Minnesota Valley Business, December 2018 by Free Press Media

The Definitive Business Journal for the Greater Minnesota River Valley December 2018

Jaci Sprague is GMG’s Young Professional winner. Photo by Pat Christman

Best in Business GMG award winners spotlighted Also in this issue • MANKATO CLINIC HELPS FIND WORKPLACE HEALTH RISKS • RESTORED GARDEN CITY CHURCH NOW AN EVENT CENTER • OFFICE SPACE DESIGN EVOLVES AND GROWS

The Free Press MEDIA

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Estate Planning By: Andrew A. Willaert

s a trust right for me and my family? When planning postmortem distribution of your assets, even to pass your estate solely to immediate family, the options may seem overwhelming. Reasons for a trust can include avoidance of probate, minimizing estate taxes, protection of assets, or to avoid otherwise complicated and burdensome processes. Whether a trust is appropriate depends on facts and circumstances, the nature of the assets, and very often family dynamics. A trust is a legal structure created to own assets that will be managed and disbursed according to the directives of the trust creator. A person who creates a trust is the settlor, or grantor. The trust

instrument provides that a trustee (who may also be the grantor and beneficiary) will manage assets that have been transferred to the trust and, as may directed by the trust, provide for the disbursement of trust income and principal to the trust beneficiaries. Trust property can include a variety of assets such as real estate, investment funds, interests in entities, cash and personal property. Trusts may be created during the grantor’s lifetime (an intervivos, or living trust), or by a will (a testamentary trust). A living trust can be revocable (changeable) or irrevocable (permanent). With limited exceptions, a testamentary trust cannot be changed.

A general advantage of trusts is they allow the grantor to determine how assets are managed, who receives the benefits, and when and under what conditions they are received. Circumstances indicating a trust is appropriate might include, for example: (1) estate tax considerations, (2) a spouse or other beneficiary is unwilling or unable to manage assets, (3) the settlor’s children are minors or otherwise not able to handle money responsibly, or (4) a beneficiary is disabled. Trusts are also a poplar way to provide for the future educational or medical needs of surviving spouses and children.

MN Valley Business • DECEMBER 2018 • 1

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F E A T U R E S December 2018 • Volume 11, Issue 3

Veteran entrepreneurs such as the Massad Group and Tami and Tim Tupy join young professionals, including Jaci Sprague, as honorees at this year’s GMG business awards.

Claire Patterson, an Occupational Health nurse at Mankato Clinic, helps businesses find hidden health risks in their offices that can reduce injuries and insurance costs.

Since Dain Fisher opened Office Space Designs in 2000 as a tiny business selling office furniture it has grown and evolved into an office space design and furniture business.

Former congregation member Roxie Mell-Brandts purchased and restored the former First Baptist Church in Garden City and converted it to the Chapel of Peace event center.

MN Valley Business • DECEMBER 2018 • 3

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DECEMBER 2018 • VOLUME 11, ISSUE 3 PUBLISHER Steve Jameson EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Dan Greenwood Dean Swanson Amanda Dyslin Dan Greenwood PHOTOGRAPHERS Pat Christman Jackson Forderer COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Danny Creel Sales Joan Streit Jordan Greer-Friesz Josh Zimmerman Marianne Carlson Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey 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..........24 ■ Retail trends.....................................25 ■ Agriculture Outlook..........................26 ■ Agribusiness trends..........................27 ■ Construction, real estate trends.....28 ■ Gas trends........................................29 ■ Stocks...............................................29 ■ Minnesota Business updates............30 ■ Job trends.........................................30 ■ Schmidt Foundation.........................32 ■ Greater Mankato Growth..................34 ■ Greater Mankato Growth Member Activities ............................34

From the editor

By Joe Spear

How Lowe can taxes go?

ournalism is largely about the art of fact verification, and while that may not seem like rocket science, it can be trickier than it would seem at first glance. At a basic level, journalism starts with finding sources, hopefully fairly credible sources, who make statements that in some way represent factual information. So when a local developer tells a reporter that other business people they come in contact with say Mankato commercial property taxes are higher than anywhere in the nation and in Minnesota, it’s a striking statement. But is it factual? Well, it depends. That was the case recently when The Free Press reported on the closing of the Lowe’s store. One developer speculated that high taxes may have been one of the reasons’ Lowe’s couldn’t make it in Mankato. The developer also said the competition of Menards, Home Depot and Fleet Farm may have proved too stiff in a smaller market like Mankato. Other developers brought up the same point. But keeping with the line on taxes, the next step in the verification process would have involved calling on those who could provide actual data on the amount of taxes a Mankato business pays compared to a business elsewhere. So we called the League of Minnesota Cities. The organization keeps an impressive data base of tax rates in Minnesota cities so it is able to answer such questions. With a preliminary look, it appears Mankato does quite well in the area of competitive business property taxes. In fact, of three

4 • DECEMBER 2018 • MN Valley Business

other cities examined, Mankato has the lowest taxes on a $6 million commercial building compared to other places Lowe’s has stores. The cities included Blaine, Owatonna and Shakopee. Taxes were 6 percent higher in Owatonna, 15.5 percent higher in Shakopee and 6 percent higher in Blaine for taxes paid in 2016. Going back five years, the results are much the same. In 2011, Owatonna taxes on a $6 million building were 48.5 percent higher than in Mankato and 33 percent higher in Shakopee while Blain again was just 6 percent higher. So Owatonna and Shakopee got much more competitive in taxes over the last five year, while Blaine has remained stable. But once again, the truth has a nuance. John Considine, director of business intelligence for Greater Mankato Growth, also was scratching his head about the developer’s comment about Mankato’s higher taxes. He took a look at the actual Lowe’s store in Shakopee compared to the Mankato store. Both are similar in size at 140,000 and 145,000 square feet. The Shakopee Lowe’s has a value of $6.9 million for 2018 while the Mankato Lowe’s has a value of $5.7 million, 17 percent lower than the Shakopee store. But the Mankato property tax bill is just $185,518, while the Shakopee property pays $438,380, a whopping tax bill twice the size of the Mankato bill. Considine points to a lot of addons with regard to the Shakopee store. It pays $121,000 in “fiscal disparities” on its tax bill, and another $1,300 for Met Council, $2,200 for Metro Transit and

finally about $800 for the mosquito control district. Fiscal disparities in the metro area is a system of sharing property tax base among metro area cities so, in some cases, up to 40 percent of taxes generated by a big development in one city would go into the metro area “pool” for sharing with other cities. One last thing that is interesting is how similar Lowe’s stores in Mankato and Shakopee had different values. In some cases, Lowe’s or a retailer will lease their building from investors. If there is a significant multi-year lease attached to a building that would transfer to new owners, the building could be considered more valuable. Would one county consider that more valuable and another not so much. It’s possible. Facts are facts, but they often have nuances. Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow on Twitter @jfspear.

Local Business People/ Company News

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Mankato Clinic honored

Mankato Clinic has been recognized for improving the health of UCare members enrolled in Medicare, Minnesota Senior Health Options and Special Needs BasicCare plans. UCare recently recognized 13 clinics during its “A Salute to Excellence!” event. The clinics had the top results in 2017 Healthcare Effectiveness Data and Information Set measures.

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Robinson joins True

R e b e c c a Robinson has joined True Real Estate as the newest real estate agent. She has more than 10 years of residential and commercial real Rebecca Robinson e s t a t e experiences. A Northfield native, Robinson attended Minnesota State University and St. Cloud State University. Robinson has lived in Prior Lake since 2009. ■■■

Citizens names VP

Read us online!

graduate of the Graduate school of Banking at the University of Wisconsin. He has been the manager of the bank’s office in LaSalle since he started with the bank in 2000. In addition to his banking career, Denn operates a corn/soybean farm near Madelia. The bank has its home office in New Ulm and branch offices in Lafayette, Lakeville and LaSalle. Total assets as of June 30 were $389 million.

