Mnvalley 116 by Free Press Media

Ed Lee, executive director of the St. Peter Chamber of Commerce. Photo by Pat Christman

Flourishing downtown St. Peter bucks the trend of struggling downtowns. Also in this issue • Beans Coffee Co. • Vital Life Massage • Barbara Haack, Realtor

The Free Press MEDIA

» C OME JUDGE

for Yourself.

GOLFERS FROM AROUND THE WORLD COME TO CHALLENGE THE JUDGE and the two other golf courses in Prattville at RTJ Capitol Hill. Bring your clubs and come take on Judge hole number 1, voted the favorite hole on the Trail. Complete your day in luxury at the Marriott and enjoy dining, firepits and guest rooms overlooking the Senator golf course. With the Marriott’s 20,000 square feet of meeting space, 96 guest rooms and luxurious Presidential Cottage combined with three world-class golf courses, business and pleasure can definitely interact in Prattville.

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.

Nightly Dinner Features!

Warm

Winter

Wishes Take Control of Your Health

Direct Access Laboratory Testing allows you to monitor your health on a more regular basis without an order from your doctor. No appointment needed | Open Monday - Friday 7:30 a.m. - 5 p.m. | Confidential Results in 2-3 days | $5.25-$45 depending on the test A1C, glucose, complete metabolic panel, lipid panel and more.

Visit www.REHC.org for more information and a full list of tests and pricing.

Business is complicated. Banking shouldn’t be. Are you looking for ways to streamline your banking? Community Bank’s Small Business Checking is free when you maintain $200 in your account. Online banking services are available for no additional charge - including our payroll processing service. This service provides a great benefit to your employees and reduces expenses for you business. Making the switch is easy. Stop by and get started today. MONEY MATTERS. WORK SMART. LET COMMUNITY BANK HELP YOU BRING THE TWO TOGETHER.

Corporate Graphics Your Printing Solutions Company

1750 Northway Drive North Mankato, MN 56003 800-729-7575 www.corpgraph.com

BEN HOFFMAN

Assistant Vice President Lending NMLS ID 874039

MANKATO - SAINT ANDREWS DR. 507.385.4444 MANKATO - MADISON AVE. 507.625.1551 VERNON CENTER 507.549.3679 AMBOY 507.674.3300

In the heart of downtown St. Peter

228 Mulberry | stpeterfood.coop | Open 7 - 9 | Everyone Welcome Everyday

Woodhill Luxury Patio Homes Mankato, MN

True Expertise + Working Ingenuity At ISG, we believe 40 years of true expertise, coupled with ingenuity, creativity & responsiveness, truly set us apart. As a multi-disciplinary firm, we’re not just about getting the project done, and moving onto the next. We’re about helping our clients succeed, building environments that support sustainability and fostering long lasting relationships that benefit our clients now and into the future.

ARCHITECTURE

ENGINEERING

ENVIRONMENTAL

PLANNING

www.is-grp.com

MN Valley Business • January 2016 • 3

Pin This. •••• 3G

FIND SPECIAL DEALS ON:

12:44 PM

M: 8am - 8pm

120 North Broad Street Mankato, MN

T - F: 8am - 6pm

Sat: 9am - 4pm

Sun: Closed

www.meyerandsonstvandappliance.com

507-345-4688

Healthy Veggie Wrap. Yum!

Erin McCann

Eating Right

Not This. •••• 3G

12:44 PM

507-625-4606

100 Warren St. Suite 708 Mankato, MN 56001

Pioneer Bank

Your personal bankers in Greater Mankato

Decadent Chocolate Cake.

Mary Foster

Calories Unconscious

Get healthy. Get fit. Get with the Meltdown.

Marie KRAUSE

Join the Mankato Meltdown Fitness Challenge January 13th - April 13th

Mindy ANNIS

Exceeding Expectations www.bankwithpioneer.com

Sponsored By:

KASASA CASH: *APY=Annual Percentage Yield. APYs accurate as of 02/12/2015. Rates may change after account is opened. Minimum to open is $1. If qualifications are met each monthly qualification cycle: (1) Domestic ATM fees incurred during qualification cycle will be reimbursed up to $25 ($4.99 per single transaction) and credited to account on the last day of monthly statement cycle; (2) balances up to $10,000 receive APY of 2.51%; and (3) balances over $10,000 earn 0.25% interest rate on portion of balance over $10,000, resulting in 2.51% - 0.25% APY depending on the balance. If qualifications are not met, all balances earn 0.05% APY. If qualifications are met each monthly qualification cycle the interest rate tiers are as follows: 2.48% interest rate applies to balances of $0.01 - $10,000 and .25% interest rate applies to balances over $10,000. If qualifications are not met each monthly qualification cycle a 0.05% interest rate applies to all balances. Qualifying transactions must post to and settle account during monthly qualification cycle. Transactions may take one or more banking days from the date transaction was made to post to and settle an account. ATM-processed transactions do not count towards qualifying debit card transactions. Transfers between multiple accounts do not count as qualifying transactions. Debit card transactions processed by merchants and received by the bank as ATM transactions do not count towards qualifying debit card transactions. Only debit card transactions processed by merchants and received by the bank as POS transactions count towards qualifying debit card transactions. “Monthly Qualification Cycle” means a period beginning one day prior to the first day of the current statement cycle through one day prior to the close of the current statement cycle. Direct deposit required to have this account. Limit one account per SSN. ATM receipt must be presented for reimbursement of an individual ATM fee of $5.00 or higher.

Lewisville • Madelia • Mankato • Mapleton • North Mankato • St. James • Lake Crystal Loan Production Office 507-625-3268

4 • January 2016 • MN Valley Business

F E A T U R E S January 2016 • Volume 8, Issue 4

While many towns struggle to keep their downtowns from deteriorating, St. Peter has kept a vibrant downtown with a unique mix of specialty shops and stores.

Barbara Haack, owner of St. Peter Real Estate Company, has sold homes in St. Peter for 40 years and figures she’s sold at least one home in virtually every block of the city.

Lisa Donth went back to school for massage therapy and opened Vital Life Massage on Madison Avenue in 2013, offering massage for therapy and for relaxation.

Clay Sharkey & Eric Poppler found they both loved coffee and set out to start Beans Coffee Company in Mankato, selling at the Farmer’s Market and online.

MN Valley Business • January 2016 • 5

■ January 2016 • VOLUME 8, ISSUE 4 PUBLISHER John Elchert EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Dean Swanson Heidi Sampson Nell Musolf PHOTOGRAPHER Pat Christman Darren Gibbins COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey 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.. 29 ■ Agriculture Outlook...................... 30 ■ Agribusiness trends..................... 31 ■ Job trends..................................... 32 ■ Retail trends................................. 33 ■ Greater Mankato Growth.............. 34 ■ Greater Mankato Growth Member Activities ....................... 38

From the editor

By Joe Spear

Downtowns re-emerge

Specialty retail, destination shopping key

f you needed a case study on how small towns can grow and sustain their downtown retail and entertainment districts, you could very easily consider St. Peter. This month’s cover story provides insights into the small-town, downtown renaissance that seems to be have been quietly taking place the last few years in the 11,700 population town that is 12 miles and 10 minutes from Mankato. The formula is not rocket science. You need longtime established retailers who are willing to change with the times but also look down the street at how the whole block can be better. To that end, St. Peter business and civic leaders got together about 20 years ago to get grants and bring in someone to renovate the historic Nicollet Hotel, giving the downtown a landmark building that helped it establish its historic identity. Those longtime retailers also provide stability and create a destination shopping district. You go there because you need something not offered many other places. Arrow Ace Hardware, Nutter Clothing and Swedish Kontur have certainly provided that stability and destination centerpiece. Next, you need a new mix of specialty or niche retailers, something that will be unique to not only the town but to a wider region. St. Peter’s main street now features four clothing and specialty boutiques, a specialty cooking and kitchen store, an ethnic market store and a fair-trade store, La Mexicana Market and Fair Emporium. Next, you need specialty shops that offer not only interesting products, but give demonstrations on how they are made. Enter Julee’s Jewelry, Stones Throw Gallery and Bob Vogel’s Stained Glass Studio. Add to that the comfortable places to rest and get a bite to eat and a drink, and you can complete the shoppingentertainment circle with stops at the River Rock Café and the regionally drawing St. Peter Food Co-op. Of course, it never hurts to have a private liberal arts college with many cultural and artistic offerings just a short walk up the hill. Gustavus

