MN Valley Business Journal by Free Press Media

The Definitive Business Journal for the Greater Minnesota River Valley December 2020

Jon Jamieson took a leap of faith and moved and expanded his JP Fitness during the pandemic. Photo by Pat Christman

A pandemic year Hit on businesses varied Also in this issue • HEAT SALON AND LIFESTYLE STUDIO • UNION MARKET IN MANKATO • TUNE TOWN IN OLD TOWN

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F E A T U R E S December 2020 • Volume 13, Issue 3

In this pandemic year some businesses such as restaurants and leisure continue to be hammered, while other sectors have seen less pain or even saw growth.

Gina Moorhead has changed up Union Market on South Front Street with artists’ work mixed together rather than having 42 separate micro-shops.

Sally Weness and Nicole Panko have created a business, Heat Salon and Lifestyle Studio, that focuses on beauty as well as helping clients improve their lives.

For nearly 30 years Carl Nordmeier faced competition and challenges with his music stores, but today his Tune Town in Mankato stands alone.

MN Valley Business • DECEMBER 2020 • 3

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DECEMBER 2020 • VOLUME 13, ISSUE 3

By Joe Spear

PUBLISHER Steve Jameson EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Dan Greenwood Dean Swanson Katie Roiger PHOTOGRAPHERS Pat Christman COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Danny Creel Sales Jordan Greer-Friesz Josh Zimmerman Theresa Haefner

ADVERTISING Barb Wass ASSISTANT ADVERTISING Christina Sankey DESIGNERS CIRCULATION Justin Niles DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6364, or e-mail advertising@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.....................................5 ■ Business Commentary.........................7 ■ Business and Industry trends..........22 ■ Retail trends.....................................23 ■ Agriculture Outlook..........................24 ■ Agribusiness trends..........................25 ■ Construction, real estate trends.....26 ■ Gas trends........................................27 ■ Stocks...............................................27 ■ Minnesota Business updates............28 ■ Job trends.........................................28 ■ Schmidt Foundation.........................30 ■ Greater Mankato Growth..................32 ■ Greater Mankato Growth Member Activities ............................33

From the editor

Year-end reflections on Mankato business changes

020 will be a year like no other in recent memory for the Mankato community and regional businesses, but as our cover story points out, there’s good and bad that came with the COVID economy. Retail and bars and restaurants are still struggling. Hotels are still hurting. But manufacturing is rebounding. And while it’s necessary to look back on the year and take heed of the many lessons learned, it’s also instructive and heartening to look back over a longer time period and just realize what a booming, vital and vibrant place the Mankato region has become. As someone who has covered business in the area starting some 30 years ago, it has been my privilege to get to know many good business people and just plain old good folks who care about their families, their communities and their country. That’s a thought we can all hold onto going into the year end and looking ahead to the New Year. One of the first business stories I covered was published on Oct. 7, 1991, when I attended a meeting of residents and businesses in the Stahl House who worried they would be thrown out of their apartments if a plan for making the project subsidized housing and homeless shelter came to fruition. That story appeared in the first ever morning edition of The Free Press. Online meant where you put your wash. That change from an afternoon to a morning newspaper was driven in part by the opening of the River Hills Mall the same year, a project that put Mankato on the map as a regional center, but not before local businesses sued to stop it through zoning laws. The suit was thrown out as major developer General Growth

4 • DECEMBER 2020 • MN Valley Business

Properties was not short of good lawyers. As the River Hills Mall was taking hold, the downtown Mankato Mall was taking a hit as were other downtown retailers. I covered those stories for a few years it seems until the crowning blow came with the closing of the Downtown Brett’s Department store in 1992. Those seemingly dire circumstances at one point seemed to portend the demise of downtown Mankato. There were visions that it would turn into a boarded up, run-down downtown like so many other small town rural Minnesota main streets had become. And here’s where folks who think government is the problem should pay attention. Mankato’s downtown was rebuilt with a risky project the city of Mankato took on to transform the downtown mall into the Intergovernmental Center. The city invested in reshaping the infrastructure to accommodate offices instead of stores. The project got a boost when the city and the Mankato school district became main tenants. Other government entities, including the Minnesota WorkForce Center and the Society Security office took space. The Minnesota public defenders office came on. The project created a one-stop shop for government services and brought traffic downtown. That’s when the momentum began. Of course, the civic center followed a few years later and the rest of the downtown rebirth story was nearly complete. Soon downtown became a place to invest. Some of the beautiful old buildings were refurbished and restored. The old train depot was beautifully restored by Mankato developer Curt Fisher and his associates. Mankato

developer and builder Mike Brennan took a risk on the Landkamer furniture building and restored another downtown gem with its Art deco architecture. Again, both projects had government financing assistance that has now paid off in a growing tax base and increased further the vibrancy of a downtown. The growing city center drew investors for bars and restaurants along Front Street, with the centerpiece brand new Pub 500 built on the old location of the Frederick family’s longtime corner café and headquarters. And the crowning achievements of the Profinium building by the Tailwind Group, the Eide Bailly building by Tony Frentz and Robb Else and the Bridge Plaza building by Brennan all help give Mankato a signature skyline. As for the Stahl House, it never became a homeless shelter, and now is the home of the Wine Café, a popular watering hole for locals. The building is on the National Register of Historic Places. COVID brings us our most difficult challenge yet, but one that can be overcome. Our history suggests we’re up to the task. As the sun rises over those buildings and on a new year, it’s important to remember where we’ve been, but more importantly, where we’re going.

Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow on Twitter @jfspear.

Read us online!

Local Business People/Company News ■

3 join Gislason

Gislason & Hunter added three attorneys to their firm— Daniel Schwartz, Jennifer Gish and S a m a n t h a Hanson-Lenn. Schwartz and Hanson-Lenn will practice out of Daniel Schwartz the New Ulm office and Gish will practice out of the Mankato location. Schwartz will focus his practice on agriculture law and agribusiness, business and Jennifer Gish corporate law, finance and b a n k i n g , litigation and real e s t a t e , environmental law and land use. Gish is an a s s o c i a t e attorney working in a variety of practice areas, Samantha including civil Hanson-Lenn litigation, banking and business law. Hanson-Lenn will focus her practice on bankruptcy, agriculture law and commercial litigation.

David Beck has been named vice president and will continue his role specializing in business and agribusiness banking at the Madelia location. Carissa Lutterman has been named assistant vice president and will continue her role as a mortgage banker at the St. Peter location. ■■■

Chankaska promotes Taylor

Chankaska Creek Ranch & Winery promoted John Taylor to vice president of alcohol operations and the official winemaker and distiller. He has worked for the last two years as the assistant winemaker and the general manager of the mobile bottling line ser vice company Precision Wine Bottling. A native Californian he interned with Edna Valley Vineyards where he worked with cool climate grapes while finishing his degree from Cal Poly. He spent three years with E & J Gallo Winery and three years comanaging a vineyard and crafting estate products with Ecluse Wines in Paso Robles. He spent the next four years working with various winemakers, joining Chankasaka in 2018. ■■■

Pioneer Bank names directors

AH Hermel Co. President Blake Hermel and owner/operator of Wenner Underwood Farms, Chuck Pioneer promotes 5 Wenner have been elected to the Pioneer Bank has promoted five Pioneer Bank board of directors. employees. Hermel and Wenner, along with Jennifer Svien has been named nine other members make up the vice president and will continue her board of directors. role as a mortgage banker at the Hermel has been president of AH Mankato Adams Street location. Hermel since 2016 and is a former Marie Krause has been named first officer with Mesaba Airlines. vice president and will continue her Wenner owns Underwood Farms role as a marketing director at the and is a former board member of Adams Street location. Nicollet County Bank from 2002Ashley Scharbach has been 2019. He is also a past board named assistant vice president and member/treasurer for Nicollet will continue her role as a personal County Pork Producers, past banker at the Mankato Stadium director of the Minnesota State Road location. MN Valley Business • DECEMBER 2020 • 5 ■■■

Corn Growers Association and past member/secretar y of the Steamboat Pork Sow Cooperative.

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Holmgren reelected at Compeer

Dale Holmgren of North Mankato has been reelected to serve on the Compeer Financial board of directors. He was first elected in 2001 and will serve a four-year term. He is a swine, corn and soybean farmer, working with his brother on their fifth-generation farm. Holmgren graduated from the University of Minnesota with a bachelor’s degree in agriculture business administration. ■■■

Pathstone opens office

Ecumen Pathstone announced the names for its new Independent Living and Memor y Care offerings, as well as the opening of its new sales office in downtown Mankato. Celebrating its location on the 44th Parallel Nor th, the Independent Living community will be called Latitude. The Memory Care community has been named Landing. They also opened a storefront sales office at 600 S. Riverfront Drive. It will also house The Ecumen Store. The Ecumen Store’s hours of operation are 8 a.m. to 4 p.m., Monday - Friday. Jennifer Pfeffer, regional operations director, said potential residents can make sales office visits by appointment only, which can be made by calling 507-3813255 or visiting ecumenpathstone. org/latitude. “We wanted to have an offcampus place where we can safely invite our neighbors in to see floor plans, review artist renderings of the space, and ask questions,” Pfeffer said. Latitude will feature Scandinavian-influenced architecture and furnishings, and the floor plans all named after other cities around the world that are on the 44th Parallel North.

