Issue 1: MHK Business News - Q1/2019

2019 • Quarter one

STARTUPS

Biotech Disruption MS Biotec’s “Dynamic Duo” Chases a Probiotic Holy Grail

ECONOMICS

CID Aims to Bolster Manhattan Town Center

REGION

Imagining Regionalism with Christy Rodriguez

FINANCE

Old Money: Historic Tax Credits Explained

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Managing Editor Josh Brewer Photo Director Josh Hicks Copy Editor Ashley Phillips Art Director Jordan Seirer Production Manager Kehoulani Krimbill Contributing Writers Josh Brewer Gavin Colton Josh Hicks Jeff Koenig Derek Larson Mike Matson Sarah Siders Brandon Savage Contributing Photographers Doug Barrett Josh Hicks Blade Mages Wrenn Pacheco Luke Townsend Illustrator Darcie Riordan Publisher Blade Mages For subscriptions, advertising information or a current media kit, please contact: editor@mhk.business MHK Business News 103 N. 3rd Street Manhattan, KS 66502 (785) 320-6621

MHK Business News is published quarterly (February, May, August, November) by 502 Media Group, LLC., 103 N. 3rd Street, Manhattan, KS 66502. MHK Business News considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Although persons and companies mentioned herein are believed to be reputable, neither 502 Media Group, LLC, nor any of its employees or agents accept any responsibility whatsoever for their activities. MHK Business News is printed in the USA and all rights are reserved. © 2019 by 502 Media Group, LLC. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Views and opinions expressed by contributing writers do not necessarily reflect the views and opinions of the publisher.

A Note From the Publisher When I first came to Manhattan, I saw the Little Apple as a mere stepping stone on a path to the dream job in the perfect city. Instead, what I saw as a stepping stone was really an amazing foundation on which I could build a life and a business that I never would have imagined possible.

Like the countless others who come and go through Manhattan, it was hard for me to understand what makes our community a better place to call home, to grow a career, to start a business, and to raise a family. Early on, I was fortunate to have some amazing people point me down unconsidered roads. With guidance and support, I found my path, right here in the Little Apple—and I want others to discover the same great opportunities that I did.

In a time when the concept of placemaking is ubiquitous in community planning initiatives and as the war for workforce has expanded to the entire country, there should be no discovery period required to determine a community’s caliber. A specific energy and optimism should be palpable, even from afar.

In the 12 years I’ve been in Manhattan, I have felt that energy grow.

Lately, I have witnessed an optimism and excitement for the future that I did not see, or perhaps appreciate, when I first settled into Manhattan. I have benefited from this momentum, and I believe it is now my turn to help others discover the same community energy that I found.

I believe that this publication can play a role in building this momentum. As a business community, we must join together to solve the problems of today and create opportunities for tomorrow. By sharing stories of enterprise and entrepreneurs, we hope to increase the number of business, economic development, and regionalism conversations while adding new voices and perspectives.

I hope you enjoy our thoughts and ideas. I hope you feel compelled, as I do, to continue these conversations within and beyond your professional networks. Most of all, I hope you will enjoy the debut issue of MHK Business News - the magazine, as much as the amazing team of writers, photographers, designers and I have enjoyed crafting it.

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In This Issue 16

Biotech Disruption One Wamego-based biotechnology company tries to beat global industry to the largest prize in the ruminant science field with scientist Dr. Celine Aperce and innovative industrial designer Justin Harpe.

28 Imagining Regionalisim with Christy Rodriguez With Christy Rodriguez at the helm of Region Reimagined, the Manhattan business community envisions the future of Greater Manhattan by recognizing lessons from our past.

36 Hop Flop? A Pint Half Full.

The closure of Tallgrass Brewing Company raises questions about the real ROI and sustainability of economic development incentives.

Don’t Miss

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1 Million Cups Celebrates One Year in MHK

CID Aims to Bolster Manhattan Town Center

Old Money: Historic Tax Credits Explained

A Special Thanks to Our Editorial Advisory Committee Trent Armbrust Lyle Butler Kent Glasscock Cheryl Grice Vern Henricks Chad Jackson Donna Logback Mike Matson Lisa Noble Gina Scroggs Wayne Sloan Daryn Soldan Mary Vanier Tim Weddle Jerrod Westfahl mhk business news

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LOCAL ENTREPRENEUR CHRIS ZACHARY PRESENTS TO 1MC ATTENDEES.

Photos and Article by Josh Hicks

SPOTLIGHT

1 Million Cups MHK Celebrates One Year of Connecting Local Entrepreneurs Manhattan’s 1 Million Cups chapter aims to empower, educate and caffeinate a growing entrepreneurial movement.

People say that we’re losing the art of listening and that the distractions of mobile devices, social media, and overloaded calendars are to blame. However, there is an ever-growing community of Manhattan entrepreneurs of all ages and industries who purposefully show up on the first Wednesday of each month to listen to the business ideas and dreams of others.

The national movement is called 1 Million Cups (1MC), and in November, Manhattan’s chapter celebrated one year of connecting and accelerating local 4

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entrepreneurs through business presentations, spontaneous networking, and gallons of coffee. Since the fall of 2017, the monthly meeting regularly attracts 80 to 90 attendees.

Ben Sigle, co-owner of Manhattan Running Company, presented their new online shopping and local delivery service at 1 Million Cups in June. “The relationship aspect is why I continually attend. I have attended every single one, and I will always continue to go to see regular faces and meet new people. I try to insert myself in each presentation, take

what they’re saying and implement it in what I’m doing to see if it works.”

In 2012, the Ewing Marion Kauffman Foundation of Kansas City created 1 Million Cups with a mission to learn about local entrepreneurs and what they were creating over coffee each week.

Like Sigle, Trent Armbrust, director of economic development for the Manhattan Area Chamber of Commerce, is a regular attendee. “1 Million Cups has allowed me to see a part of Manhattan that is grassroots, innovative and exciting. The individuals that have presented

and their interaction with the audience reinforces the significant relationship between entrepreneurial success and community.”

The format is consistent and simple.

Two presenters from area businesses, typically start-ups, are given six minutes each to share their story, explain their business model, and discuss their current business challenges.

Another regular attendee, Tim Weddle, a financial advisor for Keating & Associates, said, “The unprecedented challenges facing small business today require a new model of collaboration from the entrepreneurial community to improve the odds of startup success. And that’s exactly where 1MC comes in.”

1 Million Cups Manhattan is not branded by any other organization, even though organizers for 1MC Manhattan are involved with The Fellow Coworking, 502 - a strategic marketing agency, the Manhattan Area Chamber of Commerce, and other local businesses.

While the one-hour event has light

programming, organizers treat the time spent together not just as an educational experience, but an opportunity to build a community of people who can work together to make Manhattan and beyond a better place through better business.

The Alms Group, which recently opened their innovative real estate and philanthropy brokerage in Manhattan, took the opportunity to present in March of last year. Cameron Ward, broker and partner of The Alms Group, said, “Presenting at 1 Million Cups allowed me to share my story with dozens of local entrepreneurs that took a genuine interest in my company. The conversations and business opportunities that followed closely mirror the reason I chose to go into business in Manhattan; our community is a vibrant, hardworking group of business owners that engage with and give priority to supporting others and making Manhattan a better place.”

The development of growth-focused business events and entrepreneurial communities, such as 1 Million Cups, are

crucial and exciting to have in Manhattan because of the collective knowledge sharing and resources to grow our local small businesses.

Trevor McKeeman, CEO of HiddenGenius, an online community-building tool, and an inaugural presenter at 1 Million Cups Manhattan couldn’t agree more. “For startup founders, one of the most valuable environments is to be around other founders. The chance to share notes, to talk about similar challenges, and receive unvarnished feedback is an amazing resource. Years from now, we’ll look back and see how participants’ efforts changed the face of a community and, possibly, how some of their featured startups improved the world,” said McKeeman.  1 Million Cups Manhattan is held in The Wareham Opera House on the first Wednesday of every month. Josh Hicks is a co-owner of The Fellow Coworking Space and a founding organizer of 1 Million Cups Manhattan. mhk business news

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Article by Brandon Savage Photography by Doug Barrett

EDUCATION

What Chicken Sandwiches Teach Us About Forecasting Chick-fil-A’s success at K-State football games hinges on accurate forecasting of chicken sandwich sales.

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Every year, The Walt Disney Company employs at least 70 field agents to survey over a million park and hotel guests, employees, and travel industry professionals. That data is transferred to a team of 35 analysts who use it to predict park attendance, hotel bookings, how long attendees will wait for a particular ride, and how many times they will ride it over their stay. Using this approach, Disney has been able to produce a five-year attendance forecast with a low, 5 percent average error and has been able to produce annual reports with a 0 to 3 percent error, according to Operations Management, Sustainability and Supply Chain Management.

Forecasting is the art and science of predicting events. In a business setting, an accurate forecast can be the difference between making a profit or taking a loss. Baked into larger business operations, forecasting can be overwhelming for

many small business owners who struggle to know how a forecasting model can benefit and integrate into their business.

Local Chick-fil-A owner, Dave Hamel, faced a forecasting challenge in August of 2018 when Kansas State University Athletics announced a partnership to sell Chick-fil-A’s famous chicken sandwiches at all 2018 home football games.

It was a huge opportunity, but leading up to the first game, he wondered exactly how great the demand would be.

Putting Together a Game Plan Although the Chick-fil-A corporate office provides software to generate in-store forecasts to anticipate daily sales

volume and assist with supply/food orders, it did not provide a way to forecast how many sandwiches he would likely sell in a stadium of 50,000 fans on opening day. The sandwiches would need to be cooked and prepared in the restaurant and then transported in heated containers to Bill Snyder Family Stadium for food safety and quality purposes. Hamel’s own game clock began ticking at that point, because each sandwich has a finite shelf life to be sold, after which it would need to be discarded.

An incorrect forecast in either direction would result in an undesirable outcome: produce too few sandwiches, and Hamel risked generating unhappy fans on the first day; produce too many sandwiches, and Hamel would lose money in wasted labor and sandwiches. In addition to an overall estimate of sandwiches to be sold, Hamel wanted a more mhk business news

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granular forecast to determine how many sandwiches would be needed throughout the five-hour window, starting two hours before kickoff when the stadium gates officially opened to fans. Would more sandwiches be sold in the 30 minutes leading up to kickoff or during the 20-minute halftime? The answer would guide the size and frequency of deliveries from the restaurant.

After consulting with K-State athletics, the food service company Sodexo, which runs concessions in the stadium, and other Chick-fil-A franchise owners who had served food at Big 12 football games, Hamel received additional guidance on how to generate a ballpark number for first-day sales. The input from these resources outlined multiple factors that would influence sales volume on any given day, including: Start time of the game—morning, afternoon, vs. evening Weather/temperature —cooler games would result in more sales of hot sandwiches Number and location of concession booths Opponent and game result—blowout vs. close game

A Fumble Against South Dakota With general guidance, but no concrete data, Hamel began creating estimates for the first football game against South Dakota. Attendance for the 6 p.m. kickoff was expected to be high, and initial forecasts for the day called for cool weather and a slight chance of rain. With a good amount of publicity surrounding the partnership between K-State and Chick-fil-A, and a need to avoid a sandwich sell out, Hamel set a very aggressive goal: three times the sandwich sales volume of a typical Saturday.

Using that high goal as a starting point, Hamel coordinated with his leadership team, consisting of Ashley Napier, director of catering/marketing, and Jack Fisher, director of team development, to create a detailed schedule for the 72-hours leading up to and through the football game. It outlined when food shipments needed to arrive, when frozen chicken would need to be placed in thawing cabinets, how many employees would be needed to filet, bread, and cook 8

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the chicken, and the delivery time of cooked sandwiches to the stadium. By breaking the overall goal into 10 minute segments, with projected surges in demand right before the kickoff and during halftime, Hamel was able to predict staffing needs for point-of-sale registers and additional behindthe-counter personnel.

In an effort to improve the fan experience, and to capture more discrete sales data during the game, Hamel purchased Square™ point-of-sale registers and requested K-State install hardwired internet to the two Chick-fil-A booth locations in the stadium. K-State Athletics quickly fulfilled the request on short notice, anxious to see if the technology could translate to other concession booths.

When game day arrived, Hamel’s team was prepared to deliver on his ambitious goal, three Saturday’s worth of sales, crammed into a single into a single pregame and four quarters. It would require a Herculean effort, but as the stadium parking lots filled with tailgating fans early in the day, cooling storm clouds went north and the stadium temperature continued to rise. Without the expected reprieve, the heat index soared to over 100 degrees.

When the gates opened, an expected rush of fans anxious for a Chick-fil-A sandwich didn’t materialize. Many fans ordered cold water and soda in an effort to combat the oppressive heat, but within the first 30 minutes, it was clear that sandwich sales were far below the initial forecast. After

an hour-and-a-half, sales were trending to less than a third of the initial target. Hamel slowed down the production at the restaurant but was optimistic that halftime sales could possibly bounce back to projected levels.

However, just as the Wildcats were sluggish in a slow start that resulted in a 27-24 victory, foot traffic to the booth was equally sluggish when fans, who had spent hours tailgating in the hot weather, opted out of a “fresh and hot” sandwich. The halftime “rush” had about as much urgency as the Wildcat defensive line that day, and final sandwich sales finished at less than a third of the original goal. Even though the production of sandwiches had been slowed, Hamel’s staff circled the stadium during the fourth quarter, handing out dozens of free sandwiches to security and parking staff, and hundreds of sandwiches remained, most to be thrown away.

Hamel, disappointed, took solace in what he had learned from the launch: first, his team had successfully demonstrated their capacity and ability to increase sandwich production to handle the original sales goal; and second, he now had minute-by-minute data of the night’s sales that would provide a baseline for a more accurate forecast. This would be needed the following week when the team played host to SEC powerhouse Mississippi State. “I paid some expensive tuition tonight,” Hamel said, “but I believe the education will be worth it.”

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Mid-game Adjustments Pave the Way for Better Results Hamel, a former K-State football player, is no stranger to halftime adjustments. And despite a disappointing first act, he knew he had six more home games to refine his results.

The Mississippi State game would be a morning game, with kickoff scheduled for 11 a.m., giving fans less time for tailgating and placing lunchtime right after the first quarter.

After speaking to other concessionaires, he knew that sales would be higher for this game. On the morning of the game, a cold front passed through Manhattan, and the game-time temperature was expected to be only 60 degrees — perfect weather for a nice and hot chicken sandwich!

With a revised goal and minute-by-minute forecast based on the previous game’s data, Hamel’s efforts and education positioned himself for dramatically different results. By comparing real-time sales data with his forecast model every 15 minutes, he was able to see how far ahead or behind he was from his overall forecast and continually recalculate a projected final sales total for the game, which allowed him to adjust sandwich production at the restaurant to align with the real-time, end-game estimate, helping him minimize wasted sandwiches.

The earlier start time and cooler weather resulted in nearly double the sales of sandwiches, a result that left a big

smile on Hamel’s face as well as his team’s. The frustration from the previous week had melted away. Looking forward, Hamel was excited about a third straight weekend with a home game, this time against the University of Texas at San Antonio (UTSA).

Trusting the Game Plan The UTSA game, with a 3 p.m. kickoff, presented an additional forecasting challenge. The weather was expected to be in the ‘80’s, neither too hot nor too cold. Hamel wondered whether sales would be slow like the first game or brisk like the previous week. Hamel received mixed feedback from his various sources, with some saying that afternoon games were better than evening games and others saying that they resulted in much lower sales. In response, he set a fairly conservative goal. As the gates opened that day, fans poured into the stadium. The first hour resulted in a stream of customers that was consistent but dramatically slower pace than the previous two games. After the first hour, the real-time forecast was estimating an end-game result of barely a third of the original forecast.

Hamel, an optimist by nature, initially resisted the story the data was telling. It didn’t seem possible that sales could be that low for this game. The weather was great, the football

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I paid some expensive tuition tonight, but I believe the education will be worth it. team had jumped out to an early lead—on the way to a 41-17 victory, and the stands were filled with excitement and energy. Rather than slow down production to match the dynamic forecast, he instructed his team to stay the course and continue cooking sandwiches to stay on track with the original forecast. He assumed that things would pick up before halftime.