6 • January 2016 • MN Valley Business

Adolphus College plays a big part in St. Peter’s success. It creates a generational as well as occupational mix that makes cities more vibrant. While you need longtime businesses committed to the area, you also need entrepreneurs. St. Peter seems to be attracting its share of those folks as well. Ashleigh Moelter and her husband moved to St. Peter from the Twin Cities. Pursuing a health care career in the metro area, she determined that career might not offer the flexibility she needed with two special-needs children. She opened Ashleigh’s Boutique in a small space in October 2014, and early success led her last month to open a second, larger store called The Refinery. Finally, you need a town that looks like it’s safe and fun to live in with housing stock that is priced reasonably and offers some surprises. St. Peter has a nice mix of housing, and in particular, some nice old Victorian housing that provides the feel of old neighborhoods with mature trees that are being recreated now in some suburbs because they are so popular. But in this respect, St. Peter has the real deal. While the re-emerging downtowns like St. Peter may seem like a replay of the old downtowns of the 1960s, there’s an important distinction. Those downtowns were indeed the retail districts where people went for almost all of their shopping. Now, the malls and plazas have taken over some of the big volume shopping, but towns like St. Peter have captured the new niche of small volume, high quality, fun-experience shopping that more and more of us gravitate to after we’ve left our volume shopping to Amazon. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow him on Twitter @jfspear.

Local Business People/Company News

■

First National names officers

Michael Laskey

First National Bank Minnesota added two new bank officers: Michael Laskey, senior vice p r e s i d e n t commercial lending and Jana Finken, retail banking manager, both joining the bank in

Jana Finken

October. Laskey comes with 28 years of commercial banking experience. He specializes in commercial and industrial loans as well as commercial real estate financing. Finken brings 20 years of supervisory and management experience, 14 of which are in the banking industry. Her focus will be managing retail functions at the bank’s three locations; Mankato, St. Peter, and Gaylord. ■■■

Cinch Connectivity honored

Waseca Area Chamber of Commerce recognized Cinch Connectivity Solutions as the Waseca 2015 Business of the Year. They were honored based on their longevity and significant milestones, employee impact, successful-effects of competition and market changes, business impactmanagement philosophy and community impact on greater Waseca. ■■■

Kato Insurance relocating

Kato Insurance Agency is relocating to the second floor of Profinium Place. President Scott Michaletz said the move will be effective April 1. Kato Insurance was established in 1983. ■■■

Longhenry joins Century 21

Crystal Longhenry has joined Century 21 Landmark Realtors. She is a lifelong resident of southern Minnesota moving to Mankato in 2001. She has 14 years of experience owning and managing income producing investment properties.

given to Don Hermanson of Nicollet County. This award recognizes the educators supporting all of us in production agriculture and the important role these professionals play. Hermanson is in his 19th year teaching at South Central College in Mankato in the Agribusiness Department. One of his most notable accomplishments was the Agriculture Literacy Institute which allowed teachers the opportunity to learn about Minnesota agriculture through tours and activities. Hermanson and his wife Rhonda live near New Sweden. ■■■

Two join Gislason

Gislason & Hunter is pleased to announce that Brittany King and Dean Zimmerli have joined the law firm. King focuses her legal practice in the a re a s of employment law, Brittany King Dean Zimmerli family law and agricultural law. She represents companies in all areas of employment law including unemployment, discrimination and general liability issues. Zimmerli focuses his practice on civil litigation and business issues including agriculture law, banking, corporate and employment law. He provides a full range of legal services through conducting research, drafting agreements, contract negotiations, business growth ventures and financial strategies. ■■■

SouthPoint converts charter

The members of SouthPoint Federal Credit Union voted in favor of a proposal to convert from a federal to a state chartered credit union. The vote was formalized at a special membership meeting held in Sleepy Eye. They are now known as SouthPoint Financial Credit Union. ■■■

Gabriel earns certification

■■■ Crystal Longhenry

Farm Bureau honors Hermanson

The Minnesota Farm Bureau Foundation recognized outstanding agricultural professionals during their annual meeting. The post-secondary educator of the year award was

Diana Gabriel

Diana Gabriel, certified professional coach, successfully completed a yearlong training to become a Strengths Strategy certified coach. Strengths Strategy is the leading strengths application organization in the world. The Model’s focus is teaching individuals and teams how to maximize strengths in service of “rendering weakness irrelevant” in order to create sustained superior performance.

MN Valley Business • January 2016 • 7

Schafer joins Thriveon

Jerry Schafer has joined Thriveon as Project Engineer. He brings a depth of experience in both hardware and software systems to this position that is Jerry Schafer focused on design and implementation of Information and Technology improvements. Schafer is a U.S. Navy veteran and holds a master of science degree in Software Engineering, and a master’s degree in business and management. To submit your company or employee news. e-mail to tkrohn@mankatofreepress.com Put “Business memo” in the subject line. Call or e-mail Associate Editor Tim Krohn at tkrohn@mankatofreepress.com or 344-6383 for questions.

LOCATIONS: WELLS, BLUE EARTH, MANKATO, FAIRMONT, ALBERT LEA, ST. PETER, OWATONNA, MINN. LAKE & ST. JAMES

8 • January 2016 • MN Valley Business

■

Business and Industry Trends

Economy GDP up 2.1%

The Bureau of Economic Analysis reported that real GDP increased at an annual rate of 2.1 percent in the third quarter of 2015, following growth of 3.9 percent in the second quarter of 2015. The third-quarter growth reflected positive contributions from personal consumption expenditures, state and local government spending, and residential fixed investment. Forecast real GDP growth is 2.4 percent in 2015 and 2.5 percent in 2016, below the 2.5 percent and 2.7 percent forecast last month.

Disposable income grows

Real disposable income grows by 3.2 percent in 2015 and by 2.9 percent in 2016. Total industrial production grows by 1.3 percent in 2015 and by 0.9 percent in 2016. Projected growth in nonfarm employment averages 2.1 percent in 2015 and 1.4 percent in 2016.

Energy

Gas prices stay low

The average price of U.S. regular retail gasoline was $2.16/gallon (gal) in November, a decrease of 13 cents from October and 75 cents lower than in November 2014. The federal Energy Information Administration forecasts U.S. regular gasoline retail prices to average $2.36/gallon for 2016.

U.S. oil production down

Total U.S. crude oil production declined by about 60,000 barrels per day in November compared with October. Crude oil production is forecast to decrease through the third quarter of 2016 before growth resumes late in 2016. Projected U.S. crude oil production averages 9.3 million b/d in 2015 and 8.8 million b/d in 2016.

Biodiesel to grow

On November 30, the U.S. Environmental Protection Agency finalized a rule setting Renewable Fuel Standard volumes for 2014 through 2016. Ethanol production, which averaged 934,000 barrels per day in 2014, is forecast to average about 960,000 barrels per day in both 2015 and 2016. EIA does not expect significant increases in E15 or E85 consumption over the forecast period. EIA expects the largest effect of the proposed RFS targets will be on biodiesel consumption, which helps to meet the RFS targets for use of biomass-based diesel, advanced biofuel, and total renewable fuel. Biodiesel production averaged 83,000 barrels per day in 2014 and is forecast to average 87,000 barrels per day in 2015 and 107,000 barrels per day in 2016.

