CEDAR VALLEY PATH OF PROGRESS
SUMMER FUN Cedar Valley offers entertainment options
HOT SPOTS Waterloo and Cedar Falls downtowns are thriving
PAGES 9 & 11 PRESENT: STANDING IN THE CROSSROADS
ROAD TO RECOVERY Iowa’s economy on the mend
John Deere continues to invest in the economy, people of the Cedar Valley
FUTURE: WHERE WE’RE HEADED 20 Under 40 winners call Cedar Valley a magnet for young leaders
PAGE 10 Waterloo | www.wcfcourier.com | Cedar Falls
The Cedar Valley of Iowa is a special place where businesses, careers, and families thrive. The Cedar Valley is a place where talent and ambition is rewarded and individuals are valued. Explore everything this community offers your growing business and rising career. Learn about the quality of life in the Cedar Valley. Contact us. Be prepared to love what you see and hear. Share our success. Our invitation is open –
10 W. 4th Street, Suite 310, Waterloo 319-232-1156 10 Main Street, Cedar Falls 319-266-3596 www.cedarvalleyalliance.com • www.greatercedarvalleychamber.com “The Path of Progress”
2010 PROGRESS EDITION
Signs of progress abound in Cedar Valley By JIM OFFNER firstname.lastname@example.org
Stories of the Cedar Valley’s climb out of the so-called “Great Recession” are many and varied. This year’s “Path of Progress 2010” offers in detail some of the reasons the area has been able to stem the harsher effects of the downturn. The stories of Cedar Valley business offer insights into the future vitality of the region by delving into companies’ genesis in the local market and their steady march toward viability in a volatile business climate. With business anchors like Deere & Co.’s Waterloo operations continuing to invest in the local economy and maintaining a strong work force, the future comes to the fore, since Deere has consistently demonstrated a commitment to the growth of the Cedar Valley. With memories of the celebration of Deere’s 90th anniversary in Waterloo, the company continues to showcase a deep Cedar Valley pedigree. Commitments by Target Corp. to the Cedar Valley have been well documented, with the company opening up its perishable distribution center in Cedar Falls, next door to its established center in Cedar Falls. The dedication of the perishable distribution center came almost simultaneously with Target opening its new Cedar Falls store on Viking Road. The region continues to build toward the future with a network of private and public schools, Hawkeye Community College and the University of Northern Iowa.
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Expanding entertainment options are apparent, both in Cedar Falls and Waterloo, with the web of bicycle trails, a growing variety of dining options and more entertainment venues than ever. Downtown areas continue to enjoy periods of renaissance, as local investors take the best of the past and turn them into dreams of the future. Memories of the disaster of the 2008 flooding begin to fade, as downtown Riverfront Renaissance projects continue. Local destinations along the Cedar River, in Cedar Falls and Waterloo, are the beneficiaries of funding that bring them back to their previous grandeur. The Riverloop Expo and Cedar Valley TechWorks and the rebirth of the Black’s Building provide evidence of a changing landscape around downtown Waterloo. The Lost Island Adventurepark, Grout Museum District, Five Sullivan Brothers Convention Center, the Isle Casino Hotel Waterloo, the Phelps Youth Pavilion, Gallagher-Bluedorn Performing Arts Center, Hearst Center for the Arts number among the destinations. For sports fans, the Waterloo Bucks provide evenings of baseball action, while the Waterloo Black Hawks provide sizzling hockey action to warm up winter nights. The Cedar Valley is vibrant, as can be seen readily by thumbing through this year’s “Path of Progress.” In business, community activities and a clear vision on the future, it should provide more than a little insight into an array of people, places and institutions that feed the region’s growth. u
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Deere: Waterloo’s strong, silent success By PAT KINNEY email@example.com If companies can be compared to movie idols, John Deere in Waterloo is the strong, silent type. No hoopla. No ribbon cutting. No brass band. No chest thumping. But a presence that can fill the room, or, in this case, the community. In Waterloo, Deere is a company that does not seek attention. But Deere has not shied away from reinvestment it its Waterloo operations and in the community at large. “All in all, we are pleased with the progress in the Cedar Valley community and in our business,” former Deere Waterloo operations general manager Dave Rodger said. While cutbacks have occurred in other areas, in Waterloo Deere has kept its pedal to the metal. In three
Photos by MATTHEW PUTNEY / Courier Photo Editor Workers assemble a John Deere 8000 series tractor at the John Deere production plant on East Donald in Waterloo.
years it has blown the doors off a local-investment milestone it took the company most of the past decade to accomplish. On Dec. 7, 2000, Deere launched what would end up being a $140
million reinvestment in the redevelopment of its downtown Westfield Avenue and East Donald Street facilities. The project was expected to take about seven years. That project was substantially
completed about three years ago. But Deere hasn’t stopped there. Since then Deere has invested more than double that amount in less than half the time in its Waterloo operations.
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2010 PROGRESS EDITION
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Major improvements included: A new melt operation at the Waterloo foundry. Improvement in drivetrain operations at Westfield. Most recently, an ongoing reconfiguration of production lines and a new high-tech paint operation installed this past year at the East Donald Street Tractor Works. Just a project to install improved, energy-efficient lighting at the Foundry represents an investment of $1 million alone. Deere’s multiple Waterloo-area facilities are the Moline, Ill.-based company’s largest North American manufacturing complex. Deere, in Waterloo since 1918 when it bought the Waterloo Gasoline Engine Co., produces large row-crop tractors here. Its Cedar Falls Product Engineering Center is a hub of the company’s research and development operation. And its Engine Works produces more increasingly energyefficient and environmentally sensitive engines for a host of applications. Deere has continued to invest in its people, too. Deere’s Waterloo employment remains comfortably above 5,000 — its highest level in a decade or more — despite a nonunion salaried-employee voluntary separation program about 200 workers took advantage of in the company’s ag and turf division over the past year. On the union wage employee side, the company has hired several hundred additional workers over the past decade in Waterloo, far exceeding the rate of retirements. As of September, figures compiled by UAW Local 838 in Waterloo show 1,075 union-wage workers have retired since 2003, and 1,742 have been hired, a net gain of 7 workers over six years. Rodger projects stable employment in Waterloo for the foreseeable future. “We continue to hire small numbers in several critical skill areas but in general our work force needs are being met with the work force we have today,” he said. “Our customers will ultimately determine that by their demand for ag equipment
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Jeff Samuelson, left, and Steve Meyer, work on the assembly line for a John Deere 8000 series tractor at the John Deere production plant.
— and we are prepared to meet that demand.” Rodger noted Deere continues to work with the University of Northern Iowa, Hawkeye Community College, Wartburg College and local schools on course offerings and training programs that will allow the community to cultivate and maintain a skilled work force. Deere also supports community “quality of life” initiatives that will
make the Cedar Valley an attractive place to recruit new workers. For example, the celebration of Deere’s 90th anniversary in Waterloo in the fall of 2008 was one of the inaugural events at the new RiverLoop Expo plaza downtown. And Deere and the UAW have teamed to make record contributions to the Cedar Valley United Way, exceeding $1 million each of the past two years. Business has been good for Deere
and the Waterloo operations in particular. The company racked up a record-tying five consecutive years of record profits, culminating in the company’s first $2 billion profit year ever in 2008. Deere’s Waterloodesigned and manufactured large row-crop tractors have been a big part of the company’s success — and sustained the company’s profitability through a large part of fiscal 2009 when the economy became tight.
John Deere 9630T trak drive tractor
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Deere facilities in Ottumwa, Dubuque and the Quad Cities laid off workers, and a plant in Canada closed. However, on the cusp of a recession, Deere did not retrench in Waterloo. It retooled and reloaded with new product lines. The Waterloo operations and the Cedar Valley caught the wave of popularity of a new tractor product line — Deere’s “8R” series large row-crop tractors, replacing what was known as the 8000 series. “We continue with a full pipeline of new products,” Rodger said. “This (8R Series) tractor line has been exceptionally well received by customers. Additional model lines will be introduced in the near future as we improve our tractors to provide value to our customers and to meet mandated emission requirements.” Also, despite economic conditions, Deere and the UAW managed to hammer out a new six-year collective bargaining agreement in about a month of negotiations. “Always good to refresh and renew our relationship with the UAW,” Rodger said. “The agreement reached in 2009 is a fair and equitable one for both parties particularly given the national and global economic climate.” UAW Local 838 president Scott Grapp agreed. “This definitely was an agreement geared toward the times, and our (negotiating) group did a good job of seeing the importance of that,” Grapp said. “I don’t think we
Russell Speirs works on the construction of a John Deere 9000 series tractor.
pleased everyone, but that is where we’re at. When people take into stock everything else that’s happening in America, they would feel lucky at what they’ve got, appreciate what we do have, appreciate that we’re still working. “Most of us are optimistic about where we’re headed,” Grapp said. “There’s a certain amount of wondering in the back of everybody’s mind, are we going to roller coaster or will it be status quo? All signs point to staying the course.” Business is rebounding at Deere plants geared to the company’s construction and forestry business,
such as Dubuque and Ottumwa. “Around the (Deere-UAW) chain it looks real optimistic,” Grapp said. “Keeping people working, that’s what we’re here for. We were all optimistic coming out of bargaining that this was the road we were
headed down, to remain competitive on a global basis.” Rodger said, “We all remain focused on what the do best — meeting customer needs with the world’s finest tractors built right here in Waterloo, Iowa.” u
Dennis Stiffler works on the assembly line for a John Deere 8000 series tractor at the John Deere production plant.
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Cedar Valley boasts big-city attractions By META HEMENWAY-FORBES meta.hemenway-forbes@ wcfcourier.com This summer, before your family spends a fortune on airfare and hotels so you can see world-class shows, splash at the grandest of water parks and visit one-of-akind museums, take a minute to look around. You can do all of those things and more right here in the Cedar Valley. “I’ve always said that we have everything a big city has to offer, just in a smaller, easier-to-navigate package,” said Aaron Buzza, executive director of the Waterloo Convention and Visitors Bureau. “We have performing and visual arts, history, athletic events and outdoor activities. We have the largest water park in the state. We have something that can fit every taste, and that really puts us on the map.” On the map, indeed. In May, Cedar Falls received the state’s first official Bicycle Friendly Community designation from the American League of Bicyclists. In July, ABC’s “Good Morning America” showcased the resilience of the Cedar Valley from the floods of 2008. In October, Cedar Falls received the Iowa Tourism Office’s Community of the Year Award for the second time (the first was in 2005) for its outstanding economic impact, effective marketing and a well-rounded mix of local events and attractions. Not stopping there, the Phelps Youth Pavilion in Waterloo received the Iowa Tourism Office’s Tourism and Arts Award. “These awards are for the whole Cedar Valley because when either Waterloo or Cedar Falls is recognized, it works well for everybody,” said Kim Burger, director of the Cedar Falls Tourism and Visitors Bureau. “You can’t buy that kind of advertising. It helps step up the awareness of the area as a quality desti-
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COURIER FILE PHOTOS Brianna Sturtz, left, Danielle Chelf and Megan Chelf race down the Ta’ Kotipo slide at Lost Island Adventurepark.
nation.” And while the plug is good for outsiders looking in, it’s also a reminder to local residents of the gems in their own backyards. “Look at all of the things we have here,” said Billie Bailey, executive director of the Grout Museum District. “Maybe you can’t go to Chicago and watch a play or see an exhibit at the Field Museum. But you can see a play at the Waterloo Center for the Arts and go over to the Grout Museum. And it’s all within walking distance.” The uptick in entertainment options has increased foot traffic in downtown Waterloo. New establishments like Roux Orleans, Bourre Lounge and Screaming Eagle have joined Cu Restaurant, Jameson’s Public House, the Cellar and Paco’s as favorite gathering spots among locals. “The opportunities are almost endless as we open up riverfront area,” Buzza said. “The event opportunities and gathering opportunities are absolutely fantastic. With the building restorations and new businesses,
A cyclist bikes on the area trail system.
there is an energy you can feel in downtown Waterloo. You can feel the progress.” The Lost Island Adventurepark, Grout Museum, Sullivan Brothers Iowa Veterans Museum, Phelps Youth Pavilion, Gallagher-Bluedorn Performing Arts Center, Hearst Center for the Arts and the Isle Casino Hotel Waterloo all make the short list of places to go and things to do. And let’s not forget the 100-plus miles of nature trails that wind
through the Cedar Valley. It was a much different scene in the 1980s, Bailey recalls. The farm crisis, massive layoffs at John Deere and the closing of Rath Packing Co. saw the arts and entertainment options take a dive. Bailey is proud at how far the Cedar Valley has come. “What does that say about our community? It says we are resilient. It speaks volumes about the kind of people who live here,” she said. u
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Downtown evolution continues with streetscape COURIER FILE PHOTO Mariel Mugge, left, takes a minute from displaying her handmade Hula-Hoops outside Cottonwood Canyon in downtown Waterloo to instruct Renae Savage, center, and Marley Rieff, both of Denver, during the â€œTakinâ€™ It To The Streetsâ€? event.
