and the area is a very productive agricultural location.

Paterson Grain is involved in seed sales, crop inputs, financial services to farmers, grain handling, grain exports, and through its sibling companies,

transportation, milling, and consumer food products.

“We feel that BSNF will be a very strong partner railroad,” said Paterson.

This strategy of vertical integration delivers a wide variety of benefits to the customer ranging from advantageous pricing to onestop accountability to quality control.

“This is not a boom and bust situation like oil,” said Paterson. “Bottineau will become a destination for grain.”

Paterson Global Foods is a multinational conglomerate with an international reputation founded on meeting the high-demand needs of the world’s largest agricultural buyers (North Dakota is ranked number one in 15 commodity crops).

Utilizing its knowledge in agriculture, food, transportation and finance, Paterson has established a sophisticated global trading network directly benefiting its suppliers and buyers. It also takes an interest in the communities they work with. Paterson Grain has already made charitable donations to the arena and Dakota College at Bottineau.

“We’re not just a business, but a member of the community,” said Paterson.

Paterson plans on receiving grain by early October and shipping by railroad in December.

We feel that BSNF will be a very strong partner railroad.

– Shane Paterson

corporate development officer for Paterson Grain

Entrepreneurial spirit alive and well in ND Minot Daily News PROGRESS

Saturday, April 23, 2016

By JILL SCHRAMM

It’s your business so we are going to give you the direction, the knowledge to be able to make your own decision and build your own business yourself.

Staff Writer jschramm@minotdailynews.com North Dakotans are an enterprising population, according to national statistics.

North Dakota had the nation’s third highest rate of new entrepreneurs among the smaller 25 states in 2015, based on the Kauffman Index.

Mary Beth Votava, regional director with the Small Business Development Center in Minot, said there’s a entrepreneurial spirit in North Dakota that values hard work and making your own way.

“Entrepreneurship is a lot of hard work, but you can reap the benefits tremendously,” she said.

Paul Lucy, director of economic development in the North Dakota Commerce Department, said many major companies across the state got their start as an idea in the mind of a grassroots entrepreneur. The list includes Bobcat; Great Plains Software, now Microsoft; Steiger, now Case Holland; and Phoenix International, now John Deere Electronic Solutions.

“We are definitely seeing an increase in entrepreneurship and innovative ideas developing in North Dakota,” Lucy said. “There are more resources to support that now than there ever were in the state. Those resources are def-

Page 13

Economic Development

– Mary Beth Votava

regional director, Small Business Development Center in Minot

initely having an impact.”

Votava said traffic through her office has increased with the economic slowdown of the past year because when jobs are fewer, people are more likely to consider starting their own businesses. A slower economy shouldn’t deter anyone, either, she said.

“It’s still the right time to start your own business,” Votava said. “It’s a little more difficult to get the financing that you need so it’s even more important you have a well thought-out business plan.”

Minot’s Small Business Development Center is one of 11 state and federally funded service centers in North Dakota that provides free technical assistance to businesses with fewer than 500 employees.

Connected through their host at the University of North Dakota in Grand Forks, the centers work closely with SCORE, a volunteer program that provides business mentoring.

“It’s your business so we are going to give you the direction, the knowledge to be able to make your own deci-

sions and build your own business yourself,” Votava said.

She estimated the Minot center sees 120 to 150 clients a year, excluding people who stop by just to get a few questions answered.

Sonja Stromswold, Mohall, credits the SBDC with helping her understand the “numbers” side of producing food and flowers. Stromswold said she started her bakery, Sonja’s Old-Fashioned Delicacies, in 1989 after realizing there was a demand for what something she enjoyed and was good at. However, in 1996, she closed her doors.

“I had a really good clientele, but my business sense wasn’t really what it should have been,” she said.

In 2005, she decided to revive the business.

“This time, we decided to do it right and make sure that we had a business plan and had some financial guidance.