Natural gas cheaper

The Henry Hub natural gas spot price to average $2.47/ million British thermal units this winter (October 2015– March 2016) compared with $3.35 last winter. Electricity generated from natural gas-fired power plants exceeded generation from coal fired plants in September for the third month in a row. Before April 2015, the monthly share of total U.S. generation fueled by coal had always been larger than the natural gas share. Natural gas generation in September was 4 percent higher than the level generated by coal. This increased use of natural gas for electricity generation primarily reflects sustained low prices. Total U.S. electricity generation in 2015 is expected to average 11.3 terawatthours per day, 0.5 percent higher than 2014 generation. Total generation grows by an additional 0.1 percent in 2016. Although EIA projects natural gas prices to begin rising slowly, they are forecast to remain at low levels, with the Henry Hub spot price remaining below $3/MMBtu through August 2016. These sustained low prices contribute to natural gas accounting for a historically large share of electricity generation. During 2015, EIA expects the share of total generation fueled by natural gas to average 32.4 percent compared with a share of 27.5 percent in 2014.

Less renewable electricity

Total renewables used in the electric power sector should decrease by 1.8 percent in 2015. Hydropower generation is forecast to decrease by 8.2 percent, and nonhydropower renewable power generation is forecast to increase by 4.2 percent. The 2015 decrease in hydropower generation reflects the effects of the California drought. Forecast hydropower generation in the electric power sector increases by 7.3 percent in 2016. EIA expects continued growth in utilityscale solar power generation, which is projected to average 89 gigawatthours per day (GWh/d) in 2016. EIA expects utility-scale solar capacity will increase by 123 percent (12 GW) between the end of 2014 and the end of 2016, with 4.7 GW of new capacity being built in California. Other states leading in utility-scale solar capacity additions include North Carolina and Nevada, which, combined with California, account for about twothirds of the projected utility-scale capacity additions for 2015 and 2016.

MN Valley Business • January 2016 • 9

Minnesota Business Updates

■

■ Best Buy cuts watch price Best Buy can’t afford to fall further behind Amazon.com in the consumer electronics retail business and as a means to pull in consumers, Best Buy has discounted the Apple Watch by

$100. Best Buy offers the watch at $599, down from its normal retail price of $699. Whether the move will help Best Buy is uncertain as Apple Watch sales have been poor since the product was launched on April 7. According to research company Canalys, Apple Watch sales were 4.2 million in the second quarter. Most Wall Street Apple Inc. watchers have been disappointed by these numbers. Some even claim Apple Watch sales will not pick up unless a second version has more features, and perhaps a longer battery life. The results of Best Buy’s most recent quarter, which ended October 31, were disappointing. Revenue dropped from $9.03 billion to $8.82 billion. Net income was tiny at $125 million.

■ Stores need to improve online Black Friday and Cyber Monday brought new challenges for brick-and-mortar retail chains this year, as more shoppers opted to do the bulk of their gift buying online over the all-important holiday shopping weekend. This meant increased traffic to many retail sites, which should have been good for business. Unfortunately, some retailers, including Target Corporation, struggled to keep pace with surging demand, according to Motley Fool. The holiday season has proven the biggest year yet for e-commerce sales. Cyber Monday sales alone are estimated to have climbed 12 percent over last year It’s clear from this data that more consumers are opting to shop online than ever before. Yet, some retailers still don’t have the systems in place to handle high volumes of traffic to their sites. If Target hopes to actually compete with e-commerce giant Amazon, its online channels need to be prepared to handle massive amounts of traffic. Target has invested millions of dollars into its e-commerce business to date. However, that proved inadequate on Cyber Monday when the company’s website crashed during the busiest online shopping day of the year. Target responded by creating virtual lines that prompted shoppers to refresher their browsers and wait. Target wasn’t alone. Saks, Neiman Marcus, PayPal, and Victoria’s Secret were some of the other companies that ran into glitches with their respective e-commerce channels during the all-important shopping weekend.

10 • January 2016 • MN Valley Business

■ 3M sued over medical device A Louisiana woman is suing 3M for injuries she allegedly suffered from the use of heating units during surgery. Judith Chaix filed a lawsuit in U.S. District Court against 3M and Arizant Healthcare, citing negligence misrepresentation, fraud and deceit, breach of express and implied warranty and other counts. According to the complaint, 3M’s Bair Hugger forced-air heating pad was placed on Chaix’s body during hip replacement surgery in 2009, allegedly contaminating the surgical wound and causing an infection. As a result of the product’s defective design, the suit says Chaix suffered severe, permanent injuries, including limited mobility. Chaix seeks compensatory and punitive damages to be determined at a jury trial.

■ Johnson posts profits Johnson Outdoors, the Racinebased maker of Minn Kota motors, Humminbird fish finders and Old Town canoes and kayaks, said that lower operating costs helped it swing to a profit in the typically slow fiscal fourth quarter. Johnson reported net income for the quarter ended Oct. 2 of $1.2 million compared with a net loss of $800,000 for the same period a year ago. Net sales increased 1 percent to $85.7 million from $84.9 million Sales for the outdoor recreational products company historically slow in the fourth quarter because of the seasonality of the business. Nonetheless, Johnson Outdoors reported strong growth in both marine electronics and outdoor gear for the quarter. Year-over-year, net sales were up 1 percent to $430.5 million from $425.4 million, with new products in the Minn Kota, Jetboil and Old Town brands helping offset a decline in dive equipment revenue. Net income jumped 16 percent for the year to $10.6 million from $9.1 million the year before.

■ Judge rules for U.S. Bank A California judge overseeing the city of Los Angeles’ public nuisance suit against U.S. Bancorp refused to find that the bank has a duty to repair foreclosed homes it owns, saying that finding such a “quasi-statutory duty” would not resolve any of the lawsuit’s claims. Los Angeles Superior Court Judge Elihu M. Berle rejected the city’s request to find that property owners are required to comply with safety regulations, and thus a U.S. Bancorp subsidiary has a duty to maintain and repair the homes.

Read us online!

Proud to be a part of the Saint Peter Community since 1949

www.bolton-menk.com

In the market for Health Insurance? At Community Insurance we know shopping for health insurance can be overwhelming. Let our agents match you with the perfect plan. Whether you need individual, family, or group coverage, we’ll work with you to provide you with insurance that meets your needs. QUALITY INSURANCE WITH PERSONAL ATTENTION

WHERE YOUR POLICY COMES WITH AN AGENT

MANKATO 507.385.4485 AMBOY 507.674.3355 I VERNON CENTER 507.549.3679 INSURANCE OFFICES LOCATED IN THE COMMUNITY BANK BUILDINGS

Brittany Linder

BUSINESS BANKING

www.cimankato.com MN Valley Business • January 2016 • 11

■

Business Commentary

By Dean Swanson

You can win back lost customers

“C

lients (customers) leave – it’s a fact of business life. No matter how much you bend over backward to keep them, a client will likely leave you at some point.” This comment comes from a CEO that by his 35th birthday had founded and sold two multi-million dollar companies. Mike Michalowicz is now running his third million dollar venture, is a former small business columnist for The Wall Street Journal and other publications, is a business author (one of my favorites) and a keynote speaker. So can you hope to get those lost clients back? He suggests that losing a client doesn’t have to be permanent, and how you handle that client’s decision to move on can make all the difference in the long run. The moment they break up with you can also be your chance to successfully set yourself up to win back their business. Here are a few of his suggestions.

Be gracious and grateful for the business you’ve received

Make the transition easy

Mike relates an example, “I’ve moved my accounting business from one firm to another on a couple of different occasions. The first accountant I left made the process a nightmare. He refused to share information in a timely fashion and made everything three times more difficult than it needed to be. Years later, I switched my business from a wonderful accountant to another for personal reasons. The accountant I was leaving couldn’t have been more helpful in the transition, sending along all my records and making the transition seamless. When I needed to move my accounting business again, I went back to the second guy — the one who’d been a consummate professional.”

Conduct an exit interview

Your client might be leery of taking the time to sit down with you after they’ve announced their plan to take their business elsewhere. But this isn’t about keeping their business. The goal of the exit interview is to improve your service to your other customers and to improve on any areas your departing client might have been disappointed in. If you’ve worked closely with the departing client, you may want to have an employee or colleague conduct the exit interview so your client can feel free to be brutally honest about your company. This can be an opportunity to find out what you can do to improve.

“The goal is to keep the lines of communication open (with a former client), just in case things change down the road.”