As the game progressed, the forecast continued to slump.

As halftime approached, the data showed the final sales total would be well below a third of the original forecast. Sandwiches intended for first and second quarter sales remained, and while still good to sell at halftime, an additional batch of several hundred sandwiches was already on its way, expected to arrive at the stadium within minutes.

When the second half concluded, Hamel and his team had several hundred remaining sandwiches once again. Chickfil-A employees circled the stadium, handing out sandwiches to stadium staff members, and extra sandwiches were

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dropped off at the Riley County Police Department and fire stations around Manhattan.

Although disappointing, Hamel realized that the night’s results were markedly different from the first game. The data, combined with the forecast, had given him an early warning before a single down of football was played. However, the data’s story was upstaged by other qualitative signals, which proved to be misleading, and eventually, quite wrong.

Two weeks later, with the Texas Longhorns and cooler temperatures in town, Hamel made minor adjustments to his production levels to ensure they stayed aligned with the dynamic forecast. Although sales were modest due to a 2:30 p.m. kickoff, wasted sandwiches were minimal. Despite a 1914 loss, the day was profitable.

Hamel is confident that armed with solid forecast data, a real-time point-of-sale system, and a smart, friendly and hardworking team, he will be able to replicate his successful dynamic forecasting for the 2019 season.  Brandon W. Savage provides customer experience, operations, technology, and management strategy consulting to companies throughout the Flint Hills area. He also is an instructor of strategy and operations at the K-State College of Business Administration. He and his wife, Cheryl, live in Manhattan with their eight children. Find him on Twitter @thecxpro.

Question of the quarter

THOUGHTS AROUND TOWN

Rebecca Robinson Director of Economic Development, Kansas State University Institute for Commercialization KnowledgeBased Economic Development

Brandon W. Kliewer Assistant Professor, Staley School of Leadership Studies Kansas State University

Jordan Kiehl Student Body President, Student Governing Association

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What Change Would Move Manhattan Forward Culturally and Economically?

Manhattan’s greatest asset is its people and the future of our community will be determined by the young people who choose to reside in it. Companies’ greatest asset is their employees, and communities rich with talent attract these companies. Not only does young talent want a thriving job market and affordable housing, they want amenities like parks and hiking trails, locally owned restaurants and shops, walkability, ethnic diversity, and quality schools.

Don’t believe me? Look at some of the top metros winning the war for skilled talent: Bend, Oregon; Bozeman, Montana; Austin,

Texas; Denver and Fort Collins, Colorado; San Francisco, California. Each of these towns has a dynamic work, live and play environment.

To move Manhattan forward, we must be aggressive in creating a place that the next generation of talent will choose as their home.

Manhattan has a lot going for it, but our destiny isn’t written. We need vision, strategies, and resources to build a community that’s attractive to the best and brightest. How to do it? Start by asking your intern.

The circumstances that enable rural collegetowns to be competitive have changed dramatically in a short period of time.

Manhattan has an opportunity to invest in physical and cultural infrastructure that will bring energy to industry, Kansas State University, and the business districts. To realize this potential, what it means to be from and live in this place--Manhattan, Kansas--needs

to be reimagined in order to attract and retain top talent to the region. The economic, cultural, social, and political conditions need to be forward-looking to anticipate the conditions that can support diverse ideas, life choices, and people. Recognizing and proactively responding to this global reality will ensure the vibrancy of the region 10, 25, 50, and 100 years from now.

For many, Manhattan is either a home or merely a place to go to school. As a first-year student, the extent of Manhattan for me was campus and my walk to class. The only exception was Aggieville, which I think of as both a part of the Manhattan community and as a cornerstone for campus life. Aggieville is a place that brings together all facets of the Manhattan community. Transforming Moro Street, which

runs through Aggieville, into a pedestrian mall would move Manhattan forward by continuing and enhancing relationships between K-State, community members, and Fort Riley residents.

This change would increase opportunities to make the city feel even more like home through events and activities for all residents, both temporary and permanent.

2019 • Quarter one

Jennifer “J.J.” Kuntz General Manager, Bluemont Hotel

Lonnie Baker CEO, Meadowlark

Jerred McKee Commissioner, City of Manhattan

Manhattan has been extremely fortunate to maintain a level of steady growth and change over the last 20 years when other communities have been suffering. We are, however, on the road to major change as a community with NBAF coming to reality. It is imperative we look at infrastructure and quality of life items which will attract new talent while encouraging young graduates to establish roots here.

Transportation, entertainment, recreation, childcare, housing, elementary and secondary education, and healthcare must be strong.

Our community also needs to elevate our ability to listen to and encourage our youth

to share their opinions. We should seek out underrepresented groups within the community to encourage volunteer and leadership roles.

Business success will be best accomplished when we think about inclusivity. Manhattan is uniquely blessed with a highly educated diverse population because of higher education entities like K-State, and nearby Fort Riley.

Let’s embrace the vibrant elements of our quaint college town. The average visitor comes back to our community 11 times a year. When we leverage our strengths, invite change, and represent all those we serve, we will propel what we want to see for Manhattan’s future.

Being born and raised in Kansas, I believe there is no place like the Midwest to live and raise a family. That said, in Manhattan, we have not been successful at attracting new residents because recruitment to our region has proven difficult. With a 2.5 percent unemployment rate, it is already challenging to fill the critical roles across our community.

New graduates, young professionals, and people across the nation choose where they want to live based on the quality of place, and once that choice is made, they look for a job

opportunity within that location. Important factors in choosing a place to build your life include finding a place with diversity of life. Communities with jobs, great schools, recreational opportunities, and an outlet for the arts rise to the top of the list.

I am pleased to see the regional collaboration that is already occurring with Region Reimagined. The Manhattan area has many great people who are coming together to ensure that our region is the place where people want to build careers, raise families, and live life.

I would really like to see a more diligent and purposeful focus on providing suitable housing for all Manhattan citizens and have been working towards that end. Additionally, in order to solve the workforce issues we have in Manhattan, there are two things which we need to focus on: The first is to create a city with the quality of life so that people want to live here. We are making large investments in this area through several initiatives – think things like the recreation and trails sales tax and the recent approval of the school district bond proposal.

The second has to be a focus on ensuring that

quality affordable housing is available. This is something the city has yet to put much energy behind. It would be hard to disagree that the amount of housing available for low-income citizens is lacking, but another problem is housing for young families that we are trying to retain and attract to come here. I work with several people who bought homes in the surrounding areas because they could not find something of decent quality in their price range or the special taxes priced them out of the property. These are problems that the city should solve.

The conversation never stops at www.MHK.business

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MS Biotec’s “Dynamic Duo” Chases a Probiotic Holy Grail Article by Josh Brewer

Photography by Josh Hicks

One Wamego-based biotechnology company tries to beat global industry to the largest prize in the ruminant science field with scientist Dr. Celine Aperce and innovative industrial designer Justin Harpe.

Driving on Highway 24 into Wamego, you might drive right past MS Biotec’s nondescript metal buildings behind the Pizza Hut. Inside however, is an impressive, world-class facility with mixing, sterilizing, and packaging systems custom-fabricated by Director of Production Operations Justin Harpe and a research and quality assurance laboratory under the supervision of Dr. Celine Aperce. Since launching Lactipro advance®, a liquid solution of Megasphaera elsdenii in April 2015, Dr. Aperce’s team has been in pursuit of a next generation product that many in the industry call “the holy grail of Megasphaera probiotics.” The world’s largest biotechnology and agricultural science companies are competing for this holy grail, but Aaron Hund, MS Biotec’s director of marketing, believes that his team is the one that’s “poised to grow.”

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Seek Collaborative Solution MS Biotec produces and researches direct-fed microbials, commonly referred to as probiotics. Megasphaera probiotics are valuable in the dairy and beef cattle industries because they consume lactic acid. When lactic acid accumulates in a cow’s rumen, it limits feed efficiency and increases the transition time from forage-based diets to higher energy feeds.

From a feedlot or dairy manager’s point of view, lactic acid decreases profitability and causes the herd gastric distress, and in severe cases, death. Megasphaera bacteria are also oxygen sensitive, meaning that they’re difficult to produce, distribute, and administer under normal conditions. This is one of the main reasons why larger companies haven’t been able to produce a solution to-date and why MS Biotec distributes Lactipro advance® in liquid form with a 14-day shelf life.

The probiotic strain that MS Biotec distributes was first developed and commercialized in the early 2000s by the South African company, Megastarter Biotech. At the time, Leander van der Walt, MS Biotec’s CEO, was Megastarter Biotech’s managing director. When Megastarter Biotech was acquired by Kemira Phosphates, a global distributor of animal feed phosphates, van der Walt served as its general manager from 2002 until 2009 when the company decided to divest from Megasphaera research and development. At that time, a Kansas State University graduate student introduced van der Walt to Dr. Jim Drouillard, who serves as the director of the Beef Cattle Research Center at K-State. Dr. Drouillard immediately recognized that van der Walt’s probiotic technology could play a big role in combating ruminal acidosis if approved by the Food and Drug Administration (FDA).

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Ruminal acidosis is one of the most common and costly challenges faced by beef and dairy producers.

After a thorough FDA review, the cattle industry agreed with Dr. Drouillard. Thanks to the work of the Kansas Bioscience Authority, which was disbanded in 2016, van der Walt was able to connect to industry experts, investors from the cattle industry, and public university researchers such as Dr. Drouillard and his team. “The Kansas Bioscience Authority was active in supporting research at public universities with revenue from bio-based industries, resulting in a number of industries being brought [to Manhattan] at a pivotal time,” Drouillard explains. This research foundation remains present in all aspects of MS Biotec, from quality assurance to sales and marketing.

As a third-generation rancher, Cale Wiehe recognized the potential benefits of a probiotic solution from the moment he started as MS Biotec’s first sales professional. “What we’re offering is a tide change in the feedlot time-frame.

With Lactipro advance®, we cut a 21 day transition period to 7 days, which ultimately increases the profitability of the feedlot and reduces potential stress on animals.” When he worked as a one-man sales department, Cale traveled to feedlots throughout the Great Plains to present Dr. Drouillard’s and Dr. Aperce’s research to feedlot managers and owners, and nutritionists. At first, most were skeptical, and many still are, but Wiehe sees that as an advantage as he trains his growing sales team.

“A climate of risk has been to our advantage because it forces us to prove that our solution is worth the investment.

At first, a feedlot manager could write me off, but I kept coming back and they realized this guy and MS Biotec aren’t 18

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going away. They recognize we have solid research, and it warrants having their nutritionist take a look at it. That’s why our sales team must present research that can convince a Ph.D. that our product is not a risk.”

While Cale’s sales force often speaks of Dr. Aperce’s work in the research and quality assurance labs, it’s Dr. Aperce’s counterpart, Justin Harpe, who is the company’s secret weapon. An electrician by training, Harpe designed and built MS Biotec’s primary production line by hand seven years ago and now serves as the company’s director of production operations. When describing the start of production, Dr. Drouillard commented, “There wasn’t a book or a guide telling you how to do this. Everything they have Justin built from the ground up. If you asked 100 people, 99 would have told you it wasn’t possible.”

The coordinated work of Dr. Aperce and Harpe, who the team calls their dynamic duo, will be necessary as MS Biotec closes in on an in-feed solution with extended shelf life—the holy grail. With the recent purchase of additional production space adjacent to the existing production line, many expect that big news could soon come from the company. While Dr. Drouillard doesn’t speculate on future developments, he emphasizes the need for alternatives to existing feedlot technologies, such as antibiotics. He stated, “there’s only one business that I know of that does anaerobic fermentation and it’s in Wamego, Kansas. This world-class production facility in Wamego can make extended shelf life a reality.” If so, this growing team with deep Kansas ranching roots will achieve something that the world’s largest corporations could not.  Josh Brewer is the agency marketing director at 502, a strategic marketing agency in Manhattan, Kansas.

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Article by Sarah Siders Photography by Doug Barrett

The Cost of Loss Local business owner discovers value of information management the hard way.

What was only a hazy nightmare for most business owners materialized as Christian Dodge’s reality in an instant.

He just didn’t know it yet.

“As a data loss is happening, you don’t realize how bad it is,” Dodge, the owner of St. George-based ECI Systems, explained. “It’s just gone, information we’ve had from 14 years of business. It’s a major expense. You realize you’re missing opportunities, and that’s a cost too. You have to rebuild payroll. You have an accounting nightmare.” Dodge then added soberly, “It grows as you realize how big a deal it is.”

The information loss that Dodge’s company experienced was not a data breach or a virus, the kind of thing most companies are prepared to fend off. Like most small- to mid-size businesses, ECI ensured their data would be protected through multiple backup systems. “We built our system with great firewalls, we had a virtual server used to back up our server on site, we had two external backup hard drives, and we had someone checking on back-ups,” recalled ECI’s systems coordinator, Ephraim Harrell. “We really didn’t have a concern.”

Despite their precautions, in early August of 2018, Dodge noticed his computer making what he perceived were small but easily corrected errors. These minor glitches served as the only initial warning sign the data would soon be missing.

After turning their hard drives over to a local network company for assistance, Dodge learned that the problem had started months prior when their back-up hard drives malfunctioned and stopped backing up information as designed.

“It was as if someone tossed a filing cabinet off the roof and then tried to recover and organized it. When we retrieved the data that was available, it was not accessible in the order it was created. It was fragmented,” Dodge said.

The cost of the loss of data unfolded as Dodge and his staff realized not only the loss of the documents, but the widespread impact over every area of the business. “You realize the expense of it, and then the emotions come in. The insurance company wants you to put a number on it, but you don’t even know how.”

Like Dodge, more and more business owners are discovering the need for disaster recovery planning as an essential of business management. But few know where to start. Brent Dinkel, business account executive at Twin Valley Connected Office, said they work with businesses of every size to create customized disaster recovery plans, but they always start with the essentials. “We guide our clients to what we call the ‘3, 2, 1 Best Practices:’ three copies of your data on two different media sources, one of which is off-premises.”

Planning for data disaster recovery may feel irrelevant for many companies, yet as technology evolves, business leaders find themselves ill-equipped for the potential fallout

Content sponsored by Connected Office by Twin Valley

resulting from a lack of IT know-how.

Dodge related to this perspective, “We now understand that every company is a tech company. We used to be old school, boots on the ground, but we are now realizing that information management is one of the most important aspects of our business. We take it for granted until something happens.”

Twin Valley, a Midwest technology solutions provider with a Kansas headquarters, emphasizes disaster recovery planning as one of the most important parts of running a business. As a result, creating a customized data recovery plan is one of the core offerings of Connected Office, their suite of business solutions employed by a growing number of companies and organizations throughout the greater Manhattan area. A primary focus for Twin Valley is educating not only their clients but any business owner who may be unwittingly affected by a data loss.

The majority of small and mid-size companies like ECI are slowly beginning to recognize the importance of managing and protecting information, yet without a dedicated IT person on staff, companies often struggle to proactively handle data.

Dinkel shared how this creates a conflict of personnel management for business owners. “If you don’t have a company to manage data backup for you, you have to manage the logs yourself. It’s just one extra thing on your plate. You have to watch that data backup actually happens, and if it doesn’t, you have to isolate where the problem is and attempt to restore it.”

Following his data loss crisis, Dodge realized that he needed to elevate data management to the same level of importance as accounting and other core services he employs. “I don’t want to be an expert in legal, so I have an attorney.

If I’m not an expert in accounting, I need to have an accountant. And these days, if I’m not an expert in IT, I need an IT company.”

Many companies who do not have an IT-specific staff member find Connected Office particularly useful, as they benefit from the extensive Twin Valley IT expertise off-site, allowing them to focus on their area of business. Twin Valley’s Marketing Manager, Aaron Wertenberger, said, “A lot of small companies don’t have a dedicated IT department. Oftentimes a smaller business is trying to have one

of their staff stand in as the IT person.

