Mn valley bus nov 2014 by Free Press Media

Mike Drummer at the new apartment complex near the Wow Zone in Mankato. Photo by Pat Christman

The new normal

2014 a banner year for economic development Also in this issue • The Market in Madison Lake • Full Circle Organics • Louise Dickmeyer, PDP Solutions

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F E A T U R E S December 2014 â&#x20AC;˘ Volume 7, Issue 3

2014 is one of the biggest economic development years in local history, with the Wal-Mart distribution center, apartment construction, Fleet Farm and others leading the way.

Max Milinkovich, president of Full Circle Organics, is helping the rapidly growing organics business become one of the largest in the Midwest.

Louise Dickmeyer is using her wide experiences in companies and organizations as president of PDP, which helps businesses improve their communications.

This month, Mike and Donna Tatge are celebrating 35 years as owners of The Market, a small grocery, fuel station and bait shop, located in Madison Lake.

MN Valley Business â&#x20AC;˘ december 2014 â&#x20AC;˘ 5

■ December 2014 • VOLUME 7, ISSUE 3 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Heidi Sampson Charlie Weaver Nell Musolf PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross PAGE DESIGNER Christina Sankey ADVERTISING Ginny Bergerson MANAGER ADVERTISING sales Jen Wanderscheid Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Denise Zernechel DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6336, or e-mail mankatomag@mankatofreepress.com. MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street., Mankato MN 56001.

■ Local Business memos/ Company news................................7 ■ Business and Industry trends.........9 ■ Minnesota Business updates....... 10 ■ Business Commentary................. 12 ■ Construction, real estate trends.. 33 ■ Agriculture Outlook...................... 34 ■ Agribusiness trends..................... 35 ■ Job trends..................................... 36 ■ Retail trends................................. 37 ■ Greater Mankato Growth.............. 38 ■ Greater Mankato Growth Member Activities ....................... 40

From the editor

By Joe Spear

Building boom may disrupt norm

he Mankato area is once again poised for a huge year in new commercial construction that will have a domino effect in good ways but also in ways that will likely disrupt business as usual. By the close of 2014, Mankato building permits alone will likely be very close to $200 million, a level not seen since the construction of the River Hills Mall in the early 1990s. The Wal-Mart distribution center alone registered at $70 million. The Mills Fleet Farm building permit was valued at $9 million and the Tailwind office projects in downtown Mankato round out a big year for commercial construction. But housing also seems to be following that with some $26 million in new residential building, mostly in apartment buildings that are filled easily, according to developers. But 2015 will not be much behind 2014. Minnesota State University will begin constructing a clinical science building. The Mankato Verizon Center expansion will add $30 million, and construction will also begin on a new middle school. All told, the projects will jolt the local economy by another $150 million. These projects will bring the usual economic benefits in the way of construction employment and the resulting multiplier effect on everything from restaurants to clothing stores. Greater Mankato Growth CEO Jonathan Zierdt sees this kind of trend as Mankato’s “new normal.” Says Zierdt: “I think with Greater Mankato you’re watching the birth of a star. At some point any city that crosses that regional threshold of 50,000 people something happens and you get that tipping point. This isn’t a flash in the pan — this is the new normal for us.” But the labor market is also likely to be affected by an immediate demand for 400 mostly skilled workers at the Wal-Mart distribution center. And Fleet Farm is already hiring. Those openings are going to put pressure on wages at everything from newspapers to retail stores to nursing homes.

6 • December 2014 • MN Valley Business

Employers may have to raise their wages to get the best workers. While the Mankato/North Mankato Metropolitan Statistical Area has been leading the state in GDP and job growth, wages are generally below other regional centers and show a negative trend. For 2013, Rochester led the pack with an average hourly wage of $33.74. Duluth was next at $22.88, St. Cloud was at $22.69 and Mankato came in at $21.55. Rochester has been showing tremendous growth in its average wage as it increased 24 percent from 2010 to 2013. St. Cloud grew its wages by 7.5 percent and Duluth grew by 10 percent. The bad news: Mankato/North Mankato average wages have fallen by 9 percent in the last few years, from a high of $23 per hour in 2011. So, while we’ve had good growth in the number of jobs, the data would suggest many are below the average wage, thus pulling that average down for the last two years. Zierdt sees the building boom creating some wage hikes in some sectors. “Will it globally raise our wages across the board? It may, but we don’t know yet.” There may be a new normal when it comes to housing. Builders and developers are still seeing the most demand for apartments. Several large projects are coming on line and developer Mike Drummer says many of them are already fully rented. Single family homes may not be as attractive as they once were for a new young working professional who knows they may have to move several times for employment and who see there is risk in tying themselves to a mortgage. Mankato’s economic landscape is changing. And while there is likely to be some disruption, most of it will be for the better. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@mankatofreepress.com

Local Business People/Company News

■

Snell nominated for national dealer award

Todd Snell, president of Snell Motors, has been nominated for the 2015 TIME Dealer of the Year award. Snell is one 55 dealer nominees from across the country who will be honored at the 98th annual National Automobile Dealers Association convention in San Francisco in January. Snell, 51, was chosen to represent the Minnesota Automobile Dealers Association in the national competition. Todd Snell The award is sponsored by TIME in association with Ally Financial. Snell was involved in the dealership at an early age and purchased the dealership in 1998 when his father, Don Snell, retired. Since then, Snell Motors has grown from 25 employees located in downtown Mankato to a hilltop location with 170 employees and four businesses – Snell Motors, Snell Tire & Lube, Snell Auto Wash and Snell Powersports & Equipment. ■■■

Mathiowetz wins family business award

Twin Cities Business Magazine and Hubler for Family Business has awarded one of five Minnesota Family Business Awards for 2014 to Mathiowetz Construction Co. in Sleepy Eye. The award takes a close look at how notable Minnesota companies prepare generations for leadership, how family and business roles are defined and grow through the years, and how they maintain a sense of family while running a business in a competitive industry. The article states: “The Mathiowetz family excels at keeping things level, whether it is a facet of the family business or one of the Mathiowetz Construction Company’s major projects. The road hasn’t always been smooth – the family has had its share of tragedy and challenges over the decades, but its business today remains strong as it moves into its fourth generation, thanks to hard work, foresight and faith.” Mathiowetz Construction Company is owned by Brian Mathiowetz, his wife Ronda, their three children Brett, Rachel and Chad, and Brian’s sister, Julie Anderson and her husband Paul. ■■■

Wells Concrete buys Hanson Structural

Wells Concrete has acquired the Maple Grove office and production facilities of Hanson Structural Precast. The combined organization strengthens the company’s presence in the Minneapolis-St. Paul area. “Hanson Structural Precast fulfills new product and schedule flexibility opportunities for Wells Concrete,” said Dan Juntunen, president and CEO of Wells Concrete. “Hanson brings a team of highly experienced professionals, a resume including major stadiums and high rise office and housing projects and an outstanding safety record that will contribute to making Wells Concrete a stronger

and more competitive organization in the marketplace.” Wells Concrete will be relocating its Golden Valley sales, engineering and construction services office to the Maple Grove Hanson Structural Precast location to streamline business processes. The combined office will operate under the Wells Concrete name. At this time, there are no plans to eliminate any positions. Terms of the acquisition were not disclosed. ■■■

Brunson joins CAB Construction

Steve Brunson has joined CAB Construction Co., as production manager. CAB is a regional metal fabrication and millwright firm with 30 years of experience. ■■■

AgStar’s Hinrich earns certification

Pete Hinrichs, senior director of home mortgage underwriting and servicing at AgStar Financial Services, recently earned the Certified Mortgage Banker designation. This makes Hinrichs one of just a few people in the U.S. with both the CMB and Certified Residential Underwriter designations. The Mortgage Bankers Association is the national association representing the real estate finance industry and offers the CMB designation. CMB is the highest professional honor in the real estate finance industry. Fourteen individuals received the CMB at the 101st annual convention. ■■■

TBEI promotes England

Truck Bodies and Equipment International recently announced the promotion of James “Archie” England to the newly created position of VP, Engineering and Quality. “As customers’ quality expectations continue to rise, combined with the desire to expand our ISO certification process, the time was right to create a centralized management position at TBEI to drive that quality in all of our family of brands,” said Bob Fines, CEO & president. England previously served as TBEI’s director of engineering. TBEI is a Minnesota based corporation that encompasses five leading manufacturers of dump truck bodies, hoists and truck and trailer equipment, including Crysteel. ■■■

New Ulm CVB manager retires

The New Ulm Area Chamber of Commerce announced the retirement of CVB Manager Terry Sveine. Sveine began at the Chamber in 1999. Over the past 15 years, he worked to build the tourism industry in New Ulm. He’s been involved with Oktoberfest, Heritagefest, Mushroom Fest, Parade of Lights and many other festivals.

