iq magazine - summer fall 2012

Art of AttractionThe Economic Forces of Air Travel

EconomyBankAbility – Charting the new lending landscape. Pg 28

communityBare market – Rural grocery stores: Can they be saved? Pg 32

PhilAnthroPyGraduated Generosity – The power of permanent endowments. Pg 10

3rd Quarter, Summer/Fall 2012

Welcom

e to t

he

new

!

First-time mom Tonya Wermager is filled with questions. Luckily, she has Dr. Kara Lynn Fausch to listen and talk through everything on her mind so she knows just what to expect every step of the way.

We know there’s just one you and we know working together helps you stay healthier. Has it been a while since you saw a doctor? Call us for an appointment today. (218) 828-2880

Tonya wishes babies came with manuals. Dr. Kara Lynn Fausch knows that.

Need to find your very own primary care physician? Call us or go to EssentiaHealth.org

MyHealth onLine aCCess To your DoCTor’s oFFiCe ConVenienT neiGHBorHooD CLiniCs 170 essenTia HeaLTH primary Care pHysiCians

First-time mom Tonya Wermager is filled with questions. Luckily, she has Dr. Kara Lynn Fausch to listen and talk through everything on her mind so she knows just what to expect every step of the way.

We know there’s just one you and we know working together helps you stay healthier. Has it been a while since you saw a doctor? Call us for an appointment today. (218) 828-2880

Tonya wishes babies came with manuals. Dr. Kara Lynn Fausch knows that.

Need to find your very own primary care physician? Call us or go to EssentiaHealth.org

MyHealth onLine aCCess To your DoCTor’s oFFiCe ConVenienT neiGHBorHooD CLiniCs 170 essenTia HeaLTH primary Care pHysiCians

Unconventional by design.

What’s the big idea? We’ll help you figure it out. Effective branding

combines creative strategies with savvy design. Let’s talk about

how to position your business for success. Contact us today by

calling 218-454-3210 or visit RedHouseMedia.com.

Thought into every creative concept.

Creative ConceptGreat ideas don’t have to be hard to come by.Hit your target market at just the right time,

with just the right message — in a way that stands out from the rest.

STUDIO (218) – FRANKLIN ARTS CENTER – BRAINERD, MINNESOTAfacebook.com/redhousemedia

RHM_FullPage_ThoughtIntoEvery_Dain:Layout 1 6/22/12 1:13 PM Page 1

Features20 art of attraction

The economic forces of air travel.

28 Bankability With stricter regulations on community banks, a good balance sheet usually trumps a good idea.

32 Bare Market Rural grocers offer wealth, wellness, and aisles of community connections. But can they be saved?

36 Double Bottom Line Enterprising charities measure success by both purpose and prosperity.

DepartMents 6 Initiatives

The Foundation’s Regional Investment Highlights.

10 philanthropy Graduated Generosity – Through the power of permanent endowments, new school foundations unite donors with student experiences.

14 Community Twister of Fate – From the ruins of a devastating tornado, Wadena finds ways to invest in itself.

16 economy Challenges – What was your biggest business challenge and how did you overcome it?

46 Home Made Water Works, Cambridge Products made right here in central Minnesota.

48 Where is IQ?

Table of Contents

initiative Foundation Quarterly3rd Quarter, Summer/Fall 2012

Photo by Ellen Meiselman

Dear Friends,My husband, Neal, and I have been married for nearly 36 years. Last year, he

“retired” from a 27-year law enforcement career. I thought this meant hours of

hunting, fishing, vacuumed floors, clean dishes, folded laundry—you know, the

inevitable changes that you’d come to accept.

Of course, that’s not quite how it went.

Evidently, our electric stove wasn’t up to snuff. A gourmet gas cook-top was

required to evenly heat chili. So, Neal and our son, Mark, ripped up our kitchen.

Evidently, the yard was an embarrassment. There was no play-set for the

grandkids, and we needed a more extensive lawn. So, Neal ripped up our yard.

Evidently, “retirement” didn’t provide enough challenge or mental stimula-

tion. He ran for County Commissioner, and the bugger won. So, Neal ripped up

our desk (with stacks and stacks of paper).

Change can be hard sometimes, kind of like our brand-new IQ Magazine.

During our first nine years, we dissected big topics like future workforce, riv-

ers, rural revitalization, healthcare and methamphetamine. We were pretty darn

good at what we did, and we thank you for your many years of loyal readership

and support.

After hundreds voiced their opinions in surveys and focus groups, the

Initiative Foundation refocused its five-year plan on economic growth and

recovery. No surprise, IQ is changing along with us. Through a razor-sharp

business lens, our magazine articles will now cover the connections between

economy, community and philanthropy. We will feature more stories, more

people and more places in an effort to inspire leaders and unearth solutions.

Case in point: the issue you’re now holding crisscrosses central Minnesota

to explore the economic impact of airports, the community challenge of rural

grocery stores and the philanthropic efforts of school foundations. Economy,

community, philanthropy—it’s all connected.

And just like new cooktops, new yards and new jobs, change is often unex-

pected. But in the end, it’s well worth the wait.

Enjoy the (new) magazine!

Kathy Gaalswyk

President

Printed at Range with Soy-Based Ink on Recycled Paper

VolumE 10 , 3rd QuArtEr SummEr/FAll 2012

init iAt iVE FoundAtion

President | Kathy Gaalswyk

Vice President for External Relations | Matt Kilian

Grants & Communications Specialist | Anita Hollenhorst

EditoriAl

Managing Editor | Elizabeth Foy Larsen

Writer | Sarah Colburn

Writer | Laura Billings Coleman

Writer | Maria Surma Manka

Writer | Mike Mosedale

Writer | Rachel Reabe Nystrom

Writer | John Reinan

Writer | Lawrence Schumacher

Writer | Andy Steiner

Art

Creative Services Coordinator | Eric Rittmann

Lead Photographer | John Linn

Photo Technician | Justin Wohlrabe

AdVErtiSinG / SuBScriPtionS

Advertising Director | Brian Lehman

Advertising Manager | Lois Head

Advertiser Services | Eric Rittmann

Subscriber Services | Katie Riitters

405 First Street SE Little Falls, MN 56345320.632.9255 | www.ifound.org

IQ Magazine unlocks the power of central Minnesota leaders to understand and take action on regional issues.

rangeprinting.com4 Initiative Foundation Quarterly ifound.org

NJPA is proud to recognize these deserving students for their hard work and dedicated service to the community, school and their fellow students.

Congratulations!