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Business Commentary

By Dean Swanson

Putting your business plan into action

re you ready for the first exciting steps toward making your business plan a reality? In a previous column, I discussed the business plan. Now let us consider five key steps in making that plan a reality. These tasks are very straightforward, but you do have some decisions to make.

Step 1: Choose Your Business Name.

Your business name is the cornerstone of your business. It identifies your business legally, distinguishes you from the competition and forms the foundation of your brand. Start with a web search to see if anyone else is using the business name. If not, check to see if the business name you want has been registered in your state by visiting the website of the state agency that handles business entity filings. They generally have a search feature you can use. You can check if your business name is available to trademark by visiting the U.S. Patent and Trademark website. Once you’ve narrowed down your list to a few business names, see what other people think. Ask your SCORE mentor and your friends and family. Then get feedback from prospective customers. When choosing a business name, it’s important to understand the difference between a business name, a DBA and a URL.

Step 2: Choose a Business Structure.

The business structure you select for your business has legal, tax and administrative implications for your company’s future as well as your own. In this step, you’ll assess the different options, think about your long-term vision for your business as laid out in your business plan, and choose the best business structure to support your goals. Here are the most common options for business entity formation. Sole Proprietorship or Partnership C Corporation S Corporation Limited Liability Company (LLC) Talk to your SCORE mentor about your business entity options. Your mentor may also be able to connect you with other experts in your community who can provide advice and assistance. Once you’ve made your decision, complete the filings, registration, and paperwork required for your chosen business structure.

Step 3: Apply for a Tax Identification Number.

Depending on your business structure, you may need to apply for a federal Employer Identification Number (EIN). Also known as a FEIN, a Federal Tax ID or a Federal Tax Identification Number, this is what

the IRS uses to identify your business (similar to a Social Security number for individual taxpayers). If your business is a sole proprietorship without employees, you don’t need an EIN (you use your Social Security number instead). If your business is a corporation or partnership, or if you have employees, you need to get an EIN. Applying is free and can be done online. Some states may require you to get a state tax identification number as well.

Step 4: Get Necessar y Licenses and Permits.

Getting the business licenses and permits required by your location and industry ensures you are in compliance with federal, state and local laws, so your business startup can proceed smoothly. Without this paperwork, you might have to pay fines, delay your progress toward startup or even be prevented from starting your business altogether. Federal Licenses and Permits. Your small businesses won’t need federal licenses or permits unless you are engaging in an activity that’s regulated by the federal government. State and Local Licenses and Permits Licensing and permitting requirements vary depending on your location and industry. Start by visiting your state, city and county websites to see what types of licenses and permits you need. Once you obtain your licenses and permits, be sure to note when they expire. Many licenses and permits are good for only one year, at which time you have to reapply and pay the annual fee. Keep track of your renewal deadlines so your business remains in good standing.

Step 5: Open a Business Bank Account.

Corporations are required to open business bank accounts. But even if you are operating as a sole proprietor, setting up a separate bank account for your business has many benefits. It makes your business appear professional to customers, suppliers, and others, which makes them feel more confident about doing business with you. Using a business bank account for your business income and expenditures also helps you keep business and personal finances separate. This is important for tax purposes, and also makes it easier to do your bookkeeping and manage your business spending. In addition, business bank accounts typically include features that personal checking or savings accounts do not, such as the option to open a line of credit or to get a business credit card. Dean Swanson is a volunteer certified SCORE mentor and former SCORE chapter chair, district director, and regional vice president for the north west region.

MN Valley Business • DECEMBER 2020 • 7

Jessica Beyer, president and CEO of Greater Mankato Growth, says her staff continue to help area businesses during the pandemic, even as GMG itself has been financially hit by the pandemic.

Uneven pain Pandemic year hit some businesses, bypassed others By Tim Krohn | Photos by Pat Christman

s this year of the COVID-19 pandemic comes to a close, the local landscape shows businesses that continue to be devastated by limited customer movement while others saw only temporary downturns or enjoyed gains in business. “Ever y industr y has been

drastically different in how they’ve been affected,” said Jessica Beyer, president and CEO of Greater Mankato Growth, the area chamber of commerce. “We have a diverse economy here,” she said, noting that things such as manufacturing and agribusiness were disrupted but have pushed

Cover Story

8 • DECEMBER 2020 • MN Valley Business

Jon Jamieson, chose to move and expand his JP Fitness in the midst of the pandemic, a move he says brought plenty of stress. through the pandemic. “Manufacturing has had some job loss, but they have being doing a lot with automation.” GreenSeam, the GMG division that focuses on agriculture, reports that the livestock sector in particular was blindsided when the pandemic struck. Restaurants and major food service customers closed and stopped buying pork, beef, poultry, eggs and dairy products. While grocery sales for those products jumped, the food packaging and distribution systems could not quickly pivot. Several meat processors were shut down as COVID outbreaks hit their workforces and livestock farmers were left with animals they had nowhere to sell. “When we started with COVID there was the livestock euthanization and supply chain issues in the food sector really hit hard,” Beyer said. “We’ve come a long way since then. ConAgra is investing in Waseca. The (idled) Winnebago ethanol plant has been bought, exports have really picked up. There are still investments in agribusiness.”

Farmers have been buttressed by massive government subsidies, much of it handed out by President Donald Tr ump without congressional involvement. By the end of this year, federal payments to farmers are projected to hit $46 billion, a record amount. Still, the American Farm Bureau expects debt in the farm sector to rise 4% this year. Area auto dealers saw a slowdown in sales in March, April and May as stay-at-home mandates and limited outings by customers hit. But by early fall the total number of vehicles sold for the year was nearly equal to last year’s totals for the same period. Home improvement stores, grocers and others selling staples experienced mostly increased business even at the start of the pandemic, with business disruptions confined to supply chain shortages and struggles keeping fully staffed. For small businesses, the pandemic has often hit harder as small retail shops and other family run businesses struggle, but some entrepreneurs not only have been pushing through the

downturn but have chosen to expand. Jon Jamieson, owner of the relatively new JP Fitness, made the decision to move from their small downtown location to a bigger facility at Madison East Center. “We made the decision during the pandemic. There was an opportunity that came up and we took it,” he said. “It definitely wasn’t an easy decision. We contemplated and went back and forth quite a bit, but it allowed us to offer the amenities and space we always wanted for our clients.” And GMG, a nonprofit that has for years been a successful force in expanding and promoting area businesses, tourism and agriculture, has itself been pummeled by the downturn in the economy. “We’ve had less revenue from events and other things,” Beyer said. “We had to take some budget measures just like other organizations have had to.” At River Hills Mall in Mankato, business has been slowly and steadily rising. “Things are going

MN Valley Business • DECEMBER 2020 • 9

Jon Jamieson said being able to open large garage doors during nice weather has been a big benefit in his new location at Madison East Center.

Jeff Miller works out on one of JP Fitness’ treadmills. well considering we were closed for 55 days,” said Manager Andy Wilke. “We’ve been trying to manage our way out of that shutdown. We reduced hours and are starting to see our traffic pick up. We saw traffic get back to strong levels around Labor Day weekend, so that’s good to see.” But perhaps the hardest hit business sector has been restaurants and entertainment venues, many of which continue to struggle with state-mandated limits on occupancy and by a reluctance of some customers to venture out.

Patrick Person, whose family and other partners operate several restaurants and bars in the area, said most eateries are not designed to be financially feasible when forced to operate at 50% occupancy. “It’s ridiculous. If you’re wearing a mask and I’m wearing a mask and there are dividers (between tables), I don’t know why they don’t ease the restrictions. Especially in Minnesota where it gets cold,” Person said. “People have a right to go out. I think we forget that.”