MN Valley Business • december 2014 • 7

I+S adds new shareholders

I+S Group announced the addition of five new shareholders, including Paul Lawton and Justin Steffl in the Mankato office. This expanded ownership increases the number of shareholders to 21 in the 150-person company. “Successful transition of ownership is critical for any organization. We are very fortunate to have these five individuals who have all displayed Paul Lawton leadership and alignment with ISG’s vision join the shareholding group,” said President and CEO, Chad Surprenant. Lawton is an architect with 12 years of professional experience, including expertise in the planning and design of government, civic, commercial, medical, and education projects. Steffl is a senior project manager. His efforts are focused on leading projects through the entire design process, Justin Steffl beginning with the early design phase and continuing with construction administration through close-out and warranty follow-up.

VINE Faith in Action, local veterans of Mankato and North Mankato, Pub 500, Y Barbers/Onatah on Belgrade, Front Street Property owners and the city of Mankato, Visit Mankato, and the city of Mankato. ■■■

Promotions announced at Pioneer Bank

Galen Reding

■■■

GMG honors business award winners

Greater Mankato Growth held its annual Business Awards & Hall of Fame in November. The Business Hall of Fame award went to Minnesota Elevator Inc. The Distinguished Business Award went to PresenceMaker Inc. Friesen’s Family Bakery & Soup Bar won the Entrepreneurial Business Award, Barb Embacher received the Hap Halligan Leadership Award, Kevin Velasquez received the Young Professional of the Year Award and the College of Business at MSU and Tyalor Corp. – Innovation Center won the Brian Fazio Business Education Partnership Award. Visit Mankato honored Bent River Outfitters with the Bring it Home Award and Justin & Jenna Rinehart of Nicollet Bike Shop won the Hospitality Award. The City Center Partnership honored several businesses and groups for renovation projects and new construction:

8 • December 2014 • MN Valley Business

Marvin Kimm

Jen Winkelman

Pioneer Bank announced the promotions of Galen Reding as the bank’s first chief ag banking officer, Marvin Kimm as the bank’s southeast market president and Jen Winkelman as assistant vice president. Reding has over 35 years of experience with the bank. He is a multiperil and hail crop insurance product sales and servicing expert and agricultural lender and credit analyst. Kimm’s experience with the bank dates back to 1986. Since that time he has developed into one of the bank’s leading agricultural and commercial lenders. He has served as the Mapleton Chamber of Commerce president, Heather Curling Club president and on the planning and zoning commission for the city of Mapleton. Winkelman began her career at Pioneer Bank in 2007 as an administrative assistant and became the bank’s first full-time internal auditor in 2011. As internal auditor, she has expanded the bank’s internal loan review process, brought the bank’s directors examination in house and has coordinated audit procedures.

■

Business and Industry Trends

Local Economy

Summer vehicle sales up

than last winter.

Crude prices tumble

Car and truck sales in Mankato were strong over the summer, outpacing last year. Vehicle sales in June, July, August and September totaled 4,044. That compares to 3,654 sold over the same period last year.

Weakening global demand helped North Sea Brent crude oil spot prices fall to an average of $97 per barrel in September, the first month Brent prices have averaged below $100 in more than two years. EIA projects that Brent crude oil prices will average $98 in fourth-quarter 2014 and $102 in 2015.

Local consumers spending more

U.S. oil output highest in 25 years

Consumers shopping in Mankato spent about 3 percent more over the summer than they did last year, based on the local sales tax collections by the city of Mankato. For June, July, August and September, the city collected $1.73 million in local sales taxes compared to $1.67 million last year.

■■■

Energy

More natural gas exports, production

Increased natural gas production is projected to satisfy 60-80 percent of a potential increase in demand for added liquefied natural gas exports from the Lower 48 states, according to recently released analysis from the Energy Information Administration. The report considered the long-term effects of several LNG export scenarios specified by the Department of Energy’s Office of Fossil Energy. The study also considered implications for natural gas prices, consumption, primary energy use, and energy-related emissions. Effects on overall economic growth were positive but modest. In the export scenarios that EIA was asked to analyze, LNG exports from the Lower 48 states start in 2015 and increase at a rate of 2 billion cubic feet per day per year, ultimately reaching 12, 16 or 20 Bcf/d.

Total U.S. crude oil production averaged an estimated 8.7 million barrels per day in September, the highest monthly production since July 1986. Total crude oil production, which averaged 7.4 million barrels per day in 2013, is expected to average 9.5 million barrels in 2015. If realized, the 2015 forecast would be the highest annual average crude oil production since 1970. Natural gas plant liquids production is expected to increase from an average of 2.6 million barrels per day in 2013 to 3.2 million in 2015.

Natural gas inventories down

Natural gas working inventories on September 26 totaled 3.10 trillion cubic feet, 11 percent below the level at the same time a year ago and 11 percent below the previous five-year average. Despite the lower stocks at the start of this winter’s heating season, EIA expects the Henry Hub natural gas spot price to be $4/million British thermal units this winter compared with $4.53 last winter. This price forecast reflects both lower expected heating demand and significantly higher natural gas production this winter.

Heating costs fall

Average U.S. household expenditures for natural gas, heating oil, electricity, and propane will decrease this winter heating season (October 1 through March 31) compared with last winter, which was 11 percent colder than the previous 10-year average nationally. Projected average household expenditures for propane and heating oil are 27 percent and 15 percent lower, respectively, because of lower heating demand and prices. Lower heating demand and higher prices contribute to natural gas and electricity expenditures that are 5 percent and 2 percent lower Natural gas exports are up, but so is production.

MN Valley Business • december 2014 • 9

Minnesota Business Updates

■

■ Stores act to alert web visitors

■ Nortech quarterly profits rise

A group within the advertising industry’s self-regulatory body said that Best Buy Co., Yelp Inc. and three others had agreed to prominently alert website visitors when third parties are collecting information for behavioral advertising, to resolve the first actions stemming from a recent compliance warning. In order to resolve challenges brought by the Online Interest-Based Advertising Accountability Program, Best Buy, Yelp, Answers Corp., Buzzfeed Inc. and Go.com agreed in five separate decisions to provide real-time, enhanced notice and choice to website visitors whenever third parties are collecting their information.

Nortech Systems Inc., which has a facility in Mankato, reported net sales of $28 million for the third quarter ended Sept. 30, compared with net sales of $27.4 million for the third quarter of 2013. Operating income for the quarter was $473,000, a 26 percent increase over the third quarter of 2013. The company’s net income for the third quarter of 2014 was $333,000, compared to $218,000 for the third quarter of 2013. Based in Wayzata, Nortech is a full-serve electronic manufacturer, serving the medical device, military, aerospace, industrial and machine visions markets.

■ Centerpoint receives honor E Source has recognized CenterPoint Energy’s Minnesota energy efficiency program for achieving the greatest energy savings in the nation as a percentage of its natural gas sales (1.16 percent). The result surpassed the company’s state-approved energy savings goal. “We thank our customers who participated in our energy conservation programs last year, thereby producing the energy savings that both lowered their natural gas bills and their impact on the environment,” Doug Peterson, Senior Director of Sales and Conservation Improvement Programs for CenterPoint said in a statement. E Source provides research and advisory services to more than 300 utilities and large energy users.