Area Student Recognition 2012 WINNERS

CROSBY-IRONTON EAGLE VALLEYBRAINERDBERTHA-HEWITT

MENAHGA

BROWERVILLE

Brenna McKnight

Skylar Voge

Justin Dudley

Cody Hoheisel

Michelle Pachan

Ashley Olson

David Schreffl er

Katherine Bender

Neil Zimmer

Denver Kortuem

Ashley Strom

Tyler Zak

Rachel Bachmeier

Jose Rodriguez

NORTHLAND COMMUNITY PINE RIVER-BACKUS ROYALTONPIERZPEQUOT LAKES

STAPLES-MOTLEY

PILLAGER

Wayne Brown

Erika Schwalbe

Alex Julich

Cory Rauch

Cole Brooks

Jacob Levig

Fran Ellestad

Hunter Olson

LexieLehrke

Jeremy Grittner

Allyson Ohlgren

Drake Anderson

SWANVILLE UPSALA VERNDALE WADENA-DEER CREEK

Samantha Meacham

Mike Hoemberg

Katie Kruzel

Riley Gutormson

Andy Clear

Israil Pundsack

Ariana Sandberg

Halbert Barrett

WALKER-HACKENSACK-AKELEY

Paige Schiller

Mason Lohmiller

Tanner Josephson

Clairissa Mekola

LITTLE FALLS

Andrew Moe

AITKIN

Nicole Hammond

Dylan Brostrom

LONG PRAIRIE-GREY EAGLE

SEBEKA

Megan Lillquist

Thomas Houle

BIG ENOUGH TO HELP. SMALL ENOUGH TO CARE.You need to see how we do business. Starting with one bank 30 years ago, Frandsen Bank has grown to over 30 community bank locations across Minnesota and border communities in Wisconsin and North Dakota. As the sixth largest bank holding company in the state, we are ready to lend money for business and real estate.

BAXTER 218.855.1320

NISSWA 218.963.3316

CROSSLAKE 218.692.2455

www.frandsenbank.com

FC083012 CA083012

MEMBER FDIC

North Dakota. As the sixth largest bank holding

SMALL ENOUGH

community bank locations across Minnesota

ELYWARRENWARRENWARRENOSLO

FORKSFORKSGRAND

EAST GRAND FORKS

ADA

TOWERVIRGINIA

CLOQUETCARLTON

CROSSLAKE

BAXTERNISSWA

PINE CITY

FOLEYFOLEYBRAHAM

FOREST LAKE DRESSERLUCK

HECTOR JORDANFAIRFAX LONSDALE

MONTGOMERYMONTGOMERYDUNDAS

WATERVILLEMANKATOMINNESOTA LAKE

MANKATONORTH MANKATONORTH MANKATO

NEW ULM

BIRD ISLAND

CLINTON

3rd Quarter 2012 5

Welcome, Wayne!Wadena CountyWayne Wolden, City of Wadena mayor and new Foundation trustee: “Private sector employment is a major issue in our region. The Initiative Foundation plays a crucial role in economic development and workforce. I’m excited to be a part of that.”

Lake LegacyCass CountyThe Whitefish Area Property Owners Association and Pine River Watershed Alliance partnered with the Foundation to establish the “Land & Waters Trust,” a endowment fund. Lakes define our quality of life and keep Minnesota’s economy afloat.

Improved EfficiencyCrow Wing County A business loan helped Stern Industries relocate their manufac-turing facilities to Brainerd, resulting in energy and production efficiencies and additional equipment to expand their product line. Other partners in the financing included Bremer Bank, Region 5 Development Commission and City of Brainerd.

Forces at WorkKanabec CountyA grant to the East Central Regional Development Commission will help businesses find financing, locate available sites, access tax incentives and explore export options – all in the name of creating quality jobs.

The Drive to ThrivePine CountySandstone is among 19 active communities in the Foundation’s community development program. Through Thriving Communi-ties Initiative, public and private sector leaders create action plans to spur the economy, develop community assets and invest in future workforce.

It Starts HereMille Lacs CountyThe Foundation awarded a grant to support “It Starts Here,” a partnership between the City of Princeton, Chamber of Commerce and EDA. Goals include downtown revitalization and finding new businesses to fill vacant store fronts.

Staple ResourcesTodd CountyA community fund partner of the Initiative Foundation, the Staples Motley Area Community Foundation (SMACF), held their annual awards event on October 4 to recognize the outstanding contribu-tions of local businesses, organizations and individuals. Next year, SMACF will celebrate its 20th year of local philanthropy.

TrailblazingMorrison CountyRoyalton and Pierz will be better connected with support from a Foundation grant. Leaders are hatching a plan for connecting both cities to the Soo Line Trail, a 274-mile path that extends all the way to Wisconsin. Paths like this are a recreational amenity that’s important for tourism and livability.

Welcome, Traci!Chisago CountyTraci Tapani, co-president of Wyoming Machine (Stacy, MN) and new Foundation trustee: “As a business owner in Chisago County, I believe that investing my time and energy in the community is impor-tant. I’m excited to have the oppor-tunity to serve.”

(Hydro)Forming JobsIsanti CountyA business loan to Water Works in Cambridge provided the necessary capital to expand their manufacturing facility, resulting in the creation of 20 new jobs. Financing partners included Premier Bank, the City of Cambridge and MN Department of Employment and Economic Development.

Robo-ClassSherburne CountyThe Foundation funded the Becker High School robotics program to encourage students (especially young girls) to explore the fields of science, technology, engineering and math. Skilled STEM careers are expected to fuel future innovations, especially in core industries like manufacturing.

Gold’n OpportunityStearns CountySpecial thanks to CEO Mike Helgeson for Gold’n Plump’s $20,000 investment in the Initiative Foundation Endowment. President Kathy Gaalswyk presented Mike with a special plaque, made of the same material as the 25th Anniversary Commemorative Wall that honors more than 300 Foundation donors.

Time for CelebrationWright CountyThe Annandale Area Commu-nity Team (ACT) recently celebrated the 10th year of having an active community planning team. Having that core group of volunteers has allowed them to complete a multitude of projects, including the recent opening of Clock Tower Park.

Early InvestorsBenton CountyA grant to the Sauk Rapids-Rice Public Schools will support training for early childhood professionals as they help children with special needs. Although long term, their investment in quality early childhood care is proven to be directly connected with quality workforce development.

Initiatives

Regional Investment Highlights

Photo Credit: Staples World.

6 Initiative Foundation Quarterly ifound.org

Welcome, Wayne!Wadena CountyWayne Wolden, City of Wadena mayor and new Foundation trustee: “Private sector employment is a major issue in our region. The Initiative Foundation plays a crucial role in economic development and workforce. I’m excited to be a part of that.”

Lake LegacyCass CountyThe Whitefish Area Property Owners Association and Pine River Watershed Alliance partnered with the Foundation to establish the “Land & Waters Trust,” a endowment fund. Lakes define our quality of life and keep Minnesota’s economy afloat.

Improved EfficiencyCrow Wing County A business loan helped Stern Industries relocate their manufac-turing facilities to Brainerd, resulting in energy and production efficiencies and additional equipment to expand their product line. Other partners in the financing included Bremer Bank, Region 5 Development Commission and City of Brainerd.

