MN Valley Business Journal

Attorney Nick Frentz

Legal Eagles Big cases bring big rewards Also in this issue •

•

•

The Free Press MEDIA

Decadent Desserts Kato Insurance Karla & Angie VanEman

MANKATO, MN

SOUTHERN MINNESOTA’S PREMIERE EVENT FACILITY With over 45,000 square feet of flexible meeting/event space

Trade Shows | Concerts | Corporate Meetings | Conventions | Weddings

Plus, Mankato’s City Center’s arts and entertainment venues are right out the front door!

VERIZONWIRELESSCENTERMN.COM | 507.389.3000

,i>V…ˆ˜}Ê£ÓäÊÞi>Ă€ĂƒĂŠÂˆÂ˜ĂŠLĂ•ĂƒÂˆÂ˜iĂƒĂƒĂŠÂˆĂƒĂŠ>ĂŠĂƒÂˆ}˜ˆvˆV>Â˜ĂŒĂŠ>VVÂœÂ“ÂŤÂ?ÂˆĂƒÂ…Â“iÂ˜ĂŒÂ°ĂŠĂŠ ÂœĂ€ĂŠ >Ă€Ă€ÂˆĂƒÂ…ĂŠ ÂœÂ…Â˜ĂƒÂœÂ˜ĂŠ >ĂœĂŠ"vvˆVi]ĂŠÂˆĂŒÂ˝ĂƒĂŠ>ĂŠĂ€iĂƒĂ•Â?ĂŒĂŠÂœvĂŠÂ…>Ă€`ĂŠĂœÂœĂ€ÂŽ]ĂŠ>Â?œ˜}ĂŠĂœÂˆĂŒÂ…ĂŠ>ĂŠ `i`ˆV>ĂŒÂˆÂœÂ˜ĂŠĂŒÂœĂŠÂŤĂ€ÂœĂ›Âˆ`ˆ˜}ĂŠÂˆÂ˜Â˜ÂœĂ›>ĂŒÂˆĂ›iĂŠÂ?i}>Â?ĂŠĂƒÂœÂ?Ă•ĂŒÂˆÂœÂ˜ĂƒĂŠĂœÂˆĂŒÂ…ĂŠÂŤĂ€ÂœviĂƒĂƒÂˆÂœÂ˜>Â?ĂŠ Ă€iÂ?ˆ>LˆÂ?ÂˆĂŒĂžĂŠ>˜`ĂŠĂŒÂ…iĂŠÂ…Âˆ}Â…iĂƒĂŒĂŠiĂŒÂ…ÂˆV>Â?ĂŠĂƒĂŒ>˜`>Ă€`ĂƒÂ°ĂŠĂŠ ĂŒÂ˝ĂƒĂŠĂœÂ…>ĂŒĂŠÂ“>ÂŽiĂƒĂŠ >Ă€Ă€ÂˆĂƒÂ…ĂŠ ÂœÂ…Â˜ĂƒÂœÂ˜ĂŠ >ĂœĂŠ"vvˆViĂŠĂŒÂ…iĂŠÂŤĂ€i“ˆiĂ€]ĂŠvĂ•Â?Â?ĂŠĂƒiĂ€Ă›ÂˆVi]ĂŠÂ?i}>Â?ĂŠĂ€iĂƒÂœĂ•Ă€ViĂŠvÂœĂ€ĂŠ Ă€i>ĂŒiÀÊ >˜Ž>ĂŒÂœĂŠ>˜`ĂŠ-ÂœĂ•ĂŒÂ…iĂ€Â˜ĂŠ ˆ˜˜iĂƒÂœĂŒ>°ÊÊÊÊ *Ă•ĂŒĂŠÂŁĂ“Ă¤ĂŠĂži>Ă€ĂƒĂŠÂœvĂŠÂ?i}>Â?ĂŠiĂ?ÂŤiĂ€ĂŒÂˆĂƒiĂŠĂŒÂœĂŠĂœÂœĂ€ÂŽĂŠvÂœĂ€ĂŠĂžÂœĂ•Â°ĂŠĂŠ ÂœÂ˜ĂŒ>VĂŒĂŠ >Ă€Ă€ÂˆĂƒÂ…ĂŠ ÂœÂ…Â˜ĂƒÂœÂ˜ĂŠ >ĂœĂŠ"vvˆViĂŠĂŒÂœ`>Þ°

AREAS OF PRACTICE UĂŠ*iĂ€ĂƒÂœÂ˜>Â?ĂŠ ˜Â?ÕÀÞ UĂŠ i`ˆV>Â?ĂŠ >Â?ÂŤĂ€>VĂŒÂˆVi UĂŠ Ă€i>VÂ…ĂŠÂœvĂŠ i`ˆV>Â?ĂŠ*Ă€ÂˆĂ›>VĂž UĂŠ Ă€ÂˆÂ“ÂˆÂ˜>Â?ĂŠ iviÂ˜Ăƒi UĂŠ7Ă€ÂœÂ˜}vĂ•Â?ĂŠ i>ĂŒÂ… UĂŠ ÂœÂ˜ĂƒĂŒĂ€Ă•VĂŒÂˆÂœÂ˜ĂŠ >Ăœ UĂŠ Ă•ĂƒÂˆÂ˜iĂƒĂƒĂŠ >Ăœ UĂŠ œ““iĂ€Vˆ>Â?ĂŠ ÂˆĂŒÂˆ}>ĂŒÂˆÂœÂ˜ UĂŠ ÂˆĂ›ÂˆÂ?ĂŠ ÂˆĂŒÂˆ}>ĂŒÂˆÂœÂ˜ UĂŠ Ă€ÂˆÂ“ÂˆÂ˜>Â?ĂŠ iviÂ˜Ăƒi

UĂŠ “Â?ÂœĂžÂ“iÂ˜ĂŒĂŠÂ­ “Â?ÂœĂžiÀŽ UĂŠ ĂƒĂŒ>ĂŒiĂŠ*Â?>˜˜ˆ˜}ĂŠEĂŠ*Ă€ÂœL>ĂŒi UĂŠ ÂˆĂ›ÂœĂ€ViĂŠEĂŠ >“ˆÂ?ÞÊ >Ăœ UĂŠ Ă€LÂˆĂŒĂ€>ĂŒÂˆÂœÂ˜ĂŠEĂŠ i`ˆ>ĂŒÂˆÂœÂ˜ UĂŠ,i>Â?ĂŠ ĂƒĂŒ>ĂŒiĂŠ >Ăœ UĂŠ Â?iVĂŒĂ€ÂˆV>Â?ĂŠ VVˆ`iÂ˜ĂŒĂƒ UĂŠ/Ă€>Փ>ĂŒÂˆVĂŠ Ă€>ÂˆÂ˜ĂŠ ˜Â?ÕÀÞ UĂŠ/ÀÕVÂŽĂŠ VVˆ`iÂ˜ĂŒĂƒ UĂŠ ÂœÂ˜ĂƒĂ•Â“iÀÊ >Â˜ÂŽĂ€Ă•ÂŤĂŒVĂž UĂŠ ÂŤÂŤi>Â?Ăƒ

Madelia OfďŹ ce: 507.642.3141 | Mankato OfďŹ ce: 507.625.2525

,, - 7° " ÊÊ

WWW.PAULSENARCHITECTS.COM 507.388.9811 |

PAULSEN ARCHITECTS

Paulsen architects knows that today’s schools are micro-communities that need a wide range of facilities to enrich the education of the next generation; retain talented faculty and staff; and make the most effective use of land, buildings, infrastructure and budgets. Our experienced team of design professionals balance these needs to design safe, sustainable learning environments that help each student efficiently and effectively fulfill their potential.

PLANNING INTERIORS | ARCHITECTURE | ENGINEERING |

Put 120 Years of Legal Expertise to Work for You

Bright colors Bright ideas

507-625-4606 121 E. Main St. Ste 311 Mankato, MN 56001

Corporate Graphics Your Printing Solutions Company

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

MODERN SOLUTIONS COMPLETE SATISFACTION. Schwickert’s is proud to partner with you to choose solutions that are good for your business and for our environment. A Green Roof or a rooftop garden is an attractive and energy-saving alternative to a conventional rooftop. A Green Roof can keep buildings cooler, save energy, extend the useful life of the roof and add beauty and useable space.

Call us today to learn more about Schwickert’s Green Roof services

330 Poplar Street, Mankato, MN | 888-724-9421| schwickerts.com

F E A T U R E S April 2013 • Volume 5, Issue 7

12

Civil litigators

Local lawyers, such as Randy Knutson, who focus on civil litigation, including personal injury cases say the work is rewarding and often emotional as they guide fragile victims and their families though the legal and financial roadblocks they face.

18

Decadent Desserts

20

Amy Otto just opened Decadent Desserts on North Riverfront Drive where she bakes and meets clients for her thriving catering business, which is growing entirely through word of mouth.

Special Focus: Higher education’s impact Mankato’s higher education campuses have a big economic and talent impact, attracting 6,000 new students every year with about 25,000 students attending school here annually.

28

Karla & Angie VanEman

Karla VanEman, a Realtor since 1976, opened American Way Realty in 2001. Daughter Angie, after a stint working in New York, returned to Mankato to join her mom and brother in the real estate business.

About the Cover

Nick Frentz, personal injury lawyer at Frentz & Frentz Photo by The Free Press Media photographer John Cross.

MN Valley Business • April 2013 • 5

■ April 2013 • VOLUME 5, ISSUE 7 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Pete Steiner Brenda Flannery Kent Thiesse Marie Wood PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross GRAPHIC DESIGNER Jenny Malmanger PAGE DESIGNER Christina Sankey ADVERTISING David Habrat MANAGER ADVERTISING sales Karla Marshall 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 kmarshall@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.........8 ■ Minnesota Business updates..........9 ■ Business Commentary................. 10 ■ Agriculture Outlook...................... 32 ■ Agribusiness trends..................... 33 ■ Job trends..................................... 34 ■ Construction, real estate trends.. 35 ■ Retail trends................................. 36 ■ Greater Mankato Growth.............. 38 ■ Greater Mankato Growth Member Activities ....................... 40

6 • April 2013 • MN Valley Business

From the editor

By Joe Spear

Business has risks and rewards From lawyers to insurance there’s drama

M

innesota Valley Business travels this month quite literally through the trials and tribulations of business in the Mankato region Our cover story features local lawyers and some of the biggest trials and cases they have faced over the last few years. Several other profiles and features chronicle the surprisingly similar journeys of small family businesses that have shown longterm records of success and real staying power.

The stories offer a feel for the risks and rewards of business. Business, after all, is nothing but a story.

There’s a beginning, a middle and an ending. And like any good story, there are feel good moments as well as stress and drama.

There’s no shortage those story elements in this month’s edition.

Talk about drama and trials. Randy Knutson of the Farrish, Johnson Law Office had no idea a phone call from a concerned parent would lead to a case involving the selling of a newborn’s DNA into a state and national news story.

A Minnesota Supreme Court ruling led to statewide changes in how the Minnesota Department of Health collects and stores the DNA of newborns. Lots of big brother, personal privacy ramifications. The case goes on and the implications could grow even larger.

“When you get a Supreme Court decision on how the state should operate — the first ruling of its kind in the nation — it’s rewarding,” Knutson says.

Mankato attorney Nick Frentz has been doing more typical cases for years involving personal injury. In a way, it becomes like a business transaction. Once an insurance company knows its client bears some responsibility for an accident, it is more about how much compensation victims should receive.

Those settlements can range into the millions. A Frentz case involving three Minnesota State University

students killed in an auto accident on the way to an engineering competition was settled for over $5 million.