■ AgStar reports higher earnings AgStar Financial Services reported earnings for third quarter ending Sept. 30. The company reported net aftertax earnings of $32.8 million for the third quarter and $85.7 million for the year. This reflects a $1.8 million increase over last year’s, year-to-date performance. “These earnings are the result strong net interest income growth year-over-year,” Rod Hebrink, president and CEO said in a statement. “In addition to positive net interest income, we’ve had significant improvements in the portfolio credit quality.” AgStar is paying out the 2005 patronage allocations of $28.9 million to 10,700 stockholders. Since the program’s inception in 1998, AgStar has allocated $453 million in patronage dividends. AgStar, along with eight affiliated Farm Credit partners, also recently closed a $150 million junior capital fund. The fund, the Rural Business Investment Company, assists private equity investments in agriculture-related businesses. AgStar committed $20 million to the fund.

10 • December 2014 • MN Valley Business

■ Sears looks at sale and lease back of stores Sears, following nine straight quarters of losses, said it’s actively exploring the possible sale and lease back of 200 to 300 stores in a bid to strengthen its balance sheet, according to Bloomberg News. The selected outlets would be sold to a newly formed real estate investment trust. Sears would continue to operate stores in the locations sold to the REIT under leases. It also would let shareholders purchase stock in the trust. Edward Lampert, Sears’s chief executive officer and its biggest investor, has been seeking ways to wring more cash out of the company’s assets — including its sprawling real estate holdings. Sears also announced a rights offering last month, giving it more time to return to profitability. The operator of the Kmart and Sears department-store chains stores aims to raise a total of as much as $2.07 billion this year if rights offerings are fully subscribed, according to a blog post last month. Fitch Ratings calculated in September that the company would need $4 billion of capital to avoid running out of cash in 2016.

■ Fatenal CEO to resign Willard Oberton notified the board of directors of Fastenal that he intends to resign from his position as Chief Executive Officer at the end of this year. The Winona-based company named Leland Hein, Jr. as CEO effective Jan. 1, in addition to his role as president of the company. Hein, 53, joined the company in 1985 and during his tenure has held various sales and managerial roles. Oberton, 56, will continue to serve as chairman of the board and will be continue to be actively involved in strategic planning.

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■

Business Commentary

By Charlie Weaver

Immigration reform: Global competition requires international talent

ee if you can guess what these people have in common:

– They create more than one-fourth of all new businesses. – They created one-third of the venture-backed companies that went public between 2006 and 2012. – They or their children founded an astounding 40 percent of Fortune 500 companies. Our underperforming economy could use a lot more of these job-creating wizards. Do you know who they are? Immigrants. Immigration reform is a hotly contested issue, and the debate in Washington is centered on border security and citizenship options for undocumented individuals. But while those major issues must be addressed, a smaller reform — expanding H1-B visas for highly skilled individuals — would produce broad economic benefits. In today’s hyper-competitive global economy, it is more important than ever to attract and retain talented people. Human capital advantages help companies and countries generate innovative ideas that lead to economic growth. Unfortunately, American immigration laws often bar the best and brightest international workers from joining U.S. corporations, costing all of us the economic benefits of their cutting-edge skills, expertise and ideas. A particularly frustrating aspect of our dysfunctional immigration system is that our universities are educating thousands of talented international students who would be sought-after employees if they could remain in the United States after graduation. Many U.S. companies, particularly in the technology sector, have unfilled positions because there simply aren’t enough qualified candidates, especially those with backgrounds in science, technology, engineering and math (STEM). Those fields depend heavily on immigrants, who comprise 29 percent of scientists, 50 percent of Ph.D.s employed in math and computer science and 57 percent of Ph.D.s working in engineering. Unless our educational system starts producing substantially more American-born STEM graduates, we will need more bright immigrants to fill critical roles in ground-breaking, growth-driving sectors. There are unfounded fears that U.S. citizens will lose jobs if H1-B visas are expanded. But because of the high cost and administrative burden of sponsoring H1-B applicants, U.S. companies would almost always prefer to hire U.S. workers; there just aren’t enough qualified American-born candidates in some fields. Rather than diluting the impact of America’s economic might,

12 • December 2014 • MN Valley Business

“Unfortunately, American immigration laws often bar the best and brightest international workers from joining U.S. corporations.” talented immigrants bring fresh ideas that produce economic growth that benefits everyone. We can energize our economy by welcoming top talent from around the world. The nonpartisan Congressional Budget Office analyzed the immigration bill that passed the Senate and determined that, if it became law, it would boost GDP by 5.4 percent over the next 20 years and decrease the federal deficit by almost $900 billion. A nation with an underperforming economy and staggering debt cannot afford to ignore those numbers. Numerous business executives have shared with me their frustration with nonsensical immigration policies that are suppressing economic expansion. Even if comprehensive immigration reform is politically impossible, Congress has a great opportunity to produce economic growth if it acts now to expand H1-B visas. Contact your elected representatives and tell them to open our doors to the next generation of creative innovators. MV Charlie Weaver is executive director of the Minnesota Business Partnership. Founded in 1977, the nonpartisan organization has a membership of more than 110 chief executives from Minnesota’s largest employers.

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Local developers say rental housing is hot and will stay in short supply for years.

A record breaker

2014 one of biggest construction years in history By Tim Krohn | Photos by John Cross and Pat Christman

s local construction and economic development winds down for the year, the big news of 2014 is clear. “Obviously the highlights are having the Wal-Mart distribution center started,” said Mankato City Manager Pat Hentges. “This will be a record year for commercial/industrial development — Wal-Mart, Mills Fleet Farm, the Fed Ex building and some others. We’ve had the best commercial year since the boom years of the ’90s with the construction

14 • December 2014 • MN Valley Business

of River Hills Mall.” Hentges notes the 2014 numbers are obviously skewed simply by the single building permit filed by Wal-Mart — totaling some $70 million for its distribution center going up on the east edge of town. But he said the overall construction in the city, including the three Tailwind Group buildings nearing completion on one block of South Front Street, set a high mark for annual economic development. Still, Jonathan Zierdt believes there is much more to

Cover Story

L to R: Mankato City Manager Pat Hentges. Jonathan Zierdt, Greater Mankato Growth come. “This is one of the biggest years on record and 2015 looks really strong,” said the president and CEO of Greater Mankato Growth. He points to four construction projects already slated to start next year: the downtown civic center expansion, new dining and clinical buildings at MSU, and a new middle school. “Those four projects alone are $150 million.” “I think with Greater Mankato you’re watching the birth of a star. At some point any city that crosses that regional threshold of 50,000 people something happens and you get that tipping point. This isn’t a flash in the pan — this is the new normal for us,” Zierdt said. “We lead the state in GDP growth, job growth, high livability. Our cost of doing business and living are among the lowest.” Hentges, too, expects things to keep rolling. “There’s no indication next year will slow down much. The housing should be big and there will be a lot of smaller commercial/ industrial projects coming on, just based on inquiries we’ve gotten. I think it will be a diverse year ahead.” Housing growth uneven While commercial and industrial growth was the story of the year, housing continued to be strong, albeit still heavily slanted toward apartment construction rather than single-family homes. “By far the hottest thing has been the rental market,” said Mike Drummer, one of the area’s most active developers. “There are several of us doing rentals, and they just fill up and there are waiting lists.” Drummer finished two complexes near the Wow Zone with a third coming next summer for a total of 155 units. “There’s a need for housing for young professionals,

people who graduated from college and are staying in the area.” “There’s a definite shortage of rental. I see even a greater shortage coming as we bring these new jobs online and have the new school built.” Hentges said that while rentals have been hot, that’s not the case for single-family homes. “If you look at our housing starts, they are down for the year. It hasn’t been the busiest year for single-family homes. But if you add all the apartments, it will be a pretty good year.” A slowdown in single-family homes is likely due to tighter loan underwriting requirements from banks and changing attitudes. Drummer said many first-time homebuyers want to look at spec homes that are already built, but they have difficulty qualifying for loans. “It’s loosening up a little, so I think it’ll get better.” He noted that in 2004, in his Cougar Estates subdivision near East High, there were 20 different builders putting houses up in the subdivision. This year, he said, there were just a few builders working in several subdivisions in the area. Hentges and Drummer said there’s also been a shift in attitudes among younger people who don’t want to take on the debt of buying a home and want to keep their options open. “People want to be more mobile, especially the young professionals. They aren’t fixing on houses right away,” Hentges said. “I think there just isn’t quite the demand for new housing. There is good demand in apartments and empty-nester housing for town homes and assisted living.” And while housing in Mankato and North Mankato may