‘A Hail Mar y’

Jamieson opened JP Fitness

10 • DECEMBER 2020 • MN Valley Business

downtown in 2016 and opened in their new location at the end of August, in the site of the former AAMCO Transmission at Madison East. “It was really stressful,” he said of the decision to make a big investment in a new location. It was kind of a Hail Mary at the end of the game.” For a few months, he thought that Hail Mary pass was a mistake. “I had the impression that on May 1 the business closures would end but when that continued it was very stressful.” The fitness center lost about 15% of its members as soon as the shutdown started. “During that time this spring there were a lot of serious conversations about maybe needing to have a career change,” Jamieson said. “But the support of our clients was huge. We did Zoom classes and recorded some workouts for members. That pivot helped us stay afloat. But it was stressful to think that we maybe wouldn’t ever open again.” Now he and his staff are settled in to a space two-and-a-half times larger and they picked up more than 100 new memberships after being able to open their new facility They renovated the space and put in new garage doors facing Madison Avenue that they are able to open during nice weather. “That helped his summer. People feel a little better when the doors are open.” While they are limited to 50% capacity they now have such a spacious facility that they can easily handle the needs of all their members at any given time. “We were able to add triple the amount of equipment. But basically we’re the same 24/7 business. Our focus is personal training, one-on-one and small group training.”

Restaurants struggle

Even as COVID has hit various industries differently, those within the restaurant business are also affected differently. As outdoor patio seating ended with the cold weather, many restaurants worry whether they can sustain even their more limited customer base with indoor

May your Christmas be Merry & Bright! Ashley Small wears a mask and gloves as she serves a customer on Atomic Star’s this summer. With outdoor dining now unavailable already hard hit restaurants worry about how the winter will go for them. only dining. “It affects different restaurants differently,” Beyer said. “Some rely more on sit-down and some more on drive-thru.” Wade Becker, owner of Big Dog Sports Cafe in upper North Mankato, said that putting a hard focus on curbside pickup business has helped them ease the blow of losing their outdoor dining. “In June when we could open up (for indoor dining) again, I thought curbside would drop but it stayed up and even grew.” GMG has been holding regular sessions with restaurant and

entertainment business owners to brainstorm ways to promote themselves and lobby the state for financial and other assistance. “Eighty three percent of travel and leisure businesses and organizations are small businesses. Small businesses are a huge piece of the economy,” Beyer said. “A Minnesota Hospitality Association survey of its members found that without a lifeline or support to the industry it could be up to 40% that won’t survive through 2020.” GMG has also been trying to

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MN Valley Business • DECEMBER 2020 • 11

get the word out that restaurant/ hospitality businesses have not, as many feared, been a big source of spreading COVID-19. As of late October, the state estimated that just 2.6% of COVID cases come out of the restaurant/ hospitality industry.

GMG pinched

Beyer said she’s proud her organization has moved quickly to help businesses. “We’ve continued to find ways to help businesses when we’re needed more than

ever.” But her organization, too, has been hit hard. The nonprofit gets funding from the membership fees businesses pay, from support from local governments and from other sources and it has seen its funding fall. Its Visit Mankato division, which promotes tourism and sponsors events such as the Mankato Marathon, has been especially hit as it gets much of its funding from the local lodging tax.

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“With the hotel business down that’s impacted us a lot.” She said the loss of revenue from not being able to hold an inperson marathon this year also hurt. The budget for Visit Mankato is down 52% this year, Beyer said. Across the GMG divisions, there has been a 32% reduction in staffing. “Yet we’ve remained strong. I’m proud we’ve continued to find creative ways to help businesses.” GMG has had a number of COVID responses from advocacy and mask distribution to blogs and helping businesses navigate the Paycheck Protection program and other assistance programs. Wilke said the return of the holiday shopping season brought some cheer and sense of normalcy to the mall. “We’re excited for the holidays. Santa will be in the mall but it will be a different experience. They can visit with him at a distance but not sit on his lap.” The mall’s holiday hours are

longer than the shortened-hours the mall has been operating under since it reopened in May. “Holiday hours are what our traditional hours usually were.” Wilke said that even with shorter hours some retailers have struggled to find enough staff to stay open the same hours as the mall. “We’re very flexible with our tenants. Not all our retailers are able to follow those mall hours because of staffing challenges. Some might close at 8.” Wilke said some retailers have permanently closed during the pandemic. “It’s a trend we see across the country. It’s sad to see but not unexpected. Those retailers that were in trouble before COVID, COVID just accelerated it.” While the year has been tough on retailers and malls, Wilke said they are seeing some good news when it comes to future leasing. “Some are seeing an opportunity to expand their portfolios, so we could see new leases coming in in 2021.” MV

Shoppers wore masks on the first day River Hills Mall reopened in June.

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Gina Moorhead has rebranded the Union Market in downtown Mankato.

Market rebrand

Moorhead revamps Union Market By Dan Greenwood Photos by Pat Christman

hen Gina Moorhead moved to become the general manager of Union Mankato in 2018, a sign downtown Market at that very location. The store in front of a vacant building at 615 features a variety of products made by local S. Front Street caught and regional artisans, her eye. which had a soft opening “It was a sign on the in June of 2018 before window that said, revamping the store in “coming in 2018: micro2020. UNION MARKET shops,” Moorhead The market soon 615 S. Front St., Mankato recalled. “I thought, attracted additional 507-779-7300 ‘that looks really artists looking to sell unionmarketmankato.com interesting.’” their wares – ranging Facebook: Union Market Little did she know at from paintings, gifts and the time that that sign apparel – under one roof. would propel her to By August of that year,

Spotlight

14 • DECEMBER 2020 • MN Valley Business

when the Union Market had its grand opening, the number of brands doubled to 15. “By Thanksgiving, we had 42,” Moorhead said. “It was great because there was all this local talent under one roof.” Moorhead hired on a couple of people to help her out as the market continued to fill up with new merchandise. But by January of 2019, the company that owned the building was less than enthusiastic about handling 42 different leases and decided to put the building back on the market. Disappointed and not wanting to lose the space, Moorhead signed the paperwork that month to lease the building out herself. Instead of 42 micro-shops selling their items separately, Moorhead re-organized the market so all of the artists’ merchandise were mixed together rather than separated. “I turned it into a department store,” Moorhead said. “It made more sense to have an accessories department, an art department, and an area for gifts, home, apparel, kids, kitchen and apothecary items. Everything is mixed and we don’t do square footage leases, it’s just a regular store where we do wholesale or consignment.” After spending the next several months reorganizing, Moorhead held another grand opening for the new version of the market on Oct. 4, 2020. A couple of the participating artists taught classes, from crochet to illustration that day, which Moorhead said will continue regularly at Union Market. “It went really well,” Moorhead said. “It was a little bit more grassroots leading up to it with all the brands and small businesses telling their friends. I have a friend in Minneapolis who does public relations that I’ve worked with before, so she got a press release together and sent it out and we had some influencers as well.”

Her own line

Along with managing the market, Moorhead’s own trademarked line of apparel is also featured here. When she was looking at

Gina Moorhead has changed Union Market from being 42 micro-shops selling their items separately, to one where the artists’ merchandise are mixed together. colleges more than 15 years ago, her academic interests ranged from marine biology to sociology, but what really appealed to her was fashion design. She soon found herself on the West Coast, enrolling in what is now the Seattle Fashion Academy, earning two degrees there, before returning to Minnesota to care for her grandmother in 2012. One day, when she was working on her fashion portfolio at a coffee shop in the Twin Cities, she struck up a conversation with a ceramist, who asked her about her goals in fashion. That chance encounter ended with the ceramist giving her a phone number of a friend who designs men’s suits for the fashion industry. When she called him, he gave her a number of contacts in Vietnam, travelling there in 2013, where she worked with several tailors to transform her designs into physical samples. “I went to Vietnam because I didn’t want to make everything myself and I didn’t want to mostly be a designer on a computer,” Moorhead said. “I wanted to make 50 odd pieces, all different kinds.” While in Vietnam, worked with a variety of local tailors with dif ferent specialties, experimenting with different fabrics and stitches to create her own brand to sell on her return to the United States. “All of a sudden I have this community of different tailors that

are helping me make all these different items,” Moorhead said. “I was having lunch with them and meeting these kids, their families. They are so talented. I have such admiration for them, and they were so warm and welcoming to me as this white girl in Asia. After a month, she returned to Minnesota and of ficially trademarked her two brands, GinaMarie womenswear and GrasMark menswear labels. She continues to travel to Vietnam a couple times a year to work with the same group of tailors to develop new designs. Back in the Twin Cities, Moorhead had another chance encounter that would advance her career – this time with a city council candidate who knocked on her door. They got into a conversation about her fashion designs and the candidate connected her with a friend who was organizing a fashion show in Minneapolis. “That led to my first fashion show,” Moorhead said. “There was a writer there named Jahna Peloquin, she was fashion editor at Minnesota Monthly at the time.” Soon Moorhead’s fashion line was getting coverage in newspapers, blogs and magazines. She moved to Mankato in 2018 when her partner was offered a faculty job at Minnesota State University. MV

MN Valley Business • DECEMBER 2020 • 15

Sally Weness is co-owner of Heat Salon and Lifestyle Studio along with Nicole Panko.