Citizens Bank Minnesota promoted Mark Denn to executive vice president. Denn will take over the day to day management of the bank on Jan. Mark Denn 1. Cur rent president and CEO Lou Geistfeld has announced his plans to retire at the end of 2019 at which time Denn will assume those responsibilities. Denn is a 1987 graduate of Madelia High School, a 1992 graduate of the University of Minnesota, Morris and a 2003

Mediacom employees honored

Two Waseca Mediacom employees ear ned top c u s t o m e r service awards. Alan Mclean, of Lake Crystal, was awarded the S y s t e m Technician of Alan Mclean the Year award for his work as a broadband specialist in the t e c h n i c a l operations field. Mclean has been with Mediacom for 12 years. Brittni Kruger, Brittni Kruger of Eagle Lake, was recognized with the Unsung Hero award for her commitment to help in areas outside her normal job responsibilities. Kruger has been with the company two years. Mediacom employs nearly 300 people in southeastern South Dakota and throughout Minnesota. ■■■

MN Valley Business • DECEMBER 2018 • 5

Maes honored

The Minnesota Beverage Association gave its Tavern of the Year award to Mettler’s Bar and Restaurant and Loose Moose Saloon. The award was given to owner Michael Maes. ■■■

VanRoekel appointed to board

M e l a n i e VanRoekel has been appointed to the board of directors of United Prairie Bank. VanRoekel has an extensive background in leadership of Melanie VanRoekel financial teams and functions for several companies, most recently as the vice president of finance and administration for Agropur, formerly Davisco Foods International of LeSueur.

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6 • DECEMBER 2018 • MN Valley Business

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Business Commentary

By Dean Swanson

An advisory board for your small business has benefits “Do yourself a R ecently, I attended a meeting with fellow business mentors and the comment was made that several clients have expressed the frustration of being “alone” as they manage and run their company. Here is an idea for you. As a small business mentor, I can attest to the fact that starting and managing a small business requires paying attention to multiple areas of responsibility. Start a list… accounting, marketing, operations, sales, customer service, personnel, management, research and development, planning…and the list goes on. Rarely do entrepreneurs have the knowledge and skills to adeptly strategize ways to successfully execute all of them on their own. To improve areas of their businesses and discover ways to streamline processes, some businesses enlist the help of advisory boards. According to Penny Pompei, SCORE mentor and chairman of the Palm Beach chapter, “It truly is very lonely at the top, especially at the top of a small business. You are expected to be all things to all people, and while lots of people have plenty of advice for you, they don’t fully understand your business, nor do they always have your best interests at heart.” An advisory board consists of professionals with expertise in various business disciplines, who provide strategic advice to help an entrepreneur manage and grow the business. Unlike having a board of directors, having an advisory board doesn’t obligate a business owner to act on the guidance provided. Advisory boards offer an opportunity to

progress and success.

favor and never

pick your friends and relatives to be on your advisory board,” glean knowledge from experts without the formality and structure of a board of directors. Some ways small business owners can benefit from advisory boards include: • Challenge the “tunnel vision” that is keeping them from exploring new approaches that might be more effective than what they’re currently doing. • Stimulate creative thinking. • Connect them with valuable contacts and resources they otherwise might not have had an opportunity to meet. • Facilitate professional and personal development via the new knowledge gained from the members of their board. • Serve as a sounding board for addressing challenges, solving problems, and exploring new ideas. • Give them a greater sense of accountability, knowing others have a keen interest in their

“Do yourself a favor and never pick your friends and relatives to be on your advisory board,” advises Pompei. “That always leads to problems. You really don’t even have to like the people that you choose — but you must respect their knowledge and ability. If you make widgets, you don’t need another widget expert to advise you—you need people who are forward thinkers about their own businesses. If you haven’t yet read “Team of Rivals” about President Lincoln’s trusted advisors, now is the perfect time to do so. He knew differing opinions made an organization strong, as long as everyone knew that the ultimate decision rested on his shoulders. Every business stands a chance of being “Uber’ed” out of existence. Pick advisors that will help you predict the future.” If you think your small business could benefit from the help of an advisory board, reach out to your local SCORE chapter to discuss the possibility of forming one for your company. SCORE mentors offer expertise in all aspects of starting and running a small business; they have the knowledge and experience to help you assess your efforts and guide you in ways to reach your goals.

Sorenson is a volunteer Certified SCORE Mentor and former Regional Vice President for the North West Region. seminnesota.score.org

MN Valley Business • DECEMBER 2018 • 7

Jaci Sprague, senior district manager of Junior Achievement for the Upper Midwest,was named Young Professional of the Year by GMG.

8 • DECEMBER 2018 • MN Valley Business

Top of the line GMG honors the best in business, volunteerism By Tim Krohn | Photos by Pat Christman

aci Sprague says Mankato and North Mankato are places that make it easy for young people like her to succeed as professionals. “I feel like you can have it all in Mankato.” Sprague was one of many business people and entrepreneurs recognized recently by Greater Mankato Growth during its annual business awards and Hall of Fame banquet. While Sprague was honored with the Young Professional of the Year award, a couple of longstanding businesses were inducted into the Hall of Fame: The Massad Group and Liv Aveda Salon & Spa. Sprague, senior district manager of Junior Achievement for the Upper Midwest, grew up in Hastings and graduated from Minnesota State University. After graduating college in 2009 she was a preschool teacher for a time and, taking advantage of good deals by home builders hit hard by the recession, built a home with help from her dad. “I went from living in college rentals and said, ‘OK, it’s time to be a professional in the community and not living with roommates.’ ” In 2010 she began with JA, which works with kids in Kindergarten through 12th grade, fostering workreadiness, entrepreneurship and financial literacy skills. “In Kindergarten you teach about needs and wants. In high school we teach things about starting your own business,” she said. She oversees the program in Greater Mankato and New Ulm, which includes 10,000 students and 400 classrooms. “When I started there was just me in the office and now there are three staff members for the area.”

A big part of the job is recruiting the 500 business professionals needed to volunteer in the schools. “We have about 80 percent retention of our volunteers, so obviously the volunteers and the teachers love doing it.” Sprague was nominated for the award by Brad Boettcher of CliftonLarsonAllen, who first met her in the GMG Young Professionals group. “I met Jaci through YP and then I got pretty heavily involved in Junior Achievement,” Boettcher said. “The piece I thought was great about Jaci is she’s gotten a lot of young people involved in the community. She’s gotten a lot of young people to volunteer through Junior Achievement.” Sprague, 31, is still actively involved in Young Professionals, which brings together professionals age 21-40. “Early on I appreciated the networking and getting to know other professionals in YP. Now I continue to enjoy the professional development events that continue your education, as well as the social part of it,” Sprague said. “The community makes it easy to be a young professional. The Young Professionals group and the businesses here really empower young professionals to be part of the community and lead and have civic responsibilities.” She said as a mom of two young kids she especially appreciates a community that allows career and child rearing to go hand-in-hand. “I don’t know that I got this award because of anything special I’ve done. It’s what others have done for me and handed to me.” MV

Cover Story

MN Valley Business • DECEMBER 2018 • 9

Tami and Tim Tupy opened Liv Aveda Salon & Spa in 2002.