We take the load off this person and step into the IT service realm to help them do their job and make their lives better.”

Dodge recalled one of the reasons he survived the data catastrophe was his insistence on having a strong team and reliable business partners in the community. “I was taught early on, surround yourself with great people. You have to do your due diligence and make sure these community business partners are on a solid foundation.” Wertenberger agreed, “One of the benefits of working with Twin Valley is the small-town approach. Our history and roots are small-town Kansas. We pride ourselves on customer service, and a lot of customer service is a customized approach.

We want to understand how technology can make your business better.”

Dodge acknowledged that having the right IT partners beforehand could have saved him thousands of hours and dollars. “If we had the right company in place, we would’ve rolled in on Monday, and we wouldn’t have had a glitch. If you don’t take care of your house and care for it appropriately, you will pay for it in the long run.”

In the end, Dodge, Harrell, and the ECI team realized this was a learning opportunity for themselves, and they hope others can benefit from their mistake. Dodge and Harrell articulated that their advice for others in this situation is to have a good team and to have a good disaster recovery plan. “We looked at it as an educational event,” Dodge said.

“We now know so much more about the lines of what we need to do as ECI to make sure our information is protected.

Your information system is your biggest asset, next to your people. We are on the right path to make sure we have the right steps in place.” 

Brent Dinkel Account Executive

Contact Brent to learn how Connected Office can streamline your business and protect you from data loss.

(800) 515-3311 InnovateManhattan.com Content sponsored by Connected Office by Twin Valley

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ECONOMICS

Article by Derek Larson

CID Aims to Bolster Manhattan Town Center As a community improvement district, the Manhattan Town Center will fund improvements through a mall sales tax. What improvements could be coming and what does it mean for Downtown Manhattan?

When the Manhattan Town Center opened in 1987, the native limestone exterior, cathedral-high ceilings, and array of fountains wowed area residents. Everything, from the rosette logo down to the tile floors, was crafted with care.

Unfortunately, 30 years of wear can take its toll on just about anything. And when things like 30-year-old floor tiles need replacing, it’s not always as easy as you would hope. In the Town Center’s case, it’s impossible, according to Marketing Manager Jeff Sutton.

The tile lining the halls of Manhattan Town Center is no longer produced. Not by the German company that produced it in 1987 and not by anyone else. “We’ve tried looking all over the world to get this tile replaced.” Thus, as the mall looks at addressing the flooring of different areas, they must consider replacing the entire floor, rather than just patching problem areas with replacement tile.

It’s not just the floor that needs some care. Sutton says that many pieces of the Manhattan Town Center that

benefit members of the community every day have not been tended to since the mall’s construction. Thankfully, changes are coming to Manhattan Town Center in the form of a new economic development tool that will help fund future renovations spanning from the mall’s floor to its roof. The Manhattan Town Center is officially a Community Improvement District (CID).

A CID is an economic development tool designed to help improve Kansas communities by bettering conditions for existing businesses and attracting new growth. For Manhattan Town Center’s purposes, the tool will add a 0.75 percent sales tax to all purchases made at Town Center shops and movie theater, and its surrounding restaurants, including Chili’s and Texas Roadhouse. Ninety percent of the funds generated from the additional sales tax will be dedicated to renovations, repairs, and enhancements to non-revenue-generating areas throughout the mall, many of which are long overdue. The remaining 10 percent will belong to the city of Manhattan.

How the Mall’s CID Came to Be In June 2018, following a presentation by members of the City Manager’s Office, the Manhattan City Commission passed the policy that allows Manhattan businesses to earn the CID designation with a 5-0 vote. The potential of the tool earned strong support from the members of the commission. “I voted for the CID because it is one of the tools for economic development,” Butler said. “It provides revenue for mall renovation without any impact on the general fund or property taxpayers.”

The designation was officially granted to Manhattan Town Center after a public hearing in November 2018. The mall is the first area in Manhattan to receive the CID designation. Many other cities across the state have implemented CIDs, including Topeka, Lawrence, Salina, Wichita, Hays, and Kansas City. Specific examples of CIDs include Legends Outlets in Kansas City and Holliday Square in Topeka. Manhattan Town Center’s additional sales tax will be implemented in April 2019 and will be in place for 22 years, the maximum allowable length of a CID designation.

Manhattan’s CID policy directs the city to consider petitions seeking to promote economic development within the City. As outlined by the City Manager’s Office to the City Commission in a June meeting, the City may prioritize applications for CIDs that meet one or more of the following criteria: 1. The proposed project will redevelop existing retail districts and/or attract new retail to enhance the city’s economic base; 2. The proposed project will attract commercial, office, industrial, and/or mixed-use development; 3. The proposed project will create facilities that promote the cultural, historical, or artistic elements of the City or region, will encourage tourism and will enhance the quality of life; 4. The proposed project will occur within districts, corridors, opportunity areas, or other locations identified in the Manhattan Urban Area Comprehensive Plan. The City will give preference to proposed CID projects within the Aggieville and downtown business districts.

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Preference to Aggieville and downtown does not mean projects in other areas will not be considered for CID designation, but that, “[Aggieville and downtown] are areas where the city is heavily investing in,” said Jared Wasinger, assistant to the city manager in a public presentation to the City Commission in

We’re at the front door of the community June, “and we want to see that economic development growth in the future.”

Commissioner Linda Morse, who was mayor at the time of the CID designation, said, “The renovation of the Manhattan Town Center is a large project and the CID seems like a most appropriate funding mechanism. You may have noticed the updating that has taken place in the K-State Union, which wrapped up a $31 million renovation project in October 2017, in the last few years. Overall, it is more appealing to students and the public.” The renovations funded by Manhattan Town Center’s sales tax revenue will also aim to increase the downtown community’s appeal.

CID designation will help Manhattan Town Center fund projects that could include more handicap-accessible entrances with automatic doors, repairs to the roof, restroom renovations, parking lot lighting, and more. “We definitely have a need for several of these things,” Sutton said. “The mall was built in 1987.

It’s time for some of those things to be updated.” With the CID designation lasting 22 years, it may wind up helping fund projects that have not even been dreamed of at this point. Sutton said, “There’s a definite need for what we’re going to be doing, but we don’t necessarily have all the answers for 22 years down the road.”

Not Another Dying Mall In an age of one-click shopping and free shipping, a single refrain echoes: malls are dead. Across the country, malls that once served as primary retail centers for thousands of customers stand vacant as cities ponder what to do with the

empty space. The issue is so wide-ranging that entire websites exist solely to detail the ins and outs of “dead malls,” along with the negative effects they can have on their communities.

While some may think the Manhattan Town Center is just a mall at the end of its life, Sutton stresses that it is much more. It’s not only a home to a variety of stores and restaurants, Manhattan also sees it as a social center. A gathering place. A key cog in the city. “We’re at the front door of the community,” Sutton said. “(The mall is) kind of anchoring downtown, and we feel that the community is invested in our success as well.”

In Manhattan, that investment involves much more than shopping. Manhattan Town Center hosts more than 40 events throughout the year.

The list includes art exhibits, historical displays, musical performances, indoor trick or treating, collectible and craft shows, charity events, festivals, family events, and more. “The community feels good and feels invested in what’s happening here at the mall,” Sutton said. The CID designation will help Manhattan Town Center upgrade its space to offer better surroundings for these events and new events that may come to the mall in the future.

Unique to Manhattan Town Center is its annual hosting of the Manhattan High School prom. The mall has been home to the event every spring for the last 31 years. The transformation from shopping space to celebration center provides area high school students with the chance to celebrate in a one-of-akind setting, and the mall’s architecture provides a backdrop that no high school gym can replicate. “That’s different than really any other mall that you might go to,” Sutton said.

Tax Increase Risks While some citizens may worry that Manhattan Town Center could overextend itself, racking up repair expenses that the sales tax revenue cannot cover, leaving the city to foot the bill, the tax model has removed that risk. Manhattan Town Center’s CID is pay as you go, meaning that the mall will only be reimbursed up to the amount of sales tax revenue that has been generated for the project.

gateway to Downtown Manhattan. Potential renovations could make the area suitable for outdoor performances.

The Next Chapter of Manhattan’s Downtown

CONCEPTUAL PLANS FOR A REIMAGINED COURTYARD AT MANHATTAN TOWN CENTER

Reimbursement will only occur after projects are completed and verified by a third party. Manhattan’s CID policy also includes a performance agreement that allows the city to review the mall’s books, records, sales tax returns, and invoices.

Sutton said, “We couldn’t come in and do millions of dollars’ worth of work up front and immediately ask for millions of dollars back because that wouldn’t have been enough time for those sales tax dollars to have built up.”

While Kansas CIDs allow for projects to be covered by special obligation bonds, the pay-as-you-go model mitigates the risks that accompany those projects, by requiring a firm financial plan up front and only distributing funds that have been earned. The model also does not touch property taxes, which was a selling point for Morse. “My primary concern was that the property taxpayers not be burdened by the project,” Morse said.

“The shoppers at the MTC (Manhattan Town Center) will be funding the improvements through an increased sales tax on the goods they are purchasing.”

The sales tax increase will amount to 0.75 percent, meaning that when shoppers spend $100 at the mall, they will pay an extra 75 cents in sales tax. Regardless of the size of the hike, a tax increase is a tax increase, and the mall approached the issue with care. They conducted focus groups sessions to gauge public opinion and store owners’ opinion before presenting to the City Commission, gathering people from a variety of backgrounds to represent the varying dynamics of indi26

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viduals in the Manhattan community.

As part of the focus groups, Manhattan Town Center representatives polled members about the mall. They asked what members liked and disliked. After sharing opinions, focus group members had the opportunity to hear about the potential area enhancements that could result from the Community Improvement District. “We didn’t have any negative feedback about the CID,” Sutton said of the focus groups and meetings with store managers.

Prior to approving CIDs, the city historically incentivized projects with Transportation Development District or Tax Increment Finance District designations. While similar, the policies hold some key differences that eliminated them as possibilities for Manhattan Town Center. Transportation Development Districts can only be used to fund improvements for public infrastructure.

Meanwhile, Tax Increment Finance Districts limit revenue streams to incremental property taxes or existing sales taxes. Because Manhattan Town Center is privately owned, and because the city did not want to affect property taxes, neither was a strong option for funding mall renovations.

As part of the CID, the city will earn 10 percent of the sales tax revenue.

With their funds, they plan to address the courtyard plaza on the west side of the mall, a project that has been under discussion for years, City Commissioner Wynn Butler said. That area, which opens to Poyntz Avenue, serves as a

The expense of renovating a property as large as Manhattan Town Center is an intimidating one, but the state’s CID Act was approved with opportunities like this in mind. As large of a project as the mall renovation is, a much larger opportunity also exists. “I am eager for the Town Center to continue to succeed and grow our retail space,” Morse said.

“The original vision for the Town Center was to attach it to our downtown. Just think how large our downtown is now.”

While mall renovations can make the space more appealing to shoppers and potential tenants, the opportunity for CID designation can make the city, and downtown in particular, more appealing to restaurants and retailers who have considered coming to Manhattan in the past or may consider coming to Manhattan in the future.

...an all or nothing bet aimed at forever maintaining Downtown Manhattan as the primary commercial district.

The Manhattan Town Center is itself a prime example of the transformation that can come from economic incentives; a portion of the city’s original financing for Manhattan Town Center came from an Urban Development Action Grant.

Prior to the mall’s construction, the site was an eight-block tract of city comprised of 77 properties. Not seen as the ideal gateway to downtown, conversations about redeveloping the area began amongst the City Commission in the late 1970s. A decade later, Manhattan Town Center became the cornerstone of that downtown redevelopment project.

It was viewed as a community-changer; an anchor for the city’s retail. As Paul Rhodes wrote in The Manhattan Mercury in June 1986, “Manhattan Town Center — with its green and gray logo that was based on a limestone rosette

salvaged from one of the dozens of buildings demolished for the project — is an all or nothing bet aimed at forever maintaining Downtown Manhattan as the primary commercial district.”

The mall had an immediate impact in revitalizing the downtown area. Manhattan Town Center opened with great fanfare, including a formal gala that invited 1,800 members of the community to walk the halls for the first time and an estimated 22,000 to 25,000 visitors on the mall’s opening day. Local businesses beautified their storefronts as the mall’s grand opening neared, and the sidewalks lining Poyntz Avenue received new trees, planters, and benches. Even shopping hours were affected. In response to Manhattan Town Center staying open until 9 p.m., many downtown businesses extended their weekend and evening hours to take advantage of the extra traffic. By bringing new life to Downtown Manhattan, the mall complemented local businesses rather than competing with them.

Thirty-plus years later, as the city’s first CID, Manhattan Town Center is again an integral piece of economic development. It seems fitting. Al Ratner, president of Forest City Enterprises, the real estate investment company that led the mall’s development, deemed Manhattan Town Center “a link between Manhattan’s proud past and bright future” at the mall’s ribbon-cutting ceremony.

That bright future has arrived. The city’s population has grown by over 40 percent since Manhattan Town Center opened and that growth brings higher demand for economic development, the sort of economic development that can flourish with tools like the CID. “Think of a restaurant or a retailer that you would love to have in Manhattan,” Jason Hilgers, deputy city manager, said in response to City Commission questions in June. “It generates a lot of retail sales. It has a lot of interest. Communities will put these tools out there with lower thresholds to try to attract them.”

While Manhattan has not needed to incentivize development in recent years, Hilgers said tools like the CID can go a long way in bringing certain businesses in. “We do know of retailers that will only come here if we are willing to give them incentives. These are the types of tools that other communities have clearly been aggressive with.”

As the city continues to invest in downtown, Aggieville and elsewhere, the CID provides a tool that will help incentivize renovation and new development.

Picture new retailers, both large and small, setting up shop within the city.

Picture local businesses finally having the opportunity to update interiors that were last considered modern in 1974.

Picture Manhattan and what you want it to be. The CID provides another avenue to make it all possible. It all begins at Manhattan Town Center.

Derek Larson is the communications manager at Nelnet Diversified Solutions.

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IMAGINING REGIONALISM with Christy Rodriguez

With Christy Rodriguez at the helm of Region Reimagined, the Manhattan business community envisions the future of Greater Manhattan by recognizing lessons from our past.

Article by Sarah Siders

Photography by Wrenn Pacheco & Josh Hicks

ALLEN DINKEL, MICKEY DEAN AND CHRISTY RODRIGUEZ EXPLORE HISTORIC JUNCTION CITY

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Christy Rodriguez, an urban planner hired to lead the vision and implementation of the Region Reimagined project, stood near the entrance desk of the brightly lit Manhattan Chamber of Commerce, welcoming visitors into her office.

Inside, six chairs surrounded an ovular conference table that dominates the room, perhaps as a symbol of how Rodriguez will spend much of her time as the Region Reimagined program director. Two floor-to-ceiling windows parallel one another, one along the interior of the office, giving passersby a transparent look into her conversations with community members, the other opening out onto Poyntz Avenue with a view of the Riley County Courthouse.

Rodriguez rolled her chair from her desk along the wall, paper in hand, to take notes of her own. Her wide eyes were already listening. Celebratory snapshots from Manhattan’s recent history hung in tiles along the wall opposite her: a Kansas State football game, a homecoming parade, a flood.

No family photos sat on the desk behind her. “I just arrived four days ago,” she said then laughed, referencing her family’s move from Fort Worth, Texas, to Manhattan. She glances around her office at the sparse decoration. “My family pictures are still in my phone.”

Strange Aberrations in Manhattan’s Past Tracy Anderson remembers the sense of foreboding that hung over Flint Hills residents in 1998. “I was working in an architecture firm here in Manhattan, and I remember there were all these conversations within the business community and in our office about Big Red One shipping out. The school district had to close down two elementary schools, and this got the community really stirred up because nobody wants their neighborhood schools to close. We had to let one or two people go from the office as well. We just didn’t have the work to support them.”