Beauty lifestyle Heat Salon and Lifestyle Studio opens

By Katie Roiger | Photos by Pat Christman

Weness wanted to be the first to bring the phenomenon eat Salon and Lifestyle Studio’s mission of to Mankato. creating relationships and community Additionally, she envisioned a location that would enrichment fittingly began with a deep not only offer great services but friendship. have an atmosphere like no other. Sally Weness and Nicole Panko She contacted her friend Nicole were longtime friends with Panko to talk about her dream and complimentary interests: personal share ideas for bringing it to life. beauty and interior design. HEAT SALON AND In the winter of 2015, Weness was “We wanted it not to feel like your LIFESTYLE STUDIO typical salon,” Weness said. “We working from a local Mankato salon 1591 Tullamore St., Mankato wanted people to feel that they and dreaming of creating her own 507-387-5115 unique business. Blow dry bars and were coming to a gathering space.” heatthestudio.com waxing salons were starting to gain Panko’s designer background Facebook: Heat Blowdry Bar traction in big-city locations and came in handy as they discussed

Profile

16 • DECEMBER 2020 • MN Valley Business

and Wax Studio

possibilities. Once they had a solid plan, Panko created a layout for a salon that was meant to look like a destination as well as a stylist studio. When Heat Salon opened to the public in June 2016, it had a grey herringbone floor, teal and orange accent colors, and a huge island in the center of the studio. The island became a popular spot for guests to wait for their services to begin, or for bridal parties to sip mimosas. “We wanted a fun atmosphere with a bit of a coffeehouse vibe!” Panko said. Weness and Panko agreed that their businesses’ mission statement would be crucial to creating Heat’s overall vibe. Their goal was to provide high-end services in a welcoming ambiance, and to develop relationships with their clients founded in support and empowerment. “I want people to feel better leaving than they did when they come in: More beautiful, more confident,” Weness said. Heat’s team expanded their services to include cuts, coloring, and beauty treatments, and the salon gained a following. Then COVID-19 dropped on Mankato like a ton of bricks. Businesses like salons, which couldn’t follow the six-feet-apart recommendations, were frequently hit hardest and closed longest. When they were allowed to reopen, Heat’s team followed the health mandates and hoped for the best. Although keeping their customers safe remained their top priority, Panko and Weness couldn’t help but worry about the future of their business when capacity was down to 50 percent and the public was understandably concerned about leaving their homes to get beauty treatments. “It was so frustrating to sit there and see the business wither away,” Panko said. “We thought, ‘We’ve got to do something!’” The two co-owners put their heads together to deeply ponder what their business meant to them. They realized that along with providing their customers with quality beauty services, they also felt strongly about empowering every visitor to be his or her best self.

A new direction

With these principles in mind, the Heat co-owners decided to take a radical step. Over the summer of 2020, they rebranded their business, renaming it Heat Salon and Lifestyle Studio, and expanded it to become a curated boutique as well as a hair salon. Like blow dry bars, lifestyle studios were not a new concept in larger cities, but were new to the area. “That makes me excited that we can offer this to people,” Weness said. She and Panko thought that a lifestyle boutique would be a fitting addition to their salon. Heat’s co-owners realized beauty and lifestyle frequently go hand in hand, because taking care of health and appearance is something that everyone does on a daily basis. Panko said that intentionally making a ritual out of beauty practices and self-care can be an enriching experience. Heat’s boutique collections were created with an eye to that type of enrichment. The first collection, Hair and Beauty, was the easiest to curate because the salon’s team had been selling similar products from

Sally Weness dries a clients hair in the Heat Salon and Lifestyle Studio in Mankato. their first days in business. The second collection, Lifestyle, expanded on the idea of linking beauty and self-care. “It has anything practical to daily life: Silk pillowcases, hair scrunchies, journals, books,” Panko said. The third collection, which was launched in late October, is dedicated to loungewear. This collection, called Live in It, was a no-brainer to Heat’s co-owners, who saw the need for comfortable yet professional outfits for working from home. “It’s stuff you can sleep in, but you could also run to the grocery store or hop on a Zoom meeting in it,” said Panko, who was wearing the brand during her interview. “It’s really comfy and cozy!” Panko said that she and Weness plan to add a fourth collection for Wellness in January. Each of the four categories is designed to be exclusive: Once a product is sold out, they don’t restock. This keeps the collections seasonal and fresh. Heat’s rebranding also gave it the opportunity to become more deeply involved with the Mankato community. The salon started a blog that features regular guest authors. “We want it to be about all topics lifestyle, from fitness to wellness to health recipes,” said Panko. The category is purposefully broad so that lots of people can contribute. One of the blog’s most recent posts was about back-to-school snack recipes for kids. Anyone can apply to write a post by emailing their ideas to heatthestudio@gmail.com. Heat also partners with local artisans as well as local writers. The salon team is currently working with a soap maker to sell her wares on their website. The process will be the subject of an upcoming blog post. Working with local crafters goes hand-in-hand with Heat’s mission of empowering clients to be their most authentic selves. For Weness and Panko, fostering creativity, self-care and self-confidence promotes inner and outer beauty. “A phrase we use a lot is beauty from the inside out,” said Panko. “If you feel good on the inside, you’re going to look good on the outside.” Both co-owners agreed that they want their clients and customers to take that good feeling with them out into the community after receiving a service or purchasing a product. “I want them to have a positive energy, the vibe we try to have here at all times,” Weness said. “It’s a culture we’re trying to create. It’s not just about hair.” MV

MN Valley Business • DECEMBER 2020 • 17

Tune Town owner Carl Nordmeier has survived several competitors and some tough times but his downtown Mankato store remains popular.

Tuned in Downtown record store thrives By Dan Greenwood Photos by Pat Christman

f it wasn’t for an MTV contest nearly 30 Target’s music department, he had already years ago, Tune Town in Mankato may started to consider opening his own music never have come to fruition. store when he was still living in the Twin Owner Carl Nordmeier Cities. But it wasn’t until had been working in the he entered an MTVmusic department at the sponsored contest to win a Lake Street Target’s record store that the plan Minneapolis location in really started to take hold. TUNE TOWN the early 90s when an 630 N. Riverfront Dr., Mankato “I said, ‘if I don’t win this option to transfer to I’m going to move back 507-625-6507 Mankato was on the table. home with Mom and Dad recordstoreday.com/ But when he moved into in Morristown, save up Store/4008 an apar tment near money and open my own Facebook: Tune Town Minnesota State record store,’” he said. University, that job fell through. Nordmeier’s Nordmeier didn’t win that contest, and by other source of revenue, as a weekend DJ, 1993, he had saved up enough from a factory wasn’t enough to cover the bills. job to open Tune Town in Faribault using his Frustrated with the corporate nature of own used CD collection to fill the shelves

Feature

18 • DECEMBER 2020 • MN Valley Business

Tune Town has seen an uptick in people selling or trading albums and CDs thanks to time they spent cleaning up their homes during the pandemic. before moving his store to Mankato in 1997. At the time, Tune Town had a lot of competition in Mankato. There was Ernie November downtown, Musicland at the old Madison East Mall and Disc Jockey at River Hills Mall. Today, Tune Town is the only record store in town left standing. The digital era of downloading music and the economic recession had hit the record store industry particularly hard in 2010, and Tune Town, which was located at the River Hills Mall at the time, was no exception. “In 2010, our sales dropped by 30-40%,” Nordmeier said. “I was draining my bank account. The River Hills Mall let you put your rent on your credit card, so I maxed out all of my credit cards.” That year, as he was cruising around town looking for a new, more affordable and centralized location, Nordmeier saw a for-rent sign at 630 N. Riverfront Drive. Tune Town has been there ever since, eventually expanding in back and into the building’s basement, where customers can

find everything from jazz and classical to vintage country in addition to independent metal, punk and indie rock collections upstairs. The new location proved to be a destination, as it gained a reputation not just locally, but throughout the region, attracting customers from northern Iowa, Sioux Falls and the Twin Cities. Nordmeier said the resurgence of vinyl continues to expand every year. “About five years ago I really started to notice it,” he said. “We’ve been stocking vinyl for probably 20 years, but this year vinyl sales have finally surpassed CD sales at Tune Town.” Employee Andy Sundwall, who has been working at Tune Town off and on for 15 years, said the vinyl craze has attracted a younger customer base to the store in recent years. “Pretty much everything is released on vinyl now which is pretty cool to see,” Sundwall said. “It’s been crazy to see it pick up and have new generations of kids coming in and buying stuff again,”

Sundwall said. Tune Town also celebrates Record Store Day twice a year, usually with live bands, complimentary beer and coffee, and hundreds of exclusive vinyl records to sell. First celebrated in 2008 to shine a light on the unique subculture of independent record stores, the bi-annual event celebrated in April and again on the Friday after Thanksgiving now has a roster of about 1,400 independent record stores participating internationally. While the event took a few years to gather traction, Nordmeier said Record Store Day combined with the vinyl resurgence was key to keeping his business afloat.