MN Valley Business • december 2014 • 15

The Wal-Mart distribution center is going up quickly on the east side of Mankato. not have been growing wildly this year, nearby Eagle Lake is having a boom year in new housing as it becomes a bedroom-community suburb of Mankato. Hentges expects all housing development to keep booming in the region in the years ahead. “If you look at housing, the market is still very tight. If you talk to Sheri Allen (superintendent of Mankato Area Public Schools), their numbers are up and those people have to live someplace. And you have Wal-Mart and Fleet Farm already hiring and there is going to be more workforce demand,” Hentges said. Drummer said he expects next year to be even stronger than this year. “We have $15 million in permits for rental housing next year, by the new Wal-Mart distribution center and college housing off Stadium Road near the new roundabout.” Pressure on wages The economic development boom is putting pressure on businesses looking for employees as the economy continues to improve. Verizon Wireless, which has for the past couple of years been adding staff to its Mankato service-call center, has taken aggressive steps to find employees. They’ve frequently held free “career fairs” where people can take in seminars on topics such as using LinkedIn to improve their job search chances while letting people talk to Verizon managers about jobs at the call center. Help-wanted ads are back stronger than they have been for a decade and employers from the service industry to skilled manufacturing say they are increasingly finding it difficult to find qualified new hires. Add to that the coming of at least 400 new jobs at the Wal-Mart center, Fleet Farm and elsewhere, and competition to get employees will only intensify. “We get the impression that bringing 400 jobs into the

16 • December 2014 • MN Valley Business

marketplace is probably going to drive up wages,” Hentges said. “I hear from those in the service sector that it’s going to create shortages and drive up wages. I think in manufacturing, where they need skilled workers, there’s a shortage in the trade and skilled sector.” Zierdt said wages will undoubtedly push up in some sectors. “Will it globally raise our wages across the board? It may, but we don’t know yet.” Zierdt said businesses are helped here because of a low cost of doing business overall and because the higher livability of the area draws potential employees. And as the cluster of business grows, even more people start looking at moving to the area. “Business clusters bring masses of people, both customers and employees. People come here and say ‘I’ll try working there and if that doesn’t work I’ll try over there.’ ” He said that as more people retire any thriving economy in the country faces the same workforce issues. “This won’t go away anytime soon,” Zierdt said. “So what do you do? Everyone has to have their oar in the water on this one. Education, what businesses are doing, community organizations.” Hentges said the heated-up local economy stands in contrast to a reputation Mankato has of being high in poverty. State and national rankings often show the city and county as having among the highest poverty rates in the state. He thinks much of it is driven by the fact that the large number of college students are counted in the surveys, students who are making little if any money while they’re attending school. “Certainly there is an impact from all the immigrants in our community, there certainly is poverty out there. But with the workforce shortage and the pressure on wages, I’m a little at a loss for those (poverty) numbers.”

Top: The iconic silo takes shape on the new Mills Fleet Farm, set to open in the spring. Right: The new apartments near the Wow Zone are aimed at young professionals. New challenges for landlords The fast pace of construction in the commercial sector is also putting pressure on landlords renting out space, particularly higherend office space. The Tailwind projects downtown are adding a large amount of top quality office space. While some of the new tenants, such as Profinium Bank, are new to the area, other tenants are moving out of existing space in Mankato. Abdo, Eick & Meyers is leaving the Brett’s building for one of the new towers, and Ridley is exiting its offices on Riverfront Drive for the new offices. Developer Mike Brennan is also planning a large mixeduse building near the library, including higher-end office space. Hentges said developers may take a step back before starting a lot of similar new projects. “There’s a lot of interest in some more mixed-use projects downtown. With

the Tailwind project along with the transformation down there and the Brennan building, I think the marketplace has to settle out a little.” He said he has similar concern about the rapid pace of commercial development. “We’ve had good infill in the retail market. What worries me is if we open up one new grocery store or something we’d see another one close down.” MV

MN Valley Business • december 2014 • 17

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I have people tell me what they’ve spent playing one round at Pebble Beach and a night at the hotel, or going to Pinehurst for a couple rounds. We do the entire week, travel, hotel, green fees, good meals and everything for the price of one day at these places. And it’s absolutely a sensational place to come. TO PLAN YOUR VISIT to Alabama’s Robert Trent Jones Golf Trail, visit rtjresorts.com or call 1.800.949.4444 today. facebook.com/rtjgolf twitter.com/rtjgolf 18 • December 2014 • MN Valley Business

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MN Valley Business • december 2014 • 19

Max Milinkovich, president of Full Circle Organics.

Taking organics Full Circle Compost facility one of largest in Midwest By Heidi Sampson | Photos by John Cross

ver the years, Max Milinkovich, president of Full Circle Organics, started developing an idea of composting organics while working in restaurants and later, while working for Waste Management. However, it was at Waste Management when handling outside sales for the company, that the first talks of organics and diversion really got started. “Organics and landfill diversion centers on the idea of diverting organics from incineration or local landfills,” he said. “We’ve been trained to believe, at least in this area, that incinerating recyclables is okay, and it’s not. The biggest problem was the creation of programs to allow for composting but there was literally nowhere to put the

materials, especially in the Midwest. Also, having originally come from Arlington myself, I held a particular interest in developing diversion opportunities in Minnesota.” In 2010, Milinkovich sat down with his great uncle, Tom Huffman, at a family reunion. Huffman started discussing his business, which dealt with anaerobic digestion of manure, as he was land applying a lot of materials at that time. The conversation evolved into a discussion on organics, responsibility, and landfill diversion. “My message when I am presenting our idea of composting organics and landfill diversion,” Milinkovich

Profile

20 • December 2014 • MN Valley Business

The finished compost holds 200 times its weight in moisture. said, “is the idea of being responsible with our waste. We don’t necessarily get caught up in the terms or terminologies associated with going green. In some cases it isn’t responsible to drive x amount of miles to compost something if there is another option closer. We want to be responsible about our diversion and I think the sustainable way of doing it is in being responsible. We try to look at the whole picture.” Birth of Full Circle Organics After Milinkovich’s and Huffman’s conversation on organics and landfill diversion at the family reunion, MFS Farms, which stands for Mike Fitzsimmons and Sons Gary, David, and Kevin - called Huffman looking for a pump for their manure spreader. With the concept of organic and landfill diversion still fresh in his mind, he asked MFS Farms if they’d be interested in an idea he’d heard about. “At that time, the Fitzsimmons’ were considering expanding their feedlots,” Milinkovich said. “My great uncle decided to talk to them about another use for their land. Since MFS Farms contains a progressive group of guys, they were extremely interested.” Roughly a year after the initial conversation at their family reunion, the two joined forces helping to make Full Circle Organics become a reality in 2011. Their first site was constructed with the assistance and partnership of MFS Farms. Since the completion of the Good Thunder site, Full Circle Organics has developed six other sites, some which they own and some of which are partnerships with other facilities or groups of people. Rapid Growth Since 2011, Full Circle Organics has developed facilities or working relationships in Becker, Shakopee and Dubuque,

Iowa for the composting of organics. They also work with Dodge County, utilizing their recycling transfer station, which allows them to send organic materials from eastern Minnesota through Dodge County to the Good Thunder composting site. Covering the North Metro area of the cities is a demonstration project partnership with TriCounty Organics out of St. Cloud. “With the permitting process, as well as getting sites up and running,” Milinkovich said, “expansion must be at the right pace, as with any business. At Full Circle Organics, we have eight direct employees but that doesn’t count those who are running our compost sites. However, with our current rate of growth, there is no reason why our company won’t be the largest composting company in the Midwest. Right now, we are nipping on the heels of the largest composting company. By early 2015, there is absolutely no reason why we won’t be the largest manager of organics composting in the Midwest and we are just starting out. That’s pretty incredible when you think about it.” Composting Misconceptions The biggest misconception surrounding the idea of composting organics and landfill diversion centers on the idea of water usage. However, composting organics doesn’t require the usage of water. “Our compost mixture is organics, grass, and leaves,” Milinkovich said. “We do use some corn stalks and hay bales for our bulking agents as well, but no water. We also do not in any way use hog manure within the compost mixture.” Typically, composting organics takes about six to eight months, which according to Milinkovich, is a daily labor of love. Those who work on the composting sites are responsible for everything from taking temperatures of