The era Anderson referred to was known to most of the United States as a prosperous one. With the dot-com and real estate bubbles of the late 1990s and early 2000s, wealth, growth and fortune flourished in most communities throughout America. During this exact time period, however, the Flint Hills region limped along, experiencing a net population growth of only eight people.

The ballooning national economy rendered itself unsustainable, and the nearly decade-long event referred to as “The Great Recession” followed, with dismal job growth and a loss of the opportunity for wealth creation available only a few years before. Yet this next decade of Flint Hills history once again defied the behavior of the rest of the country. Between 2005 and 2008, the region thrived as approximately 11,500 jobs were created, and the community saw a population growth of over 13,000 people.

The cause of the strange aberration from national trends was, in short, troop movements in and out of Fort Riley.

From 1996 to 2005, when national momentum and growth juxtaposed regional stagnation, the First Infantry Division left Fort Riley to serve in Germany for a peacekeeping mission. Conversely, when the First Infantry Division returned to the area in 2006, the immediate result was population 30

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and job growth, even while the rest of the country began plodding toward recovery from recession.

Tracy Anderson leaned back in his chair, gratefully recalling the fortuitous timing of his decision to start Anderson Knight Architects in 2002, only three years before the return of Big Red One to the area. “I didn’t realize it then, but my timing was impeccable in that regard.” Comparing the two decades to one another, Anderson reflected, “People had not realized up to then what an impact Fort Riley had on the area. They know now.”

Strong Foundations Support a Sustainable Future In 2017, the Manhattan Area Chamber of Commerce commissioned Market Street Research, an Austin-based provider of community development and strategic planning, to create an assessment of the region, as well as a collaborative plan for the way forward, a project now called Region Reimagined. Born from the hopes of expanding on the historic

People had not realized up to then what an impact Fort Riley had on the area. They know now. relationships with Kansas State University and Fort Riley, Region Reimagined articulated a path beyond the growth and development anomalies created by these institutions. A 40-person steering committee comprised of community influencers and business leaders now advises Region Reimagined with Rodriguez at the helm as program director.

Examining census and research data of Pottawatomie, Riley and Geary counties to create a larger picture of the assets and needs of the region, Market Street talked with local citizens via online polls and focus groups to learn more specific concerns and struggles, then reported progress and final results to the steering committee.

Market Street summarized their findings, writing: “The Community Assessment revealed that Greater Manhattan has experienced a stable economy that buffered the region from the Great Recession but depends too heavily on public sector employment and unpredictable troop movement trends and student enrollment fluctuations. The benefit of employment anchors such as Kansas State University and Fort Riley is that Greater Manhattan can pursue economic diversification from a very solid base of assets.”

Community Stories and Strategies for Growth Market Street’s research revealed four core narratives of the community. The first two stories that emerged emphasized the resounding theme of the region’s reliance upon Kansas State University and Fort Riley for population and economic growth, as well as the heavy dependence on public-sector employment. In particular, the economic impact that Fort Riley has on the Flint Hills region cannot be overestimated.

The third narrative that emerged was a desire to diversify the region’s economic development through a combination of research and entrepreneurship. As this approach is already employed by larger universities, such as Johns Hopkins and Stanford, the report suggested expanding upon research already being done

by Kansas State University to build local businesses and create additional jobs around new discoveries and patents developed by the university.

The fourth core story from Market Street’s research suggested that while the region’s quality of life is attractive, it is likely unsustainable without a diversified economy. Indeed, the city of Manhattan regularly receives awards for the lifestyle it affords its residents, such as “#2 Best Place to Live in America” by Livability.com and “One of the Ten Best College Towns in America” by American Institute for Economic Research.

Nevertheless, the ability to maintain this atmosphere of well-being for its citizens depends on the decisions to expand opportunities and strengthen a sense of identity and stability in addition to its historic support systems.

In response to the four areas of growth potential, Market Street proposed a multitude of community planning and development strategies, which the steering committee clarified and voted into an order by priority. The final strategic plan outlined nine strategies to be launched and implemented over the next five years.

Advised by a steering committee and led by Rodriguez, each of the nine Region Reimagined strategies will be developed and implemented by an assigned workgroup, composed of leaders and influencers active in the strategy’s specific industry. Rodriguez’s challenge will be, at least in part, to encourage the strategy-informed visions of the workgroups while connecting the work to initiatives already in progress in the community.

“I want to get to know the region and identify the partners out there who can help. There are a lot of people who are doing great things. One of my talents is bringing them together.”

Rodriguez understands the location of her position is at the intersection of many projects and efforts at varying stages of progress and implementation, many of which precede her work in the region. “My role [with R2] is to track progress, network, communicate, provide support through partnership, and to understand what success is for each goal.

I’ll be looking for common goals and common initiatives.”

Stepping into her new role, Rodriguez sees her role as program director as one of relationship building first. “I am here to take time to listen and learn and what drives each group or individual.

Once you understand that, you can start building those bridges and connections and identify partnerships. Building relationships is a key component and people need to be able to trust, and sometimes that takes time.”

“Not just an urban planner” Despite only recently finalizing her move to the area, her 8- and 5-year-old daughters arrived in mid-July to play soccer with Sporting Kaw Valley. “I didn’t even know if I had the job yet, but we wanted to be here.” Her husband, Adrian Rodriguez, joined the Kansas State University staff as the first associate vice president for student life of diversity and multicultural student affairs in December of 2017. “I am happy to have our family reunited,” she said, smiling.

“My husband and I are both Texas natives, but we got married in Wichita and worked there for five years.” She paused, apparently pleased to find herself back in Kansas raising her young family.

“We used to live in Old Town when I was working with the city there. I loved Old Town,” she said while smiling with a twinge of nostalgia. “I worked with the Sedgwick County Planning Department there, and we did some neighborhood revitalization work along Douglas Avenue.

I was part of launching the project, and I am very proud of the work they’ve done there.” She relaxed deeper into her chair, a soft-spoken confidence in her voice.

Rodriguez’s diverse resume elevated her to the top of the list during the hiring process for Region Reimagined program director. In addition to successful urban planning and revitalization in Texas and Kansas communities, she boasts experience in grant management for communities 50,000 and below, and

in Fort Worth, she managed a $20 million budget in her role as the program administrator for the Fort Worth Police Department. “I really grew in the Fort Worth role from being an urban planner to having a certain skill set.” Rodriguez recalled. “In Fort Worth, I was doing more than urban planning. I was learning contracts, technologies, logistics, and understanding how to work with different cultures and personalities.” She noted one of the aspects of the Fort Worth position prepared her for her role as program director for Region Reimagined.

“The interpersonal side was a huge part of my role in the police department.”

Wayne Sloan, president of BHS Construction, took part in the interview process for the Region Reimagined program director. “When we interviewed Christy, she was very articulate and focused on what she did. What swayed me the most was the diversity of her resume. She was not only a planner but had experience as a grant writer, and Region Reimagined is going to need to be funded. Our hope was she may able to go out and find ways to pay for this so our communities don’t have to.”

Sloan added, “Region Reimagined is partly urban planning, but it touches all parts of our community, and the person in her role needs to be adaptable.

She was able to take her abilities and experiences and adapt them in each of her previous roles. Her work in the Fort Worth Police Department really stood out, where she managed over 20 people and worked with a 20 million dollar annual budget. She was able to survive the role, push their initiatives forward, and be seen as a strategic player and leader in that environment.”

Matt Crocker, CEO of SPS Companies, also participated in the search for the program director and expressed confidence that Christy was the right choice. “A big motivation for me was the passion she voiced for making a community better. That passion was evident in her past experiences, and in particular, what she expressed as the aspect that she enjoyed the most in her past jobs.

Christy was quickly able to connect the dots and present implementation steps that recognized the need to involve and engage a broad group of individuals.”

Rodriguez’ vision for the region springs from a love for her work and an appre-

ciation for small communities developed in grant management for communities of populations 50,000 and below.

“In a small community, there is an appreciation for the individual character of the community and historic preservation. The icons of the community are celebrated a lot more,” Rodriguez observed. “A small community can more easily celebrate what makes us unique. In Manhattan and the Flint Hills, there are certain things that make us different, and we want to identify what those things are. Kansas State and Fort Riley are huge drivers, but they are not the only drivers.

The agricultural community is going to be a huge part of who we are working with; we’ll need to make sure that initiatives are not only supporting cities but whole counties.” She added, “From a regional perspective, we want to determine how it all goes together and how we can work together to make improvements and be the best that we can be.”

Why Weren’t We Here 10 Years Ago? Rodriguez said the decision to leave Fort Worth to live in the Flint Hills was a difficult one at first. “We were very involved in our community in Fort Worth. We loved the church we were part of, and my oldest daughter was part of a Spanish immersion program. I was a Girl Scout leader too. We were very established there, but we felt there are things happening in this region where we would have a better quality of life.

When we moved here, I thought ‘why weren’t we here 10 years ago, with the schools and everything the region has to offer.’ It’s a great [place] to raise a family.”

A young, diverse, and educated couple with elementary-aged children, Christy and her husband Adrian reflect a larger trend of young families making the Flint Hills their home. USD 383 enrollment reports show increased numbers of young families in the area, with a growing number of students each year for the past several years. In 2018, enrollment increased again by 127 students throughout the Manhattan-Ogden schools.

Rod Harms, president of Civitas Group and long-time Manhattan resident, noted his own observation about

the trend in young families in the area.

“I’ve noticed more and more young families, both at church and in my work around town. This has been reflected in enrollment numbers as well, despite the decreased enrollment of Kansas State,” he reported.

Like Rodriguez today, the benefits of the community are also what brought Rod and his young family to Manhattan over 20 years ago. “We wanted to raise our kids here. Seeing the young families coming to Manhattan gives me hope for Manhattan’s future.”

These developments are encouraging as two of the nine strategies outlined

by Region Reimagined prioritized

It’s a great place to raise a family. strategies aimed at attracting and retaining talent in the region. While the movement of young families to the region suggests this goal may already be underway, Market Street’s community conversations revealed an undercurrent of dynamics that prevent a majority of young people from enjoying the benefits of the area. Commonly named barriers were difficulty locating affordable housing and childcare, as well as a lack of opportunities for upward career mobility and a trend among millennials looking for a welcoming, ethnically diverse living and working environments. These obstacles reflect Market’s Street’s finding that without a diversified economy, the quality of life the region offers is likely unsustainable.

Region Reimagined creates a unique opportunity to give up-and-coming leaders who remain in the area a voice in the conversation for how to solve some of these challenges and attract other young professionals like themselves to the region. Established community leaders like Harms believe initiatives like Region Reimagined are needed to raise up new leadership for Manhattan. “One of the most important roles of Region Reimagined is engaging young leaders with what is happening in the city. People are talking and thinking about [Region Reimagined] now,” Harms said. “This may be the process that introduces the new generation of leadership into Manhattan.” mhk business news

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City Commissioner Jerred McKee, a young professional, Kansas State graduate, and a member of a Region Reimagined workgroup, recalled how he remained in the area because of leadership opportunities he gained immediately after college. After working with an election campaign, he said, “I felt so energized. It was this trigger for me that a 20-something could make a difference.

I decided I had lived here for five years at that time, and I didn’t want to uproot and go somewhere else.” He laughed, “I have just never stopped having fun here, frankly. Couple that with great opportunities in my career and I have never had a reason to leave.”

The workgroups collaborating to make the strategies of Region Reimagined a reality are one of the ways in which new leaders are coming together to share their vision for the area and work to see it become reality. Sheila Ellis-Glasper, owner of SEG Media Collective located in Manhattan and an African American business owner is a member of the Entrepreneurship and Innovation workgroup who sees her involvement with the initiative as an open door to influence the region for an upcoming generation of diverse young people entering the workforce and looking to make the Flint Hills their home.

We will communicate that the door is always open.

She initially hesitated about returning to the area to start a business and raise her ethnically diverse, young family, admitting she was unsure about the success she could have as she had not seen many other successful minority business owners in the area. After spending three years working at Kansas State University and leaving to start her own business, however, she and her family purchased a home and made the decision to stay and invest in the community. “We chose to stay in Manhattan, because my business has grown, and overall, the climate for small business success is very supportive here.”

Ellis-Glasper hopes that her role in the Entrepreneurship and Innovation workgroup will offer her an opportunity

to create a shift in the understanding and practice of diversity. “My hopes are for Manhattan and K-State to become more proactive rather than reactive when it comes to diversity. That starts with thinking about what diversity truly looks like in our community and bringing all the voices to the table.” Her experience with business and entrepreneurship in other areas informs her recommendations for how the Flint Hills region could develop diversity. “The choice is up to us to make a more inclusive environment for our children and the future of Manhattan.”

McKee noted that diversity and inclusivity are also high values for him personally, and he sees this reflected in city leadership as well. “The diversity in city leadership is improving. The established leaders here are as accepting as me.” McKee is hopeful about opening opportunities for diversity in the region and said the progress toward this goal is already evident. “This area has several smaller communities within the larger community. While that creates challenges, the upside is no matter your background, you can find a niche here.”

In her work as Region Reimagined program director, Rodriguez hopes to communicate the value of inclusion by reiterating the importance of listening.

“We want everyone to know they are invited and open the doors to participation.

We want anyone who has questions to understand that we are here in support.

We will communicate that the door is always open.”

Nurturing Homegrown Talent As Ellis-Glasper noted, her decision to stay in Manhattan and grow her business reflected her experience of the region as supportive to growing business. In his city leadership role, Jerred McKee felt homegrown talent tends to value the community and wants to invest in both small and significant ways. “Companies like 502 are homegrown talent giving back to the community,” McKee said.

“When I was touring their new space for the opening, I noticed a sign in the conference room that says, ‘Nonprofits can use our conference room for free.

Talk to Blade to learn more. We’d love to have you here.’ That was a moment where I realized that businesses like 502

We chose to stay in Manhattan, because my business has grown, and overall, the climate for small business success is very supportive here. are the kinds of entities that we want to get behind because they have a level of buy-in that we need.”

Some companies, such as The Alms Group, a local real estate agency, have even designed their business model with philanthropy in mind. Still a young business, The Alms Group has donated thousands of dollars to local schools.

Their mission statement reads, “The Alms Group puts the power of change back in your hands, supporting causes important to you while still offering service that puts your needs first. At The Alms Group, we believe when our neighbors are deeply rooted and thriving, so are we.”

Defining Who We Want to Be Many of the participants in Region Reimagined are hopeful for what it can accomplish. Of the work, McKee said, “Region Reimagined has incorporated the aspects of creating a community and sense of place here to help people want to stay here and grow the community. According to research, millennials choose a place before they find a job. So we need to help create community.”

More than what Region Reimagined can do for the Flint Hills and its citizens, the initiative represents a moment in time, a shift of leadership, and an opportunity to define the Flint Hills region beyond its historic relationships and support systems. Tracy Anderson observed, “In terms of a city’s history, Manhattan is a teenager, leaning on familiar relationships with Kansas State University and Fort Riley. We have an opportunity at this moment to step out and determine who we want to be.”  Sarah Siders is a freelance writer, author and small business coach who specializes in leadership and healthy relationships. mhk business news

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Hop flop?

A Pint Half Full.

The closure of Tallgrass Brewing Company raises questions about the real ROI and sustainability of economic development incentives.

Article by Josh Brewer

In April of 2014, Manhattan visitors and locals couldn’t grab a beer overlooking Poyntz on a summer evening or attend a Science on Tap event to learn about innovative work spearheaded by community members because Tallgrass Taphouse was not yet a fixture of Manhattan’s downtown.

Instead, people knew the Tallgrass brand as one of the first craft beer options available in Aggieville. Craft beer was already quite popular outside of Kansas, with nanobreweries, microbreweries, brewpubs and production-scale breweries in major cities and small towns throughout the West Coast,

Illustrations by Darcie Riordan

Colorado, Texas and Michigan; but Tallgrass was a Manhattan, Kansas brand—and Manhattan, Kansas was damn proud of Owner and Founder Jeff Gill and his growing team.