By JOHN MOLSEED firstname.lastname@example.org WATERLOO â€” Fourth Street in downtown Waterloo still follows its familiar route but has come a long way in the last year. The streetscape project, delayed by the 2008 flooding, was officially completed last year. Besides a complete repaving and utility work, the project included replacing stamped concrete with real bricks, planting beds near the intersections, new benches and matching bike racks and repainting the light fixtures along the street. The project has made the street more inviting to more than just drivers, said Sindee Kleckner, the former executive director of Main Street Waterloo. â€œItâ€™s a public right of way that can be used for more than just driving,â€? said Kleckner, who left her position in June to pursue an opportunity in Wisconsin, where she lived for more than a decade. Outdoor seating at downtown venues has flourished since the project was completed. Diners can eat in the fresh air at the Screaming Eagle and Cottonwood Canyon. They joined Cu restaurant, Jamesonâ€™s, and La Chiquita, which already had seating on the sidewalks when the project got under way. â€œThe road looks good, the sidewalk looks good, the street is well-lit and people feel safe here,â€? said Tony Eischeid, manager of Cottonwood Canyon Coffee. â€œItâ€™s nice to see people walking around here.â€? The streetscape project wrapped up in June. A September event, â€œTakinâ€™ it to the Streetâ€? marked the occasion. The celebration came nearly a year after the estimated completion date when the project started in 2008. Flooding in 2008 delayed work and pushed the completion date back several months, upping the price of the estimated $1.26 million streetscape. â€œItâ€™s really important, with the flood, to think about the recovery that has happened in downtown,â€?
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Kleckner said. The city is still working with contractors for a final tally on the cost of the project, staff at the city engineerâ€™s office said. The street isnâ€™t the only visible change in downtown Waterloo. The main floor of the Blackâ€™s Building reopened to the public as Roux Orleans. A $2 million renovation project, the former department store was restored and transformed into a res-
taurant and lounge. The eighth-floor ballrooms were also renovated as part of the project. The Union Block building, at 114 E. Fourth St., owned by Jim Walsh, was renovated inside and out in a $3 million effort. The upper floors serve as home to the Healthcare Quality Association on Accreditation. Several other business opened or relocated in downtown Waterloo
including Iowa Hospice which, along with 25 full-time jobs, moved to 624 Commercial St. The changing landscape of downtown is exactly what Kleckner hoped to see when she took the position as executive director of Main Street Waterloo at the beginning of 2009. â€œThatâ€™s the thing about a downtown,â€? she said. â€œItâ€™s always changing, always evolving.â€? u
â€˘ Businesses new to the neighborhood in 2009: â€˘ Iowa Hospice, 624 Commercial St. â€˘ Jaylin corporation, 501 Sycamore St., Suite 736 â€˘ Beau Monde Beauty Salon, 224 E. Fourth St. â€˘ Brejes Handbags and Accessories, 607 Sycamore St., Suite 100 â€˘ Nuestra Raza, 630 Sycamore St. â€˘ New Living Church, 524 Mulberry St. â€˘ Heal the Family, 212 E. Fourth St., Suite 125 â€˘ Dyton Media, 212 E. Fourth St., Suite 107 â€˘ Two for Tots, 622 Sycamore St. â€˘ Roux Orleans, Bourre, Sky Event Centre, 501 Sycamore St. â€˘ Kramer and Kehe Accounting, 212 E. Fourth St., Suite 108 â€˘ Wild Sides, 312 W. Fourth St. â€˘ La Moderna, 632 Sycamore St. â€˘ Cohesive Creative and Code, 516 Lafayette St. â€˘ Protech, 221 E. Fifth St. â€˘ Butt Ugly Saloon, 728 Commercial St. Source: Main Street Waterloo
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Region seen as magnet for young leaders By JIM OFFNER email@example.com WATERLOO — Through the prism of youth, the Cedar Valley’s future looks pretty bright, because the region is in many ways building on its past. That is the collective assessment of eight Cedar Valley Business Monthly 2009 20 under 40 recipients who gathered at the newspaper’s offices to discuss the Cedar Valley’s business climate at the dawn of a new year. Downtown redevelopment is a key to the success of the region, the group said. “Specifically with the stuff I’m doing right now with my profession, both Waterloo and Cedar Falls, in particular, I’m doing a lot to revive the history of the towns,” said Chris Reade, vice president of property development with Barmuda Cos. Reade was directly involved in the recent renovation of the Black’s Building in downtown Waterloo. “The history of the building is what I love most about it,” he said. “Bringing back that history is a neat thing. It brings you back to your grass roots. That’s what everybody is having to do right now, having to go back to the basics.” But the Black’s project is merely emblematic of the renaissance of a once-moribund downtown district, Reade said. “I like what the people and governing bodies are doing to improve these downtown areas and making them a draw and improving some of the heritage of what’s here,” he said. Downtown revitalization is a healthy move as well, said Brittany Argotsinger, community program coordinator of the Black Hawk
County Health Department. “One thing that’s really, really important to vital communities is walkable communities, making sure you have vital services within walking distances so that people are getting out and not relying on modes of transportation that are bad for the environment, but also encouraging physical activities and the connectedness you feel in a community that you feel when you can just walk to shop and work,” Argotsinger said. “So some of that downtown revitalization really promotes walking and getting out there and really finding out what our community has to offer in terms of small businesses and shops and improving our community’s health.” It’s been a proactive process, Reade said. “That’s what I like about this community,” he said. “We saw it with the floods and the tornados. People kind of draw together.” Young people are drawn to communities with dynamic downtown areas, and the Cedar Valley is providing just that, said Maggie Burger, financial analyst with Speer Financial Inc. “I think those are huge,” she said. “I know just personally coming back, that was a huge drive. I even looked into living in the downtown area because that was
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a big draw. There are a lot of services offered there. When you talk about young people wanting to branch out and go to a metropolitan area like Chicago or Minneapolis, they’re living in the downtown area. So they’re looking for those types of services here and to keep them here, and our communities have done wonderful jobs to revitalize the downtown areas.” The group in the discussion shared an optimistic outlook on the region’s near- and long-term outlooks, its present amenities and the heritage on which it can build; the group also said young people need to step up and contribute to that progress. “I think we really need to see the younger generation step up a lot more to be able to take the reins, especially if the older generation is going to be willing to step out of the work force,” said Crystal Buzza, assistant vice president/marketing project coordinator with Lincoln Savings Bank. “I see a lot of people that are older that are waiting to retire, and I think part of that is they’re concerned.” The Cedar Valley is a compelling draw for young blood, the group said. “Being a lifelong resident of the area, I had opportunities to leave and chose to stay,” said Allison
Parrish, communication director with the Community Foundation of Northeast Iowa. “I travel all over the place and love to travel to different places, and the Cedar Valley continues to feel like home. It has everything we need. It’s got good schools and has culture, but it has all these things on a much smaller scale. It’s a really neat location and there’s things going on here, and it feels like home. As you travel you have a sense for that.” Amber Jedlicka, director of Landmark Commons of Friendship Village, noted that the bigcity-small-town combination is an essential draw for young families. “It has a small-town feel, but it has everything you’d want in a larger community,” Jedlicka said. “It has traditional values. You feel like your neighbors care about you. You feel like the community cares about the people that are here and the success of young people.” Brooke Burnham, director of convention development with the Waterloo Convention & Visitors Bureau, said she also returned after having been gone for years. “To be here, where people are catching that entrepreneurial bug and thinking about innovating things and environmental and community innovations, it’s exciting to be around that,” Burnham said. “The Cedar Valley is one of the most diverse communities in Iowa, and that’s an asset. We have a lot to teach our young people, to learn ourselves and to experience, racially and economically, but with the university in town, the two communities can build on each other’s strengths. It’s right at our fingertips in a relatively small community.” Ben Squires, a Waterloo dentist and native of Waverly, said he liked the character of the region. “It seems the standard of work ethic is a little higher here,” he said. u
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Downtown C.F. keeps moving forward By JON ERICSON firstname.lastname@example.org CEDAR FALLS — Brent Johnson bought out his employer, Bike Tech, in downtown Cedar Falls three years ago. This past year, he bought the building in the 100 block of Main Street that the business has occupied for 13 years. He saw it as a natural progression, a way to control the future of his business. “We’re in this for the long haul,” Johnson said. It’s that kind of investment downtown that continues the renaissance of the Parkade. Despite the economic downturn, Community Main Street reports activity downtown resulted in a net gain of 47 jobs in the past 15 months. “Existing businesses are constantly investing in their buildings,” said CMS Director MaraBeth Soneson. In 2009, downtown continued building on the growth it has experienced in the past 20 years. While the developer of the big State Street mixed development backed away from the project, existing businesses downtown had a good year and some new shops popped up to continue the variety of offerings. The role of downtown as the community gathering place was reinforced in November, when thousands turned out for the Holiday Hoopla event to kick off the Christmas season. The district prides itself on operating around the clock, from the pre-sunrise opening of Cup of Joe to bar close in the wee hours. It attracts all ages with a variety of shopping and entertainment options. Part of the charm of the downtown business district is the fact that it’s not easy to define. The entertainment and dining options get a lot of attention, as do all the specialty retail shops. Together, those categories make up half of downtown, but the oth-
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COURIER FILE PHOTO A crowd fills downtown Main Street in Cedar Falls during the Holiday Hoopla celebration Nov. 27.