Forces at WorkKanabec CountyA grant to the East Central Regional Development Commission will help businesses find financing, locate available sites, access tax incentives and explore export options – all in the name of creating quality jobs.

The Drive to ThrivePine CountySandstone is among 19 active communities in the Foundation’s community development program. Through Thriving Communi-ties Initiative, public and private sector leaders create action plans to spur the economy, develop community assets and invest in future workforce.

It Starts HereMille Lacs CountyThe Foundation awarded a grant to support “It Starts Here,” a partnership between the City of Princeton, Chamber of Commerce and EDA. Goals include downtown revitalization and finding new businesses to fill vacant store fronts.

Staple ResourcesTodd CountyA community fund partner of the Initiative Foundation, the Staples Motley Area Community Foundation (SMACF), held their annual awards event on October 4 to recognize the outstanding contribu-tions of local businesses, organizations and individuals. Next year, SMACF will celebrate its 20th year of local philanthropy.

TrailblazingMorrison CountyRoyalton and Pierz will be better connected with support from a Foundation grant. Leaders are hatching a plan for connecting both cities to the Soo Line Trail, a 274-mile path that extends all the way to Wisconsin. Paths like this are a recreational amenity that’s important for tourism and livability.

Welcome, Traci!Chisago CountyTraci Tapani, co-president of Wyoming Machine (Stacy, MN) and new Foundation trustee: “As a business owner in Chisago County, I believe that investing my time and energy in the community is impor-tant. I’m excited to have the oppor-tunity to serve.”

(Hydro)Forming JobsIsanti CountyA business loan to Water Works in Cambridge provided the necessary capital to expand their manufacturing facility, resulting in the creation of 20 new jobs. Financing partners included Premier Bank, the City of Cambridge and MN Department of Employment and Economic Development.

Robo-ClassSherburne CountyThe Foundation funded the Becker High School robotics program to encourage students (especially young girls) to explore the fields of science, technology, engineering and math. Skilled STEM careers are expected to fuel future innovations, especially in core industries like manufacturing.

Gold’n OpportunityStearns CountySpecial thanks to CEO Mike Helgeson for Gold’n Plump’s $20,000 investment in the Initiative Foundation Endowment. President Kathy Gaalswyk presented Mike with a special plaque, made of the same material as the 25th Anniversary Commemorative Wall that honors more than 300 Foundation donors.

Time for CelebrationWright CountyThe Annandale Area Commu-nity Team (ACT) recently celebrated the 10th year of having an active community planning team. Having that core group of volunteers has allowed them to complete a multitude of projects, including the recent opening of Clock Tower Park.

Early InvestorsBenton CountyA grant to the Sauk Rapids-Rice Public Schools will support training for early childhood professionals as they help children with special needs. Although long term, their investment in quality early childhood care is proven to be directly connected with quality workforce development.

Charles “Chuck” Mooty has more than30 years of business and civic leadershipexperience. He earned both hisbachelor’s degree and a Masters ofBusiness Administration degree from theCarlson School of Business at theUniversity of Minnesota. After graduating,Chuck worked for SuperValu in theFinance and Treasury departmentsbefore transitioning to InternationalDairy Queen, where he served in avariety of leadership roles for more than21 years. During his last eight years ofservice with International Dairy Queen,Chuck held the titles of Chairman,CEO and President.

Currently, Chuck is President and CEOof Faribault Woolen Mill Company. Heis also serving as interim CEO of FairviewHealth Services—a large, integratedhealth system headquartered inMinneapolis. Chuck has volunteered atFairview for more than 12 years invarious governance capacities. He is thecurrent chair of the board of directors forFairview.

Chuck is a life-long resident of Minnesota,and he is active in a variety oforganizations and community activities.He and his wife Elizabeth reside inMinneapolis and have three grownchildren—John, Paige and Will.

www.anderson-cen te r .o rg

For more information or tickets,call Eric Jungels at 320.251.5420

Corporate Sponsors

Charles W. MootyCEO, Faribault Woolen Mill CompanyInterim CEO, Fairview Health ServicesThursday, January 24, 201311:30 a.m. – 1:00 p.m.River’s Edge Convention Center


LARSON BOAT GROUP

For 100 years, Larson Boats has been sewn into the fabric of

the American dream as one of the country’s hardest-working

hometown brands. Through the ups and downs of a century,

one thing has never changed: Larson’s commitment to our

community.

Larson Boats is dedicated to providing good jobs for genera-

tions, producing a quality product the community can be

proud of, and sharing wholesome family fun by shipping

boats around the world, that brings us all closer together.

So this year, Little Falls, let’s celebrate the last 100 years and

look forward to 100 more!

www.striperboats.com www.larsonboats.com www.triumphboats.com

1 9 1 3 2 0 1 3

AFTER A CENTURY OF QUALITY BOAT BUILDING, WE DECIDED IT WAS TIME TO BRING BACK A TRUE CLASSIC ... THE ALL AMERICAN 23

MidwestEye_IQspr2012_Layout 1 5/17/12 1:40 PM Pa

Bremer Bank has built its reputation on delivering personalized solutions. And when our clients prosper and entrust us with their business, we’re able to strengthen communities too. We’re the only financial services provider owned by its employees and a charitable foundation. We do it all with one goal in mind: building healthy communities where people and businesses can thrive.

Brainerd 829-8781 • Baxter 828-5191 • Aitkin 927-37941-800-908-BANK (2265) • Bremer.comMember FDIC

Put our team to work for your business

IQMagazine512.indd 1 4/27/12 1:50 PM

3rd Quarter 2012 9

By Sarah Colburn | Photography by Justin Wohlrabe

Through the power of permanent endowments, new school foundations unite donors with student experiences.

Graduated Generosity

Philanthropy

Living over two hours from the Twin Cities, most of Jennie Planer’s students in the Crosby-Ironton schools had never been inside a true concert hall or seen a full orchestra take the stage.

Planer wanted to inspire her fifth and sixth-grade students and show them exactly what the world of music has to offer. The challenge was that she didn’t have the bud-get to do anything beyond encouraging her students to watch the Minnesota Orchestra on YouTube.

That’s when the music and band teach-er turned to the Cuyuna Lakes Education Foundation for h e l p — r e q u e s t -ing $500 to take her students to see the Minnesota Orchestra perform in Minneapolis.

T h r o u g h o u t Minnesota, fami-lies and alumni are investing their financial resources and volunteer hours to form independent school foundations. Supporting academics, activities and athletics, the goal is to provide experiential learning opportunities that would only be possible with external funds.

Many school foundations are raising funds for permanent endowments, the long-term strategy of building charitable investment accounts. The principal is never spent, but annual earnings fund student opportunities for generations.

Endowment funds are the financial back-bone of many colleges, universities and pri-vate schools, and Minnesota school districts appear to be catching on. While endow-ments are in no way replacements for district tax levies, they do offer alumni—often area residents and business leaders—a chance to give back to their local schools.