More coming in

“We try to stock a lot of product and I want to make sure we have everything that people want,” Nordmeier said. “A lot of places that do Record Store Day would only get one or two pieces of something and it would be sold out. I try to bring as much stuff as I can, and whatever is left over it will gradually sell.”

MN Valley Business • DECEMBER 2020 • 19

Used records and CDs have also played a big role in drawing customers into the store to sell, donate or buy used albums, CDs and DVDs. “We’re constantly taking stuff in. I had a feeling it was going to be pretty crazy this year once we reopened (after stay-at-home order), because people were home cleaning and getting rid of things,” he said. “On average we’ll take a collection every day, but lately it’s been 3-4 collections every day.” Nordmeier compares opening up a new collection of music to Christmas day, and regular customers routinely flock to the store to sift through the new batches of used CD’s and records on display, looking for that perfect gem. “It brings people into the store every week,” Nordmeier said. “It always gives me a thrill when someone comes in and they freak out because they’ve found something they’ve been looking for for years and are so happy.” Sundwell said they get a lot of customers who come in specifically without a goal, just to spend time

browsing and see what they can find. “A lot of people come here with no expectations on what they’re planning to try and find unless it’s a brand-new release,” he said. “They just want to dig through everything and see what pops up; usually they are pleasantly surprised.” Talking music with customers is one of the most rewarding parts of the job, said Nordmeier, and Sundwall said working at the store has exposed him to music that he never would have experienced if he hadn’t worked here. “There’s a lot of stuff I never would have given the chance,” Sundwall said. “Just hearing Carl or somebody else in the store recommending something – some of those have become my favorite bands ever.” After 27 years in the record store business, Nordmeier still enjoys going to work every day, and he can’t imagine doing anything else. “As long as I keep doing what I love and making a living at it, I’ll be happy,” he said. MV

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Less coal for power

From January to June 2020, the electric power sector consumed 184.8 million short tons of coal, 30% less than during the same period in 2019. After setting an annual record of 1,045 MMst in 2007, coal consumption in the electric power sector has been declining. This decline is happening as many coal-fired power plants are retiring or converting to natural gas, driven by tighter air emission standards and the decreased costcompetitiveness of coal relative to other resources. In addition to reduced coal-fired generation capacity, declines in the electric power sector coal consumption so far in 2020 are partially a result of competition arising from low natural gas prices. Relatively mild winter temperatures and responses to the COVID-19 pandemic both reduced electricity demand. Lower demand also contributed to the decline in coal consumption.

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22 • DECEMBER 2020 • MN Valley Business

Coal consumption in other sectors is also declining. Coke plant coal consumption from January to July 2020 was 9.2 MMst, a 14% decrease compared with the same period in 2019. EIA expects coke plants to consume an additional 6.4 MMst in 2020. In that case, 2020 coke plant coal consumption will be 13% lower than 2019 levels. From January through July, the retail and other industry sector consumed 14% less coal than

during the same period last year.

Retail/Consumer Spending

Electricity use falls

EIA forecasts 2.2% less electricity consumption in the United States in 2020 compared with 2019. EIA expects retail sales of electricity to fall by 6.2% this year in the commercial sector and by 5.6% in the industrial sector. EIA forecasts residential sector retail sales will increase by 3.2% in 2020. Milder winter temperatures earlier in the year led to lower consumption for space heating, offset by increased summer cooling demand and increased electricity use by more people working and attending classes from home. In 2021, EIA forecasts total U.S. electricity consumption will be similar to 2020 consumption.

Refineries running less

Gross inputs to U.S. refineries, also referred to as refinery runs, have been lower than the five-year (2015-19) average since April, when responses to the pandemic reduced demand for refined products such as gasoline, distillate fuel, and jet fuel.

Vehicle Sales Mankato â&#x20AC;&#x201D; Number of vehicles sold - 2019 - 2020 1500

912 1,033

1200 900 600 300 0

Source: Sales tax figures, City of Mankato Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.

Sales tax collections Mankato (In thousands)

- 2019 - 2020

600

$466,990

$350,000

500 400 300 200 100 0

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato In April, substantial declines in U.S. domestic demand for jet fuel and motor gasoline resulted in a significant reduction in U.S. refinery operations, including reduced refinery inputs and corresponding reductions in refined product outputs. The economic effects of the pandemic drove the decline in diesel demand, which began largely in May. Since May, demand for some products, particularly gasoline, has increased somewhat but remains below historical levels.

Renewables grow

EIA forecasts that renewable energy will be the fastest-growing source of electricity generation in 2020. EIA expects the U.S. electric power sector will add 23.3 gigawatts (GW) of new wind capacity in 2020 and 7.3 GW of new capacity in 2021. Expected utility-scale solar capacity rises by 13.7 GW in 2020 and by 11.8 GW in 2021.

- 2019 - 2020 $24,544

$59,761

70000 52500 35000 17500 0

Source: City of Mankato

Mankato food and beverage tax - 2019 - 2020 175000 140000

$68,804 $55,679

105000 70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business â&#x20AC;˘ DECEMBER 2020 â&#x20AC;˘ 23

■

Agricultural Outlook

By Kent Thiesse

The election’s impact on future ag policy T he highly contentious 2020 Election is now history, and we will now move forward with a new administration and several new members of Congress, along with changes in leadership of the U.S. House and Senate agriculture committees. There are many key issues that potentially could affect the agriculture industry, which will likely be addressed and possibly resolved by Congress and the White House in the next few years. We will now await to see who will be appointed to serve as Secretary of Agriculture and to head the Environmental Protection Agency (EPA). These appointments, along with subsequent appointments within the agencies and at the state level, can have a big impact on how various agriculture and environmental policies are implemented and administered. The leadership of key congressional committees, such as the House and Senate agriculture committees, will also influence which major issues are addressed in the next two years. Following is some perspective on some of the key ag policy issues that will likely be under consideration during the next session of Congress, or by executive action from the Administration:

Dealing with COVID-19

The pandemic did not stop or go away on election night and is likely to be with us for some time to come. The policies that are enacted at the federal level, either through congressional action or administrative order, certainly could have some impact on the agriculture industry. Last spring we saw the financial implications that can be incurred by production agriculture, when COVID outbreaks closed processing plants and caused interruptions in supply chains. Farm operators received significant financial support in 2020 from coronavirus food assistance program payments (CFAP1 and CFAP2). A big question going forward is whether the federal government would again step up with assistance payments for farm families, if we face similar challenges again in 2021.

Trade Policy

There was not a lot of recognition of agriculture related issues during the recent presidential

24 • DECEMBER 2020 • MN Valley Business

election; however, one topic that did get some discussion was past and potential future trade agreements. During the past four years, the previous North American Free Trade Agreement (NAFTA) was re-written into the United StatesMexico-Canada (USMCA) trade agreement between the three countries. Discussions to reset previous trade agreements with China lead to serious trade disputes between the U.S. and China that resulted in numerous tariffs being implemented on many goods and services. This included tariffs on many ag products that China imported from the U.S. Finally, a new Phase 1 trade agreement was reached between the U.S. and China, which has begun to be implanted during 2020. Ag trade with China has increased during the year; however, it is still below levels prior to the trade war with China and under the trade targets that were established in the Phase 1 agreement. The Trump administration also withdrew from the TransPacific Partnership (TPP) trade agreement with many Asian Countries, including Japan. It will be interesting if the new administration and leadership in Congress goes back to multilateral trade agreements such as TPP, as well as if we continue with current trade policy with China, Canada and Mexico, which are the largest trade partners for U.S. ag products.

Rising Health Care Costs

Rising health care costs and access to adequate health care continue to be major concerns for farm and rural families in Minnesota. Some families have seen health insurance premiums rise 50-100% in recent years, with individual farm families and sole small business owners now paying $30,000 to $40,000 per year or more for health care coverage. At the same time, many rural hospitals and clinics have been closed and consolidated into larger regional health centers, which has limited access to quality health care services in some rural areas.