While lawyers pursue cases that create risks for defendants, longtime Mankato insurance business owner Scott Michaletz has been all about helping clients avoid risk.

The need for insurance is an easy one to figure as society becomes more litigious. Says Michaletz: “We provide protection and security. We offer risk management.”

Kato Insurance celebrates its 30th birthday this year, and its story is much like many small business stories you will hear about in the Mankato region. Usually, a family member — father or mother — started the business and kids grew up with learning the ropes. They eventually take over the business, modernize with technology and new products, but retain the longtime loyal customer bases.

That’s also the case as we peer into the All American Realty business of Karla and her daughter Angie VanEman. They have for years held the distinction of being one of the top listing and selling agencies in the Mankato area.

In our profile this month, we hear from another up and coming entrepreneur who aims to start another homegrown, family business.

Amy Otto just opened a shop for her Decadent Desserts business on North Riverfront Drive in Mankato.

She’s started small but already has seen demand for her desserts grow.

From weddings, special occasions and catering she is building another family-run business.

All know that customer service is key, working hard will be a given and the risks of owning a business will eventually have its own rewards.

MV Joe Spear is executive editor of Minnesota Valley Business.

Contact him at 344-6382 or jspear@mankatofreepress.com

Local Business People/Company News

■

Pathstone Living earns Customer Experience Award Ecumen Pathstone Living in Mankato was given the Customer Experience Award by Pinnacle Quality Insight, a national customer satisfaction firm that interviewed customers of Pathstone.

Pathstone was given the award for a number of categories, from nursing care to overall customer experience.

“We’re very fortunate at Pathstone Living to employ talented people who strive at providing the best care possible and make lives better for the people we serve,” said Jennifer Pfeffer, executive director.

■■■ Dove, Weinberg, Gislason named Super Lawyers Gislason & Hunter announced that Michael Dove, Justin Weinberg and Daniel Gislason were honored as 2013 Super Michael Dove Justin Weinberg Lawyers.

Dove and Weinberg were named in the Banking and Finance category, with Weinberg named a “Rising Star.”

Gislason was named in the Mediation category.

Each year, Super Lawyers selects attorneys using a rigorous, multiphase rating process. Peer nominations and evaluations are combined with third party research. Each candidate is evaluated on 12 indicators of peer Daniel Gislason recognition and professional achievement. Selections are made on a state-by-state basis.

The Super Lawyers selection process involves three basic steps: creation of the candidate pool; evaluation of candidates by the research department; and peer evaluation by practice area.

■■■ Hoffman earns management distinction John Hoffman, of the Minnesota Business Center of the Principal Financial Group, has qualified for the company’s Management Achievement Round Table.

MART is a gathering of top field management to exchange ideas and acknowledge accomplishments.

Managers qualify for this distinction by achieving excellence in a number of key factors including recruiting, retention, persistency and growth. Only the top managers nationwide are awarded this honor.

Weichert employees honored Weichert Realtors Community Group broker/owner Rich Draheim has announced the company’s 2012 award winners. Three high achievers will be honored by Weichert Real Estate Affiliates at a banquet in April.

Topping the list from the Mankato agency is Christa Wolner, inductee into the 2012 Ambassador Club, one of the three top categories of awards to agents presented annually by the national franchise organization.

The Sales Achievement Award will be presented to Michael White and Stephanie Jacobson.

All awards are based on minimum requirement per award category in gross commission income or units earned in 2012.

■■■ Schooff named to circle of distinction David Schooff, president of Coldwell Banker Commercial Fisher Group, has earned a spot in the company’s Bronze Level Circle of Distinction based on his transaction revenue for 2012. The honor is given to top ranking producers among Coldwell Banker Commercial professionals.

David Schooff

■■■

Powers promoted at Abdo, Eick & Meyers Christine Powers, CPA, has been named a partner of Abdo, Eick & Meyers.

Powers joined Abdo, Eick & Meyers in 1997 and specializes in working with businesses and nonprofits for tax accounting and consulting services.

She provides consulting on software Christine Powers issues, tax advice, cash flow management, budgeting and planning.

Powers is a graduate of Minnesota State University with degrees in accounting and business administration. She is also a member of the Minnesota State Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Powers was also recently been named the recipient of the Greater Mankato Area United Way “Volunteer of the Year” award.

■■■ Bluth named in Best Lawyers Joseph Bluth of Manahan and Bluth Law Office has been selected for inclusion in the 2013 edition of The Best Lawyers in America in the practice area of Family Law. This marks 15 years of selection by his peers as one of the best in his specialty. Bluth has been practicing law in Mankato since 1984.

■■■

MN Valley Business • April 2013 • 7

■

Business and Industry Trends

Agriculture

consumption, with little change in gasoline and jet fuel consumption.

Local corn and soybean prices rose in March after dipping slightly in February.

Corn was selling for $7.30 per bushel, almost a dollar higher than a year ago. Soybeans rose to $14.33 per bushel, more than a dollar higher than a year earlier.

Natural gas working inventories ended February 2013 at an estimated 2.08 trillion cubic feet (Tcf), about 0.36 Tcf below the level at the same time a year ago but still 0.27 Tcf greater than the 5-year average (2008-12).

Crop prices rise

Hog prices off

Prices for a 185 hog carcass fell significantly from $82.48 in February to $74.66 in March. Prices are down $13 per hog from what it was in March of 2012.

■■■

Energy

Gas prices finally fall

The weekly U.S. average regular gasoline retail price fell in early March for the first time since mid-December according to the federal Energy Information Administration.

The March 11 average was $3.71 per gallon, down $0.07 per gallon from February 25.

EIA expects that lower crude oil prices will result in monthly average regular gasoline prices staying near the February average of $3.67 per gallon over the next few months, with the annual average regular gasoline retail price declining from $3.63 per gallon in 2012 to $3.55 per gallon in 2013 and $3.38 per gallon in 2014.

Crude oil will average $108

The Brent crude oil spot price, which averaged $112 per barrel in 2012 and rose to $119 per barrel in early February 2013, will average $108 per barrel in 2013 and $101 per barrel in 2014.

The projected discount of West Texas Intermediate crude oil to Brent, which increased to a monthly average of more than $20 per barrel in February 2013, will average $16 per barrel in 2013 and $9 per barrel in 2014, as planned new pipeline capacity lowers the cost of moving mid-continent crude oil to the Gulf Coast refining centers.

U.S. oil production rising

U.S. crude oil production exceeded an average level of 7 million barrels per day (bbl/d) in November and December 2012, the highest volume since December 1992. EIA estimates that U.S. total crude oil production averaged 6.5 million barrels per day in 2012, an increase of 0.8 million bbl/d from the previous year. Projected domestic crude oil production is expected to average 7.3 million bbl/d in 2013 and 7.9 million bbl/d in 2014.

Fuel consumption to rise

Total U.S. liquid fuels consumption fell from 20.8 million bbl/d in 2005 to 18.6 million bbl/d in 2012. EIA expects total consumption to rise slightly over the next two years to an average of 18.7 million bbl/d in 2014, driven by increases in distillate fuel and liquefied petroleum gas

8 • April 2013 • MN Valley Business

Natural gas inventories lower Natural gas prices up

EIA expects the Henry Hub natural gas spot price, which averaged $2.75 per million British thermal units (MMBtu) in 2012, will average $3.41 perMMBtu in 2013 and $3.63 per MMBtu in 2014. Current options and futures prices imply that the lower and upper bounds for the 95-percent confidence interval for June 2013 contracts at $2.79 per MMBtu and $4.67 per MMBtu, respectively.

Less hydropower production

Total renewable energy consumption declined by 2.2 percent in 2012, as the decrease in hydropower more than offset the growth in the consumption of other renewable energy forms. This drop was the result of hydropower production falling by 13 percent as water supply in the Pacific Northwest fell from the unusually high levels seen in 2011.

EIA projects renewable energy consumption to increase by 2.6 percent in 2013. While hydropower declines by 3.2 percent, nonhydropower renewables grow by an average of 5.5 percent. In 2014, the growth in total renewables is projected to continue at a rate of 4.5 percent, as a 2.6-percent increase in hydropower is combined with a 5.4-percent increase in nonhydropower renewables.

Ethanol down to ‘09 levels

Fuel ethanol production averaged 865,000 bbl/d (13.3 billion gallons) in 2012, its lowest average since 2009. EIA expects ethanol production to remain near current levels of about 800,000 bbl/d through mid-2013 before recovering to pre-drought production levels, averaging 857,000 bbl/d for the year.

Ethanol production is expected to rise in 2014, averaging 922,000 bbl/d. Despite the forecast increase in ethanol production, EIA expects the drawdown of banked renewable identification numbers, as the average ethanol share of the gasoline pool increases only modestly between 2012 and 2014. Biodiesel production, which averaged 63,000 bbl/d (1.0 billion gallons) in 2012 is forecast to increase to 82,000 bbl/d (1.3 billion gallons) in both 2013 and 2014.

CO2 emissions fell 3.9 percent

U.S. Energy-Related Carbon Dioxide Emissions. EIA estimates that carbon dioxide emissions from fossil fuels declined by 3.9 percent in 2012, and projects increases of 1.9 percent in 2013 and 0.7 percent in 2014. The increase in emissions over the forecast primarily reflects the projected increase in coal use for electricity generation, especially in 2013.

Minnesota Business Updates

■

■ AgStar reports earnings of $107 million AgStar Financial Services reported year-end after-tax earnings of $107 million, resulting in $55.3 million in allocated patronage for the year ending Dec. 31, 2012.

“We are pleased with our strong performance in 2012,” Paul DeBriyn, president and CEO of AgStar Financial Services said in a statement. “These earnings are a result of many factors including strong client satisfaction and loyalty results, increased interest income, a one-time insurance premium refund and an increase in patronage earned from AgriBank, FCB.” In addition, AgStar achieved record-breaking results in the home mortgage division and worked hard to substantially reduce the risk in the portfolio.

As a way to share profits with their client-stockholders, AgStar implemented a patronage program in 1998. Since the program’s inception, AgStar has allocated more than $392 million in patronage dividends to qualified stockholders. In 2012, AgStar was able to retire and return to its stockholders the remaining patronage allocations for 2002 and 2003 totaling over $40 million.

■ HickoryTech reports increase in revenue, income HickoryTech Corp. reported fourth quarter revenue of $46.6 million, an increase of 18 percent year over year. Net income for the fourth quarter totaled $2.5 million, up 60 percent year over year, and earnings per share totaled 19 cents per diluted share, a 55 percent increase from a year ago.

Fourth quarter results include the company’s Fargo, North Dakota operations, which were acquired in March 2012.

“HickoryTech met or exceeded its 2012 objectives while we invested in future growth initiatives that will further strengthen our business,” John Finke, HickoryTech’s president and chief executive officer said in a statement. “We made significant progress growing our fiber and data revenue organically and with a strong, strategic acquisition in Fargo, North Dakota. With 76 percent of our revenue coming from business and broadband services, our increasingly diversified revenue sources have allowed us to manage the regulatory challenges and declines in our legacy telecom operations.

Looking forward, we remain focused on growing our business services and completing our greater Minnesota broadband project, which further expands our fiber network and gives us access to additional markets.”

■ Target faces hiring suit Instead of employing capable and qualified workers, many claim the Target Corp. would rather employ unfair hiring practices that disproportionately exclude AfricanAmericans.

Ten African-American Minnesotans filed formal complaints with the Equal Employment Opportunity Commission claiming they were wrongfully denied employment based on their past run-ins with the criminal justice system. Members of TakeAction Minnesota, the St.