The Initiative F o u n d a t i o n w o r k s w i t h Cuyuna Lakes, allowing them to make grants for everything from field trips to par-ticipation schol-arships to after-school clubs and activities. “Our

primary goal is to build thriving com-munities and a strong economy, and it all starts with quality early childhood and K-12 education,” said Tricia Holig, one of the Initiative Foundation’s Turn Key

Many school foundations are raising funds for permanent endowments, the long-term strategy of building charitable investment accounts. The principal is never spent, but annual earnings fund student opportunities for generations.

clark marshall: Cuyuna Lakes Education Foundation10 Initiative Foundation Quarterly ifound.org

Community Engagement is a cornerstone of a St. Cloud State University education—at all levels. Our professors, like Mark Springer, dean of the College of Liberal Arts and the School of the Arts, teach their students that getting involved is an opportunity and an expectation. Dr. Springer is the principal trombonist with the St. Cloud Symphony Orchestra and deeply involved in the St. Cloud arts community. He truly leads by example.

More than 45 percent of the musicians in the St. Cloud Symphony Orchestra have ties to St. Cloud State, and the University is pleased to serve as host for Orchestra performances.

Community Engagement: A cornerstone at St. Cloud State

AN ENGAGED COMMUNITY

www.stcloudstate.edu

All faiths or beliefs are welcome.

SENIOR APARTMENTSPlease call (218) 829-1429 for more information.

www.good-sam.com

GoodSam_IQRuth_7.75x4.625_Layout 1 5/1/12 12:59 PM Page 1

3rd Quarter 2012 11

Fund liaisons. “We all remember a special field trip or a classroom experiment that changed our perspective and maybe even our career path. School foundations are helping to make those things possible.”

The Initiative Foundation partners with central Minnesota schools to host foun-dations and manage endowment funds. Generally, a school foundation advisory board can begin making grants one year after the establishment of the endowment. As the fund grows over time, boards gen-erally limit giving to five percent of their average endowment balance, so that the endowment can continue to grow.

“In the Initiative Foundation we have somebody pushing us, keeping us on task,” said Clark Marshall, secretary and treasurer of the Cuyuna Lakes Education Foundation. His board began a fundraising effort in July targeting graduating classes from the 1940s to the 1970s. Initial efforts have garnered more than $20,000.

In addition to establishing these endow-ments, the Initiative Foundation also assists with planning, consulting and accepting donations for the foundations—including gifts of stock, real estate and other vehicles that have unique tax advantages for donors. “We make it simple for them,” Holig said. “They don’t have to form their own non-profit organization or worry about financial management and administration. Their job is to raise funds and recommend grants that have the greatest impact.”

For Planer, the $500 grant she received from the endowment meant her students were able to travel two hours south to hear the sounds of the Minnesota Orchestra

reverberate through the Minneapolis Orchestra Hall. “Anything I can find to help motivate them on another level helps to keep them practicing,” she said. “These are world-class musicians, and it was great to see the kids pointing out their instruments.”

The Initiative Foundation also helped the Sauk Rapids-Rice School District launch a school foundation. In September 2012, the Sauk Rapids-Rice Education Foundation kicked off its fundraising efforts by raising $15,000—money personally given by the district’s administration team, school board members, teachers and staff who have opted to donate through payroll deduc-tions. After hosting community meetings facilitated by the Initiative Foundation, the advisory board decided their funding pri-orities should include classroom grants for learning opportunities, activity fee scholarships for low-income families, fam-ily engagement initiatives and support for early childhood development.

The funds are separate from those of the school district and can’t be used to cover the district’s operating expenses. District lead-ers must continue to seek voter approval for operational levies needed to manage day-to-day costs. Grant money is available to teachers and nonprofits that want to provide programming for kids and families within the district.

“As business leaders and community leaders we often spend a lot of time react-ing to what needs to happen now,” said Dan Bittman, Sauk Rapids-Rice superintendent. “We also have to provide opportunities for children in the future.”

“We all remember a special field trip or a classroom experiment that changed our perspective and maybe even our career path. School foundations are helping to make those things possible.”

dan Bittman: “We have to provide opportunities for children in the future.”12 Initiative Foundation Quarterly ifound.org

M E M B E R

dba your neighbor.

BlackRidgeBANK invites

business owners, CFOs

and accountants to meet

our friendly, hard-working

business banking specialists.

Nobody will work harder

to be your hometown

commercial bank.

AlexAndriA

CArlos

MiltonA

BrAinerd/BAxter

CrosslAke

nisswA

M i n n e s o t Al o C A t i o n s

BisMArCk

FArgo

west FArgo(opening 2013)

n o r t h d A k o t Al o C A t i o n s

blackridgebank.com

•HousingServices •MentalHealthServices •SeniorHealth&Wellness •Food&ClothingShelf •FamilyServices

Catholic Charitiesservespeopleacrosstheheartofourstate:

We are a nonprofit organization supported by generous individuals, foundations, businesses and faith communities.

Callustoday:320.650.1550•800.830.8254orvisitwww.ccstcloud.org

3rd Quarter 2012 13

In September, the city received a big boost when the state’s Department of Employment and Economic Development announced that it selected the proposed Wadena Regional Wellness Center for a $4.2 million grant. One of just nine projects picked from a broad field of applicants, a new community center had been on the city’s agenda for a dozen years.

Ironically, the tornado that wreaked so much havoc helped pave the way for the project because it destroyed the existing

community center. With assistance from the Initiative Foundation, volunteers have already raised more than $3 million in pri-vate donations for the $10 million plan.

“We administer a fund so that volunteers don’t have to get mired in the administrative details,” said Kilian. “The new center will be a point of community connection as well as a rural health and economic driver. We are also able to accept non-cash gifts like stock that provide more tax advantages to donors.”

Although Wadena has suffered some loss of population, Wolden said the ameni-ties at the new wellness center may help reverse that trend. The 50,000 square foot, city-owned facility will house the only pub-lic lap pool in the county. The center will also boast a warm water therapy pool, or, as the mayor referred to it, “a hot tub on steroids.” The Tri-County Hospital will con-tribute $47,000 annually for access to the therapy pool. That arrangement, the mayor said, illustrates the value of actively seeking partners to help pay for public projects. “This is finally coming together,” Wolden gleefully added. “And it’s been a 24/7 party in this town since we got the news.”

in state history, caused widespread car-nage. In Wadena, the hardest hit city, it destroyed about 100 buildings—including the school, the community center and the fairgrounds—and damaged another 400. Fortunately, no lives were lost.

At the time, the disaster and its immedi-ate aftermath was the subject of plenty of news reports and even an episode of “Storm Chasers” on the Discovery Channel. After the cameras left, however, came the com-plicated and sometimes nettlesome matter of planning and rebuilding.

While the school con-struction costs were cov-ered by insurance (plus a $985,000 grant from FEMA for the storm shelter), Wadena was left with a raft of challenges. City leaders scrambled to save the businesses that suffered the most, even donating land to help Leaf River Ag rebuild.