er half is the domain of businesses, bolstered by financial and technology companies, and residential. All of that mix fits in with the historic heritage of the district, with restoration projects constantly under way. “There’s an ethic that those buildings are more valuable preserved than they are modernized,” Soneson said. The success of the past few years piggybacks on the transformation of downtown many years before. “We’ve had a good 20-year run,” said Jan Andersen, CMS events and promotions director. Andersen points to major restoration projects over the years, including the Oster Regent Theatre, Black Hawk Hotel and the Oddfellows building, as giving others inspiration to invest in downtown as well. “We’re pretty happy not to see too many empty storefronts right now with the way it’s going around the country,” Andersen said. While downtown has typically focused on aesthetics, business retention and attracting new businesses, it has worked more at promoting tourism in recent years. At the heart of that is downtown’s connection to premier bike trails. From downtown, bicyclists can spread out in all directions on trails, and the more recent city initiative to promote on-street bicycling started
with a route that goes downtown. “The bike trails are huge. It’s more subtle, you don’t see it, but the trails have had a huge impact,” Andersen said. The downtown streetscape project in 2004 put a more finished and
refined touch on the district. Now that type of makeover is onto its final phase in the College Hill business district. The city also is planning a streetscape project on Center Street in North Cedar. u
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Phantom EFX, Barmuda , T8 are happy together By TINA HINZ email@example.com CEDAR FALLS — Phantom Park has created a new business culture. In August, Phantom EFX, Barmuda Corp. and T8 Webware moved into a new 54,000-squarefoot building at 900 Technology Parkway. The companies vacated their old headquarters at 209 S. Roosevelt St. after it flooded in 2008. They had been split up temporarily, with Phantom EFX and T8 setting up operations in property owned by Mudd Advertising in the Technology Park and Barmuda operating in the River Plaza Building in downtown Waterloo. According to Darin Beck, owner and CEO of Barmuda and owner/ partner in Phantom EFX and T8, Phantom Park was created to “allow the companies to grow and be COURIER FILE PHOTO a showcase facility for national and Business partners Darin Beck, left, Arron Schurman, Martin VanZee and Danny Stokes were given the title of Gaming Software Company of the Year in Cedar Falls on March 6. global clients.” And the building has become ex- bingo, dog racing or horse racing say a producer and writers have “What’s going to be cool is all actly that. — Phantom EFX has more recently been selected for a full feature, your play, going into the future, is worldwide release movie. “We’re just having a riot out here,” ventured out of its comfort zone. going to be linked together,” Schur“It’s going to the studios here fair- man said. “So if you like Reel Deal No longer can you simply make said Wade Arnold, CEO of T8. “It’s a really fun and energetic place to a game and put it on a store shelf, ly quickly,” Schurman said. “They’re Live! on the PlayStation, but you Schurman said. Many younger even looking at doing it at a pretty also want to play on your computer work.” Beck and Phantom CEO Aaron players aren’t buying games from big budget. They’re huge people sometimes, or if you’re waiting for Schurman make for a great execu- retail stores, but instead are tak- out there. Everybody has heard of an airplane and you’re playing on your iPhone, it’s not like you have tive team, Arnold added. Having ing advantage of downloadable these guys’ movies.” Phantom EFX has numerous to start over. Everything kind of three companies under one roof Web sites. The company also is takenables them to capitalize on their ing steps to synchronize games for other recent releases and more dumps together. projects in the works. other mediums. “We’re really trying to step it up synergy. Reel Deal Live!, a massively mul- with whether you play Facebook, Among the past year’s largest ac“T8 does some work for Phantom; Phantom does some work for complishments, Phantom EFX and tiplayer online (MMO) game, went mobile, PC, console — it all fits T8 next door,” Schurman said. “It’s its Cedar Valley sister company, live during the past year. Millions together,” he added. “There’s really just nice. They have different ex- 8monkey Labs, launched the hit of dollars was invested in the “vir- nobody out there doing stuff this first-person shooter game, “Dark- tual Las Vegas,” and tens of thou- advanced.” pertise than we have.” Having a new facility has been All three companies seem unstop- est of Days,” in September for both sands of people check it out each PC and Microsoft Xbox 360 sys- month, Schurman said. a dream come true and fits where pable as they continue to grow. Teams currently are working on a they’re going in the future, said tems. The game took three years to Las Vegas-themed Facebook appli- Schurman, who started the combuild. Phantom EFX The premise of the historically cation, which will be on the level of pany in 1998 with his high school The company’s slot and casino games for Windows-based PC sys- based game involves time travel FarmVille or Cafe World. They also friend Danny Stokes. All music composition, performtems rose to No. 1 in North Amer- and someone who’s been messing anticipate their first Xbox Live and with events of the past. Gamers PlayStation Network casino appli- ing, programming, art, voice actica about five years ago. Today, as technology advances, have to set the record straight by cation, with the content download- ing and manufacturing for games is done in-house, so having everythe company has risen to other saving key individuals, thus pre- able through game consoles. serving the future. challenges. During the past year, the compa- one in the same spot makes things Hollywood quickly came calling ny went mobile, releasing applica- easier. While fans can find games for “We had a pretty swank place benearly every type of simulation wa- for rights to the story. Schurman tions for iPhone, Google Android fore, but we couldn’t have done what gering — slots, poker, sports book, can’t disclose details other than to and BlackBerry.
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2010 PROGRESS EDITION
Cedar Valley pulls together to be named a ‘Great Place’ By AMIE STEFFEN firstname.lastname@example.org WATERLOO — In 2005, when the Greater Cedar Valley Alliance first applied to be designated one of Iowa’s Great Places, the myriad organizations helping to decide on which projects to feature weren’t completely in agreement. After all, as Greater Cedar Valley Chamber president and CEO Bob Justis will tell you, there’s a lot to be proud of about the Cedar Valley. But since there’s a better prospect of projects in the Great Places application funded by the state, many of the organizations involved naturally wanted to include their own projects. In summer 2008, favoritism was no longer a problem. “Everything changed after the flood,” Justis said. “Then, it became very easy to hone in on those things that were damaged (and) destroyed by that flood.” Francis Boggus, state coordinator for the Great Places Initiative, said the program, part of the Iowa Department of Cultural Affairs, focuses on communities that ral-
we’re doing in our older facility and we couldn’t have done it being spread out after the flood,” he said. “There’s no way that we’d be able to tackle stringing all these things together, which is obviously very heavy server-based and wireless and all that.”
Arnold, T8’s CEO, wants to grow into the company’s new space. T8 builds Web presences for about 200 community banks and credit unions to help the smaller banks compete with national ones. The company helps banks with their online bank eq-
2010 PROGRESS EDITION
“No question, there’s some sizzle to the steak when you can claim to be a Great Place.”
ly around their diverse organizations. “We are the community development program that encourages — almost mandates — all segments of the community to come up with a vision for the community,” Boggus said. “Communities that are coming together are more progressive. They want to make their place better.” Five projects were selected for the 2009 application, all either affected by record flooding in 2008 or highlighting the Cedar River. They included the Island Park Beach House, Ice House Museum and Washington Park in Cedar Falls; and the Cedar River Boat House and River Renaissance Trail in Waterloo. The full application, available online, frames the narrative as a conversation with a French fur trader named Gervais, the first
white settler in the Cedar Valley, according to historical documents. That was the brainchild of Kevin Blanshan, director of transportation and data services with the Iowa Northland Regional Council of Governments. Blanshan wrote much of the narrative as a trip down the present-day Cedar River with Gervais, who remembered the river of the past. “Since we were focusing on the river, why not have a dialogue and float down the river with this guy?” Blanshan said. “It was totally different than what I had done in the past, (and) I had a lot of help.” Last fall, the Alliance presented its proposal to the Great Places Citizens Advisory Board. Though the board includes Waterloo City Councilman Quentin Hart, he excused himself from voting in
order to avoid a conflict of interest. “(Hart) was obviously one of those people (who) encouraged the Cedar Valley to apply,” Justis said. In October the results came in: After four years of applying, the metro area can now officially be called a Great Place. On the surface, there doesn’t seem to be much to the designation: Signs can be placed by the road, logos can be used in marketing and the projects featured in the Great Places application become slightly more eligible for state funding. But those who worked for it say it’s a huge honor. “I was certainly pleased, not just for me but for our area,” Blanshan said. “I believe we are a Great Place and we should be designated as such. I’m happy for everyone in this area. I think it’s well deserved.” “No question, there’s some sizzle to the steak when you can claim to be a Great Place,” said Justis. “Those are the kinds of things that attract businesses and tourists to a community.” u
uity, ability to cross-sell products and services to existing customers and ability to transfer people from other institutions. The company’s sales strategy formerly involved driving to regional banks and visiting with employees there, though staff has since migrated to doing all of its sales over the phone or Internet. This year Arnold would like to broaden its sales coverage to all 50 states instead of cherry picking about half of them. “Selling something that’s $40,000 to $60,000 over the phone is kind of wild,” Arnold said. “It’s not like they aren’t buying things in those other states.
We just don’t have people calling there yet.” Despite a tight economy and reserved decisions, nine salespeople were hired in 2009. Nearly three-fourths of T8’s business comes from financial services, and last year wasn’t a good year to sell to banks. But business seems to be turning around. “The last three months were almost half the sales for the entire year, to put it into perspective how slow the first half of the year was,” Arnold said. “Every bank in the nation wasn’t going to spend 10 cents on coffee, let alone lots of money with us.
“We managed our way through it,” he added. “(Banks) were the first group into the recession, but they’re the first group coming out of the recession, so we’re poised to do a lot of growth as the rest of the economy is struggling.” By mid-January, T8 was above quota for the month. If the spike in business continues, T8 will be looking to fill three or four new positions for its sales team this year, including graphic designers and Web programmers. About 30 employees are currently with T8. “We’ve got 11 open seats, so plenty of room to grow,” Arnold said. u
Greater Cedar Valley Chamber president and CEO
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Barmuda looks to future after busy 2009 By MARY STEGMEIR email@example.com CEDAR FALLS — It’s the start of a new era for Darin Beck’s Barmuda Cos. In 2009, the organization relocated its headquarters to the newly constructed Phantom Park, and opened the Sky Event Centre, Roux Orleans Bourbon Street Grille and the Bourre Lounge in downtown Waterloo’s historic Black’s building. “This really sets the stage for a whole new decade for us,” Beck said. “We opened Beck’s on University on April 1 of 2000 — prior to that we were just the Barmuda Triangle and Bars. “When you think in those terms, the company we were 10 years ago is completely different than the company we are today, and with this new infrastructure that we have, I’m sure the next 10 years will be even more interesting than the last 10.” Today Barmuda operates 17 restaurants, nightclubs, lounges and event venues. Beck also is a onequarter owner of the video game company Phantom EFX, a business that has one-third ownership of Technical Technologies, also called T8 Webware. All are based in Waterloo-Cedar Falls. “I think that the fact that he has so many different locations around the Cedar Valley is Darin’s way of saying he believes in the entire Cedar Valley,” said Bob Justis, president of the local chamber of commerce. “He’s demonstrated time and time again that he believes in the whole community.” And just as Barmuda has grown, so has the Cedar Valley. When Beck arrived in Cedar Falls in 1986, the area was is the middle of the decade’s farm crisis. As employers issued layoffs and land prices cratered, entrepreneurs helped rebuild the region’s economy. Today, the community is the picture of economic growth, Beck said. The Cedar Falls and Waterloo downtown areas are attracting new
MATTHEW PUTNEY / Courier Photo Editor Darin Beck, Barmuda founder, inside the new Roux Orleans Bourbon Street Grille.
businesses, and bike trails and arts opportunities have improved the region’s quality of life. Many of Beck’s businesses were instrumental in the conversion, said Sindee Kleckner, executive director of Main Street Waterloo. The Black’s building renovation illustrates how historic buildings can continue to serve the community in the 21st century. “People like Darin Beck, who put their money where their mouth is, make visions come true,” Kleckner said. “That’s an asset that doesn’t compare to anything else — buildings, TIF (tax increment financing) districts … none of that matters without people who are willing to invest in their community.” This spring, another Beck’s restaurant and bar will open in Cedar Falls. The company hopes to be selling franchises outside the area by the summer. But Beck says he remains committed to serving the Cedar Valley. “Twenty years ago we were the armpit of the state, and today we’re kind of the model community of rebuilding,” he said. u
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2010 PROGRESS EDITION
Construction industry outlook improves By MATTHEW WILDE firstname.lastname@example.org
WATERLOO — 2009 wasn’t a banner construction year in the Cedar Valley, though builders believe hammers will be pounding at a more furious pace in the coming months. Waterloo failed to break the $100 million mark for building projects in fiscal year 2009 for the first time in seven years. Only $74 million worth of permits were issued, according to building official Louis Cutwright. Cedar Falls also reported a decline, writing permits for $86.9 million in construction value for the year ending June 30. Approximately $111.5 million in permits were issued a year ago. Judging by the recent flurry of permit activity and steady calls and office visits to contractors, 2010 is shaping up to be a better year. “I think it’s going to be,” Cutwright said. “Things were down, but we recently issued permits for two large apartment complexes (96 units each). Builders are saying the economy is showing signs of coming out of it (recession). “I talked to my permit specialist (in early January) and he said there were three permits for houses,” he continued. “I said, ‘You have to be kidding.’ January is generally very slow.” The right price Construction of homes in the $200,000 to $300,000 range appears to have much of the early building momentum in 2010, said Ron McCartan, president of the Home Builders Association of Northeast Iowa.
TIFFANY RUSHING / Courier Staff Photographer Brian Freed, left, and Corey Scott of Freed Construction put the finishing touches on a roof of a house on William Drive in Waterloo on Jan. 15.
“As far as the larger homes, the ones over $400,000, banks are not as free with money as they used to be, so we’re seeing a slowdown in that area,” he said. There also appears to be some construction activity on houses in the $180,000 range, McCartan said. “There’s a lot of those going in in bo th Cedar Falls and Waterloo,” he said. Don’t expect to see spec homes — houses built before they have buyers — in the near future, McCartan added. “The banks are not big on spec homes right now; they want to see them pre-sold,” he said. Not a bad year All in all, it has been an acceptable year in the Cedar Valley housing construction business, McCar-
2010 PROGRESS EDITION
tan said. “I feel fortunate to be in the Cedar Valley to make it through last year,” he said. “I know other areas of Iowa — Des Moines and Cedar Rapids — were much worse than the Cedar Valley. Was it as good as it has been? Probably not. Was it better than other areas? Absolutely.” There isn’t a lot of building activity now, but there are signs of work to come, McCartan said. “There’s a lot of people kicking the tires,” he said. “Hopefully, this spring, they’ll dig a lot of holes. But right now, there’s not a lot of holes out there.” Work has been “steady” so far this year, said Craig Fairbanks, past president of the home builders association and owner of Craig
Fairbanks Homes LLC in Cedar Falls. “I think we at least see it staying steady,” Fairbanks said. “There does seem to be some interest out there.” He said the timing is right for new projects because of current government incentive programs for firsttime buyers, current homeowners looking to “move up” and energy assistance packages that are available. “Quite frankly, it’s just a great time for potential building customers to move forward,” he said. Figures released Jan. 6 show Iowa’s economy improved in November compared to the same month a year ago. The Iowa leading indicators index jumped .4 percent, marking the second month of increases after 18 months of declines.