Paul branch of the NAACP and a woman who said her offer for employment was rescinded by Target once a misdemeanor conviction came to light, called on the retail giant to end its practice of using past criminal transgressions to deny employment. The group said they have learned of 150 applicants who were denied employment based on past criminal transgressions.

The group said Target is unnecessarily discriminating against applicants of color who have criminal records in their past, but who are presently qualified for the jobs for which they are applying.

Molly Snyder with Target’s Media Relations department said using a person’s criminal history as a determining factor for employment is not about race, but about guests’ safety.

“Over the past year, Target has engaged in a dialogue with Take Action MN regarding our fair and nondiscriminatory hiring practices,” said Snyder in an email statement. “During these meetings, we explained that Target’s criminal background check process is carefully designed to ensure that we provide a safe and secure working and shopping environment for our team members and guests while treating all candidates fairly. The existence of a criminal record does not disqualify a candidate for employment at Target, unless it indicates an unreasonable risk to the safety and welfare of our guests, our team members or our property.”

■ General Mills approves dividend increase General Mills Inc.’s board has approved a 15 percent quarterly dividend increase, as the packaged-food maker looks to return more cash to shareholders.

The increase is effective with the company’s Aug. 1. payment. The five-cent increase brings the quarterly payout to 38 cents a share and represents a yield of about 3.3 percent.

The increase, which will cost the company about $129.3 million more a year, is the 14th in General Mills’ quarterly dividend rate since 2004.

“The growth of our dividends over this long period of time is testimony to the resilience of General Mills” food businesses, our strong financial condition, and our company’s commitment to delivering superior returns to our shareholders,” said Chairman and Chief Executive Officer Ken Powell in a statement.

The maker of Cheerios cereal and Betty Crocker baking products has struggled to mitigate higher raw-material costs amid pushback from budget-conscious consumers.

The company had launched a restructuring plan last year that included job cuts, increased investments in the Yoplait yogurt business and accelerated growth in emerging markets, particularly China.

General Mills’ profit has improved in recent quarters thanks in part to the performance of newly acquired businesses overseas and improving results in its home market.

The company had $734.9 million in cash and cash equivalents as of Nov. 25.

MN Valley Business • April 2013 • 9

■

Business Commentary

By Brenda Flannery

Opportunity and Security: A Mission with Longevity

G

len Taylor recently came to Minnesota State Mankato to give the College of Business Morgan Thomas Executive Lecture. He sat with me at the front of Ostrander Auditorium and discussed his life as a successful business leader. Among the topics that came up in the conversation was the evolution of the mission statement for Taylor Corporation.

In 1963, when he started working for Carlson Wedding Services, he realized that two words could sum up what he wanted, personally, out of his employment there: opportunity and security. So when he purchased Carlson Wedding Services from Bill Carlson and began the visionary development of what is now a 90-plus collection of companies under the umbrella of Taylor Corporation, he used those two words in the company’s mission statement: We exist to create opportunity and security for our employees.

I find those two words to be an interesting duo. Opportunity, which connotes forward movement , expansion and unknown horizons, seems the alter ego of security, which speaks of cocooning, safety and certainty. But I can see why those words have remained the focus of the Taylor Corporation mission statement, and I believe that MSU’s College of Business helps both its graduates and the companies they work for achieve that goal.

Data shows that a college degree provides people with broader opportunities and greater security.

Recently, the Minnesota State Colleges and Universities system worked with the Minnesota Department of Employment and Economic Development to host listening sessions assessing the state’s workforce needs. One of

those listening sessions, regarding the financial services industry, was held here in Mankato at the end of November.

It was well attended by accounting, banking and financial planning firms, and we heard feedback that was valuable and confirming.

One of our strong takeaways from that session was that employers thought new graduates generally had strong technical skills. However, employers said that they also need new graduates to have the capacity to immediately add value to their companies as l e a d e rs , entrepreneurial thinkers and problem solvers.

Those qualities require us to look beyond the traditional classroom model and to think strategically about the learning opportunities we are providing to our students. And that is something that we at the College of Business have been intentional about for several years, and one of the biggest reasons we believe partnerships with the business community are absolutely crucial to our ability to provide extraordinary education.

For example, our partnerships with accounting firms are essential in the development of a new 30- credit Master of Accounting program that we will be offering in Mankato (and Edina) in August 2013.

Accounting professionals, some of them Minnesota State Mankato alumni, from regional firms provided critical guidance in the development of the new master program. Their professional expertise shaped the final curriculum and overall program focus.

Spring is an important time for accounting internships, and presently we have almost 40 interns placed with firms throughout Minnesota. Many of these interns are working fulltime during the firms’ busiest

10 • April 2013 • MN Valley Business

time of the year.

Our undergraduate mentoring program is another example of how business professionals are acting as important teachers and guides to our students. The mentors guide and interact with the student mentees face-to-face, via LinkedIn, during events and through email.

One of the most exciting programs we began offering a year ago is called the Integrated Business Experience. The IBE combines a suite of required business courses into a semesterlong, real-world entrepreneurial experience. As they work together to apply their knowledge to planning, launching and operating an actual business, the students gain the leadership skills, entrepreneurial mindset and hands-on experience that employers are looking for in new hires. The IBE also provides an opportunity for civic engagement, as profits from the business venture are donated to a local nonprofit. We were delighted when the IBE program was selected by MnSCU for the 2012 Excellence in Curriculum Programming Award. But it is important to note that the IBE program would not be possible without our community banking partner, United Prairie Bank, and the involvement of other community o rga n i z at i o n s including the Small Business Development Center.

I believe nothing provides more opportunity and security than a great education. I also am inspired by a company mission statement that has provided such clarity and longevity as Taylor Corporation’s: We exist to create opportunity and security for our employees. MV

Brenda Flannery is dean of the College of Business at Minnesota State University.

Big or small - I can handle it all!

KAREN WASKO

Read us online!

kwasko@hickorytech.net

MN Valley Business • April 2013 • 11

Randy Knutson, of Farrish, Johnson in Mankato.

The litigators

Civil case lawyers handle big, often emotional cases

By Tim Krohn | Photos by John Cross and Pat Christman A parent’s phone call to Mankato attorney Randy Knutson was intriguing, but he and other attorneys at Farrish, Johnson Law Office had no idea of the national attention that call would lead to.

The parent told Knutson that the Minnesota Department of Health was storing their child’s DNA records — DNA taken during routine blood screenings on newborns.

“I met with 25 parents who never consented to storing their babies’ blood samples. And it turns out the state was sending samples to private researchers,” Knutson said.

In 2009, Knutson and fellow attorneys Scott Kelly and Daniel Bellig filed a lawsuit on behalf of families seeking

to have the state destroy about 1 million blood samples it held.

The case, which is still working its way through the courts to determine if the state should pay damages, was a victory for the parents after the Minnesota Supreme Court agreed the state must destroy such data unless it has parental consent.

“When you get a Supreme Court decision on how the state should operate — the first ruling of its kind in the nation — it’s rewarding,” Knutson said.

The case brought national attention for the local lawyers with the New York Times, Washington Post, Fox and

Cover Story

12 • April 2013 • MN Valley Business

Jerry Maschka, of Maschka, Riedy and Ries in Mankato. others seeking interviews.

What the case hasn’t yet brought is any financial awards to the families, which also means no contingency payments for the attorneys. A judge ruled the children suffered no damages from the improper data storage, an issue Knutson and his partners will argue isn’t true in an upcoming hearing at the state Appeals Court.

“I never expected to get paid when this started, I just wanted to help these parents. And I still haven’t gotten paid. But you make parents happy, get some accolades — there are other rewards.”

Few cases go to trial Attorneys who specialize in personal injury and civil litigation say that while financial awards can be high and some cases contentious, their work is often fairly straightforward contract law — working with insurance companies to pay damages they agreed to pay when someone is damaged, injured or killed.

And they say that while business groups and others often portray civil lawsuits as a dire and growing threat to business growth, the perception of lawyers chasing unfounded cases isn’t accurate.

“The phenomena is that insurance companies and some politicians are making claims that there’s an explosion in lawsuits and lawyers are all getting rich,” said Jerry

Maschka of Maschka, Riedy and Ries in Mankato.

“The proof is the opposite. The jury awards are flat and on somewhat of a downward trend. Most of the litigation in our society isn’t personal injury; it’s fights between companies. That’s what’s taking up the time in civil courts.”

Nick Frentz of Frentz & Frentz in Mankato said only about 6 percent of cases go to trial. About 85 percent of the firm’s cases involve representing auto crash victims and family members.

He said much of his work is leading clients through the daunting paperwork, dealing with insurance companies and helping victims handle finances if they are unable to work.

“Insurance companies won’t generally fight a case once they accept responsibility. Early on, in most cases, you get a consensus their client is at fault. Then it’s a matter of how much they’ll pay.”

Frentz said if clients can’t work, he often works with their banks, medical providers and others to set up delayed payment of bills until a settlment is reached.

Minnesota’s no-fault law requires insurance companies to pay for a victim’s medical bills and for lost wages. Then, there can be pain and suffering awards for the victim or their family if there was serious injury or death.

Frentz’s biggest case was the $5.25 million insurance

MN Valley Business • April 2013 • 13

settlement in 2006 for a schoolrelated crash that left three Minnesota State University students dead and two seriously injured. They were traveling in a van, pulling a trailer, when they crashed on a Michigan highway as they were gong to a college engineering competition.

(Frentz had seven cases last year that he said settled for $1 million or more.)

“The MSU case was very rewarding. People suffered a tremendous loss and if you can counsel them and help them, it’s very rewarding.”

The MSU case was settled as about 20 lawyers representing victims, families and insurance companies met in a nine-hour mediation session, with lawyers and mediators moving back and forth between the various groups.

Mediation plays big role Maschka and others say a push for alternative dispute resolution, like that used in the MSU case, has made a big difference by pushing both sides to an agreement through mediation.

“That’s become a big part of the practice. It’s a benefit to clients because it’s a more friendly resolution format. The number of trials is down from what it was 10 or 15 years ago.”

Maschka represented a college student who a few years ago was riding her bike with a classmate when a vehicle ran up on the sidewalk, hitting them and killing her friend.

“As you can imagine, she had an extreme psychological reaction.

She’d met the other girl the first day of orientation and they had become very close friends and were both track athletes. I don’t believe that young woman is ever going to recover from that. If you’ve never been through an experience like that, it’s hard to imagine.”

Maschka said the case was an emotional one for him and his staff, who had a deep affection for the young woman, who was in counseling after the accident and had difficulty sleeping and concentrating.

“The insuror was saying there’s no great physical injury, and that’s true.

So now you’re dealing with what’s the value of a psychological injury. A lot more has been written about post traumatic injury and the things

14 • April 2013 • MN Valley Business

people live with. There are doctors who say the brain is physically damaged, changed as a result of traumas, but it’s a hard concept to communicate to a jury. Jurors tend to be skeptical of psychological injury.”

This case never got to a jury.

Instead it was settled with a mediator who worked between the insurance company and Maschka and his client.

In the end, they accepted a $70,000 settlement. If pursued further, Maschka said, the award may have been higher, but he said the award allowed the student to accept the situation and move on.

Lawyer fees In Minnesota, personal injury lawyers generally get one-third of any award as payment.

But if successful in a case, clients must also reimburse the law firm for its out-of-pocket costs in the cases.

“There are certain categories of filing fees, getting medical records, deposition costs, expert witnesses in addition to the contingency fee,” Maschka said.

“The costs of fees and expert witnesses and accident reconstruction have really risen. So you try to manage these cases so you don’t incur expenses you don’t have to.”