Broadband Access

One ongoing issue that has been brought to the forefront by the COVID-19 outbreak has been the inconsistent or the lack of internet service and connections in many rural areas. As public schools have been forced to utilize “distance

learning” models to educate elementary and high school students in the past year, one of the biggest limiting factors has been inadequate internet service in many rural areas. Many previous and newly elected officials talked about the need for major federal investment into infrastructure upgrades, which hopefully will also include improved broadband capabilities in rural communities. The current Farm Bill expires after the 2023 crop year, so early development of the next Farm Bill is likely to start occurring in Congress and with agricultural leaders during the next two years. Both the U.S. House and Senate agriculture committees will likely be under new leadership during the next session of Congress. There are many groups and organizations pushing for major policy changes in the next Farm Bill. As usual, the budget allocation toward the next Farm Bill will be a big part of that discussion, with some members of Congress already calling for budget cuts when the next Farm8Bill is written. Some of the key ag policy discussions in development of the next Farm Bill 6 will include: revisions in current commodity and crop insurance programs, expanding 4 Conservation Reserve Program (CRP) acreage and other conservation programs, and payment limits,2 as well as food and nutrition programs (SNAP, WIC, etc.), which accounts for about three-fourths of the Farm Bill budget. 0 F

Corn prices — southern Minnesota

(dollars per bushel)

— 2019 — 2020

Ag Policy

Agriculture/ Agribusiness

Climate Change

The current Administration discontinued many of the discussions and negotiations regarding climate 8 change that the U.S. had previously been involved with both domestically and with foreign 100 countries. Many elected leaders are now calling 6 for a 85 return to a more aggressive approach by the U.S. to4 deal with climate change, both within the U.S. borders and internationally. 70 Many of the proposed ideas involve 2 55 implementing measures to reduce the maninduced impacts of a changing climate, several of 40 which0ultimately have J F M could A M J a Jmajor A impact S O on N D the agriculture industry, both positive and 25 F M M J JhasA been S O N D negative.JIn the past,A Congress reluctant to take much action relative to climate change, due to questioning the scientific evidence, as well as the uncertainty regarding economic implications. 100

85 Renewable Energy

The70next Administration and Congress will need to decide what direction the U.S. takes regarding the mandated use of renewable fuels 55 through the Renewable Fuels Standards (RFS) 40 and other incentives for renewable fuels, such as tax credits, etc. While there is generally 25 J Fsupport M A for M development J J A Sof O N D considerable alternative energy sources, Congress and many organizations have become quite divided on the RFS and other mandated energy programs,

$3.87

2 0

$3.58

Source: USDA

Soybean prices — southern Minnesota — 2019 — 2020 8 20 100 16 6 85 12 4 70

(dollars per bushel)

$10.45

8 55 2 $8.22 4 40 0 0 J F M A M J J A S O N D 25 J F M A M J J A S O N D J F M A M J J A S O N D Source: USDA

Iowa-Minnesota hog prices

185 pound carcass, negotiated price, weighted average

— 2019 — 2020

20 100 25 16 85 22 12 70 19 8 55 16 4 40 13 0 J F M A M J 25 10 J F M A M J J F M A M J Source: USDA

Milk prices

25 22

$61.96

19 16

$45.75 J A S O N D J A S O N D J A S O N D Minimum prices, class 1 milk Dollars per hundredweight

— 2019 — 2020 25 22

$16.85

19 16 13 10

$13.63 J

20 25 16 22 12 19 8 16 4 13 0 J 10

Source: USDA. Based on federal milk orders. Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

C. Sankey

MN Valley Business • DECEMBER 2020 • 25

13 10

Construction/Real Estate Residential building permits Mankato

Commercial building permits Mankato

- 2019 - 2020 (in millions)

8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0

- 2019 - 2020 (in millions)

$2,576,264

$7,047,865

20000000 15000000 10000000 5000000

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

Existing home sales: Mankato region - 2019 - 2020 (in thousands) 237

300

251

Median home sale price: Mankato region - 2019 - 2020 (in thousands)

250

$203,500 $207,000

200

240

150

180

100

120

0 J

Source: Realtors Association of Southern Minnesota

Source: Realtor Association of Southern Minnesota

Interest Rates: 30-year fixed-rate mortgage

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

Housing starts: Mankato/North Mankato

— 2019 — 2020

- 2019 - 2020

5.5

4.9

3.8%

4.3

10 24

3.7

2.9%

3.1 2.5

Source: City of Mankato

$14,934,971 $1,791,903

8 J

Source: Freddie Mac

Read us online! 26 • DECEMBER 2020 • MN Valley Business

Source: Cities of Mankato/North Mankato

especially as it relates to climate change proposals. Ethanol and biodiesel production, which are covered by the RFS, have a major economic impact for farm operators, as well as for the overall rural economy in the Upper Midwest.

the Administration could choose to issue some executive orders relative to the issue.

Farm Financial Stress

Low profitability in both crop and livestock production in the past several years has increased financial stress for farm families in many areas of the U.S. Even though the increased Federal aid and some improved crop prices has improved the financial situation for farm operators in some areas in 2020, there are still many farm families facing financial difficulties and increased stress levels. There will likely be a continued need to provide programs and support for the farm operators and families that are facing these challenges.

Immigration Reform

Immigration policy continues to be a major issue in many portions of the U.S. and has a lot of political ramifications. Many industries, including the agriculture industry, could be significantly impacted by any potential immigration reform legislation. Both production agriculture and the ag processing industry are heavily reliant on an immigrant workforce, so major changes in getting needed workers into portions of the U.S. could greatly affect the rural economy in some locations, including in southern and western Minnesota. If Congress does not act on immigration reform,

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

Gas Prices 5

Gas prices-Mankato

— 2019 — 2020

54 43

$2.39

32 21 10 0

Gas prices-Minnesota

$1.67

$48.04

-0.4%

Ameriprise

$163.28

$172.97

+5.9%

Best Buy

$114.32

$122.98

+7.8%

Brookfield Property

$13.22

$14.95

+13.1%

Crown Cork & Seal

$79.61

$96.79

+21.6%

$4.92

-15.2%

Fastenal

$45.90

$47.17

+2.8%

General Mills

$61.28

$61.25

-0.1%

Itron

$64.98

$67.67

+4.1%

Johnson Outdoors

$87.79

$92.12

+4.9%

$165.48

$163.21

-1.4%

Target

$161.30

$158.13

-2.0%

U.S. Bancorp

$38.61

$40.36

+4.5%

$1.0

$1.82

+82%

$72.48

$74.10

+2.2%

$1.63

$48.21

$5.80

Archer Daniels

Consolidated Comm.

2.48

Percent change

Nov. 5

Oct. 7

— 2019 — 2020

Stocks of local interest

Winland

0Source: GasBuddy.com J F M A

C. Sankey

Xcel

C. Sankey

MN Valley Business • DECEMBER 2020 • 27

Minnesota Business Updates

■

■ ADM in plant food venture

strong personal-safety and health equipment sales. Sales from 3M’s health-care segment popped more than 25% to $2.2 billion, driven by gains in medical solutions, separation and purification, and oral-care equipment. Analysts expected health-care sales to total $1.36 billion. The company also said its operating cash flow came in at $2.5 billion, up 23% from the year-earlier period. 3M’s transportation and electronics division saw sales decline by 7.4% to $2.3 billion during the third quarter.

Archer Daniels Midland Co. and Marfrig received approval for their PlantPlus Foods joint venture. It will offer a range of finished plantbased food products across North America and South America. Marfrig is a beef and beef patty producer that owns 70% of the PlantPlus Foods joint venture and will be responsible for finished product production and distribution, utilizing its facilities in South America, mainly in Várzea Grande, in the Brazilian state of Mato Grosso, and its facilities in the United States. “Consumers today are demanding food that is good for the environment, for the body, for the mind, and for the development of a better you — while still being delicious,” Juan Luciano, chairman and CEO of ADM, said in a statement. ADM owns 30% of the joint venture and will supply technical expertise, application development and an array of plant-based ingredients, flavors and systems.

■ Fastenal overstocked on PPEs The initial demand surge for pandemic-related supplies such as masks and janitorial supplies has moderated, but demand still settled above normal levels in the third quarter, Fastenal executives reported. Demand for safety products is about 20% higher than historic levels. “Products like 3-Ply masks and disposable respirators are oversupplied and prices have declined,” CFO Holden Lewis said. “We believe this will correct itself based on the sell-through of these products out of our inventory. However, this process may take until the second half of 2021.”

■ 3M beats expectations 3M reported third-quarter results that beat analyst expectations on the back of

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major September Industry 2019 2020 Construction Manufacturing Retail Services Total*

73 132 20 80 305

Local non-farm jobs Percent change ‘19-’20

184 348 162 595 1,289

Construction

126000 126000 Manufacturing

Retail 113000 Services 113000 Total*

2,583 1,702 782 2,806 7,873

5,557 5,543 3,916 17,549 32,565

126000

2100 1400

113000

700 100000

Minnesota Local non-farm jobs 12000 3500 3500 10000

+115.1% +225.7% +400.8% +525.4% +313.7%

8000 2800 2800 6000 2100 2100 4000 1400 1400 2000

28 • DECEMBER 2020 • MN Valley Business

700 D

300000

3,036 2,886

240000 180000 120000 60000

700 0 0

- 2019 - 2020

(in thousands)

Percent change ‘19-’20

Services consist of administration, educational, health care and social 100000 assistance, food andJ otherF miscellaneous services. M A M J J A S O 100000 J don’t F equal M total A because M Jsome Jcategories A not S listed. O N *Categories

3500

126,080

2800

+152.1% +163.6% +710% +643.7% +322.6%

Minnesota initial unemployment claims September 2019 2020

129,509

139000

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.