Mike starts from the beginning, “When a client tells me they’ve decided to move on, I genuinely and sincerely thank them for their business. My goal is to be the classiest guy they’ve ever fired, and I do it for a couple of reasons. First, it’s the right thing to do. Second, folks make business decisions for all sorts of reasons — reasons I can’t control. Maybe the guy’s brother-in-law just started a company that provides the same services I do. Maybe they’re going to try out a cheaper alternative. Whatever the reason for their departure, I’m polite, appreciative and — here’s the key — I ask if it’s OK to stay in touch. I’ve never been turned down.”

Maintain the relationship

So your client’s gone, but they’ve agreed you can stay in touch. Once a quarter, you could give them a call or shoot them an email to see how they’re doing. You don’t ask for their business; just simply check in. Mike says, “If I see their company in the newspaper, I’ll cut the article out and mail them a copy along with my congratulations. (The old-school, snail mail approach sticks in their minds — in a good way.)” The goal is to keep the lines of communication open, just in case things change down the road.

12 • January 2016 • MN Valley Business

Never say “I told you so.”

In the event that your client does return to you, a good practice is to be humble, gracious and focused on the excellent service that you’re going to have the privilege of providing. Price shoppers abound these days, and customer loyalty can be hard to earn and even harder to keep. Taking a long, hard look at the quality and value of the services your company provides can help keep you both honest and relevant in your marketplace. MV Dean Swanson is a volunteer SCORE Mentor and Regional Vice President for the North West Region.

Right Perspective. Successful Results. As both a buyer and seller’s representative we know the value of Greater Mankato’s growing market. Our team of 10 experienced and knowledgeable commercial real estate agents offer a unique perspective and a vision for the future. Trust us to represent your property professionally with your best interest always in mind.

BROKERAGE – DEVELOPMENT – MANAGEMENT

507-625-4715 cbcfishergroup.com

MN Valley Business • January 2016 • 13

Bucking the

trend St. Peter’s downtown strong, diverse By Tim Krohn | Photos by Pat Christman

14 • January 2016 • MN Valley Business

Left: Ashleigh Moelter recently opened The Refinery after opening another boutique shop last year. Right: The Refinery offers clothing, gifts and vintage furniture.

uring a recent holiday shopping weekend, the streets of downtown St. Peter were bustling. The variety of businesses to visit is far reaching. There’s the La Mexicana Market, located next door to the Fair Emporium, which offers unique items including handmade chocolates from Italy that look like flowers. Browsers in Swedish Kontur find high-quality Scandinavian glassware and other items. A few blocks away, renowned artist Bob Vogel is working in his Stained Glass Studio and nearby jewelers are making singular pieces at Julee’s Jewelry and Stones Throw Gallery. River Rock Coffee and the St. Peter Food Co-op are a favorite resting spot. Then it’s on to any number of other stores and service businesses, from Arrow Ace Hardware and Nutter Clothing to Cooks & Company and antique stores. “I think we have a Norman Rockwell downtown,” said Chamber Executive Director Ed Lee. “St. Peter is unique because of the variety and it’s sort of an arts village. We

have just warm places. “We’re to a point where people can find everything they need here. Products, services or groceries. With a population of 11,700, we’re fortunate to have the variety and the competition to keep prices down.” While towns across the state struggle with faltering downtowns, St. Peter has hit a business sweet spot with virtually no empty storefronts, and those that do open up are usually filled relatively quickly.

Cover Story

Benefits, drawbacks

Conventional wisdom would hold that being just minutes from a major shopping center like Mankato would be a hindrance to St. Peter. But Scott Dobie, longtime owner of Nutter Clothing Co., thinks otherwise. “I think being close to Mankato is a benefit. It brings up the income of both counties. You can have someone living in St. Peter and one or both work in Mankato, but they don’t necessarily want to shop in

MN Valley Business • January 2016 • 15

The River Rock coffee shop draws a steady stream of customers to the downtown. Mankato.” St. Peter also has a busy Highway 169 running through the downtown, bringing nearly 14,000 vehicles a day. For locals the highway and a major reconstruction in 2009 that added a center median is sometimes frustrating, but mostly a boon. “We have a highway that causes a lot of problems but if they moved it, we’d be Death Valley,” Dobie said. “The new highway, the locals don’t like it because they can’t always turn where they’ve always turned. But out-oftowners like it.” And he said the center median has made the downtown much more comfortable for pedestrians trying to cross the four-lane highway. “It’s much nicer and safer to walk across now. It used to be you went half way across and then directed traffic,” Dobie said.

16 • January 2016 • MN Valley Business

Entrepreneur haven

Ashleigh Moelter and her husband were living in the Twin Cities and she was pursuing a career in the healthcare field. But with two special-needs children, she decided that career path wouldn’t give her the flexibility needed and she began thinking of opening her own store. “My husband joked that we spent so much on clothes I should open a clothing store. I had $5,000 and opened one.” Ashleigh’s Boutique opened in a small space in October 2014 at 305 S. Minnesota Ave. The business was a success and last month Moelter opened a second, larger store at 216 S. Minnesota called The Refinery. The second store offers women’s clothing but also antiques and vintage furniture from Cheap Chics Designs, which is operated by two women Moelter met at a local flea market. She said she tries to offer a wide variety of clothing and keeps prices affordable. “We have a rule in our store that

we will only have a handful of items over $60.” Lee said the entrepreneurial spirit has brought vitality to St. Peter, noting that after lacking much in women’s clothing stores, the town now features four boutiques that all opened in the past year. “I have such respect and admiration for entrepreneurs,” he said. “There’s always been risk with starting your own business, but now with regulations what they are and with what the statistics say about opening a business, it’s really challenging.” Moelter said the town has reached a critical mass of individualized shops. “I think St. Peter has such a good variety and there are so many unique stores. There’s a lot of things you don’t see anywhere else.” She tracks her receipts carefully and said the highway through the city, plus Gustavus Adolphus College, are definitely a big boost. “Sixty percent of our customers are just passing through and 40 percent are from the St. PeterMankato area,” Moelter said. And, like other business owners, Moelter said the St.

Chamber Executive Director Ed Lee.

MN Valley Business • January 2016 • 17

Scott Dobie at Nutter Clothing Co. Peter Food Co-op is a big boon for the city, drawing regular customers from a wide area.

An early founder

Anders and Janet Bjorling’s downtown store is one of the oldest current businesses. Started in 1962, his Swedish Kontur store continues to draw loyal customers and is the oldest Scandinavian store in the country. “I was an exchange student at Gustavus and I met my wife at Gustavus. When we were in college, we noticed there was no store in the area with a concentration of Scandinavian products,” Bjorling said. After graduation the couple lived in Sweden for four years before moving back to the area and starting the store. He said the store’s long success is due to focusing on high-quality Scandinavian products. “And service is very important. From the beginning we offered a gift wrap, a white box with a blue ribbon. It’s become almost a tradition, when people get one, they recognize what it is.” He said how merchandise is displayed is also key. “We get comments that it’s a wonderful experience to just walk in the store and see how things are displayed.” Bjorling said unique shops like his have made St. Peter a destination point. “I think the specialty stores are a key. There aren’t chain stores in St. Peter,” he said. “And the fact it’s a college town is very important.” He said the historic feel of the downtown is also a draw. He was part of a civic group 20 years ago that secured a large state grant that allowed renovation of the old Nicollet Hotel. “It was almost torn down. We got it restored so someone could come in and take it over.”

An unsure entrepreneur

Dobie admits his start in business wasn’t filled with

18 • January 2016 • MN Valley Business

confidence. “I bought Nutter Clothing in 1985 and I wasn’t sure I had the ability to run it.” But that uncertainty was soon replaced with a zeal for the business. There’s a relaxed feel in the store, something Dobie thinks brings his many return customers. “A lot of guys don’t like to shop that much, so when they can come in and get something and it takes 40 minutes, they’re happy. If they go to the mall it’s five stores and lunch and back to the first store, and men usually don’t like that,” he said. “There aren’t many independently owned men’s clothing stores left. Two in Mankato and mine and that’s about it in the region.” Dobie said the specialty stores in town are a definite draw that benefits everyone. “We have people come from Sioux Falls and all over. The Cooks & Company, Contents, Swedish Kontur – they draw people from all over the state with their unique niches,” he said. “We have a wonderful coffee shop and the Food Co-op is a big draw.” Dobie said the recent opening of Shopko has been good for the town. “I think it benefits the community. Some of our work-type clothing dropped off since they opened, so we just cut back on how much of that we stock.”