The recovery effort has involved exten-sive collaboration between public, pri-vate and nonprofit parties, including the Initiative Foundation. Through a combi-nation of grants, online fundraising and an emergency business loan fund, the Foundation has contributed about a half million dollars to Wadena recovery efforts, according to Matt Kilian, vice president for external relations.

Under the bright skies of a recent September afternoon, Wadena Mayor and Initiative Foundation trustee Wayne Wolden toured some of the construction projects in this central Minnesota city of about 4,000. There was plenty to take in.

With its handsome brick storefronts and art deco movie house, the old downtown looks the same as it did before disaster struck two years ago. But just a few blocks away, the story is very different. The most conspicuous new addition in this quarter of town: the gleaming Wadena-Deer Creek Public School.

After the mayor expounded on the vir-tues of the $38 million complex’s geother-mal climate control system, rain gardens and silver LEED certification, he pointed to an even more unusual feature of the design: a gymnasium that doubles as a storm shelter rated to weather winds of 250 mile per hour.

“That thing is built to withstand an EF-5,” said Wolden, referring to the Enhanced Fujita Scale, which ranks the severity of tornados. Wolden’s familiar-ity with such meteorological terminology stems from June 17, 2010, when an EF-4—the second most powerful category on the scale—ripped through Wadena and sur-rounding areas.

The mile-wide twister, which was part of the largest one-day tornado outbreak

By Mike Mosedale | Photography by John Linn

From the ruins of a devastating tornado, Wadena finds ways to invest in itself.

Twister of Fate

Wayne Wolden, Wadena Mayor

“The new center will be a point of community connection as well as a rural health and economic driver.”

Community


Graphic Design | 320.732.6450 | [email protected] | ladydogdesign.com

l ady dogdes ign

Tail thumpingDESIGN

Tail thumpingDESIGN

Tail thumping!

logo/branding development, ad and direct mail campaigns, publications, packaging ... i could wag on and on.

We have been providing cost effective metal spinning solutions for over 60 years. Our exclusive capability to spin metal up to 1.375” thick is supported by a superior commitment to product quality, highly empowered employees, and commitment to being the number one U.S. source for close toleranced heavy gauge CNC spinnings.Pr

obl

em P

ar

ts?

for assistance with production orders:call direct [800] 388-5355 or e-mail [email protected]

to learn more: www.glennmetalcraft.com

3rd Quarter 2012 15

By John Reinan | Photography by John Linn

What was your biggest business challenge, and how did you overcome it?

Challenges

KEn BArroSOwner, CEO – National Precision Machining & Engineering, Sebeka

My Greatest ChallengeBringing new purpose and direction to a struggling business.

This company had been through three owners since 1998. The most recent owner passed away and the family wanted to sell. If they hadn’t found a buyer, they were going to close the doors.

The Initiative Foundation financed the building and Bremer Bank in Alexandria financed the rest of the corporate assets. We finally closed the deal in June 2011, and there I was with a skeleton staff of 12. Sales hadn’t grown in years. So my challenge was to mentor these people and bring them into a new mentality. Here’s what we did:

ProcessesWe had to break away from systems where information is passed on informally and often known only to a few. We established processes and procedures. That’s important—you need processes that ensure your operation runs smoothly and you meet the standards you’re trying to achieve.

Economy

Build MoraleA lot of manufacturers make components and the workers don’t even know what the end product is. One of the products we manu-facture is a component that’s used in the “flash doors” that protect aircraft carrier crews when the F-18 fighter jets are taking off. I use media and other outlets as training tools to show my employees examples of what they’re making and how it’s used. That’s what builds morale.

ResultsEmployment is up from 12 to 19. Sales bookings for 2013 are pro-jected to more than double. I want to expand and build this to be the largest employer in Wadena County with the best employees and best benefits – that’s my ultimate goal.

Manufacturing is a key growth industry for small business. In central Minnesota, more than 32,000 people are employed in manu-facturing, with a median wage of around $16 an hour—well above the median wage for other occupations in the region. Manufacturers in the region rang up more than $3.3 billion in sales in 2010, accord-ing to the Minnesota Department of Employment and Economic Development (DEED). And each manufacturing job creates 1.9 additional jobs, both in the supply chain and through additional employee spending.

Unfortunately, when it comes to entrepreneurial businesses - like many in the manufacturing industry - failure is common. Roughly one-quarter to one-third of small businesses close in their first two years, according to the U.S. Bureau of Labor Statistics. The manufacturing businesses profiled here (all of which are Initiative Foundation loan clients) faced significant challenges. We asked them to share their biggest business chal-lenge and how they solved it.


ShAWn hunStAdOwner – Stern Industries, Baxter

My Greatest ChallengeRestructuring the business while adapting to changing customer needs.

I started at Stern Rubber Co. as a salesperson more than 20 years ago. After I became an owner, my partner Terry Stern and I created a number of different divisions to handle various aspects of the business.

When the recession hit in 2007, we lost a big chunk of business. Meanwhile, some of our customers were looking for different services and methods of product sourcing. We brought in a consultant, and ultimately decided that it made the most sense to split up the business. Terry took back the rubber company and I went forward with the parts brokerage and the rotational molding business. Here’s what I learned:

Be OpenAnybody that does business with us, we try to be very open about what’s going on in our business. That’s very important. People inherently want to help. Don’t try and hide the struggles. We sat down with each supplier and told them how we planned to weather the storm. They were patient, and they all got paid.

Plot Your CourseWe put together a new business plan for the new companies. We worked very hard on our projections. We got with our customers, talked to them about what we could be doing for them.

ResultsWe’re moving into a new facility in Brainerd and we just closed on a $450,000 loan for a new piece of equipment that will enable us to do larger parts. Going forward, we will be a pretty substantial player in the rotational molding industry. We will end 2012 around $15 million in sales and we’re projecting $17 million in 2013.

JoE GlEnnPresident – Glenn Metalcraft, Princeton

My Greatest ChallengeOpening export markets while planning for succession in a third-generation business.

This company was started in 1947; I’m the third generation. My father, Dennis, passed away in 2005. The succession planning had been ongoing since 2000, but it moved very slowly and was difficult.

We see major opportunities in the export market. There are very few companies that can do what we do, both in the U.S. and overseas. But figuring out how to break into foreign markets is a very daunting task for a small business. Here’s how I addressed these challenges:

Bring In ExpertsValuing the business is a difficult process. We talked it out with accoun-tants and attorneys, and they helped everybody through the process. I’m thankful that I have a great accounting firm, KDV in St. Cloud.

Roll Up Your SleevesThere is no silver-bullet solution to exporting. A few of us have been taking classes thru DEED and doing other things to get more well-versed. We’re not big enough to have anyone solely devoted to exports. It is trial and error, taking classes, networking with people who have done it to find out what works.