Tallgrass beer ran the gamut of styles with a lightly hopped Tallgrass Ale, a hopped-up, Nintendo-themed 8-bit Pale Ale, and Buffalo Sweat, a robust oatmeal cream stout. On the second Saturday of each month, a couple hundred Manhattanites would travel to the brewery on Quail Lane for a tour and to support their local craft beer scene. The year before, in 2013, the brewery had produced a record 11,775 barrels

of beer—over 365,000 gallons—in their 14,000 square foot Quail Lane facility, and they were tapped out. Having already moved 30 percent of its production to Cold Spring, Minnesota, Tallgrass began looking for a bigger home, and a former Verizon call center in Manhattan’s Corporate Technology Park provided Jeff Gill an opportunity to grow.

That opportunity led Gill to call Trent Armbrust, and Armbrust, the economic development director at the Manhattan Chamber of Commerce, was excited to talk about an economic incentive package to support Tallgrass Brewery’s $3.2 million investment in renovations, equipment, and property improvement. As a part of the Manhattan Area Chamber of Commerce’s contract with the city of Manhattan to provide economic development services, Armbrust explained the incentives available for expanding businesses to Gill and supported him through the application process, which included Gill’s disclosure of capital investment, projected wages and revenue, employee benefits, and an assessment of Tallgrass Brewery’s community fit. Once negotiated, Gill submitted his application to Jason Hilgers, Manhattan’s deputy city manager, who analyzed the package using a statistical model that predicts the return on investment to the economic development fund.

By April 2014, Gill had filed his application with the city, the former call center had been rezoned “light industrial” and a third-party group, Springsted Inc., had performed a general risk assessment. When Gill, Armbrust and Hilgers presented the package to the city on the evening of April 1st, 2014, they spoke of a company with a strong history of growth, a natural community fit, and a clear path to success. Whereas many craft beer brands focused on their local market first and slowly grew to compete regionally, in 2009, Tallgrass had partnered with Anheuser-Busch Inbev, a multinational drink and brewing company, for distribution and had switched to 16-ounce cans in 2010. The increased reach gave Tallgrass a 72 percent average annual revenue growth from 2010 to 2014.

With the support of Armbrust and Hilgers, Gill had an exciting offer for his city commissioners: in exchange for $350,000 in forgivable loans and $180,000 in grants from the 2012 Economic Development Fund, Tallgrass Brewing Company would purchase and improve the vacant Verizon Wireless Building in Manhattan’s Corporate Technology Park, add 39 local jobs in 10 years, and generate $563,512 in sales and property taxes over 10 years, netting the city fund a $133,512 return on investment.

Unsurprisingly, the commission voted to approve Tallgrass Brewery’s economic development application.

Gill, a former geologist, had started his brewery in Manhattan, and built enthusiastic community support for his brand. His business model overcame the primary obstacle to scale—the number of beer-drinking Kansans—by distributing his cans far and wide. While Springsted, Inc. didn’t conduct any industry-specific analysis, the trend was clear: craft beer was booming and Tallgrass was growing. Four years later, we know that a booming craft beer market was the exact reason that Tallgrass Brewery failed.

Why Did Tallgrass Fail?

Tallgrass Brewery’s growth model—the model that would pay for its new facilities—depended on the penetration of markets outside of Kansas. While large markets, such as Chicago and Kansas City, were sizable, they also had established craft brewing scenes and high competition, making it difficult to gain market share. On the other hand, with a national distribution system and a transportation friendly canned beer, smaller markets far from Kansas, could increase revenue for the brand.

Marquette, Michigan, a town of 20,000 where there’s a Tallgrass Brewery tap at the Iron Bay Restaurant and Drinkery, is emblematic of a craft-beer loving small market.

In 2014, the town had a small nanobrewery that brewed 3-, 5-, and 15-barrel batches at a time, a 5-year-old microbrewery that had recently started bottling, and one of Michigan’s first brewpubs. At the time, a Tallgrass beer could compete as a craft beer option to the well-known beers from national breweries, such as Pabst Brewing Company or Anheuser-Busch, and the handful of local favorites. Today, the tap rail has filled out with many more local options, pushing Tallgrass to the wayside. In Marquette, the nanobrewery in Marquette has added a production canning operation and the microbrewery’s bottling operation has grown significantly. If craft beer drinkers tire of an in-town brewery, most of the surrounding towns have breweries to choose from, while regional powers, such as Bell’s Brewery, provide enough variety for most craft beer drinkers.

The explosion of craft breweries at the local level is a national trend. When Gill first started brewing in 2007, he was only competing against 1,200 other breweries across the United States. Today, there are more than 6,600. The challenge facing Tallgrass was more complex than simple competition between craft breweries. According to the Brewers Association, the 2017 American beer market was a $111.4 billion market. The primary producers and sellers were large domestics, such as Anheuser-Busch, which produced nearly 70 percent of America’s beer by volume.

Imports, such as Heineken, constituted slightly more than 17.5 percent; and craft beer sales grew 5 percent by volume to make up a record 12.7 percent of the United States beer market by volume.

The reason why this growth did not spell success for Tallgrass, and regional breweries like it, is twofold. According to Bart Watson, chief economist for the Brewers Association: growth is negatively accelerating in the craft beer market, and the areas of the beer market that have grown are distinct from those that were growing in 2014. Today, microbreweries, those producing less than 15,000 barrels a year, and brewpubs are driving most of the growth in the craft beer market. While brewpubs had a great 2017—up 15 percent, representing 16 percent of the growth in craft beer—it’s the microbreweries and successful regionals that speak to Tallgrass Brewery’s challenges. Microbreweries, like the two in Marquette, Michigan, where there’s a Tallgrass tap at the Iron Bay, constitute nearly 60 percent of craft beer growth. The regional breweries that have grown, albeit slightly, tend to be the smaller breweries producing less than 30,000 barrels. mhk business news

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Tallgrass Brewery’s new facility was built to brew 100,000 barrels, compared to the 11,775 barrel production capacity of its old brewery.

Reflecting on the challenges that Tallgrass faced, Armbrust explained, “There was a fundamental market shift, and Jeff was in early and Tallgrass was growing. His distribution strategy was very solid, and he built a network of distributors in many states. The competition—and no one could have predicted the explosion of craft breweries—made that very difficult.” Given that Gill decided to add production capacities—and to increase Tallgrass Brewery’s debt-to-equity ratio with nearly $6 million in private capital investments and $250,000 in forgivable loans—based on market growth, some have questioned whether the city’s agent, Springsted Inc., could have appropriately advised the city commission on risk surrounding the performance-based grant and forgivable loan. Armbrust, responding to that criticism, said, “[Springsted Inc.]’s role is not to predict the market, nor is it to predict future management decisions.”

What is the “Eco-Devo” Fund?

The city funds economic development packages, such as the one that Tallgrass Brewery received, through a county-wide, half-cent “Roads and Jobs” sales tax (RICOED), which originally ran from 2002 to 2012 (RICOED “Old”).

Voters extended this initiative in 2012, and it will sunset in 2022 (RICOED “New”). In 2016, this half-cent sales tax had, on average, generated approximately $3 million per year.

Under RICOED, revenues support county roads and bridges and city economic development activities. Thirty-five percent of that city revenue helps offset property taxes going toward city debt, such as streets and projects, while the remaining 65 percent is allocated to traditional economic development and infrastructure, such as the North Manhattan Avenue 38

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improvements. While there is no formal structure to the 65 percent allocated to economic development, the breakdown has been referred to as one-third property tax, one-third infrastructure, and one-third economic development for ease of discussion. This final “third”—often close to $1 million per year—is distributed as business incentives, such as forgivable loans and performance-based grants.

Armbrust is quick to point out to those who characterize the fund as a corporate handout that “company incentives are a very small portion of the pie for this half cent, 10 year sales tax” and that “it is ultimately up to the discretion of the commission to make an award of economic development dollars.” Armbrust said that his role, as the economic development director, “is to facilitate the [application] process, and if [an applicant] meets the city’s model, then we will support the application.”

...when other communities are offering dollars, you have to compete with dollars.

The political power to award these funds, monies transferred from taxpayers to private companies by a commission vote, is, according to Jeff Koenig, the owner of financial and business consulting firm Open 4 Business, the root of the “error in economic development that has spread across the country.” However, Koenig cautions against specific criticism of Manhattan’s economic development fund without an understanding of the larger picture: “Really no government should have this kind of mechanism, but it would be unfair to say that Manhattan shouldn’t when its neighbors offer it.”

Armbrust agreed: “In an ideal world, no community would need to offer economic incentives, but when other communities are offering dollars, you have to compete with dollars.”

The funding mechanism that supported Tallgrass,

RICOED “New”, is the third iteration of Manhattan’s economic incentive program. Voters approved the first fund, the Manhattan Economic Development Opportunity Fund (MEDOFAB), in 1994, and it was funded by a four-year, one-half-cent retail sales tax beginning in 1995 that ultimately generated more than $11 million. The City Commission invested MEDOFAB funds in 21 companies based on the recommendations of an advisory board and six primary focus areas: 1. Retention and Expansion of Existing Enterprises 2. Research and Kansas State University 3. The Mid-America Commercialization Corporation 4. Venture Capital 5. Recruitment and Relocation 6. Retirement At the time, the city also established a set of primary goals for the fund: Create quality jobs with corresponding wages, benefits, and working conditions.

Diversify the property tax base in Manhattan.

Decrease reliance on federal, state, and local government for jobs.

Maintain, stabilize and build on the existing strengths of the community.

Invest public funds in ways that create self-sustaining economic development activities.

Use public funds to leverage private investment in economic development.

MEDOFAB funded successful Manhattan businesses, such as Farrar Corporation, Continental Mills, GTM Sportswear (now Hanesbrands) and Manko Windows, but in 2016, the most recent reporting year, 92 percent of compa-

nies funded through MEDOFAB were defunct. In 2016, of the remaining businesses, Continental Mills eliminated two full-time employees (FTEs), Farrar eliminated seven, and GTM eliminated 127. Annual reporting doesn’t tell the full story, however, as Continental Mills had successfully created 13 FTEs from 2014 to 2016, one over projection, Farrar had created 22 FTEs, 30 below projection, and GTM had created 488, 153 under projection. Manko Windows, which completed its reporting in 2015, had created 206 FTEs since 2006, 98 over projection.

At its sunset, MEDOFAB investments were associated with the creation of hundreds of full-time positions with benefits, a diversified tax base that would grow after tax abatements expired, and the investment of over $26 million in private capital. However, MEDOFAB’s 92 percent failure rate and the measurable returns on an $11 million investment led to revisioning the goals and objectives of economic development and increased scrutiny to ensure that funding supported sustainable economic development.

Goal 1: Determine the likely requirements to support the growth coming from NBAF from 2016 to 2026.

Goal 2: Support KSU and Chamber of Commerce efforts to attract NBAF-related companies to Manhattan.

Goal 3: Develop requirements for KSU/North Manhattan Corridor for 2016 to 2020.

Goal 4: Support the efforts of local businesses, Chamber of Commerce, MATC, and USD 383 to build and sustain a local workforce with appropriate skills needed for growth of existing businesses and attraction of new business.

Goal 5: Share monthly reports highlighting any expenditures as well as credits and provide quarterly forecast information. mhk business news

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In describing the city’s evolution in economic development, Armbrust said, “Under MEDOFAB, we were investing in companies. Today, RICOED invests in jobs.”

This new focus had positive results. In 2016, only 8 percent of the companies funded using the RICOED “Old” funds were defunct, a clear improvement on the 92 percent failure rate under MEDOFAB. Moreover, key companies in which RICOED “Old” invested, such as CivicPlus, Flint Hills Beverage, Manhattan Area Technical College (MATC) and Meadowlark Hills, had exceeded projections for job creation, capital investment, and wage structures, as of 2016.

Armbrust, an unabashed advocate for the businesses he represents, reflected on the businesses which have received support: “If you look at some of the great things that have happened in Manhattan, it’s because private businesses have grown in Manhattan. CivicPlus, Manko Windows, GTM, Florence Manufacturing have had an enormous impact on our community—those are the influential businesses that have been successful—and there was hope that Tallgrass would be one of those and it ended up not being, but that’s the environment that we’re in.”

“We have had company failures before. We will have company failures in the future. The community of Manhattan, when these are awarded, takes on a certain amount of financial risk. It’s a risk tolerance choice by the commission.

We have lowered that risk based on the evaluation and we’re not investing in companies the way we originally were with MEDOFAB.”

Envisioning Economic Development for Manhattan’s Future For Jeff Koenig, the idea of equal access is fundamental to understanding the role of government and why business incentivization falls outside its scope: “What’s government for?

It’s supposed to tax the population and, more or less, provide services across the population. A park, a street, a fire station, the public at large has access to those services whether they use them or not. An eco-devo fund, not so much.” To Armbrust, the role of government in incentivizing business is more subjective: “Economic development means different things depending on the size and type of community you’re in. We invest our time on primary employers, or net importers of dollars, and they are companies that sell their goods or services outside of Manhattan because they are bringing money into Manhattan. A community either grows or shrinks based on their primary employers and that’s where we’ve spent our economic development dollars.”

Following the failure of Tallgrass Brewery, one of the four companies that have received incentives from RICOED “New”, Armbrust said that “there will be more people looking at how we perform with the fund” and “that [the City Commission] will rightly ask more questions.” As incentives are approved by the Manhattan City Commission, the direction of economic development going forward is, ultimately, political and therefore rests with the public. As the public may not have the business acumen to understand financial 40

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risk or read the city’s Economic Development Report, the onus for imagining future economic development in the city and for communicating its role in creating jobs, lifting wages, and expanding operations rest with community leaders. To that community, Armbrust said, “We’ve had many successes that are staples of this community. This isn’t just on commissioners—this is on all of us to say that we want company growth, we want those jobs for people’s kids in the future.”

As jobs have been identified as the central metric of success for the city’s economic development program, it’s surprising that the relationship between a government’s cash incentives and tax abatements and its ability to attract new business and add jobs to existing businesses remain unproven in the larger economic sense. Timothy Bartik, of the W.E. Upjohn Institute for Employment Research, reported in a 2017 report that analyzed data from 45 industries in 33 states from 1990 to 2015 that “incentives do not have a large correlation with a state’s current or past unemployment or income levels or with future economic growth.”

As this dataset represented more than 90 percent of the country’s GDP during that time, the data calls into question how significantly government incentives will affect future job creation in Manhattan when compared to market trends and access to facilities and workforce. Rather than rejecting economic development, Bartik argues for alternatives to cash, such as “incentives that are services, such as customized job training,” explaining that “such services may be more cost-effective than cash in encouraging local job growth.”

Looking to the future, Armbrust asked, “How are we as a community, besides economic development funds, helping build the next great group of companies in this community?

And, realizing that entrepreneurial endeavors have a high failure rate and being comfortable with that, how do we help foster that next generation of great businesses?” For some, the answer to that question lies in local workforce development, for others, infrastructure improvements and access to facilities that can house animal science and biotechnology companies. For Koenig, it’s about vision: “Until we have an answer to the bigger question—what Region Reimagined is all about—we, as a town, are just flailing.” From there, he suggests developing a local seed capital fund like the Mid-America Angels, an angel investors group based in Kansas City, with a group in Manhattan.

Reflecting on the needs of CivicPlus over time and the effect that economic development policies have had on that company’s growth, CivicPlus CEO Brian Rempe said that not only are development needs broader than access to capital, the need for capital does not always align with economic development opportunities. Rempe said, “Access to capital is probably a bigger limiting factor to [CivicPlus’s] growth today than it was when we received [economic development] incentives, because we have embarked on a growth path that includes inorganic growth through making acquisitions, which is expensive.” When CivicPlus received an incentive package, however, the needs were more specific than general capital: “We were struggling to fill positions because we weren’t very well known in the community and weren’t able to tell our story as broadly as we would have liked. We were also outgrowing the four separate multi-tenant buildings that housed our teams.”