Ace is the place

The Arrow Ace Hardware store in downtown has been a staple for decades – the place where people not only go to get merchandise but to get advice. “We focus on convenience, customer service and having knowledgeable people on board so people can come in and get their questions answered,” said owner Dave Neiman. “Everybody in town knows Rose (Rustman), our store manager. You bring your problem to her and she’ll figure it out. They have a new educators breakfast in town every

Top: Dave Neiman’s Arrow Ace Hardware store has been a fixture in downtown for decades. Right: Arrow Ace Hardware’s Rose Rustman is the person people go to when they have a question or problem. year and they get up and say, ‘If you need something, go see Rose,’” Neiman said. He started working in his dad’s store 38 years ago and bought it 30 years ago this year. Since then they’ve expanded into three neighboring storefronts. He and family members also have 10 other Ace stores in the state, including one in Mankato. He said the downtown has continued to thrive over the years. “The storefronts are pretty full. There’s a couple empty, but they always seem to fill up. Some other downtowns you start seeing a lot of vacancies, but that hasn’t hit here. I think people appreciate the personalized service they get in town.” MV

Serving the community for over 130 years

The Staff of Nicollet County Bank

220 South Third Street • St. Peter • 931-3310

MN Valley Business • January 2016 • 19

Barbara Haack has been given a prestigious award for her 40 years in real estate.

20 â&#x20AC;˘ January 2016 â&#x20AC;˘ MN Valley Business

St. Peter’s Realtor extraordinaire Haack has sold homes in town for 40 years By Heidi Sampson | Photos by Pat Christman

arbara Haack, owner of St. Peter Real Estate Company, was recently awarded the Realtor Emeritus status from the Board of Directors of the National Association of Realtors and is the first woman to have received the award in Southern Minnesota. When the award was presented Haack was asked what she viewed has been the biggest change to the real estate industry in her 40 years of work. “The paperwork,” she said. “What started out as a one page purchase agreement with no addendums has now evolved into a manuscript.” In order to receive the Realtor Emeritus recognition, the realtor must have 40 years of membership with the National Association of Realtors, as well as have completed at least one year of service at the National Association level. However, for those selected through 2019 the one year service requirement may also be met through service at the state or local level. “I’ve enjoyed the people,” Haack said. “That’s really what’s kept me around for 40 years and the people of St. Peter have been so very good to me. This recognition wouldn’t have been possible without them. My husband retired several years ago and has asked me to retire too. However, my problem is that I like the people so much. I like being with them, talking with them and I love teaching – which is what is really going on in real estate today,” she said. “We walk our buyers and sellers through the process while instructing them in real estate. As a Realtor we are someone that our buyers and sellers have to trust and that is so very, very important.” While she is the first woman in Southern Minnesota to have received the distinction, it hasn’t been due to a lack

of women entering her field throughout the years. But many of the women haven’t stayed in the field as long, partly due to the fact that children tend to dictate more of a woman’s hours and availability, which can be hindrance when selling homes. At the time Haack moved to the St. Peter area and began selling homes, she had a junior, a freshman, an 8th- and a 6th-grader, all at home. “I had four children all within five years. Being a Realtor wasn’t much of a challenge by then, I’d gotten through the first five years. On a more serious note though, I don’t come from a real estate, a broker or a sales family. What I see now is that a lot of people, who grew up with parents in real estate, are in the real estate also, and so consequently I think that we are going see lots more of that type of lineage in our future real estate agents. Of course it will be mostly men since women have families and find it difficult to get a call at any time of the day to go out and view homes. As a realtor, it’s important to answer the phone when they call. You just hope that arrangements can be made so as not to disrupt things within your own family, but that’s not always the case.”

Profile

“We walk our buyers and sellers through the process while instructing them in real estate. As a Realtor we are someone that our buyers and sellers have to trust and that is so very, very important.”

Early Beginnings

Barbara and Dale Haack moved to St. Peter, in 1973. Prior to her move, she had been successful in selling their homes in Falcon Heights and in Fargo. Feeling fairly comfortable with the selling process, she toyed with the idea of selling homes for a living. Up until their move to St. Peter, she had taught Math in the Roseville School District. But she knew that with her four children she did not want to teach where they were going to school. With the move to St. Peter complete, becoming a realtor

MN Valley Business • January 2016 • 21

Barbara Haack has been given a prestigious award for her 40 years in real estate.

LEADING THE WAY for Ì!125!YEARS!Í Experience the modern amenities and Victorian charm of the only privatelyowned office building in Mankato to bear E s seal of the EPA’ energy efficiency.

PROPERTY MANAGER

612.685.2210 awsumb@pressenter.com

22 • January 2016 • MN Valley Business

seemed like the next right thing to do and she passed the Realtors exam. However, after passing the test, she received a form that asked who her broker was. She didn’t even know she needed a broker. Not to be deterred from her goal, she went around town and found a man, Harold Martin, who was willing to take her in. Although, Martin wasn’t into selling homes at that time, primarily because he was more of a developer, Haack stayed on and worked for Martin for her first year. During that time, Martin’s business expanded as more of his employees obtained Realtor licenses. “I was grateful for my time under Harold’s wing,” she said. “Ultimately, I decided that sitting on a chair selling real estate wasn’t what I wanted to do. However, because of my education, I was allowed to take the brokers exam early.” In 1975 she passed the brokers exam and set up her own office. Originally, her office was located in half of an old funeral home converted to offices. After a few moves around St. Peter, she settled on South Third Street, a stone building and was there for 15 years. Today she works out of

her home. As a new Realtor she tried selling property around the lakes - Lake Washington and Lake Jefferson - but that was mostly on weekends. While she enjoyed showing homes, she often felt more like a tour guide, which prompted her to return to only selling homes in St. Peter. Throughout her 40 years, Haack doesn’t believe that there is a block - especially in the main part of town - which she hasn’t sold a house on. “I’ve been very successful. The St. Peter community has been so very good to me and I truly appreciate their business. Their referrals and selling homes maybe four or five times, which could be the same house or maybe some of the same buyers and sellers over multiple purchases, have been a wonderful gift.” Over the years she has done a lot with both sides of selling, in terms of representing the listing and the buyer. While she acknowledges that some Realtors would count that as two sales, she also knows that some would count that as one sale. Although she doesn’t know which is a more accurate portrayal of her selling record, she believes that if she counts every sale equally, she’s sold 1,000 homes over 40 years. “I used to have 40 sales a year. At one point, I had signs on eight houses in a row in town. Now that’s something you don’t see every day.” Today Haack finds that she advises a lot of people, whether that is her fellow Realtors, buyers or sellers, she receives a lot of requests for the real estate knowledge she has acquired over the years. “Whatever it is that I know,” said Barbara, “I am willing to share. My main goal in real estate has been to help people find their homes. That’s what makes people appreciate you and come back to you. It’s the willingness to be helpful, with their best interests at heart.” MV

Audio, Video, Automation Systems Control your: • TVs • Music • Movies • Lighting • HVAC • Security • Locks • Garage Doors • Shades • More by smartphone or tablet

388-3271

Call us and let us show you how it works

www.ecsmankato.com

Mention code MVB2015 for 10% Discount

INTRODUCES YOUR

YOUR WIRING PROS

In addition to the MSP Airport, Land to Air Express now offers multiple daily trips from Mankato to Rochester and Southern MN destinations in between. Convenient Mankato shuttles are still available every day to and from the Minneapolis International Airport.

Visit landtoairexpress.com or call 507-625-3977

Member FDIC

We always put you FIRST!

Experienced Lenders

providing customized service for your business!