Hall of Famers Tupys, Massads have long ties to community By Tim Krohn | Photos by Pat Christman

he two families inducted into the Greater Mankato Growth Hall of Fame have the tenacity needed of long-running and successful entrepreneurs. Tami and Tim Tupy’s Liv Aveda Salon & Spa grew out of the HairMasters salon Tami operated downtown before moving to the hilltop to open a full-serve salon and spa. While the salon was inducted into the Hall of Fame recently, the couple also keeps busy with another business, the Mankato Brewery that Tim opened in 2012. John and Najwa Massad married in 1971 and had two children, Meray and Karla. In 1984 they opened their first restaurant in Mankato,

10 • DECEMBER 2018 • MN Valley Business

Meray’s, named after their eldest daughter. While Meray’s closed in 1997, the family has gone on to operate Olives Mediterranean Restaurant in the Hilton Garden Inn, Najwa’s Catering, Massad’s Grille in River Hills Mall and Massad’s Mediterranean Grille near the university.

Liv Aveda

Tami had worked at the HairMasters in the Michaletz Building in downtown Mankato for 20 years when the owners sold it to her and Tim. She ran the small shop for another nine years before the couple decided to open Liv Aveda Salon & Spa in 2002 at their current location in the strip mall across from the entrance of River Hills Mall.

Liv Aveda Salon & Spa was the first in Mankato to offer full hair and spa packages.

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“It was a huge leap to open up here.” She said bringing a full-service salon and spa grew out of her own frustration. “There were times I wanted to get a massage and facial package and there were places you could get a massage but not a facial or waxing or spa package. You had to drive at least an hour or more to get services like that,” she said. “I thought that was ridiculous. Mankato is better than that.” The couple had a clear vision when they opened the salon. “I wanted people to walk in and think they could be in the Twin Cities,” Tami said. They have expanded their space three times since then, but she said the core concept of the business hasn’t changed. “There are other places that do some of the same things we do, but we make it more of an experience for customers.” As the city has grown, so has the competition. “You can’t sit back. There are a lot more salons and you have to step up your game and make sure

MN Valley Business • DECEMBER 2018 • 11

Najwa and John Massad, with daughters Karla Njoku (center) and Meray Rahme (right), inside Olives by Massad’s. you’re giving people what they want.” While she is the face of the salon, her husband has always been intently involved in the business. “Tim is everywhere. People ask me what we attribute our success to and it’s our team and the combination of Tim and me. I work behind the chair and know what the service provider will think if we put something in place. Tim has the analytical mind and I have the creative mind, and it just works well together.” The salon has 11 multi-use rooms used for massage, facials and waxing. “There’s always a waiting list for massages,” Tami said. Still, hair care is the core of the business. They have 27 styling stations, although not all are staffed at all times. They employ 66 people. The salon is also heavily involved in charitable endeavors. The Aveda chain is a big supporter of Audubon Society. “In April we celebrate Earth Month and have a comedy show at the brewery. That’s gone over very well. We’ve raised hundreds of thousands for Audubon. We’ve been the highest fundraiser for Aveda in the seven-state area. All the money stays local for projects to clean up lakes and improve water quality.” Tami said she has no plans for slowing down. “I can’t imagine not doing this. One of my guests said, ‘We’ll have to figure out something else when you retire.’ I said, ‘I’ll be in my walkers cutting your hair.’ It’s my passion and you really build relationships with your guests.”

Massad Group

The Massad name was well known in culinary

12 • DECEMBER 2018 • MN Valley Business

circles in the Bekka Valley of Lebanon, where John and Najwa are from. Najwa was born in Lebanon and moved to Mankato with her family in 1960 when she was a youngster. John was involved in his family’s restaurants in Lebanon. Najwa met John during a trip to Lebanon and the two were later married and lived there. They came to visit Mankato in the ’70s, returned to Lebanon, but then fled when war broke out in 1982 and have been in Mankato ever since. John began experimenting with an Americanized version of schwarma using beef rather than lamb. When they opened Meray’s restaurant in 1984, they introduced Mediterranean food, including John’s schwarma, to Mankato. Meray’s operated successfully until the construction of the nearby civic center reduced parking in the area and hurt business. They opened Massad’s in River Hills Mall in 1995 and closed Meray’s a couple of years later. The family opened Najwa’s Catering, based at the civic center, and in 2007 took a big step by opening another full-service restaurant – Olives by Massad’s. At the time, Najwa admitted she was initially opposed to the idea of the family opening the restaurant. “He’s my husband. I was worried about him working so hard all day and night.” But soon after opening she knew that being back in the full-service restaurant business is just where the family was destined to do. “When John’s back there behind the grill and you look at him from the side, he just has this big grin on his face. He’s happy,” she said.

John Massad is happy and at ease inside the klitchen at Olives. They added the Massad’s Grille near Minnesota State University in 2013. “It’s been beyond expectations,” Najwa said of their

full return into the restaurant business. “Mankato has embraced us.” MV

MN Valley Business • DECEMBER 2018 • 13

GMG 2018 award winners Hall of Fame

LIV Aveda Salon & Spa Massad Group

Distinguished Business award Neubau Holdings

Entrepreneurial Business award

Sustainability Mankato Place

Downtown Detail

Twin Rivers Council for the Arts – Common Grounds Parklet

Creative Placemaking The Hub Food Park

GreenSeam awards: Seamed in Success

B.E.S.T. of Waseca – Waseca Vision 2030 in partnership with the city of Waseca, Waseca County

Growing in the GreenSeam award

True Real Estate

Aker – Orlando Saez and Todd Golly

Brian Fazio Business Education Partnership award

Children’s Museum of Southern Minnesota, South Central College, EI Microcircuits, Dotson Iron Castings, Jones Metal, Big Ideas

Hap Halligan Leadership award Betty Ouren

Young Professional of the Year Jaci Sprague

Visit Mankato awards: Bring It Home award Minneopa State Park/bison preserve

Hospitality award Jack McGowan’s Farm

City Center Partnership awards: Renovation under $500,000

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MN Valley Business • DECEMBER 2018 • 15

Claire Patterson, an Occupational Health nurse at Mankato Clinic, helps businesses find problems in their offices that could lead to injuries or health issues.

16 â&#x20AC;˘ DECEMBER 2018 â&#x20AC;˘ MN Valley Business

Reducing hidden health risks in the office By Amanda Dyslin

Photos by Pat Christman

itting in a desk chair, moving only your fingers anything (for the employee). If she would have along the keyboard — it doesn’t seem like experienced anything, like carpal tunnel or back there’s a lot of risk there for injury in the work strain, worker’s compensation would have been paying place. on that, and the company ends up But Claire Patterson, an paying higher premiums, and Occupational Health nurse at there’s lost work time and Mankato Clinic, knows better. productivity,” Henning said. “The From eye strain to carpal tunnel, cost is really so minor.” CLAIRE PATTERSON weight gain, or even back and neck Also, Henning said, Patterson Occupational Medicine, injuries, there are all kinds of suggested low-cost ways to fix Mankato Clinic hidden health risks associated with problems. Solutions could be as 507-385-3972 office jobs. simple as putting reams of paper mankatoclinic.com/ Employers invest a lot of money under a monitor to raise it up so a into health plans for their workers, person’s neck isn’t bent forward, or occupational-medicine and prevention can mean big raising the height of a desk chair, or savings down the line for all involved if health risks are moving a printer closer if a person is constantly corrected early. That’s why businesses pay to have twisting their body to reach for printouts. Patterson and other area occupational health workers “It takes less than an hour to evaluate an employee,” come assess employees’ working conditions and Henning said. “For a company with a significant suggest changes. amount of employees, yes there’s an investment, but “I do things like check out how your work station is it’s really minor in the scheme of things.” set up, your office setting, and I listen to concerns In addition to proper work station ergonomics, employees are having about aches and pains, and I Patterson said typically office employees aren’t moving make suggestions there,” Patterson said. “So, for around enough. example, if three or four people are having back pain, “It’s not any fault of their own; they might get busy,” I’ll come in and assess, watch how they’re working, she said. “But I’m a firm believer that you need to and I’ll probably visit with some of those staff members move once an hour.” and rearrange their work station and suggest changes Patterson said drinking a lot of water is not only on how things are done.” good for your health on its own, but it’s a good trick to Patterson worked with the three employees of Great get people to walk more frequently because you have River Insurance on these kinds of issues. Kristin to use the restroom more. Henning, chief human resources officer with Walking around also gives the eyes a rest from Farmward Cooperative, said they brought Patterson staring at a computer screen, which can cause eye in after an employee was having issues with her work strain. setup. “(We should) be mindful of all the different things in “We’ve always had the philosophy that wellness and the environment,” she said. safety go beyond the typical operational positions that Patterson also shows employees stretching and we have,” Henning said. moving exercises to help with wrist, back and other In addition to wanting employees to feel comfortable body aches. and safe at work, the small investment of hiring an Various other services are available to companies, occupational health official for a couple of hours including on-site flu shots, physical therapy and more. outweighs the much larger costs that could result in “We’re in an era where you don’t see nurses in long-term injury, Henning said. (Mankato Clinic companies anymore,” Patterson said. “I wish we could charges an undisclosed hourly rate that varies based offer more.” MV on services and other factors.) “When you think of the risk, just say we hadn’t done