Six of eight indicators were up, including permits for residential housing units at 9.9 percent compared to November 2008. Besides the economy, building officials say historically low interest rates and tax credits and grants to encourage first-time home buyers and homeowners to upgrade have contributed to the resurgence. First-time home buyers can qualify for an $8,000 tax credit, while people who have owned a home for at least five years can get a $6,500 credit to upgrade. Waterloo is disbursing $1.6 million in state grants to build new houses of about 1,300 to 1,400 square feet — covering the down payment, or up to 30 percent — for first-time buyers and homeowners
“The Path of Progress” • 15
displaced by the 2008 weather disasters. “I have no doubt it’s helping. Young people are buying and taking advantage of it (credits),” said Craig Witry, Cedar Falls building official. At the midpoint of fiscal year 2009, Witry approved 78 permits for single family homes. At the end of December — the midpoint of fiscal year 2010 — 101 permits had been issued. Construction permits were valued at nearly $53 million for the first six months of FY 2010, Witry said, or $400,000 less during the same time last year. That means commercial building is still down, he said. Cutwright is confident Waterloo will end up writing about $80 million in permits by June 30, or about $6 million more than FY 2009. Cutwright said downtown Waterloo will be teeming with contractors this spring finishing up Riverfront Renaissance projects and building new businesses.
“Our economy is good, unemployment is good and interest rates are good. All we’re missing is a good selection of homes. I think it will get better. ‘‘ Bob Reisinger
“Waterloo is poised to have a good downtown entertainment center,” he said. Brooke Klunder, president of Klunder Homes Inc. in Cedar Falls, feels confident enough in the local housing market to spend hundreds of thousands of dollars to build town homes on speculation. The project, which started last year on Greenhill Road, has 108 units. He builds a few at a time, sells them and constructs some more. The local economy, thanks
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to John Deere and other businesses, remained stronger than other parts of the country during the recession, Klunder said. With interest rates still low — in the 5 to 5.5 percent range — he thinks people will want to spend this spring. “People don’t want to miss out,” Klunder said. “I’ll build them on spec. It seems to be pretty successful.” Fairbanks, the home builder and real estate broker, believes 2010 will be a good year. He said more people are stopping by the office and checking out his Web site — www.buildbuyorsellhomes.com — lately. Fairbanks said he’s met with four or five couples in the past 40 days to discuss building plans. He expects to build four or five homes this year compared to three in 2009. Many of his clients these days are nearing retirement age. Fairbanks constructs homes geared toward this demographic, with features like no-step entries and wide
doorways. “The economy doesn’t affect them (50-plus age group) as much. And they have good homes to sell,” Fairbanks said. “My real estate business has been tremendous.” The inventory of existing homes for sale is low, according to Bob Reisinger, president of the Waterloo-Cedar Falls Board of Realtors. Normally there are 1,400 to 1,500 homes on the local market compared to about 900 currently. Reisinger said some homeowners reluctant to sell want more confirmation the economy is recovering. He hopes housing tax incentives will encourage more to sell this spring. “Our economy is good, unemployment is good and interest rates are good. All we’re missing is a good selection of homes,” he said. “I think it will get better. u Jim Offner, Courier business editor, contributed to this article.
2010 PROGRESS EDITION
TechWorks brings virtual reality to schools By ANDREW WIND email@example.com WATERLOO — Advanced technology being used everywhere from medical fields to manufacturing industries may someday be a reality in Cedar Valley classrooms. Cedar Valley TechWorks is partnering with the Waterloo and Cedar Falls school districts to create virtual reality laboratories on its developing campus and in three high schools. Virtual reality creates computer-simulated three-dimensional environments used for a variety of purposes. The John Deere Product Engineering Center donated a fullroom virtual reality system to TechWorks that was originally valued at more than $4.5 million. TechWorks is seeking grant funding to install the system at its downtown campus and purchase introductory virtual reality equipment for use in computer labs at Cedar Falls, East and West high schools. TechWorks is being developed as a regional innovation center that will provide space for start-up businesses researching and creating bio-based products. But organizers saw an opportunity to involve students in their efforts with the virtual reality donation. “We began this project because we realized the importance of virtual reality understanding for our high school and middle school students, and how it can help them with problem solving in a different way,” said Cary Darrah, TechWorks’ general manager. “It just opens all kinds of doors, it’s exciting. Both superintendents were responsive.” She described the equipment to be purchased for the three schools as “table top” models that use software downloaded for free from the Internet. “It will be a pretty scaledback version, but it will contain enough information to get people hooked on the possibilities.”
2010 PROGRESS EDITION
Students would work on schoolbased equipment and then have opportunities to use the virtual reality lab at TechWorks. Along with the lab’s educational focus, Darrah said it could be used by the startup businesses that move into TechWorks to expand or enhance their products. Eventually, the equipment could become available to other schools as well as students at Hawkeye Community College and the University of Northern Iowa. School district and TechWorks officials looked at the example of East Marshall High School, one of eight school systems across the state that have virtual reality technology. “They’ve had a VR system in place for several years,” said Darrah, located in a room that holds no more than 12 to 15 students. The school’s system came through a donation from the Mayo Clinic with the help of Rockwell Collins engineer Jack Harris. Darrah said East Marshall’s system is being used in a variety of classroom settings, often to help students “visualize things that are hard to comprehend.” For example, classes have used the equipment to show students a three-dimensional model of a heart that they can walk through and trace blood circulation patterns. Cedar Falls Superintendent David Stoakes said “whenever you can look at something in three dimensions, whether it’s a cell or other organ of the body,” it’s better than when you see it “on a flat piece of paper.” Stoakes has worked with Darrah on developing the partnership between TechWorks and the school districts. He sees a lot of benefit for the schools in the virtual reality laboratory. “I think the benefits are twofold,” said Stoakes. “First, that we expose our students to technologies that they’re currently not exposed to. We’re always looking for ways to bring advanced technologies to our students. He said other Iowa schools that
have used virtual reality technology are finding that students learn more quickly and have longer retention when it is incorporated into the course content. In East Marshall, Darrah said the virtual reality lab has boosted students’ interest in engineering and technology careers. The lab is used with a project-based curriculum that encourages students to problem solve more effectively in workplaces that rely heavily on technology. TechWorks needs $500,000 to set up its lab and purchase equipment for the schools, part of its $10.42 million first phase of development. Installing and upgrading the virtual reality lab at TechWorks will cost $215,000 plus another $220,000 to prepare space for the equipment. The high school equipment would cost $15,000. Start-up operations for the first year would cost $50,000.
“I guess for us the challenges are to identify the funding,” said Darrah. “These aren’t huge expenses or huge acquisitions.” “We’re looking at a couple of funding options now,” said Stoakes. Among those are the U.S. Department of Education’s Investing in Innovation Fund and the National Science Foundation. “Getting the VR system in the schools is very minimal compared to the entire project,” said Darrah. Supporters may develop publicprivate partnerships to purchase the school equipment before any grant funding comes through. While TechWorks won’t rely on the schools for operational funds at the beginning stage, she said sustaining the program may require districts to take part in those costs. “It will be a creative funding stream that is identified to get this done,” said Darrah. u
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Internet service on the fast track By JOHN MOLSEED firstname.lastname@example.org
WATERLOO — If telecommunications technology is to the 21st century what the railroads were to the 1800s, Waterloo is getting a bullet train. The city will be home to the fastest residential Internet service in the nation through a program launched by Mediacom. The company still is testing its Ultra 105 package that offers download speeds of up to 105 megabytes per second. For customers that can mean quicker Internet, streaming video and online games. For economic development officials, the service is another recruiting tool for the Cedar Valley. “Everything is about access, speed and cost,” said Steve Dust, Greater Cedar Valley Alliance president. “Broadband access is the qualification for technologyrelated businesses.” “People have come to expect it,” said Betty Zeman, spokeswoman for Cedar Falls Utilities. CFU offers business packages of 100 mbps download and upload speeds. Residential packages range from 10 mbps with one mbps upload speed, to 50 mbps download and 10 mbps upload. CFU installs to-the-home fiber-optic cable in new developments. Mediacom is expanding its fiber network as well. The perception that rural areas are cut off from broadband isn’t the case in Iowa, said Phyllis Peters, spokeswoman for Mediacom. “We keep telling people how fiber-rich we are,” she said. The Ultra 105 package is the company’s way of showing what they’ve built. The 100-mbps service in Waterloo is, for now, the fastest of its kind offered to residential broadband users in the nation. Some testers signed up for the service beginning in December. Dust and his family are one of the households testing
MATTHEW PUTNEY / Courier Photo Editor Mediacom employee Jeremy Hovey hooks up cables for return connections from homes to Mediacom. The company is offering the highest-speed residential Internet service in the nation to some Waterloo customers.
the high-speed product. Dust said he and his family have put it through its paces by having up to five computers at a time on their home network and by downloading movies and uploading photos. After the testing phase, the product will be offered to most Waterloo residents later this quarter, said Phyllis Peters, spokeswoman for Mediacom. Waterloo was chosen to host the high-speed product after city leaders agreed to the proposal and Mediacom moved some cable channels onto digital cable to make room for the technology, Peters said. Customers have reported sustained high speeds including one that reported downloading 20 gigabytes of information in less than two and a half hours, Peters said. “Maybe there aren’t many applications to take advantage of that right now, but things change so fast,” Peters said. Things will need to change in some areas to allow people to use the capacity of the bandwidth
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available to them. Older home routers may slow the service. Peters said Mediacom is working with a vendor to get routers that handle capacities that normally are reserved for business internet service.
The Ultra 105 service isn’t available in Cedar Falls and only in certain areas of Waterloo. “We still have to see how far and wide we’re going to deploy that,” Peters said. u
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2010 PROGRESS EDITION
PFGBest CEO sprints through 2009 By JENS MANUEL KROGSTAD email@example.com CEDAR FALLS â€” After 30 years of expansion, acquisitions and, yes, marathons, Russ Wasendorf shows few signs of slowing. Amid the worst financial crisis since the Great Depression, 2009 turned out to be a banner year for the 61-year-old founder, chairman and chief executive officer of PFGBest. Wasendorf has fearlessly defied conventional wisdom throughout his career. As financial groups racked up huge profits in the high-flying early 2000s by collecting interest on their customersâ€™ money, the Cedar Falls native saw a flawed business model. He directed his brokerage firm, founded in 1980, to build profits on modest transaction fees. The key to a healthy bottom line: Use technology to enable millions of transactions. When the Federal Reserve lowered the nationâ€™s interest rate to zero in late 2008 â€” collapsing the profits of many competitors â€” PFGBest, formerly Peregrine Financial Group, swooped in to pick over the remains. In the past year, the company has acquired two brokerage firms, including its largest competitor, Chicago-based Alaron Trading, and a financial book publisher. Wasendorf said he plans to move the publishing house, Traders Press, from South Carolina to Cedar Falls, where he bought a warehouse in the cityâ€™s industrial park. â€œBy pure happenstance, we came into this financial crisis fairly well capitalized. Therefore, not only did we feel we could ride through the crisis and recession, but we thought it would provide us with some opportunities to acquire some weaker firms that would fill in some of the gaps in our firm,â€? Wasendorf said. Wasendorf also opened My Verona, a restaurant in downtown Cedar Falls, and gave $2 million to University Northern Iowaâ€™s athletic program. Even Wasendorfâ€™s highest-profile
2010 PROGRESS EDITION
accomplishment this year proved unconventional. Not only did he shift his companyâ€™s headquarters from Chicago, the Midwestâ€™s financial capital, to a small Iowa college town, the $18 million glimmering glass, steel and cement building is unlike any in the Cedar Valley. Environmentally friendly construction materials and methods were used in nearly every aspect of the 50,000-square-foot, two-story structure built on a 26-acre site neighboring Beaver Hills Country Club. â€œWe set out to create a desirable building. By that I mean desirable to the employees, desirable to the environment, desirable to the location, desirable to the community,â€? Wasendorf said. A Romanian construction company owned in part by Wasendorf provided inspiration for the modern design. In areas of Europe, commercial office buildings by law must provide natural light to at least 95 percent of employees. The long and narrow building allows for abundant windows, a feature Wasendorf said has helped increase worker productivity. Construction minimally disturbed the surrounding 60-year-old woods, and oak trees tower only feet from workersâ€™ offices. Built into a hill, passers-by canâ€™t spot the building from a distance, leaving the natural landscape undisturbed. Not surprisingly, most neighbors are pleased. â€œI think itâ€™s a beautiful building. There are pine trees in the parking lot, and lots of large oak trees. It looks different than anything else in the area,â€? said Chad Hoffman, general manager of Beaver Hills Country Club. With so much accomplished in 2009, Wasendorf said he looks forward to expanding his company further. But he has put on the brakes in one area. After running 10 marathons, he has down-shifted to triathlons. â€œI donâ€™t know why I donâ€™t slow down,â€? he said. u
MATTHEW PUTNEY / Courier Staff Photographer Russ Wasendorf, CEO and sole shareholder of PFGBest, stands outside his companyâ€™s building.