MICHAEL

LASKEY

CORY

ABELS

KEN

BRUCE

KUEHNER GRATZ

CRAIG

BODE

MIKE

FAVRE

BEN

GOSSETT

Equal Housing LENDER

Visit us online at www.fnbmn.com Mankato 507.625.1121

St. Peter 507.931.4000

Gaylord 507.237.5521

MN Valley Business • January 2016 • 23

Lisa Donth opened Vital Life Massage on Madison Avenue in 2013.

Tranquility amid tension

Vital Life Massage aims for relaxation, therapy By Nell Musolf Photos by Pat Christman

he view from Vital Life Massage, 1051 Madison Avenue, Suite 1, is one of cars zipping past as they hurry at breakneck speed toward work or play or school. The busy scene is an apropos reminder of just how hectic the pace of life is for most people. But along with all of that activity comes a healthy — or more accurately unhealthy — dose of stress. Helping people cope with stress, as well as with the other aches and pains of daily living, is massage therapist Lisa Donth.

Since opening the doors of her business in 2013, Donth has helped a steady stream of clients. In her business located just yards away from the hustle and bustle of Madison Avenue, Donth has created a peaceful retreat filled with plants, relaxing music and calming colors that is indeed an oasis of calm on the hilltop of Mankato. “I feel a lot of pleasure when I come in here,” Donth said of her home away from home. Massage, once thought to be the realm of

Spotlight

24 • January 2016 • MN Valley Business

only the pampered and privileged, has become increasingly massage will be and attire for the massage. Finding out popular with people from every walk of live over the past what a client wants out of a massage is vitally important. decade and the demand for massage therapists has grown. “I will make suggestions as to the kind of treatment I That demand for massages, both as a form of relaxation as think will benefit a client the most,” Donth said, “but well as a revitalizing health technique, has ensured Donth ultimately I will abide by what my client wants. It’s my that she made the right choice when she went back to goal to create a stress-free atmosphere that will benefit a school to receive her certification as a massage therapist. client’s health and that will have him or her leaving Vital “I went back to school as a returning student,” Donth Life Massage feeling better than when they walked said, “and I’m glad that I did. I believe that returning through the front door.” students tend to be more aware of what they want, careerStressful situations are often the trigger than brings wise, than they might have been when they were fresh out clients to Vital Life Massage and Donth makes sure that of high school.” she knows as much as possible about what is going on in Donth attended Rasmussen College’s massage therapy her clients’ lives. program, graduating in 2011. In 2012 she passed the “I always start every treatment, whether new or a National Certification exam and in 2013 went on to attain returning client, with a brief assessment. This is where I Board Certification, the highest standard of achievement find out if they have an injury, such as slipping on the ice, in the massage therapy field. Since opening her own or if they have a large stressor that has recently entered business, Donth is enjoying her new career. into their life, such as an ailing loved one. We do not give “There’s a lot to be said for owning your own business,” enough credence to how large of an impact stress has on Donth said. “I like being the one who decides what is both our mental and physical well-being,” Donth said. going to happen and I like being able to set my own hours. Donth also makes sure to book ample time for each I like being the one to decide how to decorate and pick out client. what to hang on the walls. I’ve got to say that It’s fun being “One thing I do is book a half an hour between clients your own boss.” so I don’t have to rush them out the door,” Donth said. “I Vital Life Massage is open by appointment (call 507never want anyone to feel like they’re being hurried or 420-4643) and offers a wide variety of services including: rushed. This business is about relaxation and feeling like chair massage, cold stone therapy, hot stone therapy, deep you’re being pushed toward the exit is not at all relaxing.” tissue massage, manual lymph drainage, myofascial Building that half an hour between appointments also massage, sports massage, Swedish massage and trigger allows Donth to slip in a last minute client on occasion as point massage. Donth said that each massage has its own well. followers. “I’ve gotten the phone call where someone needs an “There are a number of different modalities that I appointment as soon as possible and I do my very best to incorporate into my massages,” Donth said. “I am also a accommodate them,” Donth said. “It is a good feeling to certified provider of a signature treatment called Migraine be able to do that for my clients. When you work with Miracle which, as it sound, deals strictly with headache people as closely as a massage therapist does, you get to relief techniques that work for both common tension know them very well and quite often they begin to feel like headaches as well as crippling migraine headaches.” friends and of course I do whatever I can for my friends.” Donth said that almost all of her massages contain Donth is a fan of getting massages herself although she techniques from both Swedish and deep tissue massages admits that she doesn’t schedule them as often as she and that there are endless reasons people seek out massage would like. therapy ranging from wanting to relax for an hour on a “I think that’s probably true of most massage therapists,” massage table to seeking relief from pain after being in an Donth said. accident. With four years under her belt as a certified massage “The two main reasons are: relaxation and therapy for therapist, Donth is looking forward to the future. some muscular dysfunction,” Donth said. “I see people “I realize that choosing this career is not something with sore shoulders, low back discomfort and stiffness in that’s going to make me rich,” she said, “but in the end it the neck — those are some pretty common ailments.” really comes down to loving what you’re doing. And I love Donth added that massage therapy is starting to be what I do.” MV recognized for its ability to treat physical ailments of the body in both the general population as well as in the medical community. “There are now training programs that can be taken which certify you to become a medical massage therapist,” Donth said. “Hospitals and clinics are starting to embrace the value of massage as it relates to patient recovery.” Getting to know her clients is important to Donth’s philosophy as a massage therapist and she does everything possible to ensure that the people she works with are fully informed before their appointment as well as a part of the decision making process. Donth meets with her clients first to discuss the type of treatment they are seeking and then gives her recommendation as to what kind of treatment she believes will help them the most. Among the topics discussed during an initial consultation are: the reason why the client wants a massage, how long the Donth works hard to create a relaxing, stress-free environment for her clients.

MN Valley Business • January 2016 • 25

Eric Poppler (left) and Clay Sharkey check the aroma from some of their coffee beans. Right: Poppler and Sharkey operate Beans Coffee Company, a small-batch bean roaster.

Beans Coffee Co. Partners doing small-batch coffee roasting By Heidi Sampson Photos by Pat Christman

wners Clay Sharkey & Eric Poppler, of Beans Coffee Company, met five years ago. At that time, they immediately realized that the two of them had a unique love for coffee. When Sharkey and his wife went on their honeymoon, they toured a coffee roasting facility. He was extremely intrigued by the roasting process and on the way home, conducted a Google search. To his amazement, coffee could be roasted in a popcorn popper. Luckily, since he and his wife had recently gotten married, they had two of everything, including an extra popcorn popper. As a result, Sharkey and Poppler decided to make a trial run at roasting coffee in Clay’s small popcorn popper in 2010.

At first, they roasted coffee for themselves, family and friends. By 2011, their network of family and friends began requesting their coffee beans for Christmas presents. Unfortunately, when roasting beans in a small popcorn popper, one can only roast a half-cup of beans at a time, which made the increased demand for beans a bit time consuming. However, with the need for roasted coffee swelling, the two quickly graduated to their current roaster, a six-pound drum roaster. Shortly after the purchase of a larger roaster, a friend mentioned that the two should try to the Farmers’ Market as an avenue for sales. During the summer of 2014, they took their beans to the Mankato’s Farmers’ Market. For

Feature

26 • January 2016 • MN Valley Business

MN Valley Business • January 2016 • 27

the past two years, they’ve sold, their product at the Farmers Market, as well as online. “What’s really cool about Mankato, is the loyalty,” Sharkey said. “People in this community are totally in support of home roasted coffee. Over the past two summers, we’ve developed more of a following. We’ve found that people who like coffee have passion.” Through their Farmers’ Market dealings, they were contacted by a few business owners interested in their product. However, their Farmers’ Market exemption doesn’t allow for commercial retail at this time, which is something they’d like to change in the future. Currently they have been busy trying to locate commercial space in Mankato, to begin their own roasting facility. “When we started,” said Eric, “We were roasting 2 pounds at a time. Today, we have a demand for 120 pounds or more of beans, which is significant growth for us.”