Cover Spotlight

MN Valley Business • DECEMBER 2018 • 17

Dain Fisher’s Office Space Design was founded in 2000 and has grown significantly.

Head of Mankato’s Office Space Design wants to lead by example By Dan Greenwood Photos by Pat Christman

The entire environment is the exact he company’s 6000 square foot opposite of what a traditional workspace showroom at 606 N. Riverfront Dr. is a represents — with its cubicles and opressive refurbished two story historic building lighting — and that’s the in Mankato’s Old Town. point. With two offices, a large “Office Space Design is open space and a trying to stay ahead of reception area, visitors are greeted to soft OFFICE SPACE DESIGN that curve,” Dain Fisher said. “The beautiful part lighting, eclectic art on 606 North Riverfront Drive, about what we believe in the walls, lounge chairs, a Mankato is incorporating what ping-pong table and a 507-388-4405 large saltwater aquarium might be coming next, www.osdmankato.com with tropical fish. along with what is working

Feature

18 • DECEMBER 2018 • MN Valley Business

Dain Fisher said people are looking for open space designs that makes work a fun place to come to. for people now.” Part of that has to do with the belief that comfort and productivity go hand in hand. When Fisher founded the company in 2000 at the age of 19, Office Space Design was a tiny business that sold office furniture. Sales Manager Ryan Hertling has been working with Fisher since the beginning. He recalls how far the operation has come since then. “Starting out he had a single office rented out of an industrial building,” Hertling said. “We had a small warehouse that we used adjacent to that. From Dain doing it full time and me being a helper evolved into a two room office with a bathroom.” What started as an office furniture store has expanded to design, furnishing and installation. Now with a staff of seven, three of whom were hired in the past three months, the company’s portfolio includes out-of-state projects for companies like MEI-Total Elavator Solutions of Mankato, which has projects ranging from the World Trade Center Project in New York to the LAX international airport in Los Angeles. Fisher says they’ve been able to grow along with their clients. “As they continue to make acquisitions in other states, we have been there alongside them to furnish, design and install all their spaces,” Fisher said. Now based in Mankato’s Old Town neighborhood,

Fisher says the company has come full circle, a trend he sees happening with other businesses. He says that client Eide Bailly is a perfect example of how companies adapt to the changing trends. The company is in the process of returning to Mankato’s city center after operating in the outskirts of the city. Their new home will be in a $23 million, seven story tower in downtown Mankato with construction wrapping up in 2019. “They grew their business in downtown, they urban sprawled in the 1990’s, and now they are re-rooting back to where they came from,” Fisher said. “That’s a classic example of what’s happening nationally.”

No cookie cutter approach

In addition to the construction of new buildings downtown, Fisher said there’s been a renewed interest in refurbishing old buildings. “What we’re seeing across the country is adaptive reuse and historic restoration,” Fisher said. “When you’re breathing that new life into these older buildings, the furniture and the design side of it is brought out in the only way that it can be which is adapting to what you have.” Another Mankato company Office Space Design have grown with is Downs Food Group Inc., which continues to expand. Other notable projects include Minnesota State University’s library, the Hubbard Building and Mogwai Collaborative, a shared office

MN Valley Business • DECEMBER 2018 • 19

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space with private phone and conference rooms, a media room and open office collaboration and lounge areas. At present they are working with the Federal Deposit Insurance Corporation (FDIC). “One of the biggest things we’ve attributed to our success is our repeat customer base,” Fisher said. “It’s very rare that once we have an opportunity to work with someone, that we don’t perform well enough to get another chance. We don’t ever expect the business, but I think we do surprise a lot of people when they give us a chance.” When asked why the trend over the past decade has moved from cubicles to open office spaces with chic décor and a variety of amenities, Fisher nailed the reason down to culture. He said that milennials in particular associate creativity and innovation with the environment. That expands to every facet of city living, with condos, offices, restaurants and stores all under one roof. “One of our number one objective for future casting right

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20 • DECEMBER 2018 • MN Valley Business

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now is all identified through culture,” he said. “Live, work, play is all becoming one thing.” With modern glass towers under construction in downtown Mankato, and the revitalizatin efforts in Mankato’s Old Town, Fisher said the changes in the Twin Cities are now making their way to smaller urban areas like Rochester and Mankato. Fisher said what was once a dull industry now encourages creativity and the notion that work should be a place that people look forward to go to. “There’s no cookie cutter way to approach this,” Fisher said. “Every approach is personal. We challenge our clients to think outside the box. We inspire people to have fun and that’s what’s exciting.” MV

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MN Valley Business • DECEMBER 2018 • 21

Roxie Mell-Brandts purchased the First Baptist Church in Garden City in November 2013 and has since renovated the building into an event space called Chapel of Peace. Part of the renovation was reopening the balcony, where Mell-Brandts is pictured here

Former congregation member turns historic church into event venue By Amanda Dyslin | Photos by Jackson Forderer

s a young girl, Roxie Mell-Brandts sat in the pews of First Baptist Church in Garden City. She walked its historic hallways and looked out its big sanctuary windows. One thing she probably never did, though, was imagine the day she’d own the place. “No,” she said. “No, I didn’t.” But that day did come. By November of 2013 the congregation had dwindled to just 11 members, and costs were prohibitive in keeping the old brick church, built in 1868, going. “It was too much for them,” Mell-Brandts said. “I

22 • DECEMBER 2018 • MN Valley Business

think that’s happening to all the little towns. People are moving to larger areas, and they don’t have the population to keep the churches going.” Having grown up in rural Garden City and attending the church, Mell-Brandts felt a connection to it. She also had a background in flipping houses, which led to her buying the historic church (on the National Register of Historic Places listings in Blue Earth County). “I just always liked the building, and I like to restore things,” she said.