Frentz said he charges nothing for time spent on the no-fault part of a client’s claim.

“And there’s never an up-front payment (required of clients). That’s almost universal (among lawyers),” Frentz said. “That works for both sides. Clients don’t have $5,000 sitting around to pay up front. And clients feel more comfortable talking to us knowing they’re not paying for every call. Clients can talk to me all they need to. They’re not going to get charged for that.”

He said the arrangement also gives clients a bit of an edge over insurance companies. “They’re paying by the hour, but our clients don’t pay more if we decide to fight a case.” That, he said, prods insurance companies to be more open to reasonable settlements.

Fewer medical malpractice cases While high-profile, class-action lawsuits against drug companies and medical device makers get attention, local lawyers say the number of medical malpractice lawsuits against

Nick Frentz, of Frentz & Frentz in Mankato. doctors are relatively rare.

“There’s a sharp decline in medical malpractice,” Frentz said.

“First, there aren’t many legitimate claims. Hospitals do a better job now; there are fewer mistakes.”

And, he said, medical malpractice cases are generally tough to take to a jury. “Juries, I believe, give doctors the benefit of the doubt.”

Maschka’s firm has been concentrating recently on medical device suits against the Stryker hip replacement.

“We have some of those. That case will be a multi-district litigation and the cases will likely be consolidated somewhere. Then there would be some designated lead counsel,” he said “The perception is there is a very high failure rate with the recent batch of Stryker replacements, but that’s not been established yet.”Maschka said there has also been a general decline in product liability cases. “They’re very expensive and I think lawsuits have generally made products safer for the public.”

Other types of litigation are on the rise.

“In recent years we saw a huge explosion in mold cases in houses and commercial buildings. There have been whole subdivisions that

have been subject to lawsuits,” Maschka said.

“They got a lot better at insulating, and houses stopped breathing,” Maschka said of the cause.

He said record-high farmland prices also have triggered an uptick in litigation.

“When there’s more money, there’s more to fight about. Challenging probate, wills, disputes among heirs.”

On the flip side, the down economy led to more suits.

“We’re seeing a lot more suits arising out of bankruptcies. There are big ones, like the Petters bankruptcy. We’ve been hired in some of those.”

The I35W case Both the Frentz and Maschka offices did pro bono work on behalf of victims of the I35W bridge collapse in Minneapolis, the only outstate firms involved.

Minneapolis firm Robins, Kaplan, Miller & Ciresi had the lead role in the case and called other lawyers to donate time on behalf of the victims.

“It was very time consuming but a great experience,” Maschka said.

“There were so many good lawyers involved.”

The eventual settlements totaled more than $50 million. MV

MN Valley Business • April 2013 • 15

Providing Excellent Service in: • Janitorial Services • Window Washing • Carpet Cleaning • Water, Fire & Smoke • Hard Floor Care Restoration

• Family Owned Since 1973 • Insured & Bonded

Professional resources to help grow your business AUTOMOTIVE Jerry’s Body Shop, Inc. 1671 Madison Avenue Mankato, MN 56001 507-388-4895 www.asashop.org/member/jerrys

MEDICAL Mankato Clinic 1809 Adams Street Mankato, MN 56001 507-385-4075 www.mankatoclinic.com

For information on including your service to this directory, please contact

507-344-6390

MN Valley Business • April 2013 • 17

Amy Otto’s desire to make the perfect cheesecake led to Decadent Desserts, her thriving catering business.

Recipe for success Otto makes tasty treats at Decadent Desserts

By Marie Wood | Photos by John Cross

A

my Otto’s mission to make the perfect cheesecake has resulted in Decadent Desserts, her thriving catering business that offers more than 30 cheesecake varieties and even more cake pops, cakes and cupcake flavors.

Otto just opened a shop on North Riverfront Drive in downtown Mankato where she can bake, hold client consults and tastings, and sell treats by special order.

“It’s all been word of mouth. It started with a couple orders from friends,” said Otto of Mankato.

Then she got her food handling license and leased a commercial kitchen. In eight short years, Otto has grown her business from catering sweets for one wedding a month to three weddings in a weekend. Then there are graduations, events, and small orders for birthdays and special occasions.

“It’s amazing to me. I feel so blessed. Who would have thought that something you love and enjoy doing could grow so fast? I say it’s my dream job,” said Otto.

Over the holidays, Otto made 5,000 cake pops and another 1,000 for Valentine’s Day. From Peanut Butter

Cup to Red Velvet, every flavor sells, especially the newest cookie dough flavors. She also customizes cutout cookies for baby, bridal showers, holidays and events.

With desserts, it’s all abut temperature and timing, explained Otto. All her desserts are multiple steps so she multitasks while the cakes are baking. Otto’s favorite cheesecake is Chocolate, Chocolate Chip, but the Caramel Brownie with multiple layers of homemade caramel sauce and cheesecake on a brownie crust is a top seller.

“Everything I do is by hand. Everything I do is a process and it takes time. A lot of love that goes into all my desserts,” said Otto.

Profile

18 • April 2013 • MN Valley Business

Sweet trends For weddings, a small cake for the couple to cut and a dessert buffet of assorted bite-sized cheesecakes, cupcakes and cake pops is a trend with staying power.

“Bite-sized is a huge seller. Bite-sized buffets are gorgeous when they are all set up,” said Otto, who does the set-up herself.

Last fall, Otto catered the desserts for Jesse and Brandee Boehne’s wedding of 450 guests. She made a small cake for the bride and groom and a variety of Owner, Decadent Desserts cupcakes for the guests.

“She was really easy to work with.

She was very customer friendly. She Mother of three children went out of her way to make sure we were happy,” said Jesse Boehne of Henderson. “I saw people eat two, three Marketing degree, MSU or four cupcakes. I didn’t see any halfeaten cupcakes. All I saw was the Grew up in Mankato wrapper.”

At wedding consults, Otto spends as much time as the couple needs and encourages tasting. While fondant is “It’s a whole network of people that go into making a easy to work with and makes a gorgeous cake, Otto prefers wedding. Everyone refers everyone,” said Otto. butter cream frosting for taste. She has completed many A regular contributor to benefits and fundraisers, Otto online trainings and sometimes uses an airbrush to spray has plated cheesecakes, cheesecake bars and a chocolate her cakes with food coloring. lasagna cake for the March of Dimes Chefs Auction. She “It’s nice to see a really pretty cake, but it’s even better especially enjoys meeting the local chefs. when that really pretty cake tastes good,” said Otto.

Otto is grateful for a strong business support network.

Smash cakes are trending for toddler birthdays. Otto Her father-in-law taught small business classes at South makes small cakes for tots to eat, smear and smash for a Central College and specialized in start-ups. She has a tax Waseca photographer who takes smash cake photos for accountant she trusts and uses Quickbooks for daily 1-year-birthdays. operation. Otto wrote her own business plan and took out For one client with 3-year-old twins and a 1-year-old, a small business loan.

Otto made Dr. Seuss birthday treats. She created Thing 1 “We are doing baby steps. We’ve jumped in with both and Thing 2 cupcakes, a smash cake of the Cat in the Hat’s feet, but we’re taking little steps,” said Otto. “This is my hat, and a bouquet of cake pops in Dr. Seuss colors. passion. I don’t want it to fail.”

While she dreams of having her own bakery, Otto’s Referrals are huge business plan calls for slow and steady growth. Catering Otto tracks how her clients hear about Decadent desserts, a small shop open by appointment, and zero Desserts. Many people find her on Facebook and Google. employees is perfect for Otto right now.

After advertising in Southern Minnesota Bride, she “It’s nice to know it’s just me,” said Otto. booked three weddings and made her money back.

As a mother of three children with a husband who works “Referrals are huge from past brides and clients,” said full-time and a close extended family, Otto can be a mom, Otto. wife, sister and daughter. She works many nights, runs in Otto also has developed relationships with other vendors the morning and raises her children who will all be in in town: photographers, food and beverage directors, school next year. Sometimes the kids join her at work and managers at hotels and banquet halls, and event decorators. watch a movie or color at the table while she mixes, bakes Her shop is decorated with photos of her wedding cakes and decorates. taken by Nissa NaKia Photography and silk flowers and “My kids say they want to work for me. It would be swags from Silk Expressions. awesome to teach them,” said Otto. MV

Amy Otto

MN Valley Business • April 2013 • 19

■

Special Focus: Higher education’s

Colleges spur economy and create a pool of talent

By Marie Wood

F

orbes ranked the Mankato area 11th in the nation among populations less than 250,000. A key driver in this ranking, which is based on job growth, income growth, projected economic growth, education attainment and quality of life, is a cluster of five colleges including Minnesota State University, Mankato.

“One impact of higher Jonathan Zierdt education on our economy is that it can fill the current talent needs of business and be an impetus for future talent needs,” said Jonathan Zierdt, president of Greater Mankato Growth.

In Enterprise Minnesota Magazine, Mankato was named one of five “Great Places to be a Manufacturer in Minnesota.” The Mankato area was noted for showcasing the region’s manufacturing careers to high school students and for the ways Minnesota State University and South Central College are working with local companies to train workers.

In the Mankato area, manufacturing and health care each make up 18 percent of our marketplace with education following at 14 percent.

“We have three really strong blue chips that make up to 50 percent of our marketplace. South Central College and Minnesota State University are key drivers of that,” said Zierdt.

College student and parent visits, sporting events, theater, music and arts boost our tourism industry.

Plus local colleges host conferences, tournaments and other events.

“One of the gorillas for us in tourism is the presence of MSU. A huge amount of tourism and leisure travel happens as a result of all five educational institutions,” said Zierdt.

According to Greater Mankato Growth, the Mankato area attracts more than 6,000 new students every year; about 25,000 students attend school here annually. Every year, more than 5,000 students graduate. About 2,500 want to stay in the area, but only 1,000 find employment and do stay. Greater Mankato Growth is working to retain

The fountain at MSU more of these graduates.

Skilled workforce In spring 2012, Greater Mankato Growth, South Central Workforce Council and the Minnesota Department of Employment & Economic Development (DEED), conducted the area’s first Talent Supply & Demand Report.

The report is based on 2007-2011 graduation rates from Minnesota State University, South Central College, Rasmussen College, Bethany Lutheran College and Gustavus Adolphus College. Graduation rates were used to project the 10-year talent supply and demand for 20092019.

Talent supply exceeds demand in almost every career field.

Talent supply is almost equal to demand in agriculture, food & natural resources, but 150 biology graduates per year can help support growth in agriculture and food processing.

Annual talent supply in business management, administration, accounting, finance and marketing greatly exceeds projected demand by over 700 per year. The 10-year projected supply and demand for 2009 to 2019 in this field is a talent supply of 8,770 to a demand of 1,746.

A skilled workforce and labor pipeline is critical to economic development and a task force is charged with better connecting students and employers. Zierdt is also promoting our talent surplus to attract new business.

s

“Based on the south central region economy of $9.8 billion, this means that for every $100 produced in the region, $5 are directly or indirectly related to MSU.”

s

20 • April 2013 • MN Valley Business

local impact

Figure 22: Career Fields with Mankato - North Mankato MSA Job Numbers

22

As part of a Talent Supply and Demand study done last year, a chart was created to show potential jobs available in the area for various college majors.

“We’re not shy about this strategy, because another community can’t replicate this — at least not overnight,” said Zierdt.

Zierdt is targeting financial, insurance, business support, accounting and marketing companies and persuading business leaders in the Twin Cities to consider expansion in the Mankato area. Credit analysis, data processing, market research and accounting are no longer site dependent.