MN Valley Business • december 2014 • 21

compost materials to the rotation of compost. “We even have a weather station that monitors wind speed, humidity and precipitation,” Milinkovich said. “All of that is also documented and tracked daily. Composting is a lot more in-depth than one would think.” Compost Usage The final product developed after the organics have been composted is capable of holding 200 times its weight in water. Consumers interested in applying organic compost as a top dress for their yard, or as material around mound systems, will be pleased with the water retention aspect of the organic compost material. “Typically, businesses place the organic compost down before the sod,” Milinkovich said. “Our compost has a higher nitrogen component, as well as its ability to hold 200 times its weight in water. So if we are putting our organic compost on the ground our customers are gaining moisture retention, as well as the benefits associated with organic matter. It’s Top: The organics must be occasionally rotated to speed up the compost process. Bottom: It takes six to eight months to perfect for top dress on complete the composting process. yards. All they need to do is aerate, top dress, and apply seed over the compost.” pickup options as they continue to expand. “I love being a part of what feels like the ground floor in Want to Compost? organics and diversion,” Milinkovich said. “If four years At this point, Full Circle Organics doesn’t offer a public ago you would have asked what companies I’d be working drop place for organic material. However, those who are with, I wouldn’t have had an answer. Recently, my great interested in composting organics can call their information uncle Tom and I were looking at a business journal and we line at 612-327-1972 or email: info@fullcircle-organics. realized that we are working with four of the top five com. largest privately owned companies in the state of Since Full Circle Organics doesn’t offer a public drop-off Minnesota. But, those are also the companies that are the site they are tied in with a few of the local hauling leaders in diversion, as well as in being responsible, as companies within the area. They also offer some hauling they should be.” MV services for organics themselves. However, at the present time Full Circle Organics is not able to align pickups of organic material residentially. Their current focus is solely on commercial businesses. The future may present more

22 • December 2014 • MN Valley Business

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MN Valley Business • december 2014 • 23

Louise Dickmeyer, president of PDP – People Driven Performance.

Driven by people PDP helps companies communicate better By Nell Musolf Photos by John Cross

ouise Dickmeyer has had a diverse career in the business world. She holds a Bachelor of Science from Minnesota State University and a Master Degree from Regis University in Denver, and has worked for a variety of organizations. “I was a part of Taylor Corporation’s strategic accounts group and before that was in executive management and marketing roles for various organizations,” Dickmeyer said. Dickmeyer has supported business development throughout her career and spent 10 years in economic development working with manufacturing companies. When Denny Dotson of the Dotson Company in Mankato approached her about joining PDP — People

Driven Performance — Dickmeyer was intrigued. Dickmeyer is now the president of PDP, a company that aims to help companies by i m p rov i n g communication throughout their organization. “I was attracted by the social significance of the work,” Dickmeyer recalled. “Specifically, putting people first, communicating effectively with employees and creating a culture of trust and transparency—all of which drive higher levels of engagement and organizational performance. That was my key interest in joining PDP.” Improving communications has a myriad of benefits for employees, employers and stockholders. According to Dickmeyer, the

Spotlight

24 • December 2014 • MN Valley Business

Gallup organization recently reported that 70 percent of American workers are either ‘not engaged’ or ‘actively disengaged’ in their work. Such lack of engagement costs over $550 billion in lost production each year. A Towers research study stated that companies with highly effective internal communications have a 47 percent higher return to stockholders over those with the least effective communications and that between 2002 and 2012, companies with the most effective communication attained an average market valuation increase that was 20 percent higher than other companies. The Conference Board reported that employee understanding of the business strategy and how their work contributed to company performance is one of the top drivers of engagement. In other words, letting employees know how important they are to the overall success of a company is vital. Another plus of improved communication is an improvement in safety. Informed and engaged employees are five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. Improved safety equals less time and money spent on injuries. “Communication is the cornerstone to employee engagement,” Dickmeyer said. “However, few companies are good at it. That is where PDP helps. We are particularly effective in solving the challenges caused by multiple generations, multiple locations and shifts.” Working with non-desk employees When a company decides to work with PDP, Dickmeyer and her team work to define what kind of communications problem is at hand and often use the results of an internal employee survey to discover what is lacking communications-wise. PDP then designs the branding and messaging needed to address that communication void. “In defining the problem, we also define the primary audience,” Dickmeyer said. “This is often the production floor worker or non-desk employee. PDP uses a proven method that is effective for implementing its employee communications system and tools. The company works with clients to identify key players in their organization that will “own” the system and contribute to the content (key performance metrics, news and information). “We customize the system to fit a client’s brand and, most importantly, share best practices,” Dickmeyer said. “We relish the fact that companies that work with PDP are seeking to create or cement a culture where employees come first. As a part of that, they need to commit to improve communications. Transparency of information is present in all high performing companies.” PDP uses software to help companies improve communication on every level. The software is constantly under development and according to Dickmeyer, its possibilities are “endless.” It consists of the following four components: News, People, Score and Docs. The Score tool allows companies to display performance metrics to all employees at any time. Score automatically harvests data from ERP systems or from wherever the data resides and displays it on a target image that makes it easy for the viewer to see where performance stands. Dickmeyer said that clients love the Score feature because instead of having to manually print out reports and post them, the

Finishing Supervisor Shane Wendland checks out the Dotson Times on a PDP Solutions kiosk to read a message directly from the CEO. Photo provided by Matt Johnston data is always present on touchscreens placed throughout the company. “Most clients recognize that communicating with bulletin boards and emails and quarterly meetings doesn’t cut it anymore,” Dickmeyer said. “Particularly with nondesk, shop floor employees.” While the length of time needed to get the PDP program up and running differs from client to client, Dickmeyer said that a typical implementation is one to three months. PDP works closely with new clients to lead them through the process and ultimately work at the speed that works for them. PDP also continues support for clients on an ongoing basis. Companies face different challenges Keeping the level of communication as high as possible is important to keeping employees satisfied and can be key in retaining a workforce. One of PDP’s clients is a luxury automotive dealership in St. Petersburg, FL. They brought PDP in because they were experiencing, along with everyone else in their industry, high turnover in the first year of employment. With the help of PDP, that problem is being addressed by engaging employees via internal communications. Another company brought PDP in because their company had grown exponentially in sales and had greatly expanded their workforce. Due to the company’s growth,

MN Valley Business • december 2014 • 25

the CEO was no longer able to regularly walk the production floor and connect with his employees. Bothered by that, the CEO needed a new way to connect and share his vision and strategy so he turned to PDP. A local client, Sarah Richards, CEO of Jones Metal Products, said that by using PDP, her company has helped remove the rumor mill, something that arises when employees who don’t really know what is going on behind closed doors will all too often fill in the blanks with incorrect information. Richards also found that employees who knew more about each other tended to take more care around each other and to care more about the company at the same time. PDP has worked with manufacturing, healthcare, banking, safety industries and sales. Dickmeyer said that her company can work in all sectors. “Our focus in on reaching nondesk employees who typically don’t have or who are not comfortable using a PC all day. We have more manufacturing clients than any other industry. We have done pilot projects in county government and are operating in a local high school,” Dickmeyer said. “At the end of the day, the leader of the organization in any industry has to be willing to ‘own their culture’ and make a bold commitment to transparency and effective communications.” PDP incorporated in 2008 and has offices in Mankato and Seattle. It currently has a group of 10 employees and key vendors. “We all work together and don’t have a typical top down hierarchy,” Dickmeyer said, “so no one really ‘works for me.’ All of the people who work with PDP are passionate about improving the work experience for employees,” Dickmeyer said. “People above process, so to speak. I think we are almost more of a ‘movement’ than a company. Our vision is to create a world where people drive performance.” MV

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26 • December 2014 • MN Valley Business

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MN Valley Business • december 2014 • 27

Mike and Donna Tatge are celebrating 35 years as owners of The Market.