Roxie Mell-Brandts has seamlessly placed an antique piano in the Chapel of Peace in Garden City. The piano was built in 1865, three years prior to when the church was built. In 1868, workers took sand out of the river and made bricks on site to construct the building, which is double-walled (two layers of bricks deep). “Built to last,” she said. The north wall of the church was in bad shape and recreating the bricks to restore it was cost-prohibitive. So instead, Mell-Brandts chose to enclose the back wall. All the windows in the sanctuary were replaced, the entryway was rebuilt and enlarged, cracks were patched, walls were painted, the attic was insulated, the loft was opened up, and the exterior was sealed to prevent deterioration. “I have some original school-house lights that were in the church, and we put those back in,” she said. Mell-Brandts began the restoration project in the spring of 2017 and recently finished in conjunction with the 150th anniversary year of the church, which she has now named Chapel of Peace. “It was quite a bit of work, and it’s a work in progress,” she said. “But it is very usable now.” Mell-Brandts is renting out the church for events, including weddings, receptions, celebrations of life and other things. The fellowship hall can also be used for gatherings and parties. “It’s kind of a hobby, but I would love to have events there at least a couple of times a month,” she said. Kristin Kienholz, who attended First Baptist for several years, held an event at the chapel in September. Her daughter had been married out of state, and they invited about 100 family and friends to a wedding reception that they wanted to have closer to home. “The church held special memories for us, and we were grateful to be able to use the facility,” Kienholz said. Kienholz said the chapel looks entirely different after the restoration. She said Mell-Brandts’ attention to historic detail adds to the charm of the venue. “We loved the venue. The chapel is a beautiful place,” Kienholz said. MV

The original doors of the First Baptist Church in Garden City, are now on display in the community room of the new event center.

Part of the renovation includes a new entryway, connecting the chapel and the community room. Mell-Brandts said the doors come from an old church in Ohio and the bricks of the church were made in the nearby Watonwan River.

MN Valley Business • DECEMBER 2018 • 23

Business and Industry Trends ■

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24 • DECEMBER 2018 • MN Valley Business

Workforce Tapping homegrown talent

New research published by the Minnesota Depar tment of Employment and Economic Development found that many Greater Minnesota students say they would prefer to remain in their hometowns after graduation, but perceptions about employment oppor tunities sometimes get in the way. Seventy-five percent of students sur veyed in southwestern Minnesota indicated they would stay in their area if they had an acceptable job prospect. DEED said the challenge is educating students and parents about the real opportunities that exist locally. What happens when a student goes off to college and returns to find that relatively few jobs require college? Does the wage they are willing to work for change after investing in higher education? Among 10th graders, 61 percent said they planned to go to college and almost 12 percent into the military. Roughly 69 percent of jobs in Greater Minnesota do not require education beyond a high school diploma. Employment projections indicate that trend is unlikely to change over at least the next decade. A significant number of these jobs are in entry-level occupations with low pay and low or no educational requirements, but for many new workers they represent the first step in gaining valuable skills that lead to better, higher-paying jobs. Furthermore, Minnesota has roughly 230,000 jobs with a median annual wage greater than $50,000 per year that do not require college.

Energy

Retail/Consumer Spending

Coal use declining

The share of U.S. total utility-scale electricity generation from natural gasfired power plants will rise from 32 percent in 2017 to 35 percent in 2018 and to 36 percent in 2019, according to the Energy Information Administration. EIA forecasts that the electricity generation share from coal will average 28 percent in 2018 and 26 percent in 2019, down from 30 percent in 2017. The nuclear share of generation was 20 percent in 2017 and it’s forecasts that it will average about 19 percent in 2018 and in 2019.

Renewables 10% of power

Wind, solar, and other nonhydropower renewables provided slightly less than 10 percent of electricity generation in 2017. They are expected to provide more than 10 percent in 2018, and nearly 11 percent in 2019. The generation share of hydropower was 7 percent in 2017 and will be about the same in 2018 and in 2019. U.S. solar generation will rise from 212,000 Megawatt hours per day in 2017 to 268,000 MWh/d in 2018 (an increase of 27 percent) and to 303,000 MWh/d in 2019 (an increase of 13 percent).

Tilt solar expanding

In recent years, the industry has seen a shift from fixed-tilt solar PV systems to tracking systems. Although tracking systems are more expensive than fixed-tilt systems, revenue from the additional electricity generated by following the path of the sun across the sky often exceeds the increased cost.

Crude production up

EIA expects that U.S. crude oil production will average 10.9 million b/d in 2018, up from 9.4 million b/d in 2017, and will average 12.1 million b/d in 2019.

Gas prices to rise

EIA forecasts the average U.S. regular gasoline retail price will fall to $2.57/gal in December 2018. EIA forecasts that regular gasoline retail prices will average $2.75/gal in 2018 and in 2019.

CO2 emissions jump

After declining by 0.8 percent in 2017, EIA forecasts that U.S. energy-related carbon dioxide (CO2) emissions will rise by 2.5 percent in 2018. This increase largely reflects higher natural gas consumption in 2018 because of a colder winter and a warmer summer than in 2017. Emissions are expected to decline by 1.3 percent in 2019 because temperatures are forecast to return to normal. Energy-related CO2 emissions are sensitive to changes in weather, economic growth, energy prices, and fuel mix.

Vehicle Sales Mankato — Number of vehicles sold - 2017 - 2018 1500

1,011

1,311

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)

- 2017 - 2018

600

$417

500 400 300 200 100 0

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato

- 2017 - 2018

$55,189 $60,318

70000 52500 35000 17500 0

Source: City of Mankato

Mankato food and beverage tax - 2017 - 2018 175000 140000

$67,400 $58,900

105000 70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business • DECEMBER 018 • 25

■

Agricultural Outlook

By Kent Thiesse

From NAFTA to USMCA - what happens next? O n Sept. 30 the Trump administration announced a new trilateral trade agreement between the United States, Canada and Mexico. Called the U.S.-Mexico-Canada Agreement (USMCA), it will replace the current North American Free Trade Agreement (NAFTA). The NAFTA trade agreement was originally set up in 1994 between the three countries, eliminating many tariffs and other trade barriers among the participating countries. Since 2017, the Trump administration has challenged some of the trade provisions under NAFTA, threatening that the U.S. would withdraw from it if a new trade agreement was not reached. Many times, trade deals between countries are ver y complex and dif ficult to understand, as well as taking several years to be fully implemented. The new USMCA agreement is no different, with many very complex provisions for which we do not yet know all of the details. The agreement now needs to be approved by all three countries that are part of the USMCA pact, including the need for Congressional approval in the United States. The USMCA pact is likely to have a major effect on the auto industry, requiring that a greater percentage of vehicles be produced in the three participating countries at hourly wage levels similar to current wages in the U.S. and Canada. The current NAFTA agreement requires that 62.5 percent of the content in autos be produced in North America to qualify for tariff-free trade. The USMCA agreement will require that 75 percent of

components used to manufacture cars and trucks manufactured in the U.S., Canada and Mexico be from the three counties to maintain the tariff-free status. The USMCA deal also added a provision that 40-45 percent of the car components must be manufactured by workers earning at least $16 per hour, which is almost triple of the current minimum wage in Mexico. Most experts agree that the biggest impact of the new USMCA trade agreement will probably be for the U.S. auto industr y. However, there are also provisions related to digital trade, financial services, intellectual property, telecommunications, energy, and environmental issues that do not exist under the current NAFTA agreement. The USMCA agreement also contains key provisions for some segments of the agriculture industry, including dairy, hogs and wheat. USMCA agreement’s impact on the agriculture industry: • As part of this new agreement, all food and agricultural products traded between the U.S., Canada and Mexico that had a zero tariff under NAFTA would continue to have a zero tariff under USMCA. Similar to NAFTA, the USMCA agreement will not eliminate tariffs on all ag products; however, USMCA will provide more access to the Canadian market for U.S. dairy products, poultry and eggs. • Much of the focus in the USMCA negotiations related to agriculture was on dairy provisions between the U.S. and Canada. USMCA will increase the access to ship U.S. dair y products into Canada to 3.59 percent of the