ResultsWe’ve grown revenue more than 600 percent in the last decade, to about $20 million. We employ 45 people and we have a profit-sharing plan that averages $8,000-$10,000 a year per employee. We’ve grown exports by shipping for our clients to their sister companies overseas.

3rd Quarter 2012 17

(218) 829-9238 | (888) 221-5785www.gnhomecare.com

We’ll be there.

For complete home health services, including skilled medical care, trust the people who’ve been here helping your neighbors since 1984. Remember, there is a difference.

Skilled medical care for total peace of mind.

Con

tact

us

toda

y 320

.259

.822

2

Customized Training for all OccasionsWeTrainPeople

Celebrating 17 years serving Central Minnesota! www.HighImpactTraining.net

Providing programs for Leadership Seminars, Retreats & Workshops, Keynote Presentations, and Team Building Activities.


marconet.com

Wouldn’t it be nice if you could have a face-to-face conversation with the people in your other locations without leaving your office?

The cost of travel is not just the plane ticket and hotel. Time on the road could be spent being more productive.

Marco’s certified telepresence specialists can show you how a video conferencing system is the easiest and most dynamic way

for your dispersed teams to connect.

Spare the extra money, time and miles by teleporting your next meeting. Want to chat about how much you could save? We’re all ears.

Be Seen and HeardNext-generation, face-to-face video conferencing is here.

Find out how Marco can help you get the people at your multiple locations connected like never before at www.marconet.com/GetFace-to-Face

Marco_IQ Ad_VideoCon.indd 1 3/19/12 12:29 PM

Earn your B.A. in Social Work.

Some people have careers.Others have callings.

Empower others and advocate for their well-being. Prepare yourself for a rewarding career with a program grounded in professional and Benedictine values.

Learn more at go.css.edu/IQmag or call 866-478-9277

Duluth • Brainerd • Cloquet • Twin Cities

Apply now!Tuition awards available!

3rd Quarter 2012 19

Art of Attraction

The economic forces of air travel.

By Laura Billings Coleman | Photography by John Linn


Brainerd’s Andy Larson is a frequent flier, having logged more than 88,000 miles since the start of the year—

more than three full rotations around the circumference of the earth.

Though he serves as chairman of the Brainerd Lakes Regional Airport commis-sion, he rarely departs from his home air-port, which doesn’t have the flights he needs to reach the East Coast by the start of the business day. Instead, he drives to the Twin Cities the night before, pays for parking and a hotel, and loses nearly a day of productivi-ty for every trip he takes. “For business trav-elers, it’s about timing and convenience,” Larson said. “And at this point in Brainerd, it’s just not there.”

Brad Goskowicz, the CEO of St. Cloud’s Microbiologics, Inc., is also a globetrotter, spending more than $100,000 on business travel every year to reach customers in 132 countries. Though 40 percent of his revenue comes from outside the U.S., his interna-tional customers have had a much harder time getting to St. Cloud since Delta Airlines pulled the only commercial service to the St. Cloud Regional Airport in December 2009. “I’ve got a gentleman coming from Japan next week, which means he’s going to have to fly into MSP, and we’re either

going to have to hire a limo service to drive him here, or I’ll have to assign an employee to go and get him,” said Goskowicz. “As a business, you lose more of what you don’t have—enough time in our day.”

When it comes to central Minnesota’s economy, airports matter. Industry statis-tics show that every daily flight represents $4 million in annual economic impact for a community. When customers who could have boarded planes in their own region fly out of Duluth or Fargo or the

Minneapolis-St. Paul International Airport (MSP) because of price, timing, inconve-nience or simple lack of service, millions of dollars in revenue and other opportuni-ties are lost. “Better air service is a hidden piece of our economic development,” said Kathy Gaalswyk, president of the Initiative Foundation. The Foundation brought together business and community partners from both cities to brainstorm how both regional airports can attract airlines and sustain better service.

Andy larson: “For business leaders, it’s about timing and convenience.”

3rd Quarter 2012 21

missed connectionsAirports are the front door for business, according to Al Kremers, former CEO of Sartell-based DeZURIK Companies and current chair of the Greater St. Cloud Development Corporation’s Air Service Business Corps. They are a practical means for moving people, supplies and freight and a connection to an increasingly global econ-omy. They’re also a critical calling card that tells potential businesses and skilled employ-ees that your region has the resources to compete. “When you’re talking to a company about doing business here, you can talk till you’re blue in the face about the benefits of outstanding health care and a great educa-tional system, because if you don’t have great air service, it just doesn’t get through,” he said.

That’s why Kremers agreed to lead the “Let’s Go” campaign, a community-wide part-nership uniting the City of St. Cloud, the St. Cloud Regional Airport and the Greater St. Cloud Development Corporation behind the shared priority of securing air service from St. Cloud to Chicago’s O’Hare International Airport by January 2013.

He’s also one of a chorus of civic lead-ers who argue that improved air service is

a benefit not just to business travelers but to everyone in the region—from the more than 3,000 consultants who have brought their home-based businesses to the Brainerd Lakes region, to retirees who fly south for the winter, to the nearly 35,000 college students living in the St. Cloud region, to the second- and third-generation summer cabin and second home families who fly back from every compass point.

Bill towle St. Cloud’s airport manager

Airports are the front door for business… They are a practical means for moving people, supplies and freight and a connection to an increasingly global economy.


to or connecting in Chicago, making service to O’Hare, the third largest hub in the U.S., a necessity. “O’Hare has four times as many connections as MSP, flies direct from more destinations, and costs less,” she explained, noting that travelers in the region could see $3.6 million in airfare savings by traveling through O’Hare instead of Minneapolis-St. Paul International.

St. Cloud’s “catchment area”— the annual number of airline trips taken by people within the airports’ service area—exceeds 350,000, making it a potentially larger market than Duluth or Rochester, both of which are served by more than two air carriers.

But sheer numbers aren’t enough to attract airlines. “It’s really hard to get your

as more essential now that they haven’t had it for a few years. “Absence has definitely made the heart grow fonder.”

Bestgen has heard these frustrations first-hand, after reaching out to nearly 800 businesses in the region, and sitting down with nearly 400 respondents who revealed they spend more than $22 million on airfare every year. Bestgen’s research also found that 40 percent of their flights were

central AirIt’s been nearly three years since Delta Airlines made its last scheduled flight to the St. Cloud Regional Airport, effectively forcing fliers in 76 zip codes to take off from other destina-tions. “In economic development we don’t measure loss, we measure gain,” said Jami Bestgen, a marketing consultant who has helped launch the “Let’s Go” initiative. She admits the loss of service has been significant. “It’s frustrating because people see air service

rick Adair Brainerd’s airport interim manager

They’re also a critical calling card that tells potential businesses and skilled employees that your region has the resources to compete.