“We can have a marketing research group here that can inform a group in New York,” said Zierdt. “The cost to do business in Mankato is lower than in a metro area. The talent is here and it’s where it wants to be.”

By the numbers “The Economic Impact of Minnesota State University, Mankato” report conducted by Wilder Research was released in February 2013. Key findings are: MSU generates an annual economic impact of $452 million from its operations in the south central region of Minnesota.

The direct impact of the university in 2011 was $310 million, while the indirect impact in other industries was

$142 million. cts are the institution’s operations ($248 million), students’ expenditures ($202 million), and investments ($2 million).

Based on the south central region economy of $9.8 billion, this means that for every $100 produced in the region, $5 are directly or indirectly related to MSU. Real estate is the main industry sector impacted with $150.2 million supported by MSU. The impact of MSU on restaurants and bars is $33.9 million.

During 2011, the university and its students generated an estimated 5,888 jobs in the south central region. These jobs included an estimated 4,666 direct jobs and 1,222 indirect jobs, created by vendors, contractors and businesses supplying the university and students.

MSU enhances the productivity of industry and government in Minnesota. Based on 2,810 degrees awarded by MSU in 2011, this is equivalent to $552.6 million of future value created in the state.

The south central region includes Blue Earth, Brown, Faribault, Le Sueur, Martin, Nicollet, Sibley, Waseca and Watonwan counties. MV

MN Valley Business • April 2013 • 21

South Central College fills workforce needs

By Marie Wood

W

ith a mission to promote student growth and economic development, South Central College has become a regional and national leader in providing skilled workers to the health care, manufacturing and agricultural industries.

Working with the Minnesota Workforce Center, the college directly impacts local unemployment rates by retraining unemployed and displaced workers. Through its Center for Business & Industry, the college develops customized training and solutions for businesses. In 2011, the Center provided customized training for 13,634 workers and served 1036 organizations.

“We’re the institution that’s trying to get at the skills gap. Anybody at a two-year institution is most responsible for getting workers for our companies,” said South Central College President Keith Stover. “We’re very focused on employment.”

With 600 graduates annually, 94 percent are employed in the first year after graduation. Of those 94 percent, less than 5 percent are working in a field outside of their degree.

Health care On June 30, the college will complete the implementation of a $4.5 million grant from the U.S. Department of Labor to create new health care career pathways for employed, dislocated and disabled workers and veterans. With improved services to succeed, the grant was able to serve many minority and first-generation students.

Career pathways created or expanded by the grant include pharmacy technicians, health unit coordinators, community health workers, medical assistants, health support specialists, and certified nursing assistant. These programs more closely match the current and future needs of the health care workforce.

“These new programs do have an impact on our community to keep students interested in the health care industry. Not everyone is cut out to be a nurse. These are viable options to stay in the health care occupation,” said

W.C. Sanders, dean of academic affairs.

The grant also helped the college increase certifications, namely dialysis and IV sedation, which make health care workers more employable. With an updated international medical code taking effect in October 2014, the college is enrolling new and existing medical coders this spring.

“This grant was very Keith Stover reactive to the health care needs and growth,” said Anne Willaert, director of professional and continuing education.

The college used the grant to purchase cutting edge simulation and lab equipment and build five state-of-the-art labs. One of the first schools to meet new regulations for pharmacy technicians, hospitals and long-term care facilities call the school when they have openings or need Nancy Genelin training.

“We are now the school a lot of industry partners call.

We can be that point school,” said The impact of the grant will be felt for many years to come. As the Affordable Care Act is fully implemented, the new career pathways will be in higher demand. Plus the college is poised to provide more health care workers as our population ages. When the grant ends, training and collaboration with industry will endure.

“The programs are going to continue. We’ve planned so

KEITH BOLEEN. HELPING YOU REACH YOUR BUSINESS GOALS. 245 Belgrade Ave. NORTH MANKATO MEMBER FDIC

22 • April 2013 • MN Valley Business

1661 Commerce Drive NORTH MANKATO

1580 Madison Ave. MANKATO

104 Main Street MINNESOTA LAKE

www.frandsenbank.com

we can sustain these programs,” said Nancy Genelin, vice president of academic affairs.

Manufacturing South Central College is one of only two schools in the nation that has been chosen by President Obama to pilot Right Skills Now, an accelerated manufacturing and workforce training program.

In two semesters, students learn manual machinery operations and computer integrated machining to produce a product. They also complete a paid internship.

“As manufacturing is coming back, the skills they need are advanced machinery skills and computer programming. The design and production piece has merged.

It’s more technical,” explained Genelin. A classroom at SCC The new mechatronics engineering program is a direct result of the workforce needs of local manufacturers. Mechatronics integrates electronics, mechanics and computer control systems.

These jobs are in high demand in medical, biotechnology and agricultural plants.

Twenty local employers invested $10,000 each for a total of $200,000 and then the college leveraged those funds to receive a $2 million federal grant. Students are trained on state-of-the-art robotic equipment.

Agriculture In partnership with Minnesota West Community & Technical College, SCC has launched the Southern Minnesota Center for Agriculture.

“The center is providing education in a region of the state that’s highly dependent and supportive of agricultural industries and the farmers who are producing the raw materials,” said Brad Schloessler, dean of agriculture for southwest Minnesota. MV

M A S C H K A , R I E D Y & R I E S L AW F I R M

Jerry Maschka Marcus C. Christianson James D. Fleming George (Jed) Chronic

John M. (Jack) Riedy John (Chuck) Peterson Jennifer G. Lurken Nicholas J. Maxwell

Charles W. Ries Renee C. Rubish Jorun Groe Meierding Rebecca L. Peterson

Union Square Business Center, Suite 200 201 North Broad Street I Mankato, Minnesota

507.625.6600 I mrr-law.com

MN Valley Business • April 2013 • 23

Scott Michaletz (left) with sons Matt and Jon

The art of risk management

By Pete Steiner Photos by John Cross

S

cott Michaletz likes getting to know his customers. He prides himself on taking care of their needs. That might be why one of those customers is still with Kato Insurance 45 years after starting out with Scott’s father, Jerry, while Scott was still in grade school. Now, with Scott’s sons, 26-year-old Jon, and 24-year-old Matt having joined the business, there’s a strong possibility that some of the agency’s current 2100 individual and family accounts and 500 business clients will still be with the new generation four

decades down the line.

Jerry Michaletz arrived in Mankato in 1960, getting restless with his job in retail.

Starting the Michaletz Agency, he offered life and health insurance along with pension and profit-sharing plans. In 1963, with Dan Coughlan, Jerry helped found North Mankato’s first bank since the Great Depression of the 1930s. Housed in a trailer across from Spinner’s, Valley National Bank was initially capitalized at just $200,000. Jerry could offer insurance to the bank’s customers, although

Spotlight

24 • April 2013 • MN Valley Business

ultimately, he moved across the river to operate The Michaletz Agency. John Sjulstad took over the bank agency, naming it Kato Insurance.

Scott Michaletz, originally enrolled at Loyola, eventually became part of the first West High graduating class in 1974 after the high school split up. He got his insurance license while working at the St. Peter State Hospital in 1982. On April 1, 1983, Scott and his mother, Faye, bought Sjulstad’s agency and moved it to its current location on south Front Street, near the Public Safety Center. Five years later, Jerry’s Michaletz Agency, which had specialized in life and health insurance, merged into Kato Insurance, with its property and casualty lines.

A people person If you’re going to be on the retail side of the insurance business, you had best be a “people person.” As Kato Insurance prepares to celebrate its 30th anniversary, Scott Michaletz talked recently about how to survive in a crowded marketplace: “To be successful, you have to remember, if people like you, they’ll talk to you. If they (end up) trusting you, they’ll do business with you.” He says a major source of new clients is people who have spoken with long-time clients who tell them, “Scott helped me.”

Each of the agency’s 13 employees, including his wife, Gail, and sons Jon and Matt, engages in ongoing education.

“We strive to be more knowledgeable than anybody else.”

They also focus on serving the customer, not an insurance company. “Being an independent agency (representing a group of different companies) allows you to offer choice.

We answer every phone call and e-mail before we lock the door at night. We pay claims promptly and fairly. And (afterwards) we ask the customer how they’ve been treated.”

Scott acknowledges intense competition from direct writers like Geico but says, they can be quite impersonal.

“There’s more to insurance than taking applications over the phone,” is how he puts it, adding he would prefer to have a customer go to a local competitor. “There’s a lot of good insurance people in this town.”

Protection, security In this high-risk, litigious society, the need for insurance is almost a given. But Scott spells it out. “We provide protection and security. We offer risk management.” A reporter asks, how does one know if he has adequate insurance?

“We base that on an interview. We try to determine what (a client’s) exposure is. Net worth and (size of operation) is a factor. If you have a trampoline or a hockey rink in the back yard, that’s a factor. If your teens are pulling waterskiers with a boat at the lake, that creates an exposure. We do annual reviews with all our customers.

MN Valley Business • April 2013 • 25

Tom Philippi (standing) is an agent at Kato Insurance.

We’ve handled million-dollar lawsuits, when insurance did just what it was supposed to do.”

Implementation of the federal Affordable Care Act — “Obamacare” — has created concerns for small businesses worried about higher expenses or possible penalties.

Michaletz says, rather than indulge in doom and gloom about impending changes, his staff meet with clients to discuss options. “We’ve chosen not to fight the change, but to be knowledgeable and inform our customers how to make plans for it.”

Loss control is key to any successful insurance operation, according to Michaletz. “We work on developing safety plans (to prevent losses), we e-mail clients about changes in government regulations.”

The ‘big one’ The St. Peter tornado of 1998. The mega-hailstorm that hit the Mankato area three years ago. These are the kinds of events, so-called “acts of God,” that prove to be an insurance agent’s biggest ordeal. Scott Michaletz recites all the numbers drilled into his memory. “June 25, 2010.

Our biggest claim event. Over 500 claims. We have paid out over $5 million in claims to our customers from just that one event.”

Then he eyes the reporter and grins, “But you know, ultimately it was a boon to the local economy (with all the roofing and siding business it generated.)” He is asked if the all the work associated with that single storm discouraged him. “I don’t remember that as an unbearably stressful time. Our companies and adjusters really backed

26 • April 2013 • MN Valley Business

us up. It did mean a lot of overtime for us. But the agencies that didn’t respond ended up losing business to us.”

Steady growth Scott and his mom borrowed $80,000 to start Kato Insurance 30 years ago. That year they got just $250,000 in premiums. This year they expect to take in $11 million in premiums. The agency now does business in eight states.

Not everything can be replaced At 56, Scott knows that nothing is ever certain in this life. There are some things even the biggest insurance policy cannot replace. He ticks off another date that is burned into his memory. April 27th, 1993. That’s the date his younger brother, Cass, died from cancer. As the family sent thank-you’s for memorial gifts after Cass’ funeral, an idea began to grow. Scott had talked with family friend Kent Schwickert. “Leas Schwickert (head of the big local heating and roofing company) died the same day Cass did.

Cass was Kent’s best friend. So Kent lost his dad and his best friend on the same day.” Grateful for hospice services — the mattress they supplied to prevent Cass’ bed sores alone cost $10,000 — the two families decided to stage a fund-raiser. They invited 100 couples at $100 apiece to an initial fund-raiser at the Mankato Golf Club, hoping to getenough to buy another special mattress.

Over the ensuing 19 years, the Hospice Family Fundraiser would continue and grow. To date, nearly $1.1 million has been raised to support the Mayo Clinic Health

Scott (left) with parents Faye and Jerry Michaletz, shown in a 1983 photo when the business began.