26 • DECEMBER 2018 • MN Valley Business

annual Canadian production. This is higher than the 3.25 percent level that was proposed under the TransPacific Partnership (TPP) trade agreement that U.S. chose to withdraw from last year. USMCA provides for specific increases in tariff-free quotas of U.S. dairy products into Canada for fluid milk, cheese, butter, ice cream, and other products. The USMCA pact also would eliminate Canada’s class 6 and class 7 milk pricing programs, which were limiting U.S. dair y exports to Canadian markets. • USMCA increases the tarifffree quotas for eggs and egg products, as well as chicken and turkey products that can be shipped from the U.S. into Canada. The initial quotas will be allowed to increase by one percent per year for an additional ten years. • As part of the USMCA deal, Canada agreed to grade U.S. wheat imports in a manner similar to Canadian wheat, and not to require a country of origin statement on the inspection certificate, both of which have been issues in the past. The two countries also agreed to collaborate on items related to seed quality and grading systems, as well as other seed regulatory issues. • The biggest win for pork producers under the USMCA agreement is the continuation of tariff-free trading of pork products with Mexico and Canada, both of which are major export markets for U.S. pork. The pork industry also supports the strong sanitaryphytosanitary (SPS) provisions that are contained in the

USMCA pact, which go beyond those contained in the current NAFTA agreement or in World Trade Organization (WTO) agreements. The SPS provisions will allow for more transparency and sharing of scientific data, compliance measures, and other information among the three countries. One concern for pork producers, dairy producers and others is that the U.S. Section 232 import duties on Canadian and Mexican steel imports into the U.S. are still in place. As a result, the retaliatory duties and tariffs on U.S. pork and dairy products being exported to Mexico and Canada also remain in place, which has restricted the U.S. export levels of some products to these countries. Mexico currently has a 20 percent tariff on pork products and a 25 percent tariff on dairy products coming from the U.S. U.S. agriculture exports to Canada and Mexico have grown in the past 23 years from below $9 billion per year the before the NAFTA agreement to over $38 billion per year in 2016. Trade with Canada and Mexico accounts for about 28 percent of the total U.S. ag exports. In 2016, U.S. ag exports to Canada were valued at just over $20 billion, with leading export products being grains and feed, animal products, fruits and vegetables, oilseeds, 8 and horticulture products. U.S. ag exports to Mexico in 2016 totaled nearly $18 billion, with the top export 6 products being animal products, grain and feed, and horticulture products. Mexico is either the largest or 4 largest export destination for U.S. beef, pork, second poultry, wheat, corn, and dairy products. 2

USMCA still needs Congressional approval 0 J F M A M J J A

As usual, not everyone is in total agreement with the new USMCA agreement, though many feel it is a step in the right direction to address the trade issues that have been affecting sales and profitability in some industries, especially certain segments of the U.S. agriculture 8 industry. Some did not feel the new agreement went far 100 enough 6 on labor and environmental issues, while others simply 85are opposed to more open trade policies between the U.S. 4 and other countries. Most segments of the 70 agriculture industry were pleased with the USMCA agreement; however, some are very concerned with the 2 tariffs55 that remain in place on U.S. pork and dairy products 400 being exported to Mexico and Canada, in A M232J steel J import A S duties. O N D retaliationJ forFtheMSection The25next step for the USMCA agreement is to get J F M A M J J A S O N D legislative and administrative approval by all three countries. Most experts believe that approval of the agreement by the Canadian and Mexican Parliaments is highly likely. The biggest challenge to finalizing the 100 agreement may be garnering approval by the USMCA U.S. Congress. There are certain members of Congress 85 in both parties that tend to oppose most trade deals in general. 70 It is not clear if the Congressional changes following the 2018 mid-term elections will help or hurt 55 of the trade agreement. Most likely, arriving at passage final Congressional approval of the USMCA agreement 40 will require some bipartisan support in both Houses of Congress, which is not likely to occur until sometime 25 F session M A ofM Congress. J J A S O N D during theJ 2019 Kent Thiesse is farm management analyst and senior vice president, MinnStar Bank, Lake Crystal. 507-381-7960); kent.thiesse@minnstarbank.com

Agriculture/ Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2017 — 2018

8 6

$3.33

2 0

$2.89

Source: USDA

Soybean prices — southern Minnesota

(dollars per bushel)

— 2017 — 2018 8 20 100 16 6 85 $9.10 12 470 8 255 $7.79 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

— 2017 — 2018

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

$61.22

22 19 16

M M M

A M J A M J A M J

Milk prices

J J J

$55.67 A S O N D A S O N D A S O N D

Minimum prices, class 1 milk Dollars per hundredweight

— 2017 — 2018 25 22

$17.30

19 16 13 10

$15.54 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 018 • 27

13 10

Construction/Real Estate Residential building permits Mankato

Commercial building permits Mankato

- 2017 - 2018 (in thousands)

- 2016 - 2017 (in thousands)

$2,383

18000

$8,645

30000 25000

13500

20000 15000

9000

Source: City of Mankato

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

Existing home sales: Mankato region - 2017 - 2018 (in thousands)

Median home sale price: Mankato region - 2017 - 2018 (in thousands)

250

300

188

$179,500 $172,500

200

186

240

150

180

100

120

0 J

Source: Realtors Association of Southern Minnesota

— 2017 — 2018

- 2017 - 2018

4.5

4.0

3.5

3.9% M

10 N

Source: Freddie Mac

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4.9%

5.0

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

Housing starts: Mankato/North Mankato

5.5

Source: Realtor Association of Southern Minnesota

Interest Rates: 30-year fixed-rate mortgage

3.0

$2,354

5000

$840

10000

4500

Source: Cities of Mankato/North Mankato

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28 • DECEMBER 2018 • MN Valley Business

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Gas Prices 5

Gas prices-Mankato

— 2017 — 2018

54 43 $2.78

32 21 10 0

Gas prices-Minnesota

$2.24

$48.57

-5.6%

Ameriprise

$151.74

$129.80

-14.5%

Best Buy

$71.09

$73.23

+3.0%

Brookfield Property

$20.29

$19.14

-5.2%

Crown Cork & Seal

$48.86

$46.77

-4.3% +2.5%

Fastenal

$56.20

$55.13

-2.0%

General Mills

$43.21

$44.44

+2.8%

Itron

$58.24

$55.85

-4.1%

Johnson Outdoors

$81.71

$73.39

-10.2%

$211.81

$204.07

-3.7%

Target

$85.78

$87.60

-2.3%

U.S. Bancorp

$54.20

$52.93

-2.3%

Winland

$1.05

$1.06

-1.0%

Xcel

$48.88

$49.33

+1.0%

21 M

$20.29

$13.79

$2.35

Archer Daniels

Consolidated Comm. $13.45

$2.82

Percent change

Nov. 11

Oct. 9

— 2017 — 2018

Stocks of local interest

0Source: GasBuddy.com J F M A

C. Sankey

MN Valley Business • DECEMBER 018 • 29

Minnesota Business Updates

■

That was then, Bastian said. “We’ve arguably created the most successful airline in the globe. Our operations run like no airline has ever run in history. And the cool thing about all of that: We’re just getting started,” he told MPR.

■ Target’s roving cashiers Target shoppers can now check out anywhere in the retailer’s stores. In its latest move to compete with Amazon and Walmart, Target is equipping employees around its stores with handheld devices that can scan items and take credit card payments, MPR reports. The idea is to let people avoid check-out lines and get in and out of stores faster — especially during the busy holiday shopping season. During peak events like Black Friday, employees with handheld scanners were in the electronics and other busy departments.