Major Industry 139000 139000

- 2019 - 2020

Nine-county Mankato region

F M

M A A M

M J

J J

J A

A S

S O

O N

N D

The swinging pendulum of demand may have seemed stuck to one side for the last several months as the prolonged pandemic resulted in an elevated need for N95 masks. But it is starting to fall and leading to inventory imbalances, according to Fastenal.

■ U.S. Bank closes branches

are increasingly in the PPE sourcing mix as they open. Small and rural hospitals too are likely to be short on PPE. “While large hospital systems continue to benefit from a recovering PPE supply chain, smaller, non-hospital facilities are still facing acute PPE shortages,” reads the nonprofit’s September report.

400 by early next year. The acceleration of bank branch closures comes as the Minneapolis-based company, and the nation’s fifthlargest bank, now experiences three-quarters of all transactions and more than half of all loans through its website or app. The shift to digital banking sped up 139000 the COVID-19 pandemic, executives added. during “While physical branches and personal interactions will always be important, we need fewer branches today 126000 than we did even a few years ago,” Andy Cecere, U.S. Bancorp’s CEO, told investors. Executives said the closings will lead to savings of 113000 about $150 million, some of which will be reinvested into digital initiatives as well as into remodeling branches. After the next round of closures, U.S. Bank 100000 J F M A M J J A S O N D will have roughly 2,300 branches.

After closing 300 branches recently, U.S. Bank said it will shutter an additional

■ Xcel adding solar in Wisconsin Xcel Energy is seeking to buy a 74-megawatt solar farm under development in northwestern Wisconsin that would be the utility’s first large-scale solar plant in the state. The utility reached an agreement with Ranger Power to buy the 1,100-acre project in Pierce County for approximately $100 million. Ranger Power has already received the local permits 139000 139000 to build the plant. required If approved, construction is expected to start next year, with the126000 plant expected to begin operation in 2022. 126000 Mark Stoering, president of Xcel’s Wisconsin subsidiary, said the project represents the company’s 113000to renewable energy. commitment 113000

3500 2800 2100 1400 700

100000 100000 J F

J M

M J

J A

J S

S N

O D

4,006

180000 120000 60000 J F M A M M A M J J M A M J J

J A A

J S S

A S O N O N D O N D

93,948

163,956

240000 180000 120000 60000 0

1400 700 0

180000

6000 1400 4000 700 2000 0 0 J F M A J F JM FA M M AJ

120000 60000

M MJ

J JA

J JS

A AO

S N S

O D O

N N

D D

(includes all of Blue Earth and Nicollet Counties) 300000 240000

August 180000 Unemployment rate 120000 Number of non-farm jobs Number of unemployed

60000 J

0 F

240000

2100 8000

J M

F M A A M J

M J

J A

2019

2020

2.2% 61,480 1,390

4.3% 58,630 2,654

J S

A O

S N

O D

Unemployment rates Counties, state, nation County/area

- 2019 - 2020

2100

Mankato/North Mankato Metropolitan statistical area

240000

300000

D 0

300000

5,556

Minnesota number of unemployed

- 2019 - 2020

Nine-county Mankato region

A O

2800

300000

Employment/Unemployment

F M A A M J

Local number of unemployed 12000 12000 3500 10000 10000 8000 2800 8000 6000 6000 2100 4000 4000 1400 2000 2000 700 0 0 J F 0 J F

3500 12000 2800 10000

3500

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

September 2019 September 2020 2.3% 2.4% 2.8% 2.4% 2.7% 2.1% 2.5% 2.7% 2.6% 2.5% 2.5% 3.3%

4.5% 3.5% 4.7% 4.5% 3.9% 4.1% 4.1% 5.0% 3.4% 6.0% 5.4% 7.7%

Source: Minnesota Department of Employment and Economic Development C. Sankey

MN Valley Business • DECEMBER 2020 • 29

Sponsored by the Carl & Verna Schmidt Foundation

The upsides to thinking about when you will die

By Liz Weston | NerdWallet

ocial Security’s life expectancy calculator predicts I’ll live to about 86. An insurance company’s version says I should expect to die at 98. A longevity calculator created by actuaries demurs, putting the odds at only 32% that I’ll make it to 95. Eventually, I’ll find out which life expectancy calculator was most accurate. In the meantime, the different results help illustrate one of the most important and difficult calculations in retirement planning: figuring out when it will end. People who underestimate their life expectancy could save too little for retirement and run short of cash. People who overestimate how long they’ll live might stay in the workforce longer than they want to or spend less in retirement than they could. Why life expectancy matters Assumptions about life expectancy can make a dramatic difference in retirement strategies. For example, people who expect their retirement to last 20 years could withdraw 4.7% of their nest egg the first year and have a 90% chance their money would last, according to calculations by David Blanchett, head of retirement research at Morningstar, an investment research firm. To have a similar success rate with a 30-year retirement, the initial withdrawal would have to drop to 3%. Given those assumptions, someone who wanted to withdraw $25,000 the first year from their retirement funds would need to save about $532,000 to fund a 20-year retirement. Planning for a 30-year retirement would mean saving $833,000, or about 57% more. Life expectancy also can be a factor in when people should start Social Security, which can start as early as 62 years old. But most people live long enough that the larger checks they can get from delaying their applications at least until full retirement age, which is currently 66 and rising to 67, more than offset the smaller checks they give up in the meantime. But those in poor health with shorter life expectancies may want to start getting their checks earlier.

How life expectancies can differ

The first thing to keep in mind is that the longer you live, the longer you’re likely to live. At birth, the average U.S. male has a life expectancy of about 76 years and the average female 81 years, according to the Social Security Administration. If you make it to 65, though, the average man can expect to live to nearly 83 and an average woman to 85. Also, married couples need to plan for longer life spans. That’s not only because married people live longer than singles, but also because the chance of either person being alive at a certain age is typically greater than their individual chances. There’s a 50% chance that at least one member of a married couple,

30 • DECEMBER 2020 • MN Valley Business

both age 65, will be alive at 92, according to the Society of Actuaries. Other factors can add or subtract years from someone’s life expectancy. The more income and education you have, the longer you are likely to live. Race, lifestyle, health and family history play significant roles too. Some life expectancy calculators, like the Longevity Calculator created by the Society of Actuaries and the American Academy of Actuaries, use just a few of these factors. Others, such as the Living to 100 calculator, pose dozens of questions about various aspects of your life, health and family members’ health. (Living to 100 predicted I’d make it to 95, by the way.) Interestingly, few calculators ask about race, even though that can have a profound impact on life expectancy even when controlling for other factors, such as education and income. For example, one study found that Black men and women with 16 or more years of education lived on average 4.2 years less than similarly educated whites and 6.1 years less than Hispanics with the same level of education.

How life expectancy is calculated

Many financial planners, whose clients tend to have higher incomes, use age 90 or 95 as default life expectancies, Morningstar research has found. Certified financial planner Malcolm Ethridge of Rockville, Maryland, uses age 99. He acknowledges that few of his clients are likely to reach that age, but he prefers to err on the conservative side. CFP and physician Carolyn McClanahan of Jacksonville, Florida, takes a different approach that factors in the client’s financial resources, health and family history. If a client’s funds are projected to run out in their mid-80s and they’re in good health or have long-lived relatives, for example, McClanahan will help them work out a Plan B. “We discuss potential ways to reduce spending in the future or the possibility of tapping home equity at some point,” McClanahan says. Morningstar’s Blanchett suggests another option: Create a personalized estimate using a life expectancy calculator that at least factors in gender, smoking status, income and health, then add a few years to create a cushion. Based on his research, he suggests adding five years to the personalized life expectancy estimate for a single person. For married couples, he recommends adding eight years to the longer of the two life expectancies. We can’t know for sure when retirement will end — only that it will. A reasonable estimate of when helps us know how much to save and spend in the meantime. MV

Sponsored by the Carl & Verna Schmidt Foundation

Important steps when borrowing parent student loans

By Ryan Lane | NerdWallet

n more than one-third of U.S. families, parents decide how to pay for college, according to a July 2020 report from private lender Sallie Mae. Half of those parents don’t inform the child of their decision. Joe Allen, 51, of Frederick, Maryland, did talk about college costs with his daughter, a freshman at the University of Dayton in Ohio. But he understands why some families avoid the topic. “As a parent, you want to protect your children,” Allen says. “You want to do what’s best for them.” But what seems best for children may be bad for mom or dad — especially if it means taking out hefty parent student loans without discussing them. Here’s how to avoid that misstep and others when borrowing parent loans.