That’s where Mary Beth came into the picture and the Small Business Development Center,” Stromswold said. “They were extremely important in helping us get things done

right.”

Stromswold also manages Flower House Garden Center, owned by her mother, and started Prairie Bistro in 2006.

SBDC helped connect Stromswold with economic development funds that supported her ventures and helped create full- and parttime jobs for 16 people today.

SBDCs came about because of the national reality that three of five businesses will fail in their first five years, Votava said. Adaptability is necessary for long-term success as well, as indicated in statistics showing a business in its third generation is at higher risk for failure.

The three stumbling blocks that can lead to failure are lack of money and inability to borrow; lack of management skills, including lack of business direction and poor understanding of markets; and volatility, particularly in the economy.

“Being better prepared will help reduce that risk,” Votava said. “There’s a proven track record that having mentors, having business assistance, having a plan and evaluating

where you are at with your business will make your business that much more likely to be successful and sustainable.”

Statistics from the Small Business Administration and a study on SBDCs showed that the average SBDC client saw 16.8 percent sales growth, or four times the national average sales growth.

The average job growth for clients was 17.6 percent, compared to 1.8 percent as a national average.

People seek help from the SBDC for business purchases as well as start-ups. The Minot office has assisted baby boomers who want to retire and transition their businesses to a family member, employee or other buyer.

SBDC can help with succession planning for the owner, business planning for the buyer and even guide retiring baby boomers who desire to become entrepreneurs or turn hobbies into a businesses as their “bridge” to full retirement.

The Kauffman Index shows North Dakota has a good share of both older and younger people working for themselves. North Dakota ranked third among small states in the rate of older business owners, ages 55 to 64. It also ranked second in the rate of young business owners, ages 20 to 34.

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Economic Development

North Dakota makes strides in U.S. technology job market

Saturday, April 23, 2016

Submitted Photo

SRT is leading the way in the state's technology field by offering a wide range of services.

By PHIL TORRES

Staff Writer ptorres@minotdailynews.com Non-profit tech association CompTIA released its 2016 Cyberstates report, which provides a state-by-state analysis of the U.S. technology job market, and found North Dakota’s tech industry ranked 47th in the country and employed 13,398 workers in 2015.

These workers had an annual average salary of $79,588, which was 53 percent more than the average private sector wage in the entire state.

So, why is the tech industry so important to North Dakota? It means 501 net jobs added between 2014 and 2015 – a number

that’s expected to continue to rise in 2016 A tech payroll of $1.1 billion in 2015, ranked 31st nationwide, accounting for 3.6 percent of all private sector payroll in North Dakota.

Leading occupation job categories for the state include computer support specialists with 1,600 jobs and software developers with 1,200. One prime example of this is SRT Communications located in Minot, the state’s largest telephone cooperative. SRT has served the telecommunications needs of north central North Dakota since 1951, employs more than 200 people, and serves more than 48,000 customers.

Shawn Grosz, chief technical

officer at SRT, said they not only hire people in-state, but recruit from out-of-state as well.

“Everything is based on opportunity,” said Grosz. The average wage for the tech industry in the state is $79,588.

SRT maintains a fiber optic, copper and wireless distribution and access network to provide basic and advanced communications. SRT provides broadband and dial-up internet services, wireless service and cable TV as well as traditional telephone, leased line, frame relay, voicemail and long-distance services.

“The ability to retain our smart people allows those individuals to stay locally and SRT is proud to be a part of that,” said Grosz.

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USDA’s Rural Business-Cooperative Service offers programs to support local businesses

Saturday, April 23, 2016

Minot Daily News PROGRESS

Economic Development

Page 15

By PHIL TORRES

Staff Writer ptorres@minotdailynews.com The USDA’s Rural Business-Cooperative Service offers programs to support business development and job training opportunities for rural residents.

The programs help provide the capital, technical support, educational opportunities and entrepreneurial skills that can help rural residents access jobs in agricultural markets and in the bio-based economy.