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â€œThe Path of Progressâ€? â€˘ 19
Jim Walsh: Making downtown fly By PAT KINNEY firstname.lastname@example.org
WATERLOO — Some might have suggested, years ago, that downtown Waterloo would prosper again when pigs fly. Appropriately, Jim Walsh has sculptures of flying pigs in his downtown law office. He also has converted several dilapidated downtown properties into destination locations for a growing, regenerated entertainment district along East Fourth Street. It hasn’t been easy. It hasn’t happened exactly as planned or as rapidly as he hoped. But it has happened. From the buildings housing Cu restaurant, to Jameson’s Public House, to the historic Fowler Building that is home to Screaming Eagle bar and grill, to a reconditioned former Walker Shoes building and a work in progress in the former Newton’s Jewelers location, and his involvement with Iowa Irish Fest, Walsh has put some very big oars in the waters of a current many said was flowing against the future of downtown Waterloo. Walsh has been Waterloo city attorney 19 years. He’s been an executive with Van G. Miller and his home medical supply empire for about 30 years He didn’t have to invest in downtown Waterloo, and he’ll be the first to tell you he didn’t do it for totally altruistic or charitable reasons. But Walsh, who grew up in Chicago, and has been in Waterloo since the mid-’70s, lets negativity roll off his big shoulders like the Windy City native he is and moves in one direction — straight ahead. He and his companies are involved in some 25 downtown properties — his fourth career, he says, after the law, the home medical supply business and city government. To longtime downtown developers like Donna Nelson, who’ve been fighting the good fight since the late 1960s, Walsh’s entry into downtown revitalization has provided some long overdue and much appreciated muscle to
RICK TIBBOTT / Courier Staff Photographer Waterloo city attorney, VGM Group executive and downtown developer Jim Walsh is shown here in his downtown Waterloo law office.
downtown revitalization efforts. “He’s done great things downtown. We’re delighted,” Nelson, of Nelson Properties, said of Walsh. “There’s been a lot of people that have really helped, and Jim is one of those. You need people like the Hollens (Mike and Joni, operators of Cu) and the new mayor (Buck Clark, former Jameson’s proprietor) in addition to what we’ve been doing with the Black’s Building. And with Jim coming through, it’s great.” “It’s not entirely charitable,” Walsh said of his efforts.”I mean, I don’t do this just to help out in an area I thought needed help. But at the same time, it did need help. And it is what I consider my hometown. And I want to help it. “What it really needs is concentration of force,” Walsh said. “You’re familiar with that as a military concept; it’s also true as an economic concept. If you take a limited amount of dollars and investment effort and spread it all over, it doesn’t make any difference. But if you concentrate that and put it in one neighborhood — in this case I started out with just half a neighborhood, the east side of Waterloo — and if you concentrate it, you can make a difference.
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“Everybody sees that now. These three or four blocks between the (Cedar) river and the (Lincoln) park have gotten appreciably, noticeably and visually better,” Walsh said. “It’s a nicer neighborhood now than it was before. “I think it’s a long way from being economically solid yet,” he added. “We still need to mix in a few other businesses and give it a little time to mature.” He’d like to bring back a pharmacy, a men’s clothing store and some of the smaller retailers that used to be common downtown. Walsh started turning his attentions to downtown redevelopment in 2001-02. “I would have thought when I started, in five years I would have done everything. Well , it’s now close to 10 and I’m still just right in the middle of it,” he said. “It takes a long time to do the planning that’s necessary and raise funding.” The key now is to deepen the concentration of businesses and residences to sustain business and foot traffic downtown through the week and the day, and not just for weekend celebrations such as “Friday’loo” concerts. “People come down and see a big crowd down here and say ‘that’s
a pretty good deal.’ Try coming down on a week night,” he said. “Without a concentration of residences and other complementary businesses down here it’s hard for a single business to keep enough traffic. Particularly week nights.” For example, he’s also trying to generate traffic earlier in the day with an establishment planned for the Newton’s building: Newton’s Paradise Cafe. “It’s going to be mainly a breakfast place,” patterned after a similar establishment in Louisville, Ky. “We’ll give it a shot,” he said. “I’m looking for a friendly neighborhood place,” with an upscale menu. “That corner (East Fourth and Sycamore streets) needs some activity,” he said, located at the same intersection as the Black’s Building, First National Building and Regions Bank park. He wants downtown Waterloo to develop the concentration of businesses Cedar Falls has, to the point where the downtown itself becomes the destination and visitors come to “wander around” among the various shops and attractions. “That’s one of my goals for this neighborhood,” he said. “We don’t have quite the density of businesses here and variety for that yet. But we’re getting there.” u
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Green Belt, Greenhill, Ansborough grow By JOHN MOLSEED email@example.com WATERLOO â€” Some of the newest development in Waterloo and Cedar Falls isnâ€™t on the fringes of the cities, but closer to the center. The Green Belt Centre saw a development hat trick in 2009 with the opening of two businesses, groundbreaking of another and the closing on a sale of a lot in the center. All this in a recession year. Deer Creek Development president Harold Youngblut said the location at the crossroads of U.S. Highway 63 and U.S. Highway 20 is another selling point. The new Social Security office opened, Craft Cochrane consolidated its facilities into a new building there and Turnkey and Associates broke ground on its new office. Three businesses are up and running in the development including the Mauer Eye Center and Goldâ€™s Gym. â€œI donâ€™t think the recession was as deep in Iowa, especially in Waterloo and Cedar Falls,â€? Youngblut said. â€œThe area has diversified.â€? The TIF district declaration â€” in which future property tax money can be borrowed to go toward development â€” and tax rebates for businesses there, were enticing factors for the businesses, Youngblut said. The location, next to two major highways between Waterloo and Cedar Falls, was another, he said. Greenbelt Centre sits on the west side of U.S. 63, south of Ridgeway Avenue and just east of the Katoski Greenbelt. â€œIt is in the heart of the Cedar Valley,â€? Youngblut said. For some companies, a location on the edge of town is ideal. Others look for a more central location, said Steve Dust, president of the Greater Cedar Valley Alliance. â€œAny community has to be able to offer multiple products,â€? Dust said. The U.S. 20 and U.S. 218 corridors offer four-lane highways with con-
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â€œWe started it because of the Ansborough interchange. Itâ€™s a premier location.â€? Gene Leonart, president of Cardinal Construction
trolled access. â€œThose become focal points for any development,â€? Dust said. The next interchange on U.S. 20 heading east was constructed to help spur development â€” which it has. Grainger, a Fortune 500 industrial supply company, opened a new 41,000-square-foot call center in June. It was the fourth business to begin operations in the Country Club Business Plaza east of Ansborough between San Marnan Drive and U.S. Highway 20. â€œWe started it because of the Ansborough interchange,â€? said Gene Leonart, president of Cardinal Construction. â€œItâ€™s a premier location.â€? The four-lane Iowa Highway 58 corridor in Cedar Falls also is spurring growth. Greenhill Village on Greenhill Road east of Hudson Road saw a boom in 2009 and will continue to expand in 2010. Four builders will be working on projects in the development this year. The 19,000-square-foot Greenhill Market is 90 percent occupied, said Darryl High, CEO of High Development in Cedar Rapids. A 5,500-square-foot additional business space will be added this year. If weather permits, crews will break ground on that phase in March. â€œWeâ€™re hoping to get some food and beverage there,â€? High said. â€œMaybe a sandwich shop or a coffee shop. Weâ€™d love to have a small grocery store there.â€? Those businesses could serve the people who live in the 25 residential properties that have been built in the development. A 120-unit development also is planned for construction there this year. u
MATTHEW PUTNEY / Courier Photo Editor Morgan Paulson runs on a treadmill at Key West Fitness in the Greenhill Village in Cedar Falls.
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â€œThe Path of Progressâ€? â€˘ 21
COURIER FILE PHOTOS Paco Rosic painted the ceiling of his restaurant, Galleria de Paco, to look like the inside of the Sistine Chapel.
Chefs excited about dining scene By MELODY PARKER firstname.lastname@example.org
“Let’s go out to dinner tonight.” “OK. Where do you want to go?” “I dunno. You pick.” “I dunno. I picked last time. You pick.” It’s the classic “Chip and Dale” conundrum that can confound many Cedar Valley residents nearly every night of the week. Now that the metro area is gaining a reputation for privately owned fine dining establishments, making that decision has become easier — or harder, depending on your viewpoint. To get to the heart of the Cedar Valley dining experience, we went straight to the source — chefs — to tell us what’s been happening on the restaurant scene. We spoke with Waterloo chefs Mark Widman, chef at Cu Restaurant; Brice Dix, executive chef
at Roux Orleans and Sky Event Centre; and Paco Rosic, handling chef ’s duties at Galleria de Paco; Cedar Falls chefs Andrew Ung, executive chef at Ferrari’s and Park Place Event Centre; Jordan Brakow at My Verona; and Bryce Lutjen, chef at Bourbon Street; as well as Melissa McKean, who of offers regular cooking classes on international cuisine at her downtown Waterloo business, Classic Kitchen and Bath.
more willing to accept new restaurants opening in Cedar Falls and Waterloo. I think cable’s Food Network has helped open people’s eyes a little bit. People like
Pasta Diablo at Roux Orleans in downtown Waterloo.
What’s your take on the kinds of cuisine now available in the metro area? What’s been your reaction to the influx of new restaurants offering great dining experiences? Ung: “I’m excited about it. People are valuing their food more and are
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2010 PROGRESS EDITION
the idea of locally owned, that there’s a local place they can support.” Widman: “It’s on the upswing. You get real, true creativity from locally owned restaurants, and it opens people’s minds to new and exciting food. Because there’s competition, as a chef it keeps my style from getting stale and it encourages me to experiment with new dishes.” Brakow: “The Cedar Valley has done a great job expanding outwards in the types of cuisine. At My Verona, we’re a from-scratch kitchen, and I think this area has become a ‘locavore’ — buying local produce and having an innate sense of where our food comes from and how it’s prepared, a knack for knowing when something is made from scratch.” Lutjen: “I like the fact that there are so many nonchain eateries because it helps me keep up with trends in foods and what other chefs are doing. That gives me a lot of ideas and keeps me motivated. I like to see what they’ve come up with on their menus.” Dix: “Competition is good. It forces everyone to be good and get better. We have places around here that offer great fine dining experiences, but the economy right now isn’t allowing for it to be as appreciated as I think it should be.” Rosic: “I think it’s good for the metro area and downtown Waterloo to have different flavors and different types of food to choose from. The restaurants each have their specialty and different menus. That offers variety that people want.” McKean: “In downtown Waterloo, I can truly say we’re becoming a restaurant district. Cedar Falls has had that for a while and now Waterloo is coming of age. Cu was the first fine restaurant to venture into the eastside downtown development. Now the downtown has Roux Orleans, Screamin’ Eagle, La Chiquita, Galleria De Paco, the Brown Bottle and for fun, Doughy Joey’s, Cottonwood Canyon and Jameson Public House. Everyone is stepping up their game. People
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ing in French cuisine. We’re an Italian place, but I’m doing a little French cuisine because it’s missing. I’d also like to see more homegrown steak houses serving Iowa beef.