Main Street’s market for 35 years Tatges closely track needs of their customers By Heidi Sampson Photos by John Cross

his month, Mike and Donna Tatge are celebrating 35 years as owners of The Market, a small grocery, fuel station and bait shop, located in Madison Lake. Thirty five years ago, the Tatges were just beginning their family with an 11-month-old boy, when the two decided to purchase the local grocery store that contained a selection of fresh meat. “This building had been for sale for quite a few years by the time we seriously considered purchasing it,” Donna said. “I’d grown up in Madison Lake. I thought it would be kind of cool to own a store and here we are 35 years later.”

Eight years after the purchase of the grocery store, the gas station adjacent to their building would become available for purchase. With the newly acquired fuel station, the two remodeled, combining the grocery and fuel aspects into one building. During the remodel process, Mike and Donna decided to drop the fresh meat section of their grocery, choosing to offer frozen meat to their customers instead. They also decided to go with more of a convenience type theme, developing their store into a one-stop shop for customers. Over the years, the Tatges would also add pay at the pump, as well as bait for the local fishermen.

All In The Family

28 • december 2014 • MN Valley Business

Left: Donna says fresh-baked rolls help set their business apart. Right: Mike carefully monitors what items customers are buying and want stocked. “Our customers don’t have to run around everywhere and try to get the stuff they need,” Mike said. “They can get their boat filled up, grab some coffee, bait and leave for the lake.” MVB: How long have you two been married? Donna: We were married in May of 1977. We’ve been married almost as long as we’ve owned the store. So really, it’s all we’ve known. We also raised three kids here. They all worked in the store from the time they were 10. Our children developed a solid work ethic here. They learned how to take care of themselves. They also learned that if they wanted something they had to work to get it. When we started this, we didn’t know how we were going to run this business with three children, but when we look back, we don’t know how we could have done it without them. They are still a big help. Our oldest, Andrew, is a lawyer and he helps us with the legal side. Our daughter, Cathy, is a writer and editor, she helps with our signage. Our youngest, Jim, has built our cabinets and a lot of the other things around here when we re-did the kitchen. So each one has helped us along the way. There really is no way we could have done this without them.” Mike: Their time and talents have come back to help us. Donna: I think that’s what makes us a real family business. MVB: What is something especially unique about your store? Donna: We have play-at-the-pump, which means we can sell lottery tickets at the pump. Mike: Actually, we are the third store in the state of Minnesota to have the Power Ball play-at-the-pump option, which we installed last spring. What play-at-the-pump means, is that if you have a debit card and a driver’s license, you can purchase Power Ball tickets at our pumps. If a customer has a smart phone, they can, as they are going through the screens, enter their smart phone telephone number into the system. The machine will forward their (Power Ball) numbers right to the customer’s smart phone. After the drawing, if they win, the machine will notify them on their smart phone, as well as credit the dollar amount that they have won, up to $599, back to their checking account. Play-at-the-pump customers no longer have to worry about losing their tickets. This last year, the Legislature wanted to outlaw play-at-the-pump. We were the only business asked to come and testify before one of the House sub-committee, which was a rather unique experience.

MVB: What were some of the concerns of the state’s Legislature? Donna: The Legislature was worried about people overusing the machine but you can only spend up to a certain point. There is a limit. Mike: They were also concerned with juvenile’s stealing their mother’s debit card and her ID. They asked, what would happen then? However, even if the kid did steal the ID and debit card, the money would go right back into the mother’s checking account anyhow. MVB: How has play-at-the-pump gone over with your customer base? Donna: It’s starting out slowly. Mike: I think it’s taking a bit for the idea to take hold because people are still learning how to operate the system. Since there are only a few stores that have it, people aren’t all that used to it yet.” MVB: What’s something you’ve noticed regarding small businesses? Mike: We’ve watched a lot of local businesses come and go. When a small town store closes up, sometimes people can get critical, but if they don’t help to support them, they won’t be there either. It’s just like with scanning. We can run reports on what’s selling and if something isn’t selling or it’s outdated, we are going to stop having that item. I look at it as it’s our customers’ choice of what we have, by what they buy. I think that holds true for any business. MVB: What sets The Market apart from other stores? Mike: I think our wider selection helps. We are more of a superette type store. Donna: We also have fresh baked buns daily. Mike: That means all of our sandwiches that we make for lunch are made on fresh baked buns, which is something you don’t find everywhere else. We also sell the buns in 8- and 12-packs, as well as take large orders for special occasions. We bake cookies and rolls. We even have Piccadilly Pizza, which is the fresh baked option, as well as the take-and-bake pizzas. Our customers can call in and special order a pizza, or simply come in and order their pizza. MV

Hours:

Summer Hours (First part of April through October): 6 a.m. to 10 p.m. Winter Hours: 6 a.m. to 9 p.m. MN Valley Business • december 2014 • 29

» C OME JUDGE

for Yourself.

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THE ROBERT TRENT JONES GOLF TRAIL AT CAPITOL HILL is home of the Yokohama Tire LPGA Classic on the Senator Course September 18 to 24, 2014. The Marriott Prattville is part of the Resort Collection on Alabama’s Robert Trent Jones Golf Trail. Visit www.rtjgolf.com or call 800.949.4444 to learn more.

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MN Valley Business • december 2014 • 31

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32 • december 2014 • MN Valley Business

Construction/Real Estate Residential building permits Mankato

(in thousands)

- 2013 - 2014

11000

Residential building permits North Mankato

- 2013 - 2014 (in thousands)

3000

$2,603 $4,420

8250

$1,428

2000

$1,236

5500

1000

2750 0

Source: City of Mankato Information based on Multiple Listing Service and may not reflect all sales

- 2013 - 2014 275

Includes single family homes attached and detached, and town homes and condos

Housing starts: Mankato/North Mankato - 2013 - 2014

16 14

165

110

55 J

Source: Realtors Association of Southern Minnesota

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

(in thousands)

- 2013 - 2014

Commercial building permits North Mankato

- 2013 - 2014 (in thousands)

2000 1500 1000

$2,440 $1,300

$140 $165

500 D

Source: City of Mankato

Source: City of North Mankato

Interest Rates: 30-year fixed-rate mortgage

Foreclosures: 2013 Year End

— 2013 — 2014

5.5 5.0

4.3%

4.5 4.0

4.0%

3.5 3.0

170 220

220

80000 70000 60000 50000 40000 30000 20000 10000 0

Source: City of North Mankato

Existing home sales: Mankato region

Source: Freddie Mac

County

2012

2013

Percent change

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

126 37 46 98 42 49 58 57 17

101 19 27 70 25 43 39 36 24

-20% -49% -41% -29% -40% -12% -33% -37% +41%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • december 2014 • 33

■

Agricultural Outlook

By Kent Thiesse

A host of ag issues await new Congress

he highly anticipated 2014 election is now history, and the results were quite interesting, especially from an agriculture perspective. The U.S. Senate will switch from Democratic control to Republican control after Jan. 1. This means the GOP will be in the leadership role in both the Senate and the House. The leadership role also means that Republican members of Congress will serve as chairs of all Senate and House committees, including the respective agriculture committees. Following is some perspective on key ag policy issues that could be considered during the next session: Tax Incentive Extenders - Several tax extenders (“tax breaks”) expired at the end of 2013, and have not yet been renewed going forward. Among these are a few that are key to farm operators, machinery dealers, tiling companies, farm building construction firms, etc. The most prominent being increasing the Section 179 depreciation tax deduction for farm machinery and other capital assets back to $500,000 per year. The maximum deduction will be $25,000 for 2014, if no action is taken by Congress. Federal Budget - Even though the federal budget has improved somewhat in the past year, the federal debt has continued to rise. There will be a need to again raise the debt ceiling by mid-2015, which will likely open up lively budget discussions by the new Congress. There could be support to scale back spending on some programs, which may include some of the farm programs that are being implemented under the new Farm Bill. Some analysts are estimating that Federal spending for farm program payments in 2014 and 2015 will far exceed budget targets, due to the sharp drop in crop prices in the last half of 2014. Railroad and Transportation - The transporting of grain to market, as well as getting crop and livestock inputs to producers, has become a major issue in the past year, especially in the Upper Midwest and Northern Plains states. Expect members of Congress from Minnesota, North and South Dakota, and Montana to put pressure on both Congress and the White House to address these issues, either through legislation, or direct negotiations with railroad companies. Renewable Fuels Standard (RFS) - The Environmental Protection Agency was supposed to announce the revised RFS standards in November, 2013. EPA then took further comments on the proposal until May and has yet to act on the revised RFS standards. One of the most controversial proposals in Midwest States was to reduce the RFS cornbased ethanol requirement to 13.01 billion gallons, down from the 14.4 billion gallons established in 2007.