The USDA, along with their public and private partners, is connecting rural residents to the global economy.

Supporting business growth and development; facilitating sustainable renewable energy development; developing regional food systems; generating and retaining jobs through recreation and natural resource restoration, conservation, and management all fall under the agencies reach. These investments support the state’s long-term prosperity by ensuring that rural communities are self-sustaining, repopulating and thriving economically.

Through its business programs, Rural Development helps provide muchneeded capital in rural areas, often in partnership with private-sector lenders and community-based organizations. The capital may be in the form of loan guarantees, direct loans or grants to individuals, rural businesses, cooperatives, farmers and ranchers, public bodies, non-profit corporations, Native American Tribes and private companies. The funding is intended to help improve the quality of life in rural communities by enhancing economic opportunities.

USDA’s Cooperative Programs promote the understanding and use of the cooperative form of business. Cooperatives market and distribute agricultural products and supplies and provide other services such as electricity, telecommunications, credit and financial services, housing, food, hardware and building supplies.

USDA Rural Development helps rural residents form new cooperatives and improve the operations of existing ones through education, research, technical assistance, publications and funding. It collects financial and other data from farmer, rancher and fishery cooperatives every year.

This data is published in several reports, including a listing of almost 1,500 marketing, supply, service, fishery and bargaining cooperatives.

Ryan Taylor was appointed by the president to serve as state director for USDA Rural Development in North Dakota. In this role, he manages three federal agencies with a loan portfolio of over $4 billion.

“When we put infrastructure in rural North Dakota, those are the backbone of rural development,” said Taylor. “Grant money can make the difference.”

USDA’s Community Development Programs include programs, technical assistance and initiatives that help communities and regions to realize their strategic, long-term economic development goals.

For example, the North Central Rural Water Consortium II was given $3 million in financing over 2014 and 2015. Additionally, the Central Power Electric Cooperative received $75 million in financing over 2014 and 2015.

A few of the group’s business and community project ideas include:

$25,000 grant and a $1.5 opportunities for artist million loan/grant combo. mentoring.

They also provided financUSDA partnered with ing for the recently finished SRT Communications to Turtle Mountain Youth Garrison Clinic provide a $1 million loan Wellness Center.

USDA partnered with through the Rural EcoMcLean Electric Cooperanomic Development Loan tive to provide a $300,000 Program. This project as- Artspace in grant to help Garrison Mesisted Gooseneck ImpleMinot morial Hospital upgrade its ment in constructing a new emergency room to meet In 2013 and 2014, Rural 39,800 square foot John provided urgent health care needs.

Deere farm equipment fa- Development cility at its location in more than $180,000 in This project will create Velva. The project will cre- grant funding to support three jobs. The financing ate more jobs. The financ- the artists that may occupy was obligated in 2013. A $2 ing was obligated in 2014. this space. The funding million remodeling project provides is used by the to make the facility ADA Turtle Mountain Tribal compliant, as well as add a Arts Association for train- new emergency entrance Turtle ing, workshops and gallery was started in October Mountains space. Training programs 1998 with a finish date of In 2012, Rural Develop- will be offered in business July 2001. The hospital apment provided funds to management, website de- plied and was approved for construct a new Chippewa velopment, marketing and Critical Access Designation and Metis Cultural Center public relations. Funding in December of 1999. Upon the Turtle Mountain will also be used to pur- dates continue to be made Reservation. Through the chase equipment needed to to ensure that all of their community facilities pro- provide technical assis- patients receive the best gram, the project received a tance training and to offer quality care.

Gooseneck Implement

When we put infrastructure in rural North Dakota, those are the backbone of rural development.

Grant money can make the difference.

—Ryan Taylor state director for USDA Rural Development in North Dakota

Page 16

Minot Daily News PROGRESS

Economic Development

Saturday, April 23, 2016