The specific hurdles that CivicPlus faced, brand awareness and office facilities, were ultimately solved with money received through economic development money, but some, like Koenig, are left wondering if solutions to marketing services and facilities couldn’t be more accessible to the general business community. Regardless, Rempe indicated that their incentive package was “very influential,” explaining, “The incentives didn’t necessarily influence our decision to expand because we were going to do that regardless; however, the incentives made it much more attractive to redirect our attention from evaluating other alternative cities to how we could best grow in Manhattan.” That decision was larger than a single incentive package. Rempe said, “Manhattan is a great community to grow a business. There is a great, well-educated, hard-working workforce, and the community is very supportive of business needs.”

City Commissioner Jerred McKee, who also works for incentive recipient CivicPlus, looks forward to engaging the economic development conversation: “Largely, I think that the city of Manhattan uses dollars out of the economic development fund in the right way. I do believe we need to think bigger at times. No doubt capital is important for any growing business, but there are many other resources that entrepreneurs in our community could be lacking, and I want to make sure the city is always willing to start a dialogue on where it can do better.”

Going forward, the conversation around Tallgrass Brewery will also continue as the city analyzes the impact of its clo-

sure on the RICOED fund and future city commissions will surely consider it when they review incentive applications.

Given the political nature of the fund, some will oppose it on ideological grounds, and similarly, some will support it outright, but most will look to local business leaders for information on what support businesses need to expand their operations, what obstacles can be removed for entrepreneurs, and what developments could attract what Trent Armbrust calls “the next generation of great businesses.”

As the Manhattan business community reflects on the loss of Tallgrass Brewery and considers how economic development can support Manhattan’s growing economy, the answer might lie in Tallgrass Brewery’s lasting legacy: the Tallgrass Taphouse and the vibrant downtown it overlooks. Established with seed capital from local investors as a separate business entity from Tallgrass Brewery, Armbrust says that the Taphouse is “one of the many ancillary benefits of Tallgrass” and Koenig points to its role in establishing Manhattan as a “foodie town with a beer scene and a brew supply store.” As Manhattan aims to attract businesses with a highly competitive workforce, perhaps the challenges are worth considering from the Taphouse rooftop on a Third Thursday while watching families listen to musicians and laugh with magicians, as they stroll and shop below.  Josh Brewer is the agency marketing director at 502, a strategic marketing agency in Manhattan, Kansas.

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Lyle’s Here to Stay As he retires as the Manhattan Chamber of Commerce president, Lyle Butler reflects on lessons from his career and considers how business in Manhattan can develop going forward.

Article by Mike Matson

Photography by Luke Townsend

How things are done in Manhattan, Kansas is evolving. The change isn’t new or sudden and it’s not limited to Manhattan. Instead, it’s a reflection of larger demographic changes in our nation, and it takes many forms. We catch glimpses of it at work, in the coffee shop line, and when we hear new voices joining the public dialogue. With the profound impact of this change on our regional economy, it’s surprising to think that Lyle Butler is one of the few people officially responsible for managing economic changes in Manhattan. And he’s retiring.

When Lyle Butler took the job as president/CEO of the Manhattan Area Chamber of Commerce a generation ago, the voices dominating public discourse were predictable, and the systems they represented were delineated by easily understood lines.

The County Commission graded the country roads, the City Commission paved the streets in town, and the school board led our kids down the learning path. The non-profit sector stayed in its do-gooder lane, the churches kept our souls on the straight and narrow, K-State churned out engineers and agricultural industry professionals, and we all learned to accept the window-rattling explosions from the western horizon as the price we pay for having the best trained army on the planet.

That’s the way it was when Butler got here in 2000. Not so much, as he departs.

“What has changed is that the younger age groups now begin to say, ‘So, I would like to live in Florida, or I would like to live in Colorado, and I’ll move there and get a job there because I like whatever those aspects of quality of place are.’ That’s what started changing it.”

Butler arrived in Manhattan with a resume burnished by that late 20th century chamber work in Greeley, Colorado and Dodge City, Kansas.

“When I talk to people in my age group, baby boomers, and they think about their own children, now, in some cases, grandchildren, they tell me, ‘Lyle, my kids made a decision on where they wanted to live and then they got a job there.’”

Today it’s clear that the notion of quality of life has merged with quality of place, but that trend wasn’t always so clear. As Butler reflects on his 18 years as the Manhattan Chamber president, he sees how he has bent the system, not toward his will, but so that it reflected the community dynamics that were active and alive on the ground in Manhattan.

Kristin Brighton, a principal with local marketing firm New Boston Creative Group, who spent a year volunteering as chamber board president and who wrote The Post-Boomer Chamber: Attracting Gen X and Millennial Leaders, describes Butler as a mentor and “pseudo-father figure.” Not only was Brighton younger than Butler, they approached problems in a distinct way. “I’m an idea person. More than once I’ve gone to Lyle with a crazy idea, and he’s helped guide me on the path to fruition.”

“During the year I was chair of the chamber board, I asked our board to rethink several parts of the status quo to make parts of our chamber structure more effective, a process that continued into the effort that became the Greater Manhattan Project. Never did Lyle seem threatened by our 44

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executive board questioning parts of the organization; he embraced our desire to assess what was working and what wasn’t working, and supported initiatives to explore other options to make things better.”

During Lyle’s tenure, chambers of commerce across the country became the indispensable institution to effectively move ideas and agendas in local governments. They have simply become the only system in many communities with the infrastructure, relationships, influence, and in Manhattan’s case, the human resource talent.

Reflecting on those developments, Butler says, “I’ve thought a lot about that, and it’s probably more stark today than it was, but the reality is the chamber is somewhat of a default.

Chambers have become that one organization in many communities across America where, what I call the ‘good’ chambers, the progressive chambers, have realized they can bring a diverse group of people together to talk about community issues and how to improve the quality of our place.”

Butler’s retirement comes in the middle of a full chamber agenda and a community working through change and adaptation challenges, not the least of which is an evolving perception of what chamber work actually entails.

Traditionally, the business community is comprised of bottom-line driven people, such as retailers, service providers, and manufacturers who get up every morning thinking of ways to ensure the jottings at the bottom of the ledger are of higher numeric value than the corresponding figure of the previous quarter.

Under the old model, the businesses whose dues pay the chamber freight saw their chamber as a vehicle to help them do just that. They’d say, “Go lobby the legislature for lower taxes and less regulation. Keep a check on the school board for Cadillac-bond issues. You have one job. Do it.” It turns out 21st century chambers of commerce have more than one job. Many more.

In Manhattan, there’s a shopping mall struggling to find a purpose in a 21st century one-click shopping dynamic.

There’s a growing trend toward regionalism, punctuated by the need to engage neighbors in Junction City and Wamego and Pottawatomie and Clay counties, so that the Flint Hills can become an enviable regional economy. There’s downtown development, neighborhood revitalization, an evolving Aggieville, and on and on.

While it would have been easy for Butler to succeed by managing a day-to-day dated chamber of commerce, Brighton says Butler tended to lean into more proactive collaborations. He became the driving and creative force in Manhattan to think big while focusing on the details.

Butler tended to lean into more proactive collaborations “Through my time on the executive board, our leadership team championed Lyle’s suggestion to start an interregional visit program, and we chose to hire Market Street Services to conduct the Greater Manhattan Project, which lead to Region Reimagined. These last two actions have had lasting

impact on the community and will help to extend Lyle’s legacy into future generations.”

As Manhattan’s city manager, Ron Fehr understands how the framing of local issues helps others focus on what’s important. Viewed from that perspective, Butler excelled, particularly, he says, when it came to economic development and tourism. During Butler’s tenure, the chamber began the Advantage Manhattan program, which provides private industry support for economic development. In 2016, the most recent campaign raised more than $3.3 million.

“He helped guide the chamber to successful internal fundraising efforts to better the chamber and the community.

This fundraising by the business community illustrated that the chamber was willing to lead and also invest their funds in targeted improvement areas yielding a valued partner.”

Great at the day-to-day, Butler is also known for his wherewithal to recognize and understand changes on the horizon. This combination allowed Butler to bring enough capacity to wait for the community to catch up and for the city’s demographics to change just enough so that new voices were taken seriously.

“Manhattan’s been very successful because we’ve had good visionary leaders. But it’s hard sometimes to stop and say, ‘Wait just a minute. What do we want to be like in five years?’” Butler explained. “The good news is that process is in play with Region Reimagined, a community-wide vision that’s still ongoing, but that has a vision and goals that aren’t just chamber goals. And so as I leave, I’m excited about that possibility and wish I could be part of that. And maybe I can be, on the outside, instead of being directly on the inside.”

Fehr says that Butler’s departure will certainly leave a gap in his professional network. “He is a good sounding board for me and also someone I can confide in,” Fehr says, “I will miss his conversation and discussion about important items facing the community and approaches/solutions in tackling them.”

An effective chamber executive is a politician, salesperson, and cheerleader with skills to employ those characteristics in a non-threatening manner that moves the needle. Brighton said that Butler “will leave big shoes to fill.”

“I’m not sure I’ve ever seen him have a bad day. He’s always upbeat, optimistic, and willing to consider new ideas and ways of thinking, and see how those ideas could benefit Manhattan. Lyle’s also always excellent at thanking people for coming out in support of the chamber or community, making volunteers feel gratitude for giving of their time or other resources.”

Thankfully, Butler’s not going far. He helped lead and design quality of place in his career, and he and his wife have found it for themselves in Manhattan.

“People say, ‘Aren’t you excited about retirement?’ and I go, ‘Yeah, but I don’t fish, and I don’t golf.’ My life has been community development and making a place a great place.

When people say, ‘I just love living here and they start listing the amenities, then I can say, ‘Wow, we’ve done some good things.’”  Mike Matson is the director of industry affairs and development at Kansas Farm Bureau. He is the author of Spifflicated: A Family Memoir. You can find his other writing at MikeMatson.com.

Butler’s Defining Accomplishments

A retrospective look at the Manhattan Chamber of Commerce’s accomplishments during Lyle Butler’s tenure.

Downtown Redevelopment

A 14+ year project beginning in 2000, the northend, south-end, and Poyntz Avenue downtown improvements created a new and thriving commerce and entertainment district in Manhattan.

Commercial Jet Service

Since 2009, the Greater Manhattan region has benefited from daily regional jet service in partnership with American Airlines.

Development of the Manhattan Conference Center

Opened in 2011, the Hilton Garden Inn and Manhattan Conference Center offer our region a 30,000-square-foot conference center.

A Vision for the Future: Region Reimagined

Area leaders joined to develop and execute a consensus-based vision for the next five years and beyond for our region.

Economic Development

Through the creation of multiple economic development campaigns and initiatives, over 11 million dollars in private capital has been generated to support area business attraction and expansion.

The Best Town/Gown Relationship in the Country

The Princeton Review ranked Kansas State University No. 1 for great town-gown relations in the 2018 edition of “The Best 382 Colleges.”

Expansion of Leaders Retreat

Uniting the Junction City Chamber of Commerce and the Wamego Chamber of Commerce has allowed our region to come together and join forces on common issues and opportunities.

Article By Jeff Koenig

SPONSORED

Getting Smart About Generosity with Donor Advised Funds Donor-advised funds have helped the Greater Manhattan Community Foundation give back to Manhattan for 20 years.

In 2017, Americans gave $2,270 per household or $880 per person to charity, according to Giving USA. Increasingly, many of those givers want to give strategically and for the long-term. Apart from occasional spontaneous giving in small amounts, most donors tend to develop patterns of giving that revolve around a mission, an objective or a system of belief that they wish to advance.

Maximizing the impact of planned giving can be accomplished through a Donor Advised Fund (DAF). The Greater Manhattan Community Foundation (GMCF), the tax-exempt public charity that has served the Manhattan area for 20 years, defines DAFs as “charitable funds for those seeking active involvement in grantmaking. Fundholders and their successors, if desired, advise or recommend grants from their fund to support nonprofit organizations.” Since 2012, the number of individual DAFs have increased at a rate of over 6 percent per year, according to the National Philanthropic Trust, but many still wonder what a DAF is, how it works, and whether it is easy for the giver to use.

A DAF is a philanthropic account established within a public charity, much like a savings account at a bank. It allows donors to make contributions, receive an immediate tax deduction and then self-recommend grants from the account over time to charities of their choice. This allows individuals to annually plan and budget for their giving and tax benefits.

It also removes the pressure on the giver to fully distribute their gifts before yearend in order to gain the tax deduction.

Convenience is advantageous, yet there is an even better reason to utilize a DAF as a personal charitable savings account: by allowing givers to pool funds without

losing the short-term tax benefits, givers can see their giving safely invested for growth over time. In this way, donations can continue to do good for many years, even indefinitely, after the givers are gone.

In the past 20 years, over 110 DAFs have been established within the GMCF, and each DAF awards grants to organizations and programs that enhance the quality of life in our area. The amount of money under management has grown to around $80 million with more than $17 million in grants and distributions deployed to improve lives. “There were two significant years in our timeline that helped us take major steps toward coming this far,” said Vern Henricks, GMCF president and CEO. “The alliance with and support from the Goldstein Foundation in 2011 and the Howe Family Foundation in 2013 really put us on the map among Kansas community foundations.

And now, we are grateful to announce the new addition of the Butler Charitable Family Foundation.”

While GMCF’s community impact is impressive, its management efficiency should be loudly celebrated. Forbes contributor William P. Barrett wrote that charitable management should cost no more than 25 to 30 cents for each charitable dollar collected, and the 100 largest charities in the United States average around 11 cents per dollar collected. In comparison, the GMCF spends only 6 cents to aggregate each dollar. Henricks points to the GMCF mission statement as his adopted modus operandi: “we don’t fundraise” he said, “we build relationships between donors and community needs without spending on marketing the way that fundraisers do.” Humility is admirable, but the GMCF operating template is a model that we in the community

should cheer. It’s also the reason that many consider starting new DAFs with, or moving existing ones to, the GMCF to know that every dollar will be maximized toward doing good.

“Starting a DAF at the GMCF is not difficult and is much like opening an IRA,” Henricks notes. “With $10,000, a DAF can be opened with no up-front fees, which gives the donor the right to name the fund, gain professional management to help it grow, and recommend grants at any time to any qualified charity in the U.S. with checks issued in 2 to 3 days.” The GMCF notes on its website that DAFs help simplify, consolidate and establish a tradition of charitable giving among members of a family. For those who desire anonymity (giving without trying to gain personal recognition or public credit), a DAF can act as a proxy that benefits the charity receiving a grant without the charity knowing the giver.

Starting a DAF at the GMCF is not difficult and is much like opening an IRA

Some high-net-worth families may opt to start and fund their own private foundations. While there are definitely advantages to doing this, including ultimate decision-making authority and control, most will find the startup, ongoing operational expenses and management time needed to run one’s own foundation, not to mention the regulatory and tax considerations, make the DAF at a community foundation a far more attractive and efficient option.

In exchange for a small management fee, typically around 1 percent annually of the value of the account, donors can enjoy many of the benefits of a private foundation, without the management costs. Further, as the amount of assets managed by GMCF grows, its cost efficiency will increase so it intends to continuously reduce fees in the future.

Henricks said that additional benefits of creating a DAF include professional assistance finding charities that align with one’s interests while exploring different ways of giving. DAF account holders are able to work through their estate or financial planner, who will manage the DAFs for them. Some may

Content sponsored by the Greater Manhattan Community Foundation

appreciate having someone else handle all of the paperwork so they can simply enjoy the giving.

Perhaps the most personally satisfying benefit of opening a fund at a community foundation like the GMCF is the connection enjoyed with the larger community of local givers. Account holders have the opportunity to become more aware of the specific needs being met in the area. They can learn about the many ways that others are working to significantly improve lives by addressing these needs. DAF owners often serve on GMCF committees or its various programs and affiliated organizations. The current donor list numbers over 1,400 individuals and businesses. In only 20 years, it has launched dozens of defined-interest programs and named funds to address identified community needs.