34 • december 2014 • MN Valley Business

EPA regulation - Many members of Congress have become increasingly concerned with the enhanced environmental regulations being administratively imposed by EPA. Many of the proposed regulations could potentially have a direct impact on the future of production agriculture. The current item that is garnering considerable attention is the proposal by EPA to expand the definitions and regulatory controls under the “Waters of the U.S.,” which some agriculture analysts feel could greatly restrict future crop and livestock production in portions of the country. Expect the new Congress to be quite active on EPA regulation oversight. Climate change - The White House has made several promises to implement measures to reduce the maninduced impacts of a changing climate, many of which target the energy industry, and ultimately could have a major impact on the agriculture industry. Congress has been reluctant to take much action relative to climate change. The White House may decide to move forward on some initiatives without Congressional approval. Immigration reform - Many industries, including the agriculture industry, could be significantly impacted by any potential immigration reform legislation. Both production agriculture and the ag processing industry are heavily reliant on an immigrant workforce, so major restrictions in getting needed workers could greatly affect the rural economy in some locations, including in southern and western Minnesota Trade Agreements - There are several pending trade agreements that need to be resolved by Congress and the White House. The biggest of these is the Trans-Pacific Partnership trade agreement with many Asian Countries, including Japan. The agriculture industry relies heavily on these trade agreements to support the ever-expanding export markets for grain, meat, and processed agricultural products. Trade agreements may offer an opportunity for Congress and the White House to compromise during the next session of Congress. The optimist would hope that the Senate and the House will be able to compromise with the White House during the next session. The pessimist feels that the political gridlock in Washington will continue for two more years, and very little resolution will occur. The reality is probably that some of these issues will have to be dealt with on the short-term, due to the urgency and importance of the issues, as well as the potential political fallout that could result from two more years of total political gridlock. MV Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com

Agriculture/Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2013 — 2014 8

$3.99

$12.45

16 12

Iowa-Minnesota hog prices

Source: USDA

Milk prices

185 pound carcass, negotiated price, weighted average

— 2013 — 2014 140

$10.08

$3.51

Source: USDA

$86.62

$25.99

112

Minimum prices, class 1 milk Dollars per hundredweight

— 2013 — 2014 30

126

$21.00

84 70

(dollars per bushel)

— 2013 — 2014 20

Soybean prices — southern Minnesota

$79.53 S O

Source: USDA

Source: USDA. Based on federal milk orders.

Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

C. Sankey

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MN Valley Business • december 2014 • 35

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major October Industry ‘13 ‘14 Construction Manufacturing Retail Services Total*

136 179 43 202 560

Percent change ‘13-’14

96 202 44 169 511

-29.4% +12.8% +2.3% -16.3% -8.7%

Major Industry

October

Construction Manufacturing Retail Services Total*

‘13

‘14

Percent change ‘13-’14

3,495 2,390 1,347 5,579 12,810

2,993 1,758 1,212 4,720 10,683

-14.4% -26% -10% -15.4% -16.6%

Services consist of administration, educational, health care and social assistance, food and other miscellaneous services. *Categories don’t equal total because some categories not listed.

Local non-farm jobs

Minnesota Local non-farm jobs

- 2013 - 2014

Nine-county Mankato region

126,785 128,134

30000

2000

10000

1000

Local number of unemployed

- 2013 - 2014

Nine-county Mankato region

Minnesota number of unemployed

8000 6000

135,518 108,265

150000

5,489 4,441

- 2013 - 2014

200000

10000

100000

4000

50000

2000 0

2,838 2,882

3000

20000

00000

- 2013 - 2014

(in thousands)

Mankato/North Mankato Metropolitan statistical area

Unemployment rate Number of non-farm jobs Number of unemployed

Unemployment rates Counties, state, nation

(includes all of Blue Earth and Nicollet Counties) September

2013

2014

3.7% 55,967 2,176

2.9% 57,775 1,744

Source: Minnesota Department of Employment and Economic Development

36 • december 2014 • MN Valley Business

County/area Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan Minneapolis/St. Paul Minnesota U.S.

September 2013 September 2014 3.9% 3.0% 3.9% 3.1% 4.7% 3.9% 4.8% 4.0% 4.6% 3.9% 3.5% 2.7% 3.9% 3.1% 4.8% 4.2% 4.6% 4.2% 4.6% 3.6% 4.6% 3.6% 7.0% 5.7% C. Sankey

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold - 2013 - 2014 1,141

909

1200

(In thousands)

400

800

300

600

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato $51,282 $56,816

60000

- 2013 - 2014 $55,837 $59,000

51000 34000 17000

10000 J

— 2013 — 2014 $3.08

4 3 2

$2.89

1 M

Gas prices-Minnesota — 2013 — 2014 $3.02

4 3 2

$2.85

1 F

Source: City of Mankato

Gas prices-Mankato

Source: City of Mankato

68000

20000

85000

30000

Source: Sales tax figures, City of Mankato

Mankato food and beverage tax

40000

- 2013 - 2014

50000

$404

100

200

$432

200

400

- 2013 - 2014

500

1000

Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.

Sales tax collections Mankato

Stocks of local interest

Oct. 16

Nov. 12

Percent change

Archer Daniels

$43.17

$50.89

+17.9%

Ameriprise

$109.87

$129.93

+18.2%

Best Buy

$31.28

$35.12

+12.3%

Crown Cork & Seal

$44.87

$48.71

+8.6%

Eventis

$19.28

$27.10

+40%

Fastenal

$40.78

$44.58

+9.3%

General Growth

$24.03

$25.49

+6%

General Mills

$48.86

$50.94

+4.3%

Hutchinson Technology

$3.50

$3.68

+5.1%

Itron

$37.06

$41.34

+11.5%

Johnson Outdoors

$27.32

$31.22

+14.2%

$135.05

$157.40

+16.5%

Target

$59.44

$66.46

+11.8%

U.S. Bancorp

$37.10

$43.86

+12.2%

Wells Financial

$25.75

Winland

$0.70

$0.81

+15.7%

Xcel

$32.28

$33.43

+3.6%

Source: GasBuddy.com C. Sankey

MN Valley Business • december 2014 • 37

Greater Mankato Economic Development

Greater Mankato has steadily grown into a thriving regional center. The region has been ranked highly in numerous nationally recognized lists including Forbes. Greater Mankato’s economic strength and stability are due to a number of different reasons. See the list below for some key points on why so many have chosen Greater Mankato as the place to live, work and grow.

The Greater Mankato region has a DIVERSE ECONOMIC MAKE-UP, with no sector taking up more than 18% of the economy.

Greater Mankato Growth

In 2013 the Mankato - North Mankato MSA had the 5th LOWEST COST OF DOING BUSINESS among the 29 MSA’s in the upper midwest. Currently the cost of doing business is 11% LOWER THAN THE NATIONAL AVERAGE.

The Mankato - North Mankato MSA has LED THE STATE WITH YEAR OVER YEAR JOB GROWTH 46 of 48 months, including a 24 month streak of continuous growth.