3rd Quarter 2012 23

foot in the door because of the risk to the airlines,” said Bill Towle, St. Cloud’s airport manager. “You have to sweeten the pot.” That’s why the publicly owned airport pursued a Small Community Air Service Development Grant, securing $750,000 in federal funding (paid for by airline user fees) that the airport can offer an airline to offset possible losses as new air service gets up and running. The “Let’s Go” campaign also gathered more than $6 million in nonbinding pledges from the busi-ness community, underlining their plans to support and use service to O’Hare.

In August, Allegiant announced plans for new commercial service between St. Cloud and Phoenix-Mesa, an important route for Minnesota snowbirds. It also has some strategic value to the “Let’s Go” campaign because the resumption of commercial service triggered a required environmental assess-ment as well as the return of the Transportation Security Administration. With those two major items crossed off the airport’s to-do list, their case to a Chicago carrier is stronger.

“Let’s Go” is also working on a plan to bring freight service to St. Cloud, efforts that John Kramer, CEO of the Greater St. Cloud Development Corporation, compares to repairing a bridge col-lapse. “If all the roads going into your town were closed, what would you do? How much money

would you put in to get those roads opened again?” Kramer said. “That’s the way we have to start thinking about air service.”

taking offJust seventy miles north of St. Cloud, the Brainerd Lakes Regional Airport faces a very different set of challenges. Though Delta informed the airport in July 2011 that it would eventually phase out ser-vice, Brainerd is designated as one part of the United States’ Essential Air Service Program, which includes 152 federally subsidized airports in small communi-ties throughout the country.

As such, the airport is protected from

Their pitch worked: in September, SkyWest announced plans to begin service in Brainerd, providing travelers there a minimum of 12 nonstop trips to MSP every week.

Flight Plan:

St. Cloud’S ApproACh

to AttrACting AirlineS

Type

1 Do the research. The first thing St. Cloud

did was identify their users, according to

Al Kremers, leader of St. Cloud’s “Let’s Go”

campaign. “They’re the ones that can really

express the need for good air service,” he said

ver

ifr

dvfr

ro

uTe

of

flig

hT

2 Make the case. St. Cloud makes sure

they can demonstrate the benefits to all par-

ties involved—the airport, community, busi-

nesses, airlines—so everyone understands

how they win, according to Bestgen. The

Greater St. Cloud Development Corporation’s

research, for example, found that a carrier

would need just 25,000 to 29,000 individual

trips or enplanements—a fraction of the total

350,000 trips people in the St. Cloud service

area take every year—to break even.

des

Tin

aTio

n

3 Sweeten the pot. “Gone are the days when

you can expect an airline to take all the risk,”

said John Kramer, CEO of the Greater St. Cloud

Development Corporation. “When you know

you’re going to be a beneficiary of the project,

you’ve got to invest in their success.”

fuel

on

Bo

ar

d

Min

utes

4 Tell the story. “Never assume that people

know about you,” Kramer said, adding that

most airlines likely viewed Delta’s retreat

from St. Cloud as a sign of an under perform-

ing market. The “Let’s Go” campaign told a

different story—that the region spends $22

million on air travel every year and that it’s

a vibrant and thriving market where airlines

will succeed.

hou

rs

reMarks


completely losing service until a permanent replacement carrier could be found. Unlike St. Cloud, Brainerd also has freight service—twice a day flights from UPS. Yet with a recent $7 million terminal expansion, new amenities, and just a few flights a day, the airport still isn’t the economic engine that it could be. Rick Adair, the airport’s interim manager, says an airline CEO once summed up Brainerd’s situ-ation this way: “The good news is that you’re close to Minneapolis. And the bad news is that you’re close to Minneapolis.”

That attitude explains why Brainerd’s business community has worked hard to make clear to potential carriers that the region is a unique “micropolitan” area with an airport that rivals many larger commu-nities. The central Minnesota town also has the state’s largest concentration of second homes, a healthy seasonal influx of youth hockey fans, more than 3,000 consultant entrepreneurs and forecasts for the popula-tion to triple in the next 20 years.

To make that case a little more memo-rable for executives at SkyWest, a Utah-based carrier that began flights to Bemidji

last March, community leaders decided to play on the friendly rivalry between the two towns over which has the best claim to Paul Bunyan. They went to Paul Bunyanland and videotaped an interview with the 40-foot-lumberjack, who extolled all the reasons he was looking forward to flying SkyWest. Their pitch worked: in September, SkyWest announced plans to begin ser-vice in Brainerd, providing travelers there a minimum of 12 nonstop trips to MSP every week.

That strategy also proved something that leaders in both St. Cloud and Brainerd learned about improving air service in small towns—a lot depends on building a per-sonal relationship between an airline and the community it serves. “An airport is just a piece of concrete,” said Adair. “To succeed, you have to get the community involved.”

Brainerd Lakes Chamber of Commerce CEO Lisa Paxton says that will mean working closely with SkyWest and other airlines in the future to create a schedule that coincides with travelers needs. A marketing plan will cel-ebrate the convenience of being able to drive

30 minutes to the airport and park for free. In spite of three years of pent-up

consumer demand in St. Cloud, Bestgen predicts it will take another three years of aggressively marketing the St. Cloud Regional Airport to get people in the habit of using it again. One goal of the “Let’s Go” initiative was to educate local business about the benefits of flying through St. Cloud, and the risks of not using it enough. “We’ve shown them the economic loss that they’re currently seeing by not having a car-rier here, and we’ve educated them about what it really costs to put that employee in an automobile and take three hours out of his day to get to MSP,” Kramer said.

Though better air service is now poised to take off in Brainerd and St. Cloud, Kramer says the lesson of the last few years is never to take your eyes off the horizon. “Never, never, never rely on just one air service,” he said, noting that there are now a third fewer airlines than there were 10 years ago. “You have to be out there making new connections every day.”

“When you’re talking to a company thinking about doing business here, you can talk till you’re blue in the face about the benefits of outstanding health care and a great educational system, because if you don’t have great air service, it just doesn’t get through.”

Al Kremers Greater St. Cloud Development Corporation’s Air Service Business Corps

3rd Quarter 2012 25

Mora

Walker

Wadena

Staples

Buffalo

Brooten

Brainerd

St. Cloud Rush CityPrinceton

Longville

Cambridge

Pine River

Maple Lake

Sauk Centre

Paynesville

Long Prairie

Moose Lake-Carlton Co

Little Falls-Morrison Co

Remer

Milaca

Backus

Clarissa

East Gull Lake

Mal's

Morey's

Field of Dreams

Leaders Clear Lk

Commercial Paved Lighted Turf Turf Seaplane Base Private

Source: Minnesota D

epartment of Transpotation

RUNWAY READY Central Minnesota's Airports

$Nation

Sour

ce: I

nter

natio

nal A

ir Tr

ansp

ort A

ssoc

iatio

n, 2

012

Sour

ce: A

irpor

ts C

ounc

il In

tern

atio

nal-N

orth

Am

eric

a, 2

010

Supports 7% of thenational workforce

900,000 international flights per year to 279 airports

Accounts for 8% of grossdomestic product

361 direct connections to large cities in 108 countries

295Construction Jobs

577Additional Jobs

$30 MillionLabor Income

$85 MillionTotal Impact

State$12.1 billion to the MN economy$6.4 billion in labor income

165,000 jobs Sour

ce: U

nive

rsity

of M

inne

sota

, 201

0

Greater Minnesota

Sour

ce: U

nive

rsity

of M

inne

sota

, 201

0

St. Cloud Regional Brainerd Lakes Regional

Thief River Falls RegionalFalls InternationalRange Regional(Chisholm/Hibbing)

Bemidji Regional

6 Airports

2,260 VisitorsPer Year

2.5 milliondollars

$280 Per Day, Per Visit

$$$

A FINANCIAL JET STREAM...