A few of the many distinct programs that set the GMCF apart from others are featured on its densely packed annual calendar. August starts the annual grant cycle of Youth Impacting Community, which donated to 11 organizations in 2018. The uniqueness of this program is its board of high school students who investigate worthy non-profits impacting youth of all ages and decide on grant awards. Program coordinator Kim McAtee proudly reported that “these students can see the needs in the community and help to address them.”

In November, there’s the Lingerie Luncheon. Tara Claycamp explained how this annual event benefits several area women’s charities with attendees donating underwear, socks, and cloth-

ing for children to help those seeking refuge with nothing but the clothes on their backs. “I think the most rewarding thing for me was starting with a group of women 12 years ago who wanted to ‘be the change.’” Today, Tara is one of 700 Fairy Godmothers who anonymously help other women with critical needs like home repairs and transportation. In the last year, they have granted more than $56,000 to help 110 families in need and stretched those dollars further via local small business partnerships. In 2018, they also started the Hand Up Grant (HUG) program that provides up to $3,000 to take recipients beyond immediate needs and pay for additional education in order to break the poverty cycle.

Throughout the year, a small group of men called The Guardians help other men “live with hope and dignity,” as group leader Mark Hatesohl puts it, “by paying for essential needs that fill gaps when no other organization can.” With a budget of around $3,000 per month, The Guardians have purchased work tools for men to maintain employment, provided dental assistance, and even paid for pest extermination to allow a man’s children to be able to visit him in his home.

Among the best-known programs at the GMCF and affiliated foundations across area communities are the annual Match Day events, with at least six communities holding their own branded days. In May, there’s Marysville’s “Pony Up,” September brings Clay Center’s “Gather For Good,” Sabetha hosts “Give to Grow” in November, and then there is the perennial “Grow Green” every April

in Manhattan. Doniphan County and Frankfort have just created their annual Match Day drives. These Match Days now bring in over one million additional dollars in combined donations annually and individual givers are able to designate donations they make day-of to any of a number of funds listed within each community.

On March 18, 2019, the GMCF will mark its 20th anniversary during the annual Community Foundation Awards.

At the Community Foundation Awards, Flint Hills residents will celebrate the foresight of a local group of philanthropists who felt it was time for a growing region to facilitate residents’ desire to support charities here at home while also building a community investment nest egg for the future. What began as the Manhattan Community Foundation has since expanded, adding “Greater” to the name in 2008 to recognize the generosity and help of nine additional surrounding communities: Blue Rapids, Clay Center, Doniphan County, Dover, Frankfort, Junction City, Marysville, Sabetha and Wamego.

All givers who are interested to learn more about DAFs can find additional advice and assistance from their legal estate planner, accountant, financial advisor, or by scheduling a meeting with the GMCF or an affiliated foundation. Like retirement planning, the sooner an individual gets started with long-term planning for their charitable giving, the more they can enjoy the compounding effect, in this case, growing the long-range impact of their giving as a lasting legacy. 

Content sponsored by the Greater Manhattan Community Foundation

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VETERAN, SAWYER, CRAFTSMAN, ENTREPRENEUR. RETIRED FIRST SERGEANT SCOTT JACOBS PROVIDES GUIDANCE AND OPPORTUNITY FOR AREA SOLDIERS.

EMBER WOODS SAWMILL Article by Sarah Siders

On the corner of Cedar and Broadway in Riley, a group of men crowded by Ember Woods Sawmill’s front door dressed in camouflage and Carhartt. Above, a thick, smoky mist floated from a giant silver kiln into a blue sky. The mid-morning light poured through the garage opening behind them, illuminating three stories of stacked lumber.

A 101st Airborne Division banner hung nearby with a year’s worth of sawdust gathered across its surface. In the center of the group, retired First Sergeant and sawmill owner Scott Jacobs stood in his woodworker’s uniform: a red beard, dusty ball cap, flannel shirt, and work pants.

The Ember Woods Sawmill serves surrounding communities by logging, milling, and drying custom woods and creating custom woodwork, but a year ago, the mill looked nothing like it does today. “I found this place, put an offer down, and I got it. I gutted the place, took about 13 truckloads of stuff out. I’ve turned this place from a not-doing-so-well lumber yard into a functional showroom, [engraving] room, and epoxy room.”

Visiting for the week from their Indiana hometown, Jacobs’ father, Mike, welcomed patrons into the office showroom like a seasoned employee.

“Scott’s shown me the ropes, and I have some sanding work to do for him this week. He’s working me like a mule,” Mike laughed. He scratched his newly-grown beard. “Scott told me I have to have a beard if I want to look like a woodworker,” he chuckled. “My wife is going to hate it.”

Fluorescent lights and a wide window along the front of the building brightened the showroom. A drop tile ceiling hovered low over scuffed, brown tile floors. As patrons arrived to pick up orders or

Photography by Luke Townsend

drop off lumber, a screen door slammed. Jacobs shook hands, giving each person his attention and engaging them in light-hearted conversation. The smell of wood shavings and a fresh pot of coffee hung in the air. A yellow lab puppy named Chief wandered the office, saying hello to visitors. Jacobs reminded Chief not to jump on patrons, but he did not appear to understand the command.

“Chief is my mascot,” Jacobs joked.

Custom wood design samples hung high on the walls near the ceiling, while assorted sizes of furniture wood were arranged on the showroom floor, sanded smooth. Red gift bows sat in the center of each piece of wood, placed there

by Mike after he arrived. A retired insurance salesman, Mike grinned as he admitted the bows are to suggest to visitors that custom woodwork makes a great gift. Off the showroom, a workroom hosted a long table displaying slabs of wood in various stages of production. The wood in this room waits for its next purpose. Depending on the order, it may become a table, a mantle, or perhaps a cutting board or serving platter.

The workroom is something of a second home to Kevin, Jacobs’ retired first sergeant, who voluntarily works on custom orders for Jacobs several days a week. In a red shirt and sunglasses perched across the rim of his dark blue ball cap, he leaned on the wall, arms crossed. “I’m bored ‘cause I’m retired,” he smirked. Because the sawmill business is still getting started, Kevin is compensated in a combination of cash and his choice of wood pieces. Jacobs said, “I tell Kevin he runs the place.”

Jacobs laughed and added, “He makes all the decisions. I’m all over the map.” Then he added, in mhk business news

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“I think I’m most proud of this building, building it from the ground up.” a more serious tone, “It’s good because he knows me and knows when he needs to leave me alone.”

The exchange quickly turned playful again as Jacobs and Kevin reminisced like brothers about their days in the military. “I entered the military as an E1 in 1997,” Jacobs recalled. “[Kevin and I] deployed together in 2005 and were stationed in Mosul. When we first met, I was an SSG (staff sergeant).”

Jacobs leaned back against the counter, arms crossed with a smile on his face as he remembered one of the reasons their company congealed like they did. “Bravo Company had a unique mentality. We had a saying that started with a company in Vietnam: LUOFY. Love us or fuck you.” He laughed. “It was a stepchild-type company. This unit was told, ‘You’re off on your own. See you later.’ We adopted that acronym, and the first thing that happened in Kuwait was, they told us, ‘The plans changed. You’re on your own. See you later.’ Same thing with the next deployment. They told us, ‘We need people in Mosul. See you later.’” In the end, Scott did not mind the arrangement. “Basically you’re on your own, but people leave you alone.”

Kevin added that being on their own together forged a camaraderie not common to an aviation unit. “I always 52

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thought this was weird with us. We weren’t [a combat unit], but we developed and hardened like a combat unit.

We grew like a family, like an infantry unit would. We still talk regularly.” Kevin and Jacobs took turns rattling off names and current locations of the members of their unit. Kevin started, “Josh is in Salina. Bobby is on Fort Riley.” Jacobs took over, “Sam’s in Kansas City. Judson is at Campbell. Burke’s in the Campbell area.

He runs a sawmill too.” Kevin added, “We all still talk like we never left.”

Kevin bragged about the familial environment that Jacobs built. “Scott was a big part of keeping everybody together.

He took what we were doing in Iraq and kept doing it here, and it kept everybody just as close.”

Jacobs’ ability to create a hardworking, yet playful family environment continues to attract prior members of the military who want a place to feel at home after leaving the Army. Nick, also a retired first sergeant, volunteers on weekends doing work for Scott. “I pay him in woodwork. He offers to come in during the week after work, but I can’t let him.”

In a flannel shirt and mustache, Nick slid wood across a planer in the corner of the woodshop.

Nick is one of several volunteers with prior military service who enjoy spending time in the woodshop with Jacobs. As to

why he tends to attract those with prior military experience, Jacobs explained, “the civilian world has been really tough on me. I don’t understand their mentality. They just let things go.” Despite being retired, Jacobs said working with other people who have served in the military allows him to speak the language of the Army and be understood. “It’s a community. It’s all E-8s in here.”

In 2016, after 20 years of military service, Jacobs took a risk and retired, wanting to make his own way. He credits his wife for supporting him as he made the transition into work as a civilian, giving him room to take risks he would not otherwise have been able to take. “I was able to retire because my wife is selfless and a hard worker, and I knew she would be successful [in providing for us].”

While his ultimate goal was to pursue freedom in his career, initially he worked for someone else before going out on his own. “I didn’t know what I was going to do when I decided to retire. I put a year into another person’s business, but I put all my extra time into it. I sold out of that company after a year, and I started my own business because I knew I could do it better.”

Jacobs realizes that each step of his business story built on itself, but it was not clear at first. For example, after buying a CNC engraving machine, Jacobs started making farewell gifts for his friends and colleagues from the military. “I couldn’t afford to give $100 to everyone who was retiring every month so I started making engraved plaques as farewell gifts. Then one day, I said to my wife, ‘I’m buying a mill. What do you think, honey?’ She said, ‘Go for it.’”

Jacobs is quick to speak to the challenges faced by those leaving the military. “When you are in the military, you are led in everything you do. Some soldiers get out, and they have all these opportunities, but nobody guides them out.” He explained how many veterans struggle to communicate how their skills and experience translate into a civilian environment.

Having found his own way, Jacobs makes it his mission to provide guidance for soldiers he knows and help connect them to a new role. “Soldiers need to find what they are good at, what experience they have. I have helped plenty of soldiers and gotten them

jobs out of the Army.” Inviting retired veterans to work with him at the mill is one of the ways he serves other veterans and continues to create community.

He hopes the mill is a place veterans can find their place after retirement, “I encourage veterans to come learn a new skill or help me learn the skill.”

Jacobs believes that he was able to transform a struggling lumberyard into a thriving sawmill because of his Army experience. “In the Army, we’re used to building from nothing. I put a lot of work into this place. I’m still trying to figure out how to utilize the space I have, but I think we’ve got it. Eventually, I’m going to do the floors and finish the walls in the showroom.” Jacobs nodded and then looked around as if he was taking inventory of the lumber piles and sawdust, the fluorescent lights, brown tiles, and the 101st Airborne Division banner. “I think I’m most proud of this building, building it from the ground up.”  Sarah Siders is a freelance writer, author and small business coach who specializes in leadership and healthy relationships.

“I encourage veterans to come learn a new skill or help me learn the skill.”

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FINANCE

Article by Derek Larson

Photography by Blade Mages

Old Money: Historic Tax Credits Explained Many downtown property renovations receive historic tax credits to incentivize investment. How do historic tax credits work and when do they make an investment economically viable?

The Orville Huntress building was a post office, and later, a bank. Standing at the corner of 3rd Street and Poyntz Avenue for over 130 years, it has been a mercantile company, a gas and electric company, a milling and power company, a variety of shops, a car dealership, and a bar. That bar had a kitchen. And that kitchen ... well, that kitchen was not envied by many. “That kitchen was a thorn in the side of people with the city,” said building owner Jan Miller. “They knew it was on its last legs, but they still allowed it because it was grandfathered in.”

Today, that kitchen is no more. It was trimmed from the Huntress during recent renovations completed by BHS Construction. “When I told the city that we were taking out all aspects of the bar, as well as the kitchen, they were very happy.”

Miller, also the owner of Steve’s Floral, purchased the Orville Huntress Building in 2010 with the idea that she could turn it into a space to be envied. After a nine-month effort that saw updates to the building from top to bottom, the $1.2 million renovation is now complete. Miller’s tenants — The Village Geek, The Winged Lion, and 502 — occupy a space that mixes elements of the building’s history, such as stained glass windows and an original tin ceiling, with modern features and updates, such as new floors and walls.

The transformation is absolutely awe-inspiring, and it’s largely thanks to historic tax credits.

“Historic tax credits are the most important tool we have, in terms of a tool to encourage people to purchase historic buildings and help maintain them,” said Brenda Spencer, preservation consultant with Spencer Preservation.

The History of Historic Tax Credits Historic tax credits are nothing new. In 1981, the Reagan Administration enacted federal historic tax credits as part of an economic stimulus package to encourage the preservation and adaptive reuse of historic buildings. In 2001, Kansas lawmakers followed suit, implementing the state’s Historic Rehabilitation Tax Credit.

Though similar, the federal and state credits do bear distinct differences. While the federal program is designed for large-scale, one-time renovations, requiring that expenses meet or exceed the owner’s adjusted basis in the building, the state program can be used annually for any qualified projects that hit $5,000. The federal credits equal 20 percent of project expenses, spread over five years, while the state credits equal 25 percent of qualifying expenses in a single year. Any project that qualifies for the federal credit automatically qualifies for the state credit. Projects that qualify for both credits can use them together for a combined 45 percent tax credit.

Perhaps the most significant difference is that while federal historic tax credits are non-transferable, state tax credits can be sold to banks, usually for close to 90 percent of their face value.

For example, the owner conducting a $1 million renovation that generates $250,000 in tax credits could sell those tax credits to a bank for close to $225,000 in cash, meaning that building owners can finance nearly one quarter of their expenses with historic tax credits. Whether that means a new storefront, a new heating system, or a whole new space, a significant chunk of renovation expenses can be covered. “It is such an effective economic development tool that the demand just hasn’t wavered,” Spencer said. That demand has taken Spencer across the state, from larger cities to small towns. She has worked with everything from homes and hotels to high schools and hospitals. She has even taken part in a project that transformed an old parking garage into housing in downtown Wichita.

While demand is high, these credits are not simply given away. To earn the Kansas State Tax Credit, equal to 25 percent of qualifying expenses incurred during a qualified project on a qualified building, building owners must meet four conditions: Provide evidence that their building is a qualified historic structure, meaning it has been listed on the National Register of Historic Places or it contributes to a National or State Register Historic District Follow a qualified rehabilitation plan, reviewed and approved by the State Historic Preservation Office (SHPO) Exceed $5,000 in qualified project expenses Meet the Secretary of the Interior’s Standards for Rehabilitation Four bullets on a list may not seem that imposing, but completing that checklist requires extensive, often painstaking documentation. That’s where Spencer comes in. As a preservation consultant, leading historic renovation projects is one of Spencer’s primary duties. In recent years, she has participated in 10 to 15 of these projects annually.

She devotes hours to reviewing construction plans, providing photographic evidence, and documenting every aspect of the building — down to the trim — that will be impacted by renovations.

“What I’m trying to do is ensure that the client’s improvement project is going to qualify for historic tax credits, meaning they’re doing work that meets the Secretary of the Interior’s standards for rehabilitation,” Spencer said. “They’re pretty general standards, but there’s also a lot of room for interpretation. Unless you work with them daily, they’re a little too vague.”

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The Secretary of the Interior’s Standards for Rehabilitation, codified as 36 CFR 67, are regulatory for the Historic Preservation Tax Incentives program.

To meet the standards, Spencer works with building owners and architects to comb over the minutiae of improvement plans, eventually passing them along for review and approval by the state historical society, as well as the National Park Service if the building owner chooses to pursue federal tax credits. Once renovations are finished, Spencer completes a post-project review to make sure all renovations were completed as originally discussed.

With 30 years of her life devoted to historic preservation, Spencer has a great appreciation for historic tax credits.

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“While all buildings have great history and reflect different things to us in terms of what aspects of society they’re representing, I’m a pretty firm believer that preservation has to make economic sense or we’re not going to get very far. To me, that’s the basis of historic tax credits. It really helps level the playing field.”