System Hospice program. This April 19th, at the Verizon Wireless Center, the 20th annual version of the event hopes to bring in another $150,000.

Local boy Scott has lived in the Mankato area virtually his entire life. He can easily recite half a century of the community’s business history. “This is a great place to raise a family. It’s a vibrant community with a lot to offer. And I enjoy the insurance business today as much as I did the day I started. I feel very lucky.”

MV

Jerry Michaletz

MN Valley Business • April 2013 • 27

Karla VanEman and daughter Angie VanEman work together at American Way Realty, which Karla started in 2001.

Old school meets new technology VanEmans top-producing real estate agents

By Marie Wood Photos by John Cross

J

ust 10 days before 9-11, 2001, Karla VanEman opened American Way Realty.

Today, Karla and daughter Angie VanEman, along with American Way Realtor Bonnie Kruger, are consistently the topproducing local agents. In 2012, this “small-bydesign” firm was responsible for 24 percent of the listings that were bought and closed in the Greater Mankato area.

Together, mother and daughter mix old school service with today’s technology while appealing to home buyers and sellers in all stages of life. While Karla sips on coffee, Angie drinks a Diet Coke.

A full-time Realtor since 1976, Karla was the first woman president of the local Board of

Realtors and an inductee into Century 21’s International Hall of Fame. In 2011, Angie was honored as an up-and-coming agent in the 30 under 30 Realtors by the “National Realtor Magazine.”

When her children were young, Karla juggled business around her family. In her black appointment book, Karla always wrote her children’s schedules in first and often did paperwork at 2 am. Karla’s son, Mike VanEman is also a licensed Realtor with American Way and specializes in rehabbing homes.

MVB: Karla, you’ve been a Realtor since 1976, what was it like in the early days of your career?

Karla: In the very beginning, it was only me

All In The Family

28 • April 2013 • MN Valley Business

and two other women. We were unique. When I started, the whole idea of real estate franchises just came out. I worked for Archie Waugh, who was an excellent mentor.

We didn’t have Multiple Listing Service (MLS). The technology has changed things a lot in 30-some years. You only knew about the listings you had. Then you Xeroxed and sent them to other companies. Then the MLS books came out. Now it’s on the computer.

MVB: How did you build your business?

Karla: A lot of my business is repeat customers and referrals.

Angie: You were the first Realtor putting your name on signs and doing print advertising. She pioneered doing personal marketing.

MVB: Why did you start your own agency with a 4 percent commission?

Karla: In the belief that people need to retain their equity in their house. With our business model, we can provide full service and full advertising with a 4 percent commission.

Angie: We don’t have high overhead and franchise fees.

We’re a family-owned business. Homeowners can keep their hard-earned equity. We can achieve what we want to achieve.

MVB: Angie, growing up did you ever think you’d enter the family realty business?

Angie: No. I got my real estate license when Mom went on her own. I did it to do assistant work while I was in college. Then I graduated from MSU with a mass communication and public relations concentration. I got a 9 to 5 job in advertising. I moved to New York City. I was planning on working in an ad agency, but I would have had to live in Harlem. What else do I know how to do? I got my real estate license there. I worked for a sales and leasing high-end luxury real estate company. I did that for two years. I got homesick and decided to come back in 2010. I was the top-selling agent my first year back. That includes my mom. It worked out. It was surprising, but awesome.

MVB: What do you love about the real estate business?

Karla: I do still love it. I like the interaction with the people. It’s been very rewarding especially in a down market to help people who are distressed with their home sales and to get that accomplished. I like helping people find the home of their dreams. It makes you feel good.

Angie: I like being able to work for myself. It fits my personality. The harder I work, the greater my reward. I come from the genetics of a workaholic. I like being able to help people sell houses and get on with their lives. I like helping people buy the house of their dreams and making it a home. I love how happy they are. I stay in touch with past clients. I like to build a relationship with people.

MVB: How has working together affected your relationship?

Angie: It hasn’t. When I was in New York, we talked once a day. We work really well together. We’re always mother and daughter. We have a business side of our relationship.

She’s my best friend. We spend a lot of time together outside of work. We go home after working together 10 hours a day and we still chat everyday.

Karla: I’m thrilled that she’s back. I couldn’t even watch

New York crime shows when she lived out there. I’m very fortunate. My son and grandson are six blocks away and Angie is six minutes away.

MVB: What makes you a successful team?

Karla: Part of the success of our business is I’ve got the old school ideas — the tried and true. Angie’s brought our company way above everyone else with technology. Once we get them in, everyone in the office is totally committed to service. This office isn’t just the top-producing realty because of us, it’s everyone here.

Angie: I spend a lot of time looking at new market trends.

We were one of the first Realtors to be on Facebook, Twitter, LinkedIn and craigslist. We were the first to update our web site to the mobile-friendly site. The whole idea is to put the information in the customers’ hands the second they want it. My M.O. is to stay six months ahead of the trend. We’re a now generation. My generation, we want everything this second. My mom’s generation expects an answer by letter or phone call. We mix the two together to what works best for our clientele.

MVB: What was it like growing up in the real estate business?

Karla: She actually started in real estate at 4-years-old.

Several times, people would want to look last minute at a house, I’d bring Angie and Mike. One would open the door and the other would turn the lights on. She’d go along on showings. Angie would need to be picked up from dance or school. I’d say to my clients, “Scoot over, we’re going to take a detour.” Angie would turn to them and say “Well, what have you looked at so far?”

MVB: Angie, what have you learned from your mother?

Angie: Treat people how you want to be treated. She’s really busy, but she makes people feel like they’re her only client. She treats her $100,000 clients the same way as her $2 million clients. That’s important. Be kind to people.

She’s a very independent, successful woman. I really look up to that. She can take care of herself.

MVB: How do you make a family business succeed?

Angie: We’re business when we need to be business, but we’re family first.

Karla: You have to be on the same thought process and have the same vision.

MVB: What is your greatest professional accomplishment?

Karla: My biggest accomplishment is to establish a business that my daughter and son feel good enough about to work in.

MVB: What are your plans for the future?

Karla: I’m very happy with where we’re at. We know we’ll have to keep changing.

Angie: Staying up with the market trends, but the core of the business is exactly the same. Our foundation is customer service.

Karla: If it’s about the money, you’ll never be successful, but if it’s about the people you help and work with, then the money doesn’t matter.

Angie: We’re paid to do what we love to do. We’re very fortunate. MV

MN Valley Business • April 2013 • 29

there for

you

Tom Evensvold

Steve Olson

Mark David Thompson Monson

Many have trusted MinnStar Bank’s personal service to help them build and grow their businesses—and we can do the same for you.

Downtown Mankato 507-625-6816 Lake Crystal 507-726-2137

BUSINESS BANKING www.minnstarbank.com Member FDIC

MN Valley Business • April 2013 • 31

■

Agricultural Outlook

By Kent Thiesse

American farmers have much to be proud of

S

ometimes in today ’s lifestyle it is easy to take the agriculture industry for granted. U.S. citizens are blessed with the cheapest, safest, and most abundant food supply in the world, and they have more food choices than anywhere else on the globe. The U.S. agriculture industry is a leader in exporting food products to other countries, and greatly enhances the U.S. trade balance each year.

Even with all these positives, the US. ag industry continues to come under more and more p re s s u re f ro m activist organizations, the national media, and political leaders.

Following are some interesting st atistics about today ’s agriculture industry: • There are currently about 2.2 million farms in the United States, with about 922 million acres in production, with an average farm size of about 450 acres. There are approximately 375,000 farms in the U.S. with annual gross sales exceeding $100,000 per year, while those farms represent only about 17 percent of the total number of farms, they account for over 80 percent of the total sales of agricultural products each year.

• Some 95 percent of the farms and ranches are operated by farm families as individuals, as well as by family partnerships and family corporations, usually multi-generational. It’s estimated that 88 percent of the farms with over $1 million in annual gross sales are family-based farming operations.

• The agriculture industry employs more than 21 million people to produce, process, sell, and trade the nation’s food and fiber.

• There are over 300,000 women who are the primary managers of farm operations. The number of African American, Hispanic, and American Indian farmers has also increased significantly in the past decade.

• Farmers receive approximately 16 cents of every consumer dollar that is spent on food.

The other 84 cents is spent on p ro c e s s i n g , packaging, marketing, transportation, distribution, and retail costs of the food supply.

• The sale of crops accounts for approximately 58 percent of the total gross receipts received by farmers, while the sale of livestock products is about 42 percent.

• One acre of wheat will yield about 40 bushels per acre and will produce over 2,000 loaves of bread, or over 50 loaves of bread per bushel of wheat. If a farmer is paid $8 per bushel for wheat from the farm, the wheat cost in a loaf of bread is only about 18 cents per loaf.

• In 2012, farmers and ranchers spent $329 billion to produce approximately $388 billion in goods and products. In 2011, The U.S. exported $136 billion in farm goods, with a $37 billion trade surplus.

• It takes the average American less than 40 days to earn enough disposable income to pay for all the food that is consumed at home and away from home during the entire year. By comparison, it takes consumers about 100 days of earned income to pay all federal, state, and local taxes each year, and nearly 60 days of income to cover health insurance and medical costs.

• Americans spend about 10 percent of their disposable income on food each year, which is the lowest of any country in the World.

• Only 15 percent of the annual USDA budget is spent on farm commodity programs and crop insurance each year, while over 75 percent is spent on food and nutrition programs.

• The U.S. farmer of today produces enough food and fiber for approximately 155 people. This number was 19 people in 1940.

32 • April 2013 • MN Valley Business

• The soil erosion rate in the U.S. has declined by over 40 percent in the past 20 years.

Today, conservation tillage methods are utilized on over 72 million acres of crop acres.

• The Minnesota ag industry generated approximately $15.1 billion in farm income in 2010, with about 59 percent from crop production and 41 percent from livestock.

• Minnesota ranks fifth in the U.S. in total agriculture receipts, ranking behind California, Iowa, Texas, and Nebraska. Minnesota ranks fourth in the nation in total crop receipts and seventh in total livestock receipts.

Minnesota ranks first in the U.S. in turkey, sugarbeet, and sweet corn production, third in soybean and hog production, fourth in corn production, and sixth in dairy production.

• Minnesota is the sixth leading State in the U.S. for farm exports, with over $5 billion in farm exports in 2010, an amount that has more than doubled in the past decade.

Agriculture/Agribusiness Corn prices — southern Minnesota 2013

2012

$8.00

Soybean prices — southern Minnesota

(dollars per bushel)

$7.30 $6.39

$12.00

$4.00

$12.98

$8.00

$2.00

$4.00 J

F

M

A

M

J

J

A

S

O

N

D

Source: USDA

J

F

M

A

M

J

J

$100.00

Milk prices

185 pound carcass, negotiated price, weighted average

2013

2012

$110.00

$0

A

S

O

N

D

Source: USDA

Iowa-Minnesota hog prices

Minimum prices, class I milk Dollars per hundredweight

2013

2012

$24.00

$20.01

$22.00

$87.16

$90.00

$20.00

$80.00

$18.00

$70.00 $60.00

$14.33

$16.00

$6.00

$0

2013

2012

$20.00

(dollars per bushel)

$16.00

$74.66 J

F

M

A

M

J

J

Source: USDA

A

S

O

N

D

$14.00

$18.83 J

F

M

A

M

J

J

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

The top products for farm exports from Minnesota are soybeans (43%), corn (23%), meat products (11%), and wheat (7%).

The world population is under 7 billion people today, and is expected to reach 9 billion by 2050, meaning that the world’s farmers will have to double their food production by 2050 to feed the expected population.