Gourmet Beans

The Beans Coffee Company strives to keep their coffee lineup as simple and straightforward as possible. While they roast whole beans, they will also grind beans. Currently, their roasted bean selection consists of four beans: Denovo, a darker roasted coffee, which means to start anew. Their second bean is the 3Minute, which was the result of their first attempt at roasting beans that ended in failure. Although the name for the bean stuck, the roasted bean itself has become more perfected as this bean occupies the center between their darker and lighter choices. Their third, the Blue Bean, is a light roast with a hint of blueberry. Their final bean choice is a decaf Columbian, which is more of a medium blend coffee. They purchase their beans from a wholesaler in the cities, ordering directly from them because of the supplier’s willingness to break down the traditional 150-pound burlap sack of beans, into 25-pound increments. The 25-pound bag option made obtaining beans for roasting easier, in the beginning. However, today they’ve graduated

28 • January 2016 • MN Valley Business

into the 150-pound bags as the demand for their beans have increased. “We’ve found that at the Farmers’ Market that many people want fair trade or organic beans,” Poppler said. “Currently, two out of four of our beans can be found in fair trade and/or organic. However, with the Blue Bean we are still looking for something that matches flavor in organic and fair trade.” Due to their limited ability to sell under the Farmers’ Market exemption, the two have expanded their business to sell online while offering free delivery to those in the Mankato area. Although, most of their sales have been in the Mankato area, customers from Mankato have purchased their beans and mailed them to places as far away as Texas, Taiwan and Japan. In the future they would like to get into the Keurig-style K-Cups, as well as to expand their roasting abilities into more blends between the different coffees they offer. “We are a unique business,” said Eric. “We enjoy delivering and getting to meet the people who drink our coffee. We’ve found that when people try our coffee, they do so because it’s local, but they return because the product is excellent. When our customers buy from us at the Farmers’ Market or online, they get coffee that is fresh, roasted the day before. That’s simply not something that can be purchased in a store, at least not at this time.”

Construction/Real Estate Residential building permits Mankato

(in thousands)

- 2014 - 2015

18000

Residential building permits North Mankato 4000

$3,182

13500

$1,207

3000

9000

2000

4500

1000

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

- 2014 - 2015 275

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

Housing starts: Mankato/North Mankato - 2014 - 2015

214 30

165

14 14

110

55 J

Source: Realtors Association of Southern Minnesota

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

(in thousands)

- 2014 - 2015

Commercial building permits North Mankato

- 2014 - 2015 (in thousands)

4000 3000

$3,152 $1,744

Source: City of Mankato

5.5 5.0

4.0%

4.5 4.0 3.5

3.9% F

Source: Freddie Mac

$421 $328

1000 0

Foreclosures: 2014 Year End

— 2014 — 2015

2000

Source: City of North Mankato

Interest Rates: 30-year fixed-rate mortgage

3.0

214

220

80000 70000 60000 50000 40000 30000 20000 10000 0

Source: City of North Mankato

Existing home sales: Mankato region

- 2014 - 2015 (in thousands) $3,965 $1,617

County

2013

2014

Percent change

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

101 19 27 70 25 43 39 36 24

72 21 21 47 28 24 22 27 7

-29% +11% -22% -33% +12% -44% -44% -25% -71%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • January 2016 • 29

■

Agricultural Outlook

By Kent Thiesse

2016 will be year of tight profit in ag

s we look ahead to 2016 it appears that we will have even tighter profit margins in crop production for next year, as compared to recent years. The combination of lower projected market prices for corn and soybeans together with nearly steady input costs for seed, fertilizer, and chemicals will limit estimated potential returns over direct expenses and land costs, at average crop yields. Another major variable in breakeven levels in crop production are loan payments on capital investments such as farm machinery, facilities, and land purchases. Approximately two-thirds of the corn and soybean acres in southern Minnesota are under some type of cash rental agreement. Based on farm business management records for southern third of Minnesota, the average land rental rate in 2014 was just over $250 per acre; however, there was a wide range in land rental rates across the region. Most likely, average cash rental rates for 2015 in many areas of the region were nearly the same as 2014, with some rental rates declining slightly as compared to a year earlier. Based on early reports from farm operators it appears that land rental rates for 2016 in some locations across the region may adjust slightly downward in response to the tighter profit margins that are likely for 2016. However, many rental rates are likely to remain quite high. The University of Minnesota Center for Farm Financial Management has website called FINBIN, which allows farm operators, ag lenders, farm management advisors, and others to look at average income levels, direct and overhead expenses, and net return levels on farms. The data in FINBIN is based on actual farm management data

submitted by producers through the various farm business management programs. The data can be sorted on the basis of whole farms, crop or livestock farms, location, farm size or income levels, owned versus cash rent land, as well as other data sorts. Another FINBIN tool is called a “Benchmark Report,” which allows for the comparison of actual individual farm management data from a producer’s farm, compared to average data from similar farm operations in the same geographical area. (www.finbin. umn.edu) Based on a FINBIN analysis for the years 2012-2014 of more than 800 crop farms on cash rented corn acres in southwest, south central, and southeast Minnesota, the average net return over average direct and overhead expenses, including land rent, was nearly $210 per acre per year. However, further analysis showed that there was an average of a +$348 per acre net return in 2012, a negative ($7) per acre net return in 2013, and a negative ($44) per acre net return in 2014. It is likely that 2015 will again show a negative average net return, even with the above average crop yields. There is a wide variation in the net returns on cash rented corn acres between the top 20 percent of producers, compared to the bottom 20 percent. Based on the FINBIN data in southern Minnesota, the top 20 percent profit farms had an average net return above direct and overhead expenses in 2014 of +$143 per acre per year, compared to an average negative ($237) net return for the low 20 percent profit farms, which is a difference of approximately $380 per acre. More detailed analysis of the FINBIN data

FARM MANAGEMENT STRATEGIES FOR 2016 1. Know your “cost of production” ……

this is a key for making grain marketing decisions, knowing where to lower production costs, and other management decisions.

2. Optimize crop insurance and farm program options …… these programs are key component of a good risk management plan for crop producers.

3. Negotiate land rental contracts with Landlords …… there may be opportunities to

lower some very high land rental rates, or to convert to a “flexible lease” agreement.

4. Sharpen your grain marketing skills

…… no matter what level grain prices are at, there is usually a large difference in average price that farmers receive for their corn and soybeans.

30 • January 2016 • MN Valley Business

5. Use caution with capital investments

…… from 2010-2014, many farm operators invested extra income into farm machinery upgrades, facilities, and land purchases; however, much more caution and analysis is required during these times of tighter profit margins.

6. Pay attention to family living expenses

…… many farm families increased their level of family living during the higher profit years, but now may need to look for ways to scale-back the nonfarm expenses.

7. Communication is key during difficult times …… sharing farm-related issues with

business partner, ag lenders, farm advisors, and family members is extremely important during challenging times.

Agriculture/Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2014 — 2015 8

$3.51

$10.08

Iowa-Minnesota hog prices

125

Source: USDA

Minimum prices, class 1 milk Dollars per hundredweight

— 2014 — 2015 30

$25.99

$86.62

110

Milk prices

185 pound carcass, negotiated price, weighted average

— 2014 — 2015 140

$8.18

$3.36

Source: USDA

95 80

$52.15 J

$18.28

65 50

(dollars per bushel)

— 2014 — 2015 20

Soybean prices — southern Minnesota

Source: USDA

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

for 2014 looked at the various factors that comprise the large difference in the average net returns between the 20 percent high profit farms and the 20 percent low profit farms. The average corn yield for 2014 was 170 bushels per acre on high profit farms, and was near 158 bushels per acre on the low profit farms. The average corn market price received for 2014 was $4.19 per bushel on the high profit farms, and $3.77 per bushel on the low profit farms. The average on all farms in 2014 was a corn yield of 167 bushels per acre and a corn price of $3.97 per bushel. There was also a significant variation in average costs per acre in 2014 between the top 20 percent profit cash rental corn farms and the low 20 percent profit farms. The average corn production expenses on all farms in 2014 were approximately $497 per acre for direct crop expenses, including seed, fertilizer, chemicals, etc., $251 per acre for land rent, and $859 per acre for total direct and overhead expenses. The top 20 percent profit farms had average expenses of around $457 per acre for direct expenses, $229 per acre for land rent, and just under $774 per acre for total expenses. The low 20 percent profit farms averaged $530 per acre in direct expenses, nearly $277 per acre in land rent, and $954 per acre in total expenses. The average direct and overhead cost per bushel of corn produced for 2014 was $5.15 per bushel on all farms, which compares to $4.56 per bushel on the high profit farms, and $6.02 per bushel on the low profit farms. If we assume similar production expenses, land rental rates, and overhead costs for 2015 (approximately $855 per acre), with 2015 average corn yields that were approximately 1020 percent higher than 2014 yields, the average direct and overhead cost per bushel for 2015 would be range from