Bill Guernsey performs with Deja Vu at the Screaming Eagle in downtown Waterloo.
are really into food now, and we’ve had a lot of success with our cooking classes every other Thursday, taught by chefs.” How are metro area diners becoming more adventurous in their food choices? Brakow: “I think people are branching out a little more. We offer competitive prices with food chains and our food is very, very good. The Cedar Valley does a good job of promoting chefs at presentations in large venues and events. They’ve celebritized the chefs, which is kind of nice for us, and at the same time, people are starting to understand and appreciate good food. Widman: “There are more options available that people are willing to try. They’re gravitating to seafood more than before. It’s interesting that the more adventurous offerings we have tend to be higher sellers than safer options.” Rosic: “Everyone is being more educated about food, and I like to offer a unique menu that no one else has.” Lutjen: “I didn’t eat a lot of variety until I got in this business, then I started sampling, preparing and experimenting with food items, so I know what it’s like. People are stepping away from typical beef and pork. Seafood is really taking
off. We’re coming out with a lunch menu with four different seafood items.” Dix: “I’ve seen it — look at the alligator we offer.” Ung: “When people see new things on the menu or food they’re familiar with prepared in a new way, they’re more apt to try it.” McKean: “There’s great reaction to the variety that’s offered. There’s more upscale dining, more ethnic variety.” What do you think is missing from our food landscape? Dix: “I’d like to see some sushi in downtown Waterloo, some more themed restaurants.” Widman: “I’m not sure anything’s missing, between all the nice privately owned restaurants, mom-and-pop diners and chain restaurants.” Ung: “People’s tastes are always changing, and people are always on the lookout for new food. It’s definitely taken a step up in the last five years, the value people place on their food.” Rosic: “It’s only the beginning. Downtown Waterloo needs more nice clubs, Asian cuisine, maybe some Greek food.” Lutjen: “People have choices because there’s a wide range out there.” Brakow: “I’d like to see more small restaurants, and we’re lack-
How important is fine dining to development? Widman: “I think Cu Restaurant showed that it was possible to have a successful restaurant in downtown Waterloo, and other entrepreneurs set up their businesses to get the ball rolling. Everyone wants a booming downtown, and it’s important to keep the spark going.” McKean: “Cu and I were really the first to venture into down here, and I was nervous at the time. It was a little scary almost five years ago. Now it feels good to see how hard everyone is working to make our downtown a destination. Bringing people downtown makes the pie bigger and everyone gets a bigger slice.” Brakow: “It’s absolutely vital. I’ve lived in the Cedar Valley all my life and it’s nice to see what’s happening. Cedar Falls’ Community Main Street has done a good job beefing up this area, especially nightlife and restaurants, and fresh ideas keep coming. Downtown Waterloo is starting to grow and the nightlife is starting to boom and as long as it keeps improving, it’s turning into a great place to go. You have to have a good blend of retail, restaurants and nightlife.” Rosic: “This is good for Waterloo. We have places to eat that are drawing people downtown. It makes it feel alive and that’s nice. I hope it’s going to happen more and more.” Dix: “It’s very important to have a group of places that are all clustered together. That brings people to a centralized location, and the more restaurants you have, the more people will come because we all like choices.” Lutjen: “The kinds of restaurants we have now add culture to the Waterloo-Cedar Falls area. We’re not that huge of a metropolitan area, so the amount of choices we have is pretty special.” u
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The Road to Recovery is a collaborative effort by many of the state’s newspapers to give a statewide perspective on how the economy is emerging from the recession.
Signs show economy recovering across Iowa By Charlotte Eby email@example.com DES MOINES — Economists and business leaders are predicting a slow but steady rebound in Iowa’s economy in the coming months as the state recovers from a recession that has wiped out tens of thousands of jobs. They point to encouraging signs that Iowa’s economy is improving as manufacturers bring workers back and many Iowa companies expect sales to grow. “Orders are up. Employment levels have stabilized. A ton of companies are hiring again,” said Michael Ralston, president of the Iowa Association of Business and Industry, which represents firms across the state. CEOs of the state’s biggest employers are bullish about the future of Iowa’s economy. A recent survey of the Iowa Business Council’s corporate members shows they expect sales and capital spending to increase in coming months. The council represents the top executives of 20 of Iowa’s largest businesses, presidents of the three regents universities and Iowa’s largest banking association. The survey released in March found 45 percent of respondents expected higher sales in the next six months, while 5 percent expected sales to be substantially higher. Capital spending was expected to be higher by 15 percent of those surveyed and substantially higher by another 15 percent. Elliott Smith, the council’s executive director, expressed optimism about the direction of Iowa’s economy. “I think we’ve seen the bottom,” Smith said.
However, that optimism did not extend to hiring. A strong majority of council members surveyed, or 60 percent, said they expected no change in employment in the next six months, while 20 percent expect higher employment and 20 percent expect employment to be lower. Economists warn it could be some time before employment levels in Iowa reach pre-recession levels. Iowa has lost 59,500 jobs since September 2008, according to state figures. Hiring follows improvements in capital spending and sales, and when employers become confident, they begin to hire workers, said Ann Wagner, a labor analyst for Iowa Workforce Development. “Consumer spending has to get a lot stronger before hiring gets stronger,” Wagner said. When people who have dropped out of the labor force start to see improvement in the economy, it will encourage more people to start looking for work again, meaning the unemployment rate could possibly go higher, she said. Some sectors of Iowa’s economy already have jump-started hiring. Transportation equipment manufacturing and the machinery industry have begun to call workers back as they ramp up production because of improved business conditions, Wagner said. Now that manufacturing is picking up, Wagner expects to see growth in professional and business services employment. As more Iowans return to work and see their incomes grow, Wagner expects leisure and hospitality employment to grow at restaurants, hotels
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and recreational facilities. Although the national recession in 2008 and 2009 is being called the worst since the Great Depression, that is not true in Iowa’s case, Wagner said. The state saw a deep recession in the early 1980s that coincided with the farm crisis that Wagner said was more severe than current woes. In 1983, the state unemployment rate hit a historical high of 8.3 percent, Wagner said, compared to the average unemployment rate for Iowa in 2009 of 6 percent, far below the na-
tional rate of 9.7 percent this year. Dave Swenson, an economist at Iowa State University, said if history is a guide, this recovery will be slow and flat, and it may take as long as three years to regain jobs that have been lost in Iowa, and even longer for the nation as a whole. He said recovery in Iowa from the last recession that began in 2001 took five years. “Until we get to where we were before we started sinking, you can’t call it growth — all you can call it is recovery,” Swenson said. u
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Agriculture softens recession in Iowa By Matthew Wilde firstname.lastname@example.org WATERLOO — Agriculture wasn’t spared from the economic recession, but it fared better than most other industries. In fact, economists say several successful years raising crops helped financially insulate the state, unlike other parts of the country. As Iowa starts to emerge from the economic downturn, officials believe farmers and ag-related industries will help lead the way. “Agriculture has been a strong sector, which helped soften the blow. We’ve had bumper crops and revenue,” said Dan Otto, an Iowa State University economist. According to government statistics, the nation’s farmers made a record $87 billion in 2008. Though last year’s earnings slipped about $8 billion below the 10-year average of $64.5 billion due to livestock and dairy losses, America’s farmers have enjoyed their top five earnings years since 2003. Since agriculture is a leading industry in the state, officials say that’s a reason why Iowa is moving forward. The Iowa Business Council reported promising economic indicators last month. The latest quarterly figures show increased levels in sales and capital spending. Employment projected for the coming six months moved the council’s Overall Economic Survey Index to 54.3 — its first time in positive territory, a reading above 50, since the third quarter of 2008. Several economic indicators tracked by The Courier in Waterloo also have trended up. Those include home construction, utility connections and deposits at banks and credit unions. ISU released a report in February showing agriculture’s economic contributions to the state. Figures show agriculture and related industries account for 22 percent of the state’s gross domestic product, or more than $29 billion. Liesl Eathington, who prepared the report for congressional leaders
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RICK CHASE / Courier Staff Photographer Dave Melver welds the inside of a Featherlite 8127 livestock trailer at the Featherlite plant in Cresco.
to emphasize the importance of agriculture, said the industry helped soften the recession in Iowa. “It masked what was going on. Now we’re seeing positive numbers in manufacturing and construction,” Eathington said. Ag didn’t escape unscathed. Kerry Koonce, spokesperson for Iowa Workforce Development, said major ag manufacturers like John Deere and Vermeer did lay off workers during the last year. However, Koonce said ag companies are bouncing back, which can’t be said for every business sector. “Manufacturing was the hardest hit during the recession. Fortunately, they’re starting to call people back,” Koonce said. Iowa’s unemployment rate in January was 6.6 percent, compared with 5.2 percent a year earlier. The current national unemployment rate is 9.7 percent. Featherlite Trailers in Cresco recently was named the No. 1 manufacturer of livestock trailers in 2009 for the third year in a row based on registrations of new haulers. Despite the honor, Featherlite General Manager Eric Clement said the business wasn’t recession-proof. It sold more than 21,600 livestock and horse trailers last year, down more than 30 percent. As a result, more than a quarter of the work force was laid off. The company now employs a few more than 400.
Clement believes sales have bottomed out, and he expects a better 2010. As business improves, Clement expects people will be called back accordingly. “It spells relief for the local economy as the largest employer,” he said. u
Contributions of Iowa’s agriculture and related industries: • Total employment (2008): 1,993,934 • Jobs linked to ag-related industries: 366,777 • Percentage of total employment: 18.4 percent • Total gross domestic product in billions of dollars (2008): $133.17 • GDP linked to ag-related industries in billions of dollars: $29.36 • Percentage of total GDP: 22 percent
Source: Iowa State University
“The Path of Progress” • 25
JOHN SCHULTZ / Courier Lee News Service The 100-inch mill inside Alcoa’s Riverdale plant April 8.
Many Iowa manufacturers face slow recovery By Jennifer Dewitt email@example.com DES MOINES — As the national recession took its toll on all corners of Iowa’s economy, the state’s manufacturing sector was among the hardest hit. Iowa’s manufacturing landscape was dramatically reshaped as businesses came to grips with lower demand. To counteract the declining sales, employers were forced to lay off workers, eliminate positions, reduce hours and institute unpaid
furloughs, and in the worst cases, shutter factories. Of the 53,000 jobs lost in Iowa between November 2008 and December 2009, the Iowa Workforce Development reports that 27,000 --- or nearly half — were manufacturing jobs, said Kerry Koonce, the state agency’s spokeswoman. Within that sector, she said durable goods fared the worst whether it was heavy equipment, parts for the auto industry or building materials. “One of the things about this re-
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cession is it virtually hit every sector, every level of employee — professional, blue collar, everything,” Koonce said. Dave Swenson, an economist with Iowa State’s Regional Economic and Community Analysis Program, or RECAP, said manufacturing was declining nationally prior to the recession but “Iowa’s manufacturing was kind of holding its own.” “As the value of the dollar kept going down, it meant U.S. manufactured goods tended to be a bar-
gain to foreign companies. That continued to buck up Iowa’s manufacturing,” Swenson said, adding that the state kept exporting meat products and durable goods such as electronics and farm machinery. “We had a nice strong signal sent to our manufacturing sector — keep producing, people are still buying,” he said. But a rapid manufacturing decline came when the value of the dollar grew and it became clear the economic crisis was a global situation.
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“We’re guessing we hit bottom about November or December,” Koonce said. In late 2009 and into early 2010, some of the state’s manufacturers began to see signs of improvement, while others such as John Morrell joined the ranks of those closing. The company announced in January it would close its Sioux City plant. Still, Leisa Fox, vice president of membership for the Iowa Association of Business and Industry, said the group’s manufacturing members “believe universally that the recovery has begun.” One of the few upsides of the downsizing, Fox said, is that “this economy has given some companies the opportunity to strategically downsize. I think a lot of our companies were very, very fat. A good economy does that. This is going to keep the really productive workers on the floor and also going to sharpen the knife.” Swenson said the state’s manufacturing employment has climbed back to about 200,000 after a roller-coaster ride.