In addition, as economic conditions continue to improve in countries around the World, expectations for food choices and food quality are also enhanced. This is good news for the United States agriculture industry, as it is in a solid position to meet the needs. Tools like biogenetics, precision farming, technology advancements, and improved farming practices will allow farmers to continue to reach new heights for producing more food at reasonable costs, while being able to remain good stewards of the land and environment. MV Kent Thiesse is farm management analyst and vice president at MinnStar Bank, Lake Crystal. 507-381-7960); kent.thiesse@minnstarbank.com

A

S

O

N

D

Source: USDA. Based on federal milk orders.

J. Malmanger

Robert W. Carlstrom Co. Inc.

www.rwcarlstrom.com | Ph: 507-625-2872

STABILITY BEYOND THE BUILDING QUALITY. LOCAL. CRAFTSMANSHIP.

General Contractors | Construction Management

Snell Motors | Mankato, MN

MN Valley Business • April 2013 • 33

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region

Major industry

February

Construction Manufacturing Retail Services Total*

’12

’13

Percent change ’12-’13

268 211 92 771 1,395

208 257 191 718 1,210

-22.4% +22.4% -4.5% -6.9% -13.3%

2012

February

Construction Manufacturing Retail Services Total*

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

Major industry

2013

120,000

2,000

110,000

1,000

F

M

A

M

J

J

A

Local number of unemployed

S

O

N

2012

D

2013

Nine-county Mankato region 8,327 9,087 10,000

0

J

5,051 2,777 1,878 6,355 16,061

4,197 2,429 1,453 5,760 13,839

-16.9% -12.5% -22.6% -9.4% -15.4%

F

M

A

M

2012

J

J

A

S

2013

O

N

D

Minnesota number of unemployed 2012

195,550 199,406

200,000

8,000

2013

150,000

6,000

100,000

4,000

50,000

2,000 0

Percent change ’12-’13

Minnesota non-farm jobs (in thousands) 2,751.5 2,765.1 3,000

J

’13

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.

Nine-county Mankato region 124,703 123,646 130,000

100,000

’12

J

F

M

A

M

J

J

A

S

O

N

Unemployment rate Number of non-farm jobs Number of unemployed

2013

5%

5.6%

52,249

53,249

2,990

3,290

Source: Minnesota Department of Employment and Economic Development

34 • April 2013 • MN Valley Business

J

F

M

County/area

(includes all of Blue Earth and Nicollet Counties) 2012

0

A

Unemployment rates

Mankato/North Mankato Metropolitan statistical area

January

D

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

M

J

J

A

S

O

N

D

Counties, state, nation Jan. 2012 Jan. 2013 5.1% 7.0% 6.9% 9.4% 6.1% 4.9% 6.7% 6.4% 7.2% 5.9% 6.5% 8.8%

5.7% 7.8% 7.3% 9.9% 6.6% 5.4% 6.6% 7.6% 8.0% 6.1% 6.7% 8.5% J. Malmanger

Construction/Real Estate Residential building permits Mankato $673.2 $1,611.2

$8,000

(in thousands)

2012

2013

$6,000

Residential building permits North Mankato $520.7 $159.9

$3,000

2012

(in thousands)

2013

$2,000

$4,000 $1,000

$2,000 $0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato

2012

Information based on Multiple Listing Service and may not reflect all sales

2013

59 112

200

A

M

J

J

A

S

O

N

D

Housing starts: Mankato/North Mankato 2012 40

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

2013 2 1

10

50 J

F

M

A

M

J

J

A

S

O

N

D

Commercial building permits Mankato $1,662.1 $537.5

0

J

F

M

A

M

J

J

A

S

O

N

D

Source: Cities of Mankato/North Mankato

Source: Realtors Association of Southern Minnesota

(in thousands)

2012

2013

Commercial building permits North Mankato $333.5 $39.6

$2,000

2013 (in thousands)

2012

$1,500 $1,000 $500 J

F

M

A

M

J

J

A

S

O

N

D

2012

County

2013 3.9%

5.0 4.5 4.0

3.4%

3.5 J

F

M

Source: Freddie Mac

J

F

Foreclosures:

Interest rates: 30-year fixed-rate mortgage 5.5

$0

M

A

M

J

J

A

S

O

N

D

Source: City of North Mankato

Source: City of Mankato

3.0

M

20

100

$7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0

F

30

150

0

J

Source: City of North Mankato

Existing home sales: Mankato region 250

$0

A

M

J

J

A

S

O

N

D

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

Year End report 2011 2012 174 67 32 129 43 59 57 50 24

126 37 46 98 42 49 58 57 17

Percent change -28% -45% -44% -24% -2% -17% +2% +14% -29%

Source: Minnesota Foreclosure Partners Council J. Malmanger

MN Valley Business • April 2013 • 35

Retail/Consumer Spending Vehicle sales

Sales tax collections

Mankato — Number of vehicles sold 702 2012 663

2011 1,200

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

$395.3 $382.5

$500

1,000

$400

800

$300

600 400

$200

200

$100

0

Mankato 2011 2012

(In thousands)

J

F

M

A

M

J

J

A

S

O

N

$0

D

Source: Sales tax figures, City of Mankato

Lodging tax collections 2011

$50,000

2012

J

F

M

A

M

J

J

A

S

O

N

D

Source: Sales tax figures, City of Mankato

Mankato food and beverage tax

Mankato/North Mankato $24,143 $26,234

2011

$75,000

$55,169 $44,650

2012

$40,000 $50,000

$30,000 $20,000

$25,000

$10,000 $0

J

F

M

A

M

J

J

A

S

O

N

Source: City of Mankato

D

$0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato J. Malmanger

Gas prices-Mankato 2013

2012

$4.00

$3.75 (2012)

$3.00

$3.69 (2013)

$2.00 $1.00 $0

J

F

M

A

M

J

J

A

S

O

N

D

Gas prices-Minnesota

March 14

Archer Daniels

$31.40

$33.00

+5.1%

Ameriprise

$69.04

$74.35

+7.7%

$2.00

Best Buy

$15.71

$21.42

+36.3%

$39.78

$40.48

+1.8%

Fastenal

$52.49

$50.81

-3.0%

General Growth

$19.80

$19.87

+0.4%

General Mills

$44.31

$46.32

+4.5%

HickoryTech

$9.56

$10.06

+5.2%

Hutchinson Technology

$2.99

$2.92

-2.3%

$43.51

$45.36

+4.3%

$21.83

$23.06

+5.6%

$3.68 (2012)

3M

$102.78

$106.30

+3.4%

$3.62 (2013)

Target

$63.09

$66.85

+6%

U.S. Bancorp

$33.99

$34.28

+0.9%

Wells Financial

$19.20

$18.65

-2.9%

$0.72

$0.81

+12.5%

$27.89

$29.14

+4.5%

$1.00

Winland J

F

M

A

Percent change

Crown Cork & Seal

Johnson Outdoors

$3.00

$0

Feb. 14

Itron

2013

2012

$4.00

Stocks of local interest

M

J

J

A

S

Source: GasBuddy.com

36 • April 2013 • MN Valley Business

O

N

D

J. Malmanger

Xcel

J. Malmanger

MN Valley Business • April 2013 • 37

Advancing Business for a Stronger Community

Greater Mankato Growth

The Greater Mankato Difference In the March Minnesota Valley Business we reviewed the growth of our marketplace, pointing to several key indicators of Greater Mankato’s vibrancy and the Difference of our Marketplace from other areas.

At Greater Mankato Growth, Inc.’s Annual Meeting on March 14 we talked not only about our marketplace’s unique qualities, but also the Difference of our Organizations. Greater Mankato Growth and its affiliate LLCs - Visit Mankato (formerly the Convention & Visitors Bureau) and City Center Partnership - have accomplished a great deal in the past five years (just look at the timeline to the right).

A lot of that success has to do with our unique organizational structure. In 2007, the Greater Mankato Chamber of Commerce and Greater Mankato Economic Development Corporation merged to create a new integrated organization - Greater Mankato Growth, Inc. At the same time, the Greater Mankato Convention & Visitors Bureau (now “Visit Mankato”) was established as an LLC of Greater Mankato Growth, Inc., to focus specifically on marketing the area as a visitor destination.

In 2011 the City Center Partnership, LLC, which concentrates on the development of our downtown, was also formally established as an LLC of Greater Mankato Growth, Inc. While these organizations are designed to operate with autonomy, by being organized under the same corporate structure, we are able to provide better and more efficient service to the business community and the marketplace.

Still, we could not be nearly as effective, if not for the generous investment of funding and time from the Greater Mankato businesses community. So at the Annual Meeting we celebrated the most important difference the Difference You Make. The accomplishments at the right would not have been possible without the hundreds of volunteers, whose efforts enable us to do more with the resources we have. With the continued commitment and support of our Greater Mankato businesses, the next five years promise to bring more success in Advancing Business for a Stronger Community.

Greater Mankato Growth, Inc. Milestones Q4 2007 • Greater Mankato Growth, Inc. established through a merger of Greater Mankato Chamber of Commerce and Greater Mankato Economic Development • Greater Mankato Convention & Visitors Bureau created as an LLC of Greater Mankato Growth, Inc. • Envision 2020 Implementation Team convened 2008 • City Center Business Association convened (predecessor to City Center Partnership) • Young Professionals established • 1st Greater Mankato Campus & Community Fair with area colleges • Minnesota Valley Business Greater Mankato Growth Special Section started with The Free Press 2009 • 1st Minnesota Marketplace for Entrepreneurs • GMG Talent Initiatives receive MN Community Pride Award and “Rockstars at Work” Community Impact Awards • 1st Alive After 5 held by City Center Partnership • Regional Economic Development Alliance established • 1st Mankato Marathon by Greater Mankato Convention & Visitors Bureau 2010 • GMG Board establishes new strategic framework focusing on Advancing Business for a Stronger Community through eight areas of work • 1st Greater Mankato Day at the Capitol event • 25th Greater Mankato Leadership Institute class graduated • Greater Mankato Elections website with online candidate profiles and bios launched • 1st Tour of Manufacturing of South Central MN (showcasing 10 manufacturers) 2011 • New GMG Membership Structure for 2012 developed, giving members a choice of benefits • 1st CityArt Walking Sculpture Tour by City Center Partnership • City Center Partnership formally established as an LLC of Greater Mankato Growth, Inc. • Greater Mankato Leadership Delegation (70 participants) makes Inter-City Leadership Visit to Charlottesville Virginia 2012 • New Destination Marketing Strategy planning started by Greater Mankato Convention & Visitors Bureau • Greater Mankato Talent Supply & Demand Study released at Talent Symposium • New 3 Year Public Affairs strategy and investment announced • New enhanced greatermankato.com website, with online property listing tool launched • Front Street Connectivity Plan initiated by City Center Partnership • 1st Kiwanis Holiday Lights Parade organized by Greater Mankato Young Professionals Q1 2013 • New “Visit Mankato” brand officially unveiled (see page 43)

Chamber of Commerce and Economic Development

507.385.6640 • greatermankato.com 38 • April January 2013 2013 • MN • MN Valley Valley Business Business

Greater Mankato Growth Annual Meeting Highlights

Volunteers of the Year Named The Annual Meeting gave Greater Mankato Growth, Visit Mankato and the City Center Partnership the opportunity to honor their 2012 Volunteers of the Year. These standouts, along with the other volunteers, make it possible for each organization do more each year.