The cost of living in the Greater Mankato area is 23% LOWER THAN THE NATIONAL AVERAGE and individuals in the area ANNUALLY EARN ABOUT $5,000 MORE ON AVERAGE than the region’s estimated cost of living. *MSA - Metropolitan Statistical Area For data sources please visit greatermankato.com

38 december • MN Valley Business 1 •• JANUARY 20132014 • MN Valley Business

Greater Mankato at the Capitol 2015 Make your Voice Heard on January 20

Greater Mankato Growth is again coordinating the largest citizen advocacy event from our region at the State Capitol on January 20, 2015. This is the sixth consecutive year a delegation of business and community leaders from Greater Mankato will travel to St. Paul to raise the visibility of our region among state leaders. Greater Mankato at the Capitol allows attendees to be advocates on their own behalf as well as the opportunity to speak with a unified voice on key policy issues that allow our region to grow and thrive. Attendees will have the opportunity to rally in support of our community, participate in issue focused forums with state leaders, and interact with state legislators and colleagues at an evening reception, with round-trip transportation between Mankato and St. Paul. It’s your business, your city, your county and your home. Have a say in how they will be affected. “Since our elected officials have the power to make decisions about critical issues impacting the vitality of your business and our regional marketplace, Greater Mankato Growth is committed to providing opportunities that create awareness among its members, the community, and elected officials about public policy matters affecting Greater Mankato,” said Greater Mankato Growth President & CEO Jonathan Zierdt. All Greater Mankato citizens are invited to participate in Greater Mankato at the Capitol. Whether you know a little or a lot about government affairs, join your neighbors and make your voice heard! You can learn more about Greater Mankato at the Capitol, including information on registration and sponsorship opportunities, at greatermankato.com/capitol or contact Patrick Baker at 507.385.6657 or pbaker@greatermankato.com.

Greater Mankato Growth MN Valley Business • december 2014 • 39

Greater Mankato Growth

Cavaliers

Cavalier Calls on the Newest Greater Mankato Growth Members

American Cancer Society 116 Sawgrass Court, Mankato relayforlife.org/blueearthcountymn

Decadent Desserts 530 North Riverfront Drive Suite 150, Mankato decadentdessertsonline.com

Kato Public Charter School 110 North Sixth Street, Mankato katopcs.org

Malterer Mechanical 20398 549th Lane, Mankato facebook.com/malterermechanical

Profile by Sanford 511 Holly Lane, Suite 120, Mankato profileplan.net

The True Team ReMax Dynamic Agents 1720 Adams Street, Mankato findhomesinmankato.com

40 december • MN Valley Business 1 •• JANUARY 20132014 • MN Valley Business

Navigating through greatermankato.com Resources available on Greater Mankato Growth’s website, greatermankato.com

How to Navigate the Business Directory The Greater Mankato business directory is your source for local business information. With this tool you can learn more about businesses who are members of Greater Mankato Growth including finding contact information or locations and viewing any coupons or deals the that may be offered. Searches can be filtered by new members, coupons and discounts or categories. As a member of Greater Mankato Growth the business directory can be used to share information or help direct individuals to your website. If you are a member of Greater Mankato Growth, log in to the member portal to update your business directory information at any time.

5:00 - 7:00 p.m. December 2

Country Inn & Suites Hotel & Conference Center By Carlson

2014 Business After Hours Sponsored by:

7:30 - 9:00 a.m. December 17

Unique Specialty & Classics

2014 Business Before Hours Sponsored by:

For a list of 2015 hosts and locations please visit our website.

October Business After Hours hosted by Schwickert’s Tecta America of Mankato

October Business Before Hours hosted by Old Country Buffet

Greater Mankato Growth Business After and Business Before Hours gives representatives from GMG member businesses at the Engaged Level or higher an opportunity to get together with one another to exchange ideas and learn about each other’s businesses. For more information on these and other member events, visit greatermankato.com/events.

MN Valley Business • december 2014 • 41

Greater Mankato Growth

Growth in Greater Mankato NEW BUSINESS

NEW BUSINESS

Freedom Home Care, LLC 209 South Second Street, Suite 202, Mankato

Front Street Tattoo 634 South Front Street, Mankato

GROUNDBREAKING

NEW BUSINESS

Ridley Office Tower Corner of South River Front Drive and Cherry Street

Z Wireless 1750 Commerce Drive, Suite 120, North Mankato

STAND OUT IN GREATER MANKATO As a busy professional, you likely have come across opportunities to join different organizations. But there is only one organization that provides the most comprehensive business information and more opportunities to connect with others in the business community, with a membership total of more than 890. Together, we create an incredible pool of intellectual and financial resources to develop a stronger community.

As a new member, Greater Mankato Growth (GMG) welcomes you via eNews and Facebook with a link to your website. The volunteer group, Greater Mankato Cavaliers, visit your business and take a photo to be put in this publication. We also announce you at our monthy Before or After Hours event.

*When consumers know a small business is a member of a chamber, they’re 44% more likely to think favorably of it and 63% more likely to purchase from it.

GMG also offers Tips and Tricks on how to get the most out of your membership - so what are you waiting for? *Studies prove that being a member of a chamber increases business! For more information on membership contact us at 507.385.6643 or visit our website at greatermankato.com/yourmembership-your-choice.

42 december 2014 • MN Valley Business 1 •• JANUARY 2013 • MN Valley Business

*The Shapiro Group and Market Street Service

2014 Reflection 2015 Anticipation By Kathryn Reeder, Brand Manger at Visit Mankato

Visit Mankato’s 30th Anniversary Celebration

his year has been noteworthy and special for Visit Mankato. The organization celebrated its 30th Anniversary in May, the 5th anniversary of the Mankato Marathon in October and launched the Mankato Sports Commission in March. Visit Mankato has been promoting Mankato as an ideal destination for conventions, tournaments and leisure travel since 1984. In honor of its 30th anniversary and also in spirit of National Travel and Tourism week in May.Visit Mankato recognized outstanding ambassadors of Mankato for making visitors feel welcome.

These additions prompted runners to stick around and enjoy the ambiance of the race, appreciating an event that has become a Mankato tradition.

Another milestone for Visit Mankato was the launch of the Mankato Sports Commission in March. The Sports Commission serves as a department within Visit Mankato to boost sports tourism in the community. It is volunteer led by 19 commissioners and provides leadership, guidance and expertise that enables the attraction, support and administration of high quality sporting and competitive events in the area. This year has been abundant for Visit Mankato and the 2015 forecast looks just as exciting. In July of 2015, the Minnesota Vikings, along with the Mankato community will celebrate Vikings Training Camp’s 50th year in Mankato. A planning committee has already been formed and exciting ideas are in the works. On to other exciting news, Mankato has been chosen as the host community for the 2015 Minnesota Governor’s Pheasant Hunting Opener. Governor Mark Dayton made this announcement at the 2014 Governor’s Pheasant Opener in Worthington in October.

The event will allow Mankato, as a community, to highlight its acres of hunting land in addition to its excellent outdoor recreational activities including fishing, biking and kayaking. The event will take place October 9 and 10, 2015. Three new and notable events to be hosted in Mankato in 2015 include: The WORLD FITASC Sporting Clay Shooting Championship and the U.S. FITASC Sporting Clay Shooting Grand Prix in July, along with the NCAA DII Wrestling Regionals in February-March. Returning events will include the USA Archery Indoor National and JOAD Championship in March and the National American Fastpitch Association World Series in August. Visit Mankato is thankful for a great year and looks forward to what 2015 will bring its way. These great events and celebrations couldn’t occur without the tremendous support from community stakeholders, sponsors and the citizens of Mankato.

MN Valley Business • december 2014 • 43

Greater Mankato Growth

To celebrate the Mankato Marathon’s fifth anniversary, the post-race was kicked up a notch, with the addition of a local, live band, free beer from Mankato Brewery/Pub 500 and every runner receiving a finisher medal, regardless which race they ran.

Mankato Marathon’s 5th Anniversary

I+S GROUP GIVING BACK TO HELP OUR COMMUNITIES MOVE FORWARD. At ISG, we believe our success is driven by our commitment to serving our customers in the spirit of working ingenuity and true expertise. This philosophy extends far beyond our business habits and reaches out to the communities where we live and work. Because our clients and communities have believed in and supported us, ISG is able to contribute financial and other resources to support hundreds of non-profit organizations and community initiatives. Blending the talents of our team with the passion of our local non-profits, together we are able to bring aspirations to reality for many that could otherwise not afford it without assistance from firms like ours. We are proud to partner with these key groups to invest in important issues that impact our quality of life.

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