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“I think a lot of our companies were very, very fat. A good economy does that. This is going to keep the really productive workers on the floor and also going to sharpen the knife.” Leisa Fox,
Iowa Association of Business and Industry
“From the middle of 2005 through the beginning of 2008, the state’s manufacturing stayed close at 230,000 jobs. Then it did nothing but a cliff dive and dropped, dropped, dropped,” Swenson said. By mid-2009, manufacturing employment fell to about 198,000. At one point, the state’s largest single manufacturer, Deere & Co., based in Moline, Ill., had 1,900 employees on layoff at equipment plants in Des Moines, Ottumwa, Davenport and Dubuque as well as a combine plant in East Moline, Ill. The company employs 12,000
Iowa residents. Deere spokesman Ken Golden said only about 100 of the workers laid off still remain out of work, as employees have been called back in the past four to seven months. Likewise, Alcoa Davenport Works, which produces aluminum plate and sheet in its QuadCity plant in Riverdale, Iowa, saw its employment plummet to about 1,600 workers in mid-2009 through layoffs, job eliminations and attrition. In 2008, the plant employed about 2,100 workers. “We’ve seen an increase in orders, but we’re still well below the volume we saw in 2008,” Alcoa spokesman John Riches said. Nearly 200 workers have yet to be recalled. Drops in orders drove many of the layoff announcements that hit all corners of the state from Muscatine’s HNI Corp. to Shenandoah’s Eaton Corp., Forest City’s Winnebago Industries, Pella Corp.’s Sioux Center plant and the Georgia Pacific Gypsum LLC plant near Fort Dodge. And the list went on.
Among the manufacturers forced to make the ultimate decision and close the doors were RR Donnelley’s printing plant in Spencer; a 100-year-old Hocim Cement plant in Mason City; Midland Forge in Cedar Rapids; and appliance maker Electrolux, which said it will close two plants by 2011 in Webster City and Jefferson. While the job losses and layoffs did not seem to discriminate, sweeping the entire state, Swenson, the ISU economist, said “The areas that had the largest rate of decline were the micropolitan areas, those with population of 10,000 to 49,999, the cities the size of Clinton, Muscatine, Ottumwa, Mason City, Spencer and Fort Dodge.” “It was a double whammy on them because they tend to depend on manufacturing. In those economies, they’re the best-paying jobs for a lot of people,” he added. Swenson said the nation is gearing for a long, slow recovery — perhaps two or three years “before we get back to peak employment.” u
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Gaming industry weathers recession By TORY BRECHT Courier Lee News Service
Gaming numbers FY 2005 - 2009 Adjusted gross revenue by location $200
Revenue in millions of dollars
2005 2006 2007 2008 2009
Wild Rose Clinton
Diamond Jo Worth
Miss. Belle II
Diamond Jo Dub.
Iowa’s gambling industry is feeling the lingering effects of the Great Recession with flat revenues, but many casino companies dodged financial disaster through expansions and re-investment. Just under half of the state’s 17 licensed racetrack-casinos and riverboat and land-based casinos saw revenue decline between 2007 and 2009. Those that did increase revenue generally did so thanks to large-scale expansions or grand openings. “As we finished the last fiscal year, in June 2009, the state was virtually flat,” said Jack Ketterer, the Iowa Racing and Gaming Commission administrator. Ketterer said there is hope that as the economy rebounds, gaming revenue will follow. But the future is cloudy. “It’s probably going to be hard to tell,” he said. “It was so bad this winter with the bad weather, which exacerbated the issue. It’s hard to tell how much was the economy and how much was the weather.” Lagging casino revenue also hits state and local coffers. According to data from the commission, the $967 million Iowa casinos generated for the state economy in 2009 was the worst showing since 2005. Things weren’t bad all over, however. Peninsula Gaming, which operates the Diamond Jo casinos in Dubuque and Worth County, celebrated a grand opening of the Worth County property in April 2006 and a grand opening of the new, land-based Dubuque casino in December 2008. “It set us apart,” said Carrie Tedore, the company’s director of public relations. “We leveraged our grand openings and what the communities had to offer to help keep us competitive when the market was shrinking, and we came out on top. In the casino
QUAD-CITY TIMES GRAPHIC
market, where even is the new up, we were up double digits.” Things weren’t as rosy for all operators. Two of the Isle of Capri Inc.’s Iowa properties — the Rhythm City in Davenport and the Isle of Capri Bettendorf — saw revenue declines between 2007 and 2009. The company’s new casino in Waterloo — which opened in July 2007, has seen profits rise. In remarks to shareholders during the Isle’s quarterly report last February, President Virginia McDowell echoed Ketterer, saying it
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was hard to predict the prospects of recovery. “We have not been sitting idle, waiting for signs of a recovery,” she said. “We have continued to focus on prudent spending and trimming expenses wherever possible, and maintain our commitment that we will not cut expenses to the point where it negatively impacts the customer experience. “While it is difficult to predict exactly when that recovery will occur, we do believe we have generally reached the bottom of the tough consumer spending cycle,” she said. Adding to the uncertainty is the state Racing and Gaming Commission’s approval of a new state licenses for a casino project in Lyon County. Some operators in the state had lobbied against expansion, saying it would cannibalize existing markets, while others supported expanding into new markets, saying competition is good for all. One of Iowa’s biggest casino suc-
cess stories through the recession has been Prairie Meadows Racetrack and Casino in Altoona. It saw adjusted gross revenue rise from $188.7 million in 2007 to $193.1 million in 2009. However, that growth is slower than the gains it saw earlier in the decade, when an expansion in 2006 led to an increase from $178.9 million in 2006 to $188.7 million in 2007. Gary Palmer, president and CEO, said the expansion came at just the right time. As the grip of the recession tightened, discretionary income fell and the pervisitor take at casinos fell. The only way to overcome that is to bring in more people, and increase the pool. “We were real fortunate, 2008 was the best year we ever had and 2009 was the second-best,” he said. “We had to cut expenses and we had to get smart. Naturally, when people don’t have jobs and the economy is down, people who used to bring $50 were bringing quarters with them.” u
2010 PROGRESS EDITION
Retail recovery a mixed bag By Jim Offner firstname.lastname@example.org
WATERLOO — From a retail standpoint, Iowa’s emergence from the recession appears to be a hitand-miss process. “It’s a mixed report,” said Charlie Funk, chief executive officer of Iowa City-based MidWestOne Bank, which has branches across eastern Iowa. “It’s certainly not a depression, but I wouldn’t say it’s a strong rebound either. I’d say slow to muddling through, depending on the market.” Funk, chairman-elect of the Johnston-based Iowa Bankers Association, said retail sales in a particular market are tied closely to that market’s jobless rate. “It’s probably a little better in the Iowa City-Johnson County area than the rest of our footprint, but the unemployment rate here is so much better.” Iowa City is home to the University of Iowa, which employs more than 12,000 workers, and the university hospital system, which has more than 7,500 employees, Funk noted. Sales of discretionary items often serve as a gauge of retail health. “Some are doing well, some not so well,” he said. “Discretionary spending is hit and miss.” Nondiscretionary spending — groceries and other staple items — is stable, as would be expected, Funk added. “I’d say we’re seeing the recovery starting to take place,” said Jesse Tron, spokesman for the New York-based International Council of Shopping Centers. “February was the third straight month of a positive increase in sales, and a 3 percent year-overyear increase for same-store sales.” Economists often look to the foodservice sector as a barometer of the economic climate. “Discretionary forms of entertainment, like eating out, are luxuries,” said Darin Beck, finance chairman of the Iowa Restaurant Association and chief executive officer of the Cedar
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“I think things are starting to improve a little bit, and we’re certainly staying optimistic, but the overall economy still has some hiccups and that concerns us.”
Jim Henter, Falls-based Barmuda Cos., which has a number of restaurant chains under various brands that appeal to a range of tastes and demographics. “Honestly, it’s weird because some of our brands are performing very well and some very poorly in this economy. Some are kind of hanging in there, so we have a sort of blend of the effect of the economy.” However quickly Iowa’s retail businesses recover from the economic downturn, restaurants are likely to lag, Beck said. “I think our industry is probably going to recover later than other sectors,” he said. “People have had to learn to do more with less.” Consumers aren’t necessarily cutting back on eating out; they likely are being more careful about where they dine, Beck said. “It’s not that they’re going out less, they’re just spending less doing it,” he said. As a result, higher-end restaurants likely are being hit the hardest. “What it tells us is that upper-middle-class range is feeling the pinch the hardest,” he said. “They tend to be middle management, and some of those people have stepped down a tier in price point.” The Des Moines-based Iowa Business Council, made up of CEOs from Iowa’s largest employers, tracks sales from some of the largest agriculture and construction manufacturers, such as Moline, Ill.-based Deere & Co. and Pella-based Vermeer Corp. The council also tracks the retail grocery trade. Sales in both those categories seem
president of the Urbandale-based Iowa Retail Federation
to be trending toward good health, said Elliott Smith, the council’s executive director. “I think they’re off their lows from within the past year. They really experienced some significant — maybe even close to historical — lows in sales volumes.” Grocery stores, Smith noted, have
reported brisk sales as well. “They’re having record years,” he said. Jim Henter, president of the Urbandale-based Iowa Retail Federation, said the businesses in general are showing signs of recovery. “I think things are starting to improve a little bit, and we’re certainly staying optimistic, but the overall economy still has some hiccups and that concerns us,” he said. From a sales-tax standpoint, the recovery has been mixed, according to Michael Lipsman, manager of the tax-research section of the Iowa Department of Revenue. Taxable sales statewide from 2006 to 2007 increased by 2.91 percent, but went on a two-year downward trend after that, he said. The sales increase in 2008 was only 0.94 percent and, in 2009 — according to preliminary figures — decreased by 2.91 percent. u
More than can
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Iowa’s community colleges are thriving By ANN McGLYNN Courier Lee News Service
The state’s community colleges are posting unprecedented enrollment as people of all ages and experiences turn to the schools to learn new skills, get a head start on college or launch their college career closer to home. In Iowa, enrollment topped 100,000 students for the first time in the fall. Officials expect the number enrolled to not only stay above 100,000 for this coming fall, too, but increase again. Every single institution posted gains. Northwest Iowa Community College posted the largest-percent increase, with 28.6 percent more students. Eastern Iowa Community College District — which includes Clinton, Scott and Muscatine community colleges — came in second with a 21.6 percent rise and nearly
8,500 students. College leaders think the down economy is fueling the surge, as they juggle more students and tightening budgets. Iowa and Illinois both are documenting record enrollments. “We feel pretty good that we’ve been able to rise to the challenge,” said Patricia Keir, chancellor of EICCD. The types of students enrolling in the area’s schools are diverse. Erin Snyder, who works with EICCD’s enrollment efforts, described them. Dislocated workers want to get a new degree or to take a few classes in order to find a new job. Traditional-age college students remain an important segment, with more students considering community college as a place to go before heading off to a four-year institution. Family incomes play into that. Seamless transfer agreements do, too.