Volunteer of the Year Kay Wallerich

Greater Mankato Growth President & CEO Jonathan Zierdt, Visit Mankato President Anna Thill and City Center Partnership Coordinator Eric Harriman (at podium) outline plans for 2013

Volunteers of the year Kay Wallerich, Peg Hayes and Theresa Carlberg

It takes a lot of Leadership! – Boards from Greater Mankato Growth, Visit Mankato and City Center Partnership gather on stage

In recent years and particularly in 2012, Greater Mankato Growth’s Public Affairs activities have been greatly expanded, with Kay Wallerich making significant contributions every step of the way. As a member of the Public Affairs Steering Committee since its inception, Kay helped shape GMG’s online candidate information, forums and issues guidelines.

In 2012, Kay was chosen to represent the Steering Committee on the board-appointed Public Affairs Task Force, charged with making recommendations on the organization’s long term Public Affairs approach, where she served as the lead author of the proposed plan. Upon the plan’s approval, Kay chaired an interview team to make recommendations on hiring the new dedicated Public Affairs position for GMG.

Volunteer of the Year Peg Hayes

Peg Hayes has been a tremendous supporter of the Mankato Marathon and Visit Mankato’s efforts to promote our community’s healthy active lifestyle. Peg’s experience and insight as a marathon runner helped during planning of the Mankato Marathon. As a course marshal volunteer on race day, Peg helped push runners to finish on the difficult last few miles of the route. She also supports the marathon outside of the community by sporting Mankato Marathon gear at other races and attending running expos to encourage others to sign up for the Mankato Marathon.

Greg Kutcher, M.D. (left) recognized as outgoing chair of the Greater Mankato Growth Board

Thank you to our annual meeting sponsors:

Theresa Carlberg has taken the City Center Partnership – Marketing & Promotions Committee to new heights. As the 2012 committee chairperson Theresa led a committee that succeeded in elevating existing programs to their best years yet while opening the doors for new and exciting projects. One of the most visible programs Theresa helped expand was the Alive After 5 late summer free concert series in Jackson Park which drew a record crowd in 2012. Theresa also led her Committee members as they both partnered with businesses in Old Town on a Shop Local campaign over the holidays and assisted the Kiwanis Holiday Lights program by volunteering their time during the event. Theresa’s efforts go above and beyond the expected as she tirelessly worked to uphold the Partnerships ongoing mission of attracting increased customers, employees and residents to the City Center.

MN Valley Business • April • 39

Greater Mankato Growth

Volunteer of the Year Theresa Carlberg

Member Activities Business After & Before Hours

5:00 - 7:00 p.m.

Greater Mankato Growth

April 2

May 7 June 4

Minnesota State University, Mankato – Intercollegiate Athletics AAA Minnesota and Jersey Mike’s Subs Mayo Clinic Health System

7:30 - 9:00 a.m.

April 17 May 15 June 19

Mankato Ford – Quick Lane Tire & Auto Alliance Insurance Agency Corporate Graphics Commercial

2013 Business After Hours Sponsored by

2013 Business Before Hours Sponsored by

February Business After Hours at The Stationary & Gift Store by Carlson Craft

February Business Before Hours at Jordan Sands, a Coughlan Companies Business

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.

40 • April 2013 • MN Valley Business

Cavalier Calls on our

Newest Members A Springtime Tradition Ameriprise Financial Services – New Ulm 15 South Minnesota, New Ulm ameripriseadvisors.com

John Fritz Construction, LLC 417 Poplar Street, Suite 100, Mankato gmg.greatermankato.com/John-Fritz-Construction,-LLC

Natural Pathways, LLC 229 Belgrade Avenue, North Mankato natural-pathways.com

Summer Opportunities One of the many benefits Greater Mankato Growth members receive is the opportunity to take advantage of exclusive marketing opportunities. As the weather warms up, there are some particularly attractive ways to let them know about your business.

Songs on the Lawn, held Thursdays in June, gets more popular each year, and the bands and food vendors aren’t the only ones getting the attention of the audience. There are also opportunities for businesses to sponsor the event and set up informational booths.

The “Hot Deals” feature on our website provides another wonderful opportunity to promote your offers to the general public. This easy online coupon generator is featured on greatermankato.com and other websites and is particularly popular during the summer months when Greater Mankato sees more visitors.

The same feature also lets GMG members make special offers available exclusively to other members.

Greater Mankato on the Green, GMG’s annual golf tournament is another member-to-member marketing opportunity. Based on the increasing popularity of Greater Mankato on the Green, this year’s event on July 8 will include a new morning 9-hole tournament to go along with our traditional 18-hole tournament in the afternoon. Now is the time to sign up to get in on this fun way to promote your business.

For information on these and the other marketing opportunities available to members of Greater Mankato Growth, visit greatermankato.com/marketingopportunities.

MN Valley Business • April 2013 • 41

Greater Mankato Growth

Masterson Staffing - Mankato 612 North Victory Drive, Mankato mastersonstaffing.com

Everyone from the regional business community is invited to attend the Greater Mankato Business Showcase on April 9 from 4 – 7 p.m. at the Verizon Wireless Center. This popular annual event gives you an opportunity to get together with more than 500 individuals from businesses throughout Greater Mankato and learn about the products and services they provide. Plus you will have the opportunity to sample food from a variety of Greater Mankato restaurants and register for fabulous prizes from area businesses. It’s the once a year event no one wants to miss! For more information, visit greatermankato.com/business-showcase.

growth

in Greater Mankato Administrative Process Improvement New Business Dickey’s Barbeque Pit 501 Holly Lane #150, Mankato

New Business Flour Power Bakers’ Café 12 Civic Center Plaza, Suite 1684, Mankato

Greater Mankato Growth

New Owners Indulge Salon & Tanning 1713 Commerce Drive, North Mankato

New Location - Center for Sport & Performance Psychology Minnesota State University, Mankato

New Business SoMNDeals somndeals.com

42 • April 2013 • MN Valley Business

Smart organizations are using process improvement to drive out wastes that are inherent in all our systems and processes. In the April 11 Lunch & Learn workshop, Tom Kammar will discuss ways to: •Organize your office space •Eliminate making extra copies that are never used •Stop rework because errors are not caught •Speed up the signature and approval process •Create flow in your processes The workshop runs 11:30 a.m. – 1 p.m. and is just $20 $45, which includes lunch provided by Subway. To sign up, visit greatermanakto.com/lunch-learn.

The Lunch & Learn Series is presented by the South Central College Center for Business & Industry and Greater Mankato Growth.

Simplify your Life to Strengthen your Leadership Now in its 13th year, Chick-fil-A Leadercast has become the can’t-miss development event for everyday leaders.

On May 10 this one-of-a-kind event will be broadcast live from Atlanta and simulcast into communities across the globe. And this year the New Ulm Chamber of Commerce is making the broadcast available in our area. Listen to worldrenowned leaders provide insights on the potential impact in simplifying our lives so leadership can thrive. Expect to be challenged, inspired and encouraged, while you learn how to improve your own leadership skills and have the opportunity to connect with other leaders in our area. The day- long event will be held at Martin Luther College in New Ulm. Registration includes the seminar, journal and lunch. Get more information and sign up at chick-fil-aleadercast.com.

For more information on these and other professional development opportunities visit greatermankato.com/professionaldevelopment-employee-education

Greater Mankato Tourism Makeover

By Maxime Kot, Greater Mankato CVB Intern Mankato, a growing city where adventures abound, is one of many ways the Greater Mankato Convention & Visitors Bureau (CVB) has promoteds the wonders of visiting this southern Minnesota city. The CVB has always made it a top priority to promote the best of Greater Mankato to attract visitors. In March 2012, the CVB decided to go through a branding makeover to better position Greater Mankato as a tourism destination. With this objective, the CVB enlisted the help of Bill Baker, the President of Total Destination Marketing and a well-respected tourism marketing consultant who has branded everything from small cities to entire nations. With his guidance, the CVB was able to identify the essence of the community’s tourism brand. And along with the new tourism brand, the CVB will introduce a new organizational title, office space, official website and an overall new brand.

New Name There has been an ongoing national trend of tourism organizations departing from the title “Convention & Visitors Bureau.” With this term losing its relevancy and increasingly being misunderstood by tourists, the CVB has changed its name. The new name, Visit Mankato, is less complicated, makes a statement and is more relevant to tourists.

New Space With all of these changes, the newly named Visit Mankato is also moving to a bigger and more accessible location. The office will be located in Mankato Place, right across the street from the Verizon Wireless Center. The new office space is considerably bigger, which will allow for some growth, along with a Visitors Center for those who need help planning their stay. The office environment will maintain a friendly feel focused on encouraging tourism.

The organization is extremely excited for the new changes that will ultimately contribute to the betterment of the community.

To learn more about the new brand, please feel free to contact Anna Thill, President, at (507) 385.6664 or athill@greatermankato.com.

“Visit Mankato” is an affiliate of Greater Mankato Growth (GMG), operated as an LLC under GMC.The CVB is dedicated to the important work of attracting and servicing visitors to Greater Mankato.

MN Valley Business • April 2013 • 43

Greater Mankato Growth

New Brand The CVB’s new brand focuses on Mankato’s key strengths of being an affordable, convenient, versatile and exhilarating destination. Greater Mankato’s versatility stems from distinctive tourism features and experiences, including challenging trail activities, significant history and culture, and the ability to unwind in a vibrant city center filled with headliner concerts, performing arts and lively night entertainment. The new logo was created to artistically represent Greater Mankato’s persona of being adventurous and active yet casual and relaxed, culturally engaging and most importantly welcoming and friendly. In this way, the city can be an appealing destination for outdoor and sports enthusiasts, business travelers, event organizers and participants. The “Now Playing” tagline contributes to Mankato’s personality of being fun and vibrant, with a year round active lifestyle. Outside of convention and tournament goers, target audiences will include those looking for a wellness getaway, sports fan getaway, and/or a cultural getaway. A brand launch video was produced to introduce the community to the new brand. It can be found on YouTube under the title “Visit Mankato’s Brand Launch Video.” With the brand video and brand manual in hand, the CVB is visiting with stakeholders to help them incorporate the brand where appropriate. Hospitality partners can use the video for training

front line staff, for example. And all partners can use the same language when talking about our destination on their websites and other materials. It will be up to those who come into contact with our visitors to help breathe life into this brand.

With the new brand comes a variety of transitions, including a completely new website to be launched in mid-June.

encouraging success ARCHITECTURE INTERIORS PLANNING SUSTAINABILITY ADAPTIVE REUSE

OHARCHITECTS.COM 507.385.1158

Big service.

Small hassle.

Does your business bank go above and beyond to meet your needs?

We do. Bremer business bankers take the time to understand your business, and your unique needs. Then we work with you to provide individualized solutions. And you’ll discover that working with us is a breeze. So talk with a local Bremer banker. It could be the start of something big.

Bremer.com Mankato 386-2200 Member FDIC. © 2013 Bremer Financial Corporation. All rights reserved.

44 • April 2013 • MN Valley Business

MN Valley Business • April 2013 • 45

A Grand Entrance

R First impressions are important. As part of a comprehensive plan to improve first impressions across campus, Minnesota State University, Mankato came to I&S group for the design of the critical Ellis Avenue campus gateway. The inviting entrance blends brick used throughout campus with local stone and LED lighting to welcome students, as well as the community, to campus.

Celebrating 40 years of design excellence! With over 125 professionals on staff, we are prepared to exceed your expectations. Find out more at www.is-grp.com.

WWW.IS-GRP.COM "3$)*5&$54 t &/(*/&&34 t 1-"//&34 t -"/% 4637&:034 t 4$*&/5*454

GROUP One firm - start to finish ™