Assess your situation

Students should exhaust free money and federal loans in their names to pay for college. Parents can then cover remaining costs with federal parent PLUS loans or private loans. But first, review your current financial situation with your child. “Have a realistic sit-down with yourself and your family in terms of what (your) finances look like and what’s the best decision for you,” says Rick Castellano, spokesperson for Sallie Mae. Don’t borrow parent student loans if they’ll put your retirement at risk, you’re deep in debt or you can’t afford the payments. For example, the nonprofit Trellis Company surveyed more than 59,000 parents whose children attended school in Texas and found that most said they struggled with loan repayment at some point.

Have a conversation

Kathleen Burns Kingsbury, a wealth psychology expert and host of the Breaking Money Silence podcast, says talking about big expenses like college tuition can make people uncomfortable and emotional. That doesn’t mean you should avoid the conversation. “It’s OK if people get upset,” Kingsbury says. “The pitfall is if people get upset and don’t get back to it.” Instead, use this opportunity to talk about how much you’ll borrow and to teach your child how to analyze the value of a large purchase. Allen says he went through a sample budget with his daughter to illustrate the cost of her loans and how they might limit her flexibility in the future. He liked that the exercise made things more concrete than “just saying don’t take out debt.”

Figure out who’s responsible

A conversation is also necessary to determine who’ll repay the parent’s loans. If your child will — and 45% of families expect the parent and child to at least share this responsibility, according to the Sallie Mae report — that can affect your decisions. Angela Colatriano, chief marketing officer for College Ave Student Loans, says some families want the child’s name on the loan because he or she will repay it. “They don’t want a handshake agreement,” she says. But only the parent is legally responsible for a parent PLUS loan. You’ll need to weigh that when considering borrowing options. PLUS loans have less stringent credit requirements than private loans and offer everyone the same fixed interest rate. However, PLUS loans also have large origination fees and are available only to parents — guardians and grandparents aren’t eligible, for example. Your ultimate goal should be getting the least expensive loan you qualify for. If that’s a PLUS loan, make sure everyone is on the same page for repayment. Kingsbury suggests writing a simple, one-page agreement that “would spell out what the expectation is and what happens if there’s a conflict.”

Consider co-signing

Parents who prefer private loans can borrow in their name or co-sign with their child. Either option means you’ll be responsible for the loan. “It comes down to a family decision,” Castellano says. “Families should explore both options.” But he says that co-signing can benefit students in ways that borrowing on your own can’t, such as helping them build credit. Also, because a co-signed loan has two applicants, you may get a better interest rate. However, lender underwriting policies differ. For example, Allen initially got a much higher rate on a co-signed loan than he expected. The lender told him that was because it combined his credit score with his daughter’s. “I didn’t understand that,” Allen says. “I thought if I’m co-signing and bringing good credit to the equation it should be a better rate.” He applied with a different lender and got what he called a “much better” rate. Allen plans to take out that loan once his family can no longer fund the education on their own. MV

MN Valley Business • DECEMBER 2020 • 31

NEW OWNERS

NEW BUILDING & EXPANSION

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NEW BUILDING LOCATION

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32 • DECEMBER 2020 • MN Valley Business

Luxe Quarterlies & North Kato Magazine facebook.com/northkato

Keep a Pulse on Greater Mankato! Follow Greater Mankato Growth, Visit Mankato, City Center Partnership and GreenSeam on social media to stay up to date on all things Greater Mankato! From what we're up to as organizations, to the exciting happenings in our region, like business development, EXPOSURE your Brand; visitor attraction,Build downtown funNETWORKING and agribusiness TW WORKING ORKING highlights! grow your business.

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Due to COVID-19, we will not be holding Business After Hours through the rest of 2020. The originally scheduled dates will move to 2021. Thank you for your patience and understanding! Please visit greatermankato.com to learn more about additional programming and events offered.

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BUSINESS AWARDS

and

HALL of FAME

Thank You!

Thank you to everyone who attended the virtual 2020 Greater Mankato Business Awards & Hall of Fame and to our wonderful sponsors and restaurant partners! Presenting Sponsor

Meal Sponsor

Restaurant Partners

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Event Sponsors In-Kind Sponsors LIV Aveda Salon & Spa ● Mankato Brewery ● Mankato MoonDogs Nicollet South Bike & Ski Shop ● Pub 500 ● Schell’s Brewery Scheel’s All Sports ● Skin Essentials – Mankato Clinic Terrace View Golf Course

Congratulations to all the Award Honorees! Photo Credit: Sara Hughes

Learn more about the 2020 Award Honorees at

34 • DECEMBER 2020 • MN Valley Business

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Holiday Window Display Contest

his holiday season, the City Center Partnership is sponsoring the first annual Let It Glow, Kato!

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Announcing the new Allen Lenzmeier Accounting Professorships: Drs. Oksana Kim and Byron Pike Dean Brenda Flannery is excited to share this new named professorship and recipients The College of Business is pleased to announce that Dr. Oksana Kim has been selected to hold the Allen Lenzmeier Professorship in Accounting Leadership and Diversity and Dr. Byron Pike has been selected to hold the Allen Lenzmeier Accounting Professorship in External Partnerships. This commitment to accounting program excellence through the support of faculty leadership is possible through an endowed gift from Minnesota State Mankato accounting alumnus, retired Best Buy executive and philanthropist Allen Lenzmeier and his wife Kathy. The Lenzmeiers have been long-time supporters of Minnesota State University, Mankato and the College of Business including funding many accounting and diverse student scholarships as well as technology initiatives.

Photo taken recently in Minneapolis following distancing guidelines, Dr. Byron Pike, Allen Lenzmeier, Dr. Oksana Kim

Drs. Kim and Pike are members of an outstanding accounting and business law faculty that boast over 50 years of exceptional accounting education, graduates who have been among the country’s highest CPA exam performers (Elijah Watt Sells awardees) and an alumni network of great accomplishments and support.

Dr. Byron Pike, Allen Lenzmeier Accounting Professorship of External Partnerships

Dr. Oksana Kim, Allen Lenzmeier Accounting Professorship of Leadership and Diversity

Dr. Byron Pike, CPA has been selected as the Allen Lenzmeier Accounting Professor of External Partnerships. With this position, Dr. Pike will strengthen and grow relationships with companies, re-establish an Accounting Advisory Council and help elevate the program as the premier accounting destination of choice for students and employers in the region. Dr. Pike is Associate Professor of Accounting and the Master of Accounting program director, and an alumus of Minnesota State University, Mankato. Following his professional career at KPMG LLP, he earned his PhD and Master of Accounting degrees from the University of North Texas. Since joining Minnesota State Mankato in 2009, Dr. Pike has advised accounting club, re-established the annual golf event, and facilitated stronger recruiting relationships with firms. His research record includes publications in elite academic journals. In 2017, Dr. Pike was awarded the prestigious Douglas R. Moore Lectureship, becoming the only College of Business faculty member to receive this distinction in the 40-year history of the award at Minnesota State Mankato. Dr. Pike is a member of the Minnesota Society of CPAs and American Accounting Association.

Dr. Oksana Kim has been selected as the Allen Lenzmeier Accounting professor of Leadership and Diversity. Dr. Kim will help lead diversity, equity and inclusion initiatives to increase the recruitment and retention of diverse student groups majoring in the accounting program. Dr. Kim’s research agenda will focus on examining gender and nationality diversity of corporate boards of directors and audit committees with emphasis on emerging markets. She will also be working towards formation of the School of Accountancy and develop a path towards the School’s receiving a separate AACSB accreditation in accounting. Dr. Kim joined MSU in 2011, upon completing her PhD studies at the University of Melbourne (Australia). She holds a Master’s degree from Indiana University’s O’Neill School of Public Affairs (Edmund Muskie fellow), as well as an undergraduate degree in management of innovation technologies from Moscow State University of Technology “Stankin”. Dr. Kim’s professional experience includes working as an auditor at Deloitte and E& Moscow offices. Dr. Kim currently is Associate Professor of accounting and is a certified accountant (FCCA) specializing on international reporting standards - IFRS.

An Affirmative Action/Equal Opportunity University. This document is available in alternative format to individuals with disabilities by calling the College of Business at 507-389-5420 (V), 800-627-3529 or 711 (MRS/TTY). BUSC594AD_11-2020

Follow the COB MN Valley Business • DECEMBER 2020 • 37

LASTING RELIEF THROUGH BETTER BACK CARE.

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