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“The light bulb moment has finally come where people realize we’re a good investment,” Snyder said. High school students are turning to the community college to get their feet wet with college coursework. And online students who need flexibility are taking more and more classes, too. EICCD posted a 31 percent increase in online credit hours this year. Student populations at the district’s noncampus sites, including the Blong Technology Center, the Kahl Building and the new center in Maquoketa, Iowa, are growing dramatically, Snyder said. Health programs, she said, are “going gangbusters,” and the institution now offers a third-shift welding program. Meanwhile, Keir said, leaders are working to boost student activities and accommodate the extra students in terms of tutoring, financial aid and advising. The institution also plans an initia-
tive to move from focusing on just access to education and toward focusing on student achievement. “What are some things that will help students stay and do well?” she said. Terry Honeycutt was laid off two years ago from his job at the Rock Island Arsenal. The Bettendorf man decided to go back to school. He will graduate in May with a degree in logistics and management. He takes his classes at the Blong Technology Center in Davenport. He will be one of the first graduates of the program. “It matched up with everything I had done at the Arsenal,” Honeycutt said, adding that logistics are a “huge part of everyone’s life” not often thought about. The coursework has been challenging, but fun, the 39-year-old said. “When I started, it was scary,” he said. “Now, I’m going to miss it.” u
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Shorter vacations boost tourism trade EILEEN MOZINSKI SCHMIDT Dubuque Telegraph-Herald It was January of 2008 when Julie Fillenwarth started getting the phone calls. Some of the longtime customers of Fillenwarth Beach Resort in the Okoboji area — travelers Fillenwarth knew well after their decades of vacationing there — told her that they would not be coming for their annual summer getaway. Some had lost their jobs. Others, their homes. “We were crying with them on the other end of the phone,” Fillenwarth said. The recession had struck. But Fillenwarth, a manager at the family-run lakefront resort on West Lake Okoboji, said many of the room reservations canceled in 2008 were filled by newcomers who decided to stay closer to home. It was a welcome, albeit bitter-
sweet, opportunity. “We did OK, but it just wasn’t the same,” she said. The recession has in some ways spared locations like Fillenwarth Beach Resort as more travelers look to area destinations for their getaways. Regional tourists have filled the gaps left by those who could not afford to travel and increased overall statewide tourism expenditures,
even as they have whittled down the length of their vacations. But despite the upward trend, Iowa continues to be significantly outspent in tourism marketing by surrounding states. It is a pattern, some local tourism officials say, that will leave the state’s many small towns with scant resources to generate more tourism. Annual travel expenditures in Iowa increased 2.2 percent to $6.4 billion in 2008, according to the Iowa Tourism Office. The 2009 figures will be available in October. Nancy Landess, manager of the Iowa Tourism Office, said trends during the recession have been favorable to Iowa tourism overall. “People are staying closer to home, taking shorter trips. People are looking for value,” she said. The Okoboji area experienced about a 4 percent decrease last year, said Stacy Rosemore, tourism director for the Okoboji Tourism
Committee. “Overall, we didn’t see the impact like lots of places. We’re fortunately in an area where we’re a short drive for several major cities,” she said. The region, which includes 34 resorts and lodging facilities, tends to draw from Omaha and Lincoln, Neb., Des Moines, Sioux Falls, S.D., and southwest Minnesota. Throughout the Okoboji area, Rosemore said the soaring gas prices forced travelers who typically go on trips farther away to stay in the area. And she said travelers have been watching their dollars carefully, particularly by cutting back the length of their vacations. Meanwhile, the recession has taken a serious toll at larger, national tourism destinations. Keith Rahe, director of the Dubuque Convention and Visitors Bureau, said occupancy rates in Orlando, Fla., were off more than
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2010 PROGRESS EDITION
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percent last year and that many popular destinations around that state experienced considerable declines. But he said Dubuque and the tri-state area had a strong fourth quarter to end last year, and has benefited from a diverse market. “For the most part, we’re holding our own. Occupancy is down a little bit, but we do have more rooms on the market now,” Rahe said, noting the refurbished Hotel Julien Dubuque downtown and the Holiday Inn Express on the city’s West End. At the National Mississippi River Museum & Aquarium, Jerry Enzler said numbers have been up two years in a row, which he said is partly attributable to families looking for more activities to do together. “We do know there is a desire to take shorter trips and do more things as a family,” said Enzler, executive director of the museum. Gene LaDoucer, spokesman for AAA North Dakota, agreed that the Midwest has benefited from tourism trends in recent years while larger destinations have faced losses. AAA has not released its projections for the upcoming year; however LaDoucer said the economy is stabilizing and customer confidence is on the rise. “The positives are the pent-up demand we’ve had over the last couple years when people cut back on travel. We expect to see some increased interest in travel and tourism across the United States,” he said. But even as travelers are more willing to dig into their pockets to spend, LaDoucer said sustained high unemployment rates and gas prices will mean some declines overall. Landess remains confident that the state’s tourism figures will not decline as the recession ends, but acknowledged that Iowa’s budget is significantly surpassed by surrounding states. Iowa has $3.9 million in the budget for the fiscal year ending June 30, which includes the 10 percent budget cuts throughout state gov-
COURIER FILE PHOTO The Sullivan Brothers Iowa Veterans Museum in Waterloo is among the Cedar Valley’s newest tourist attractions.
“We’re expecting better things for 2010 than we saw in 2009. We look forward to this upcoming season.” Megan Lickness, assistant director of the Dyersville Area Chamber of Commerce
ernment. By comparison, Minnesota’s 2009 tourism budget was $10.7 million, Wisconsin was $15.1 million and Illinois was $50.3 million. “The budget continues to be a challenge,” said Landess, who said the state office will keep looking for partnerships with other entities around the state to enhance marketing efforts. This summer the tourism office is partnering with the Iowa Lot-
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tery, which is celebrating its 25th anniversary, to offer prizes at various events. Iowa’s out-of-state marketing currently is targeted in the Chicago and Minneapolis markets. But Rahe noted that other states putting more money into marketing efforts is putting additional pressure on Iowa’s smaller communities. Megan Lickness, assistant director of the Dyersville Area Chamber of Commerce, said Dyersville benefits from high-profile attractions in the area, like The Field of Dreams movie site, and proximity to Dubuque, but the smaller budget does represent problems for small towns. “We rely heavily on grant programs from the state and government entities to be able to market our communities,” she said. Lickness said local tourism officials are under pressure to come up with creative ways to market their areas, but she has a positive
outlook. “We’re expecting better things for 2010 than we saw in 2009. We look forward to this upcoming season,” Lickness said. Rosemore agrees. She is projecting an increase from last year’s dropoff based on the call volume to her office in recent weeks. Some resort owners she has worked with have been “pleasantly surprised” with the number of reservations they have received so far. And Fillenwarth said more longtime visitors are renewing their plans to come back to the resort this summer. She looks at the difficulties of the recent years as beneficial in the long run. “We have to look at this as a blessing any way we can,” Fillenwarth said. “It’s fun to be here doing business here. We have a beautiful lake. I love it when the guests appreciate it, too.” u
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Builders hope for stronger 2010 By DAVE DeWITTE Courier Lee News Service At the peak of the building boom in 2007, homebuyers spurred by easy credit and low interest rates were eager to move fast on their new home or remodeling project, builders say. Today, Iowa builders find prospective clients who are waiting until the moment is right, concerned about things like their ability to get financing, their job security and selling their existing homes. “We’re hearing more things like, ‘We don’t want to do this project until we have the money to pay you,’ or ‘We don’t want to take out that second mortgage,’” said builder Dan Knaup of DSM Homes, which handles remodeling projects in the Des Moines area. After tightening his belt for the last couple of years, Knaup is hoping 2010 will finally be the construction season that brings improvement. He’s having more conversations about projects than last year and is hoping that they’ll turn into contracts. Several Iowa contractors interviewed say they don’t see the construction sector leading the recovery in Iowa, despite low interest rates and the recent tax incentives for first-time homebuyers. “The job market’s going to lead us out of this recession,” said Carey Nowak of Heartland Builders of the Quad-Cities, which builds mainly custom homes. The jobs aren’t coming from the building industry, at least yet. Construction jobs in Iowa were down about 5,600 from February 2009 through February 2010, a reduction of 8.1 percent, according to the federal Bureau of Labor Statistics. Nowak says the Quad-Cities housing market is “up and down.” “A few are doing quite well, and a lot haven’t,” depending largely on the type of construction and their ability to pre-sell unfinished units,
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Courier file photo Volunteers move a scaffolding at a Iowa Heartland Habitat for Humanity house on Oneida Street in Waterloo.
Nowak said. Faced with declining new home construction, Davenport leaders decided to sweeten the pot for potential builders with a new tax rebate. Launched in July 2009, the Davenport NOW program — unanimously approved by the 10-member City Council — offers a 50 percent rebate on city property taxes for 10 years to people who build a home, renovate an old house or build or expand an existing business in developed sections of the city.
In less than a year, the city received more than 200 applications for the program, said Candice Graf, Davenport’s neighborhood development coordinator. Builder David Prochaska credits the NOW program with jumpstarting interest in new construction. He has four new houses under way in Davenport, including two in the Prairie Heights subdivision off of Eastern Avenue. This is a big turnaround from the stagnation in 2009, he said. Doug Conrad, president of Sioux City’s Heritage Homes of Siouxland, was pleased by the higher turnout at the annual spring Siouxland Home Show, sponsored by the local builders association. He says the local market is “lukewarm to warm.” Some Iowa construction markets are faring better than others. Home values and demand seem to be best in the larger growing urban centers, association executives say. Cedar Rapids, and to a lesser ex-
tent Iowa City and Waterloo, are enjoying an influx of federal and state disaster recovery dollars due to the June 2008 floods. One company alone, Ryan Companies US Inc., is expected to manage more than $100 million worth of Cedar Rapids city projects and a $160 million federal courthouse. Paving contractors who enjoyed an influx of federal stimulus dollars last year are less optimistic about 2010. “We’re going to be down about 33 percent from a normal year,” said Bill Rosener of the Asphalt Paving Association of Iowa. “It’s going to be a hard couple of years.” Rosener said business for paving contractors may not get better until lawmakers approve measures to bring the Iowa Department of Transportation more revenues. “We’re overdue for a user fee increase,” said Rosener, executive vice president of the group. u Quad-City Times reporter Tory Brecht contributed to this report.
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Alternative energy’s future looks bright By JOHN SKIPPER Courier Lee News Service Renewable energy and alternative fuels are creating “a new economy” for Iowa, according to the state’s top economic development official. Bret Mills, director of the Iowa Department of Economic Development, said, “We have recognized the importance of focusing on valueadded agriculture and also the value of wind. “These things are leading us out of the recession.” Iowa ranks first in the nation in ethanol production and second in biodiesel production. There are 31 ethanol plants in operation, producing about 3.3 billion gallons a year, according to IDED. Ten new plants are under construction. Iowa alone acounts for more than 26 percent of the entire U.S. ethanol production and the state’s biofu-
els industries have added $8 billion to the state’s economy, according to IDED estimates. Iowa leads the nation in wind generation as a percentage of total power output (15 percent) and ranks second nationally in current wind generation output. Mills said an example of an economic boon is the TPI Composites plant in Newton. TPI, headquartered in Scottsdale, Ariz., makes wind blades for turbine manufacturers and opened its Newton plant in 2008 with 170 employees. Today, it has 500 employees and expects to keep growing. Steve Lockard, chief executive officer of TPI in Scottsdale, had no trouble explaining why his company chose Iowa for its expansion. “Wind energy has been embraced in Iowa and we are proud to be at the forefront of this movement,” he said at the grand opening.
The selection of Newton for the TPI plant was especially good news for the community of 15,000 which had been hit hard by the closing of its Maytag plant in October of 2007, idling more than 1,000 workers. Many who work at TPI are former Maytag employees. Wind energy and a host of cottage industries are becoming big business in the state. Mid-America Energy Co. of Des Moines is first in the nation among rate-regulated utilities in ownership of wind energy farms with 536 turbines and 1,940 megawatts in production. Iowa and Texas are the only two states in the nation to manufacture all of the main components of a wind turbine -turbines, blades and towers. In Manly, a Worth County community not far from the Minnesota border, the Manly Terminal has developed two industries related to al-
ternative energy and fuels. Begun in 2007 as an ethanol warehousing operation, the company expanded two years later with the opening of Manly Logistics Park, a “hub” for vendors who need space to hold wind turbine components until the projects for which they were purchased get under way. Mills said, “The things we have done in alternative energy and renewable fuels have been accomplished through partnerships with universities and community colleges, the private sector and government. “We have created a very powerful tool when we’re talking to companies looking to relocate in Iowa. “We are at the crossroads of the country. We have the location, we have the space, we have the geography, we have the partnerships and we have one of the best workforces in the nation if not the world. “We are well positioned to lead the way.” u
Ethanol business keeps trains hopping By MARK RIDOLFI Courier Lee News Service Ethanol helps keep Dakota, Minnesota & Eastern rail cars loaded with grain heading westward to ethanol markets, strengthening grain prices. DM&E chief executive Vern Graham hopes that doesn’t change. “We’ve had lots of focus on Mason City with the new ethanol business,” said Graham, vice president of U.S. operations for DM&E parent Canadian Pacific. CP assumed DM&E in 2008 and Graham reports employment remained stable through the recession and even grew in Mason City, thanks to ethanol. The company added five planners in Mason City to handle logistics, mostly for ethanol shipment and new markets for ethanol waste. The leftover mash, called distillers dry grain, can be shipped westward as a livestock feed additive, a new product for the rail line. Mason City area plants are drawing “an 85-car train every six days,” Graham said. “You used to see all the grain heading east. Now you see hopper cars going in the opposite direction to these ethanol plants.” Since acquiring DM&E, Graham said his firm is
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committed to $80 million a year in infrastructure improvement, across the network. In Iowa, that means new ties and ballast to shore up rail beds. “Ties and ballast are the foundation of the railroad. We have a bit of work on the ballast. It’s not perfect, but it’s OK.” “We’ve started increasing our workforce across this region. Two reasons: Business is starting to come back and there will be some attrition in this industry.” u
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