The advantages of the credits are many, Spencer said, while the disadvantages are few. “Some people think that listing a building on the historical register is not worth the incentive.

To me, there’s no proof of that.”

A 2010 study conducted by the Rutgers University Center for Urban Policy Research for the Kansas Preservation Alliance supports Spencer’s view, noting, “On the plus side, the $69 million [Kansas Historical Tax Credit (KHTC)] has encouraged a four times greater amount of historic rehabilitation ($271 million), which, in turn, has supported thousands of jobs (about 4,400) and hundreds of millions of dollars of total (direct and secondary) economic gains in Kansas ... The KHTC leverage and multiplier benefits support the argument that the KHTC is a ‘good’ investment.”

“The only con is the review period,” Spencer said.

“You’re talking about a 75 day minimum review period to get the state historic preservation office and the national subsidies to review your packet. You have to plan ahead. You can’t swing a hammer until you have your project approved.“

Skilled Craftsmen

A Well Thought Out Purchase Jan Miller contemplated purchasing the Orville Huntress building for years. She discussed the space’s potential with her father. She pursued, but was turned away multiple times. Finally, in 2010, she and the previous owner reached an agreement. Was the price higher than she hoped to pay? Yes, but she and her father agreed that she had made a wise investment.

She spent years maintaining the building before deciding to push forward with renovations. Originally, she envisioned apartments on the second floor, going as far as having an architect draw up plans. She pivoted, though, and considered new ideas. She asked Blade Mages, principal of 502, a strategic marketing agency, about using the space for offices. “I approached him and said, ‘Are you interested?’” After a tour of the space, the answer was yes.

From the moment an agreement was in place, Mages played a key role in providing input and vision for the architecture and design of the second floor space. That meant keeping the original tin ceiling and incorporating a bar into a meeting room. Out of the norm? Perhaps.

But the owner was on-board with the new bar. “I think it’s spectacular,” Miller said.

Miller’s banker recommended that she have strong leases in place before the renovations began. With 502 signed and The Winged Lion, a store specializing in home furnishings and gifts, already a tenant, Miller had one more space that was in need of some serious TLC, so she needed a tenant. That’s when she found the Village Geek.

“The Village Geek’s space had wavy floors,” Miller said. “It had broken windows. It used to be used by a car dealership at one point and there was a sunken area where you could do the oil change and so on and so forth … we had to address that.”

Renovations began in the fall of 2017. For nine months, Miller kept a watchful eye on the progress, often checking in multiple times a day. She took pride and

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ownership in the work, and admittedly, found it difficult to let go once it was complete. “It was hard for me to walk out of The Village Geek and then leave it alone, because I wanted to be there to make sure everything was just right.”

With renovations complete, Miller can reflect. Which piece of the renovated space is her favorite? “They’re all pretty equal. They’re all my children.”

The Story of the Huntress Continues

A THOROUGH REVIEW JAN MILLER (LEFT) AND BRENDA SPENCER REVIEW PROJECT BLUEPRINTS.

The Orville Huntress building is dramatically different after the extensive renovations, but Miller still has a future vision for the building. Her vision includes a rooftop garden, a new elevator to replace the service elevator inside, and a completed cornice at the top edge of the building.

“My father knew that this was a good decision. He and I had the vision. We understood what it would look like. How the building would appear. Lights on. Active. We understood that, and to see this

fulfilled is a dream of mine, but it was also a dream of my father’s. It’s wonderful.”

Could Miller have funded the building renovations without historic tax credits?

“It would have been very difficult for me,” she said. But Miller had a plan and extensive planning, which Spencer emphasizes is key to a successful historical preservation project using historic tax credits. “If you plan for it up front and you make your schedule accordingly, then, to me, if you’re not using historic tax credits and you own a historic building, you’re leaving money on the table.”

With historic tax credits, Miller was able to make her dream economically viable and she hopes that her willingness to chase dreams and further elevate Downtown Manhattan, remains long after the building is in new hands. “I want the passion of what it took to get us here to be maintained.”  Derek Larson is the communications manager at Nelnet Diversified Solutions.

We love making old spaces new.

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PUBLIC HALL CO-OWNERS LEFT TO RIGHT TAYLOR CARR, DIANE MEREDITH, DAVID SAUTER, JESSICA MAUCK AND JESSA VOOS.

Article By Gavin Colton Photography By Luke Townsend & Josh Hicks

STARTUPS

Public Hall Preserves a Warm Balance with Orange Sky Yoga

It was afternoon in Aggieville when David Sauter announced that he was done with caffeine for the day. Across the bar in Public Hall, Diane Meredith told stories about Aggieville 30 years ago. Sauter and Meredith had already co-owned Acme Gift, The Dusty Bookshelf, Thread, Super Cub, and Varsity Donuts when the more than 100-year-old former grocery store became available. Co-owners David Sauter, Diane Meredith, Jessa Voos, Jessica Mauck, and Taylor Carr were attracted to the space, in part, because of the potential collaboration with adjoining Orange Sky Yoga.

Voos, also an owner of Orange Sky Yoga, was quick to highlight the collaboration’s value to building community 60

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among customers. “The Orange Sky community is so grateful for a space to relax and wind down after classes, to spend time together, and get to know each other.” Public Hall also houses rentable office space, once occupied by The Alms Group, a “for-social-profit” real estate brokerage.

It’s a huge space, shared between Public Hall and Orange Sky Yoga, and is separated by three steel shutters that remain open during the studio’s opening hours. Sauter said that the offices were a natural result of the things people had asked them for over the years: bookshelves and office space were at the top of many lists.

“We probably weren’t going to sell bookshelves out of a coffee shop,” Sauter said. “But the office space, with so much room, we could actually make work. Once you throw in a few offices, you all of a sudden have some constraints. And constraints are good. Constraints force you to make decisions, create inflection points.”

This is where Sauter bowed out to Meredith’s and Carr’s creative eyes.

The whole building was retrofitted to the original style.

The old grocery store logo protruded on the brick in the east nook. There’s history in the walls, along with old peanut shells and cement chippings.

“It’s super important that Aggieville stays a little old timey village, but just a polished, more well-maintained one,” Meredith said.

She is particularly fascinated with the history of the dis-

trict, having been an Aggieville business owner for over three decades now. “I imagine who the former business owners were, what they did, what they wore, what they said, what sort of customer service they provided. Women wore long dresses and hats and swept the entries.

We try to honor and preserve the space as best we can and breathe new life into it.”

Meredith sat on a sofa in the west nook, observing patrons coming and going. Nearby, students plugged in their laptops under three-foot tabletops built by local maker, Jonathan Mahorney. They barely noticed Aggieville passing them outside the shop’s large bay windows.

People at the cluster of tables at the back of the main hall lifted their heads when customers walked in, as if to say hello.

A herd of yogis emerged from the neighboring Orange Sky, mats nestled between their ribs and elbows. Some sported a fashionable duffel bag over their shoulder. One yogi said that it’s great to see someone recycling in Aggieville. For Carr, Meredith, and Sauter that one is a no-brainer.

Seasoned coffee drinkers cheer the glowing-red bags of Intelligentsia Coffee decorating the bar and barista station—a warm taste of a previous city-life for some.

“It’s really, really great coffee,” Carr said. “It’s fun to have a brand in the shop that makes us feels like we’re on vacation in Chicago. They’re a company that’s incredibly supportive of their coffee farmers, which makes it easy to love them and want to work with them.”

Intelligentsia is committed to sourcing, developing, roasting, and distributing the world’s finest coffees.

“I respect Intelligentsia’s mission to get specialty coffee to people in small towns and educating people about non-chain coffee experiences,” said Elana Carroll, cafe manager and latte art champion at Arrow Coffee.

Devon O’Malley, manager at Public Hall, said that he also plans to debut a food and cocktail menu in the near future.

“We’re currently perfecting a myriad of cocktails. We’re working on bringing meals and shareable plates that breed community. People can come with a friend and hang out and share food.”

In the east nook, a group of students ploughed silently through homework; the 6-foot-long, wooden table jutting out from the brick wall was littered with textbooks, colorful notes, and charger cords—family style. At the other, a date seemed to be going well, the couple leaning in over empty cans of Wanderlust beer.

The woman shook hers, stood and walked to the bar, past the small arsenal of pastries and cookies—almond poppy seed, pumpkin spice, coffee cake, orange chocolate, s’mores and oatmeal raisin.

Sauter and Meredith will admit that their inspiration for Public Hall was an accident, but that they’re happy to contribute some balance to Aggieville, which is the oldest shopping district in Kansas.

“We’ve repeatedly said no new projects these past few years,” Sauter said. “Our biggest concern with this place was that it was a barn, and we were worried that someone would just come along and put something that was sort of…”

“...more of the same,” Meredith finished his thought.

Sauter and Meredith believe wholeheartedly in the continuous, growing future of Aggieville and its value in Manhattan. “K-State is the number one reason people come to this town. Aggieville is the second,” Sauter said. “If people don’t understand how important Aggieville is to this community, then they’re sadly misinformed.”

Meredith is most excited about the traditions that will be born in the coming years at Public Hall: “Mulled wine on the first frost, nothing during the Nothing Festival, St. Patrick’s Day traditions, people signing the bottom of the tables, bringing candles out to tables every day at dusk ...” On the last point, she expresses some anxiety in lieu of the 2017 fire at The Dusty Bookshelf.

Carr talked about the eclectic use of such a large, varying space: “My favorite part about the different spaces in Public Hall is that whatever reason folks may have for stopping in, we hopefully have created a space for them to have intimate conversations, work on group projects at the larger tables, and make new friends with the rad staff behind the counter.

We’ve collected ideas from everywhere we’ve traveled and incorporated them into this space.” Carr pointed to the east nook and said, “San Francisco.” She pointed to the west one and said, “Minneapolis.”

Meredith, Sauter, and Carr have traveled the country, searching for inspiration and ideas. Meredith said, “We’ve

PUBLIC HALL’S ATMOSPHERE IS INSPIRED BY CITIES ACROSS THE COUNTRY AND A NEVER-ENDING SUPPLY OF CUSTOMER SUGGESTION STICKY NOTES. mhk business news

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gone to 10 coffee shops a day in New York; we’re passionate about making a difference and inspiring people to do cool things in this town.”

Sauter admits that he leaves much of the designing to Carr and Meredith.

“We knew we wanted it to be very intimate and cozy and homelike,” Meredith said. “We want people to feel like they can stay here. We also want people to be respectful and not take up an entire table for five hours—sophisticated, warm, and well-designed—we want to give the customer everything we can give them.”

The barista offered patrons samples of the three organic Tractor beverages available on ice: Orange Blossom Cardamom, Lemon Tumeric Cane, and Apricot Peach. In monstrous tubs behind the bar, they are the last colors of fall: pine tree green, earthy brown, and oak leaf yellow. The barista told me that some people like to mix them.

In the rear section of the building, three booths were jam-packed, each with a handy lamp on the wall that the patrons govern. Across from them a mosaic of yellow sticky notes bore suggestions:

“more Counting Crows,” “cushioned chairs,” “oat milk please,” “art mural,” “veggie juice,” “AC/DC,” “bike rack,” and “fire pit.”

We want people to feel like they can stay here Outside, a group of men played pingpong on the patio, which Sauter and Meredith admit is a work in progress — both the ping-pong and the patio. Two children, siblings perhaps, chased after stray balls and tossed them back in the basket.

Meredith said that her favorite moment at Public Hall was, “a day we rode our bikes down and played ping-pong. It was 65 and overcast, and when someone brought coffee to my table, I literally teared up.”

Back inside, a woman took up the only single seat in the house across from the sofa. She wore a felt homburg ornamented with a brown feather. She read a paperback and scribbled notes in a

Moleskine—she could be a writer.

The couple on the date held hands as they left. And eventually, the students in the east nook finished studying. When the patio door opened, the clucking from the ping-pong game rang through the main hall followed by a brassy cheer— someone had scored.

Laptops, pastries on silver dishes, and stout mugs of coffee adorned the L-shaped bar. Public Hall is a mingling, elbow-rubbing spot. Lights overhead blared down onto tooth-colored bar top. Plugged into their headphones, the congregation buzzed away with their respective work like crows on a telephone wire.  Gavin Colton graduated from Kansas State University in December 2018 with a Master of Arts in English, with a focus in creative prose. If Public Hall is open, he will likely be found there.

Public Hall is located at 1205 Moro St, Manhattan. It is co-owned by David Sauter, Diane Meredith, Jessa Voos, Jessica Mauck and Taylor Carr.

IN THE CENTER OF IT ALL PUBLIC HALL SERVES AS A GATHERING PLACE FOR AGGIEVILLE VISITORS.

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Interview By Sarah Siders Photography By Josh Hicks

ACCOLADES

A Conversation with StartUp MHK Winner, AdviseMe When Austin Chauncey learned he would need to spend an extra semester in college due to ineffective academic advising, he decided to change the process for good. Chauncey’s business partner, Melanie Wertzberger, experienced similar frustrations in college: academic advising that slowed graduation goals rather than assisted them. For students wishing to avoid higher student loans and universities looking to increase graduation rates, no one benefits from the system as it is.

Over the last two years, Chauncey and Wertzberger designed, built and promoted an advising platform solution called AdviseMe, which recently won first place at Manhattan’s entrepreneurial pitch competition, StartUp MHK. Already a fully functional platform, AdviseMe is currently beta testing with plans to scale. It seemed fitting to find Chauncey and Wertzberger in the Entrepreneurship Center inside Kansas State’s College of Business. Over a cup of coffee between classes, Chauncey and Wertzberger, both seniors, discussed the problem AdviseMe is solving, the business they’re developing, and their vision for its future.

How did the idea for AdviseMe come to you?

Chauncey: In my first few years of college at an out-ofstate university and at K-State, I had several advisors, but none of them were truly helpful. My first positive experience with an advisor was my computer science advisor at K-State.

I heard my friends were taking extra semesters due to poor planning, and this led us to do more research. One study we found showed three out of four students spend more time in university than needed. So it was clear this was a more universal problem.

Wertzberger: I had to do course planning in a spreadsheet on my own. Most students who are doing this successfully are doing it on their own. When I saw his initial idea sketched out, I thought, ‘This would make it so much easier,’ because every time you visit the advisor, it feels like you’re starting from scratch.

It sounds like change is long overdue in the advising world.

How did you come up with the specific model for AdviseMe?

C: Kansas State uses a system called DARS for advising, which has a fifth of the functionality of our platform. It’s very hard to interpret. We did market research and based the idea off other programs out there but added features they were lacking. User-friendliness is a big benefit of our platform.

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ADVISEME PARTNERS AUSTIN CHAUNCEY AND MELANIE WERTZBERGER.

How far developed is AdviseMe at this point?

C: We now have a fully functional prototype. So far, about 20 to 30 people have tested it. Everyone I’ve shown it to wonders where this type of program has been all this time.

One of the main features is the user friendliness. Students can see from the interface where to click to select a course, then drag and drop it into their planning schedule.

For a someone just hearing about the platform, sell them on AdviseMe in a few sentences.

W: Parents and students want a lot of value for their money. Our product personalizes the process and saves you money when you don’t have to take extra courses. With graduation and retention rates are declining, we think our product benefits universities by helping students see how much they have left and stay motivated to achieve their full degree.

C: Universities are struggling to accurately predict ahead of time the right number of courses to offer, but our data analytics would allow them to better see how many students in a certain major or graduating year were planning to attend a class a year or more in advance.

What’s coming in the next two years for AdviseMe?

W: We’re working with an advising board in the College of Business and the Assistant Dean in the College of Arts and Sciences, and we’re establishing an LLC. We’d like to hire a software developer to speed up development. That would be the most valuable knowledge that we could pick up, but we need someone who will fit our team’s personality.

C: In one or two years, I’d like to have four to five schools under our belt and looking to scale. We will be using our initial income and funding to integrate with K-State’s single sign-on authentication that students are already using. And then, we will want to scale quickly so major players aren’t mimicking our product, so we will use part of our income for growth. 

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