■ Jostens sold for $1.3B Jostens, the Bloomingtonbased producer of class rings, yearbooks and other school and corporate memorabilia, has been sold by its parent company, Newell Brands, to the investment firm Platinum Equity for $1.3 billion. The deal is part of an effort by Newell to simplify its portfolio of businesses. The buyer, Platinum Equity, is the Los Angeles-based firm led by billionaire Tom Gores that has made more than 200 acquisitions and is currently making deals from its fourth global investment fund. The company has several investments in Minnesota, including the ownership of some sizable hotels in the Twin Cities, according to the Star Tribune. Jostens is known for its school products as a corporate incentives business whose clients include professional sports leagues. The company is the maker of Super Bowl

■ Northwest merger marked Delta Air Lines celebrated the 10th anniversary of its acquisition of Northwest Airlines with a party in a hangar at the Twin Cities airport. Atlanta-based Delta paid $2.6 billion for the airline long synonymous with Minnesota. Delta CEO Ed Bastian recalled there was a lot of concern and doubt about the merger, which came during the Great Recession — and much turmoil in the airline industry. Both Delta and Northwest had just come out of bankruptcy.

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major September Industry 2017 2018 Construction Manufacturing Retail Services Total*

92 104 35 90 321

Local non-farm jobs Percent change ‘17-’18

147 52 36 96 331

Construction 126000 126000 Manufacturing Retail 113000 Services 113000 Total*

2,580 1,330 780 3,022 7,712

2,712 987 832 2,577 7,108

126000

2100 1400

113000

700 100000

Minnesota Local non-farm jobs (in thousands)

Percent change ‘17-’18

8000 3500 3500 6000 2800 2800 4000 2100 2100

+5.1% -25.8% +6.7% -7.8% -7.8%

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

30 • DECEMBER 2018 • MN Valley Business

3500 2800

+59.8% -50.0% +2.9% +6.7% +3.1%

Minnesota initial unemployment claims September 2017 2018

128,910 130,900

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

- 2017 - 2018

Nine-county Mankato region

- 2017 - 2018 2,982 3,005

2000 1400 1400

700

700 0 J F M A M J J A S O N D 0 J F M A M J J A S O N D J F M A M J J A S O N D

200000 150000 100000 50000 0

rings. It had revenue of $768 million in 2017. Jostens started in Owatonna and it still has a sizable presence there and in Eagan.

■ ADM beats expectations Archer Daniels Midland (ADM) came out with quarterly earnings of $0.92 per share, beating estimates of $0.80 per share. This compares to earnings of $0.45 per share a year ago. This quarterly report represents an earnings surprise of 15 percent. Over the last four quarters, the company has surpassed consensus EPS estimates four times. 139000 ADM, which belongs to the Zacks Agriculture Operations industry, posted revenues of $15.80 billion for the quarter ended September 2018. That compares 126000 to year-ago revenues of $14.83 billion.

■ CHS profits overstated An employee’s “intentional misconduct” led CHS Inc. to appear to be more profitable than it was, possibly for as long as four years, the company said. The employee, who was fired after the misconduct was recently discovered, misvalued rail freight contracts at CHS, the giant agriculture co-op based in Inver Grove Heights. As a result, the company said it overstated its pretax profit by as much as $190 million over the past four fiscal years, or 12 percent of its $1.6 billion pretax profit in that time, the Star Tribune reports. Financial statements in those years “should no longer be relied upon” and will have to be restated, CHS told investors in a filing with the Securities and Exchange Commission this week. With revenue of nearly $32 billion, CHS just eclipsed 3M Co. in size last year and was the fifth-largest business in Minnesota after UnitedHealth Group, Cargill, Target and Best Buy. 139000 139000 126000 113000

100000

100000 J F

1400

J M

M J

J A

J S

1400 2000

A O

S N

O D

8000 6000

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

150000

89,367 68,323

100000 50000 0

150000

4000 1400

100000

700 2000

50000

0 0 J F JM

F M A M AJ FA M

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) 200000 150000

September

100000

0 F

200000

J M

F M A A M J

M J

J A

2017

2018

2.4% 59,043 1,452

2.0% 61,106 1,219

J S

A O

S N

O D

Unemployment rates Counties, state, nation County/area

- 2017 - 2018

200000

Unemployment rate Number of non-farm jobs 50000 50000 Number of unemployed

100000

2000 0 F F

Mankato/North Mankato Metropolitan statistical area

150000

3,627 2,851

4000

700 0 J 0 J

D 0

200000

Minnesota number of unemployed

- 2017 - 2018

Nine-county Mankato region

4000 2100

Employment/Unemployment

F M A A M J

Local number of unemployed 8000 3500 6000 2800

3500 8000 2800 6000 2100

3500

700

100000

2100

700

2100 113000

2800

1400

113000

2800

126000

3500

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

September 2017 September 2018 2.5% 2.6% 3.3% 3.0% 3.3% 2.3% 2.6% 2.9% 4.1% 2.8% 2.9% 4.1%

2.0% 2.2% 2.2% 2.1% 2.6% 1.8% 2.1% 2.5% 2.4% 2.2% 2.2% 3.6%

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

initial •unemployment MNMinnesota Valley Business DECEMBER 018 claims • 31

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Drug prices widen gap between have, have-not patients

By Linda A. Johnson | AP Medical Writer

or Bridgett Snelten, changing her health insurance meant enduring wild blood sugar swings, bouts of vomiting and weight gain. The Sandy, Utah mother of two young girls has diabetes and has had to change health insurance plans three years in a row. Twice, new insurers wouldn’t cover Trulicity, a once-a-week injected diabetes medicine she’d been taking that helped control her blood sugar tightly. Instead, they made her return to an inexpensive, twice-a-day injected diabetes drug she and her doctor knew didn’t work for her. Each time, blood sugar plunges caused the shakes, vomiting and other symptoms until her doctor finally persuaded the new insurer to approve Trulicity, which retails for more than $700 per month. “It was almost a whole year of hell just trying to get on the right medication” the last time, recalls Snelten, 43. “Who are they to say more than my doctor what’s right for me?” More and more, patients like Snelten are being caught up in efforts to rein in the cost of health care efforts employers and patients desperately want to succeed. But the strategies also can restrict access to the newest, most expensive drugs even for those who need them. “We are in a sense entering a two-tiered system because there are individuals who can make it happen and just write a check” for a hefty drug copayment, says cardiologist Dr. Elizabeth Klodas in Edina, Minnesota. “Others are not able.” Some of the insurance policy provisions have long been used, but they are becoming more common, including: plans, which are used by about 20 million implement step therapy provisions. Chance that the doctor will prescribe it and the

32 • DECEMBER 2018 • MN Valley Business

patient will get it,” says former American College of Cardiology president Dr. Mary Norine Walsh, head of advanced heart failure treatment at St. Vincent Heart Center in Indianapolis. Nearly 80 percent of family doctors and specialists surveyed by the American Medical Association last year said patients “often” or “sometimes” abandon their recommended treatment if their insurer won’t cover it. Ninety-two percent said the red tape associated with getting drugs covered harms patients’ health. Dr. Stephen Kopecky, a cardiologist at the Mayo Clinic in Rochester, Minnesota, said one recent appeal for approval for a type of new cholesterol drug went on so long that his patient had to have a stent implanted in ablood vessel before she finally got approval. He thinks the drug could have prevented the procedure. “It sometimes takes weeks, if not months, of submitting prescriptions, rewriting prescriptions, appealing, rebuttals,” he says. The reason: Generic cholesterol drugs that work well for most people cost just pennies a day. The newer drugs, Repatha and Praluent, can retail for more than $14,000 a year. “I understand insurers balking,” says Klodas. But even when they approve expensive drugs, copayments can be so high, “Patients say, ‘I can’t do that.’” That can leave doctors with a tricky call. “There are situations where we have to change treatment plans because of cost,” says Dr. Yousuf Zafar, a gastrointestinal cancer specialist at the Duke Cancer Institute in North Carolina. “I’ve had a handful of patients where cost is so overwhelming they opted MV for no treatment.”