Source: USDA. Based on federal milk orders. C. Sankey

$4.17 to $4.55 per bushel. The current corn price for the 2015 corn crop at most locations in southern Minnesota is below $3.50 per bushel. As we plan ahead for very tight margins in corn and soybean production for 2016, it is a good time for farm operators to review all aspects of a crop operation. Obviously weather conditions can account for a large portion of the crop yield variation; however, there are other more controllable crop management factors that may also contribute to yield differences. Looking for ways to reduce or control direct and overhead expenses, including land rental costs, is also a key to improving profit potential for crop producers. Decisions that are made on crop marketing and crop insurance, as well as potential payments from the government farm program, can also have a significant impact on potential profitability for 2016. MV

Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@minnstarbank.com

MN Valley Business • January 2016 • 31

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major November Industry ‘14 ‘15 Construction Manufacturing Retail Services Total*

796 189 51 229 1,265

Percent change ‘14-’15

788 257 48 233 1,326

Major Industry

-3.8% +3.6% -5.9% +1.7% +4.8%

December ‘14 ‘15

Construction Manufacturing Retail Services Total*

12,107 3,118 1,345 6,546 23,116

Percent change ‘14-’15

12,369 3,710 1,278 6,272 23,629

+2.2% +19% -5% -4.2% +2.2%

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

- 2014 - 2015

Nine-county Mankato region

130,468 129,660

133000

(in thousands)

2000

111000

1000

100000

Local number of unemployed

- 2014 - 2015

Nine-county Mankato region

200000

8000

150000

4,042 3,747

- 2014 - 2015

95,612 89,793

100000

4000

50000

2000 0

Minnesota number of unemployed

10000

6000

2,911 2,902

3000

122000

- 2014 - 2015

Mankato/North Mankato Metropolitan statistical area

Unemployment rate Number of non-farm jobs Number of unemployed

2014

2015

2.3% 58,625 1,447

2.4% 57,729 1,389

Source: Minnesota Department of Employment and Economic Development

32 • January 2016 • MN Valley Business

Unemployment rates Counties, state, nation

(includes all of Blue Earth and Nicollet Counties) October

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

October 2014 2.5% 3.9% 3.2% 3.1% 2.9% 2.3% 2.9% 3.3% 3.7% 3.5% 3.5% 5.7%

October 2015 2.4% 2.8% 3.3% 3.2% 4.2% 2.1% 2.8% 3.4% 3.9% 3.1% 3.2% 4.9% C. Sankey

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold - 2014 - 2015 870

977 1200

(In thousands)

500

800

400

600

300

400

200

100 J

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato 70000 60000 50000 40000 30000 20000 10000 0

- 2014 - 2015

600

1000

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

Sales tax collections Mankato

$539

$463

Mankato food and beverage tax

- 2014 - 2015

$43,418

Source: Sales tax figures, City of Mankato

- 2014 - 2015

110000

$46,657

$57,200 $65,500

88000 66000 44000 22000

Source: City of Mankato

Stocks of local interest

Nov. 13

Dec. 11

Percent change

Archer Daniels

$37.76

$33.90

-10.2%

Ameriprise

$112.49

$103.28

-8.2%

Best Buy

$32.06

$29.59

-7.7%

Crown Cork & Seal

$50.15

$48.73

-2.8%

Consolidated Comm.

$20.48

$20.59

+0.5%

Fastenal

$38.60

$39.20

+1.5%

General Growth

$25.17

$25.71

+2.1%

General Mills

$55.81

$58.01

+4.0%

Hutchinson Technology

$3.67

$3.66

-0.3%

Itron

$33.67

$34.78

+3.3%

Johnson Outdoors

$22.24

$22.06

-0.8%

$156.68

$155.30

-0.9%

Target

$71.93

$71.70

-0.3%

U.S. Bancorp

$42.39

$41.90

-1.2%

Wells Financial

$34.50

$31.10

-10.0%

Winland

$1.99

$1.75

-12.0%

Xcel

$35.01

$34.92

-0.3%

Gas prices-Mankato — 2014 — 2015

5 4

$2.57

$1.89

1 0

Gas prices-Minnesota — 2014 — 2015

5 4

$2.52

3 2 $1.90

1 0

Source: GasBuddy.com C. Sankey

MN Valley Business • January 2016 • 33

Presented By:

Greater Mankato Growth

On November 17, more than 500 members of the Greater Mankato community gathered to honor some of our region’s most outstanding businesses, organizations and professionals at the Greater Mankato Business Awards & Hall of Fame. Thank you to our members and sponsors for a memorable and wonderful event. Please join us in congratulating all of this year’s award recipients! To view pictures and video from the event, as well as nominate a business, organization or professional visit greatermankato.com/business-awards-hall-fame. Dinner Sponsor

Video Sponsor An event of:

Photos By Spx Sports

34 • January 2016 • MN Valley Business

Greater Mankato Growth MN Valley Business • January 2016 • 35

Hall of Fame Inductees

Community Bank

Entrepreneurial Business Award

Greater Mankato Growth

Distinguished Business Award

Tailwind Group

Greg’s Champion Auto 36 • January 2016 • MN Valley Business

Freedom Home Care, LLC

al d

Brian Fazio Business Education Partnership Award

South Central College & CliftonLarsonAllen (Annual Ag Symposium)

Hap Halligan Leadership Award

Elizabeth Harstad

MN Valley Business • January 2016 • 37

Greater Mankato Growth

Eric Oleson

Young Professional of the Year

Hospitality Award

Peter Olson, Children’s Museum of Southern Minnesota

Bring it Home Award

Minnesota Vikings 50th Training Camp

Greater Mankato Growth

CityDesign Awards

Renovation over $3,000,000 - Children’s Museum of Southern Minnesota Building Children’s Museum of Southern Minnesota and City of Mankato 38 • January 2016 • MN Valley Business

New Construction Under $5,000,000 - Profinium Place Tailwind Group and Mid Rise Holdings

CityArt “People’s Choice” Award Since 2011, the CityArt Walking Sculpture Tour has brought more than $1.5 million in rotating public art to the City Center and added 14 works to the community’s permanent collection. Each year from May through October, members of the public vote for their favorite sculpture. The work of art named “People’s Choice” is then purchased by the CityArt program for permanent display in the City Center.

“Godzilla” Dale Lewis

The 2015 “People’s Choice” award-winning sculpture is “Godzilla” by Dale Lewis of Hastings, MN. Affectionately called “Kato-Zilla” by its fans, “Godzilla” was created from hundreds of stainless steel scraps welded together to create the illusion of rough textured scales.

Register Today! All business and community leaders from Greater Mankato are invited to join us at the 7th annual Greater Mankato at the Capitol on March 30, 2016 as we travel to St. Paul to raise our visibility of our region among state leaders. Visit greatermankato.com/capitol for more information and to sign up for the event.

MN Valley Business • January 2016 • 39

Greater Mankato Growth

Wednesday, March 30, 2016

BUILDING AUTOMOTION AND INTEGRATION CONTROLS HEATING AND COOLING SYSTEMS SECURITY

“Todays leading experts to help you for a better tomorrow”

Please call for a free consultation and estimate

40 • January 2016 • MN Valley Business

307 McKinzie Street So. Mankato, MN 56001 507-345-4828 507-289-4874 www.paape.com