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Health savings account:

a stealth retirement savings vehicle By Erin Ar vedlund | The Philadelphia Inquirer

e’re been hearing a lot about health savings accounts –– a sort of stealth retirement savings vehicle from which investors can withdraw money tax-free for medical expenses. HSAs are worth a look, although they’re not for everyone. If you’re covered by a qualified high-deductible health plan, you can contribute pre-tax income to an employer-sponsored health savings account or make deductible contributions to an HSA you set up through a brokerage firm. Qualified plans have an annual deductible of at least $1,350 for an individual or $2,700 for a family, according to Healthcare.gov. A health savings account is an investment account, which can bear interest or be invested in the markets, similar to an IRA. Here’s the upside: Withdrawals for qualified medical expenses are tax-free, and you can carry over a balance from year to year. The IRS in March 2018 issued guidance for 2018 HSA contributions of $3,450 for individuals and $6,900 for those with family coverage ($7,900 for HSA owners age 55 or older), according to the Isdaner & Co. accounting firm in Bala Cynwyd, Pa. One drawback: If you’re enrolled in Medicare, you can’t contribute to an HSA. However, you can create one before you enroll in Medicare and still take taxfree money out for qualified medical expenses. IRA adviser and tax expert Sarah Brenner created a helpful list of all the things you can pay for using money withdrawn tax-free from your HSA: –– Qualified medical expenses, including doctor and hospital bills, medical supplies, prescriptions, co-

payments, dental care, vision services, and chiropractic expenses. –– Your spouse or child’s medical expenses, even if they are not covered by your high-deductible healthinsurance plan. Even after your death, your spouse can use the money tax-free for qualified expenses. –– Medical expenses in a previous year, as long as expenses were incurred after you established your HSA. That means you do not have to withdraw money from an HSA every time you have a medical expense. You can pay out of pocket, and let your account grow, or reimburse yourself in a later tax year. –– Qualified medical expenses incurred even after you no longer have a high-deductible health plan and no longer contribute to your HSA. –– Certain Medicare insurance premiums after you turn 65, but not Medigap premiums. Not everyone is a fan of HSAs, including investor Lisa Hastings. “I personally think HSAs are not worth the bother unless someone is so healthy and has so much extra money that all they really need is catastrophic health insurance,” she said. “People who hawk these often forget to say that HSA plans only come with very highdeductible health insurance. They are fine for young people without health issues, but for people who actually go to the doctor or have regular medications, they are a waste of money,” she said. “The idea (of HSAs) is that you don’t pay for insurance you don’t need and can save the rest taxfree, but I’d rather pay less for my health costs now and put the money from a lower deductible and health expenses into an investment account.” MV

MN Valley Business • DECEMBER 018 • 33

INTERCITY LEADERSHIP VISIT Fayetteville, Arkansas | October 10-12, 2018

n early October, a delegation of more than 70 business and community leaders from Greater Mankato traveled to Fayetteville, Arkansas as part of the fifth InterCity Leadership Visit (ICLV). While there, the group, (made up of individuals from the private, community-based, nonprofit and public sectors) studied innovative ideas and best practices that may be brought back and adapted to the Greater Mankato region. HISTORY OF THE GREATER MANKATO LEADERSHIP DELEGATION The first delegation from Greater Mankato gathered in 2005 for an InterCity Leadership Visit (ICLV) to Bellingham, WA, which gave 73 community leaders great ideas to begin our Envision 2020 (E2020) plan. Since then, trips were made to Fort Collins, CO; Charlottesville, VA; and Columbia, MO. In addition, two retreats were held locally. Each of these trips have generated ideas to move Greater Mankato forward and strengthen the relationships and partnerships among our top leaders. GOALS OF THIS INTERCITY LEADERSHIP VISIT • Affordable housing • Greater Mankato as a destination for visiting, working and living • Talent Development, Attraction and Retention • Regional recreation WHY WE PICKED FAYETTEVILLE Fayetteville and Mankato share a number of important features: a strong sense of community safety to raise a family, quality education, vibrant economies with low unemployment and future oriented community leaders. There are also some striking differences: Fayetteville is twice the population and the immediate region five times the size and continues to grow at a significant rate (30+ individuals move to the area each day). Several national corporate powerhouses, headquarted and committed to the vitality of Northwest Arkansas, populate the region. The University of Arkansas is an R1 research university. The ICLV delegation quickly realized that Greater Mankato can learn and grow from both the similarities and differences.

2018 ICLV Delegates

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BUSINESS AWARDS

and

HALL of FAME

Greater Mankato Business Awards & Hall of Fame was held Tuesday, November 13 at Verizon Center. This is a time when Greater Mankato Growth, Visit Mankato, City Center Partnership and GreenSeam honor outstanding businesses, professionals and organizations within the Greater Mankato community and GreenSeam region. Congratulations to all of this year’s award recipients. greatermankato.com/hall-fame

GREATER MANKATO GROWTH AWARDS Hall of Fame Distinguished Business Award Entrepreneurial Business Brian Fazio Business Education Partnership Award

Hap Halligan Leadership Award Young Professional of the Year

LIV Aveda Salon & Spa & Massad Group Neubau Holdings True Real Estate Education Partners: Children’s Museum of Southern Minnesota, South Central College Business Partners: EI Microcircuits, Dotson Iron Castings, Jones Metal, Big Ideas Betty Ouren, 2003-04 Jaci Sprague

VISIT MANKATO AWARDS Bring It Home Award Distinguished Business Award

Minneopa State Park/Bison Preserve Jack McGowans Farm

CITY CENTER PARTNERSHIP AWARDS Renovation $500,000 - $1,000,000 Sustainability Downtown Detail Creative Placemaking CityArt “People’s Choice” Award

Flask, by Mankato Independent Originals Mankato Place Mall Twin Rivers Council for the Arts – Common Grounds Parklet The Hub Food Park “New Life” by Janesville, Waldorf, Pemberton (JWP) High School Advanced Metal Sculpture Class

GREENSEAM AWARDS Seamed in Success Growing in the GreenSeam

B.E.S.T. of Waseca County-Waseca Vision 2030 Aker — Orlando Saez and Todd Golly

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October Business After Hours 150th Sesquicentennial Celebration

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Photo Credit: Minnesota 93

Business After and Business Before Hours gives representatives from Greater Mankato Growth member businesses at the Engaged Level or higher an opportunity to get together with one another to exchange ideas and learn about each otherâ&#x20AC;&#x2122;s businesses. For more information on these and other member events, visit greatermankato.com/events.

Now Accepting 2018 Board Applications The Nominating Committee for Greater Mankato Growth, Inc. is currently seeking applicants (Engaged Member level or higher) to fill seats on all three boards, beginning March of 2019. Deadline for applications is 5 pm on December 28. To apply visit greatermankato.com/board

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GREATER MANKATO ity Center Mankato celebrated Maverick hockey on October 27 with the annual Hockey Night in GROWTH? the City Center event. Civic Center Plaza was filled with music by the Jeremy Poland Band and the th

EXPOSURE Maverick Machine, food, games and family-friendly fun. The night was capped off by a 3-1 victory (and Build your Brand; series sweep) over Alaska. NETWORKING TW WORKING ORKING grow your business. Stand out and get It’s not just st WHO WHO you ou To find out how you can support Hockey Night in 2019, contact noticed! know, it’s who knows k info@citycentermankato.com or 507.388.1062. YOU. Networking IS Powerful.

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