$85

$85 $223 + unproductive time + cost of ticket$1382½ to 4

hours125Brainerd

$162 + unproductive time + cost of ticket$77

1½ to 3hours70St. Cloud

TOTAL DIRECT COSTS TO BUSINESSESParking Services

for 3-4 DaysRound Trip Mileage

ReimbursementMiles to MSP EquivalentTravel Time

DRIVING TO FLY What It Costs

E C O N OM I C A I R P O W E R


Mora

Walker

Wadena

Staples

Buffalo

Brooten

Brainerd

St. Cloud Rush CityPrinceton

Longville

Cambridge

Pine River

Maple Lake

Sauk Centre

Paynesville

Long Prairie

Moose Lake-Carlton Co

Little Falls-Morrison Co

Remer

Milaca

Backus

Clarissa

East Gull Lake

Mal's

Morey's

Field of Dreams

Leaders Clear Lk

Commercial Paved Lighted Turf Turf Seaplane Base Private

Source: Minnesota D

epartment of Transpotation

RUNWAY READY Central Minnesota's Airports

$NationSo

urce

: Int

erna

tiona

l Air

Tran

spor

t Ass

ocia

tion,

201

2So

urce

: Airp

orts

Cou

ncil

Inte

rnat

iona

l-Nor

th A

mer

ica,

201

0

Supports 7% of thenational workforce

900,000 international flights per year to 279 airports

Accounts for 8% of grossdomestic product

361 direct connections to large cities in 108 countries

295Construction Jobs

577Additional Jobs

$30 MillionLabor Income

$85 MillionTotal Impact

State$12.1 billion to the MN economy$6.4 billion in labor income

165,000 jobs Sour

ce: U

nive

rsity

of M

inne

sota

, 201

0

Greater Minnesota

Sour

ce: U

nive

rsity

of M

inne

sota

, 201

0

St. Cloud Regional Brainerd Lakes Regional

Thief River Falls RegionalFalls InternationalRange Regional(Chisholm/Hibbing)

Bemidji Regional

6 Airports

2,260 VisitorsPer Year

2.5 milliondollars

$280 Per Day, Per Visit

$$$

A FINANCIAL JET STREAM...

$85

$85 $223 + unproductive time + cost of ticket$1382½ to 4

hours125Brainerd

$162 + unproductive time + cost of ticket$77

1½ to 3hours70St. Cloud

TOTAL DIRECT COSTS TO BUSINESSESParking Services

for 3-4 DaysRound Trip Mileage

ReimbursementMiles to MSP EquivalentTravel Time

DRIVING TO FLY What It Costs

E C O N OM I C A I R P O W E R

3rd Quarter 2012 27

When Dean Koerner bought Dino’s Southside Café in Richmond nine years ago, he sat down with the

loan officer at the bank he’d worked with for 20 years. An hour later he walked out with the loan he needed to start his restaurant career.

This year, when Koerner contemplated buying a nearby restaurant that had gone out of business, it was a different story. He was told “no” by every bank he visited. “They weren’t going to take the risk again, no matter what my credentials were,” said Koerner. “The restau-rant industry is high-risk in a good economy, and banks today really don’t want risk.”

Outstanding small business loans in Minnesota were down 13 percent in mid-2011, compared to three years prior—before the financial crisis broke, according to a review conducted for the StarTribune.

Restrictions on credit in this post-reces-sion, post-financial crisis era are causing cen-tral Minnesota businesses to look for new solu-tions to the lingering problem of tight credit, even as the economy recovers.

Koerner eventually found another opportu-nity—a lake side supper club in Eden Valley—that was already a bank-owned property for four years and therefore a liability that the financial institution was more willing to get off its books. He had to put up his own house as collateral to secure the loan though.

“If I’d just been starting out today to buy my café, I doubt I would have been able to get into this business,” Koerner said. “There’s a guy who wants to buy my café in Richmond, but the bank wants him to come up with 30 percent down.”

With stricter regulations on community banks, a good balance sheet usually trumps a good idea.

By Lawrence Schumacher | Photography by John Linn

BankAbility

3rd Quarter 2012 29

the new normalRobert Warzecha found a similarly friendly lending climate when he started Two Rivers Enterprises in Holdingford in 2001. But despite a good relationship with his banker, the stainless steel equipment manufacturer found that the credit market had changed since his last financing deal.

“Before the crunch, you’d go in and they’d shake your hand and give you the money,” Warzecha said. “Now, there’s a lot more documentation and scrutiny. You have to have a good relation-ship with your bank and know how they’re going to react to your needs.”

Warzecha’s bank—Amer ican Her i tage National Bank in St. Cloud—helped his busi-ness through the economic downturn. Two Rivers Enterprises currently employs between 28 and 40 people, depending on the season, and is now poised to begin a $1 million expansion.

tighter regulationsIn the wake of the collapse of nation-al banks, several changes took place in the financial field, said Rob Ronning, CEO of Little Falls-based Pine Country Bank. The 2010 Frank-Dodd Act forced

all banks, whether large or small, stable or fragile, to institute new policies for evaluating loan applications and balanc-ing their financial books.

“The biggest challenge for us today is how regulation has put a stranglehold on us,” Ronning said. “Small commu-nity banks like ours are especially hard-hit, because we have to live by the same restrictions as the big banks, but without the resources that they have.”

Ronning describes diverting staff time to regulation compliance that would other-wise be spent on servicing clients, and says the new climate has left banks more unwill-ing to “go out on a limb” for clients in the same way they might have in the past.

“The pendulum had swung too far toward easy credit for businesses before the financial crisis, and now has swung too far toward preventing another meltdown,” said Jay Johnston, president and CEO of American Heritage Bank.

Seeking AlternativesToday, some banks are requiring three years of profitability from applicants, and some have raised the minimum personal credit score they’ll accept from 650 to 680, accord-ing to the Minneapolis-based Metropolitan Consortium of Community Developers, an organization that lends to higher-risk businesses who have been turned down by the banks.

In turn, some are relying on other sourc-es of capital like the financing provided

by federal programs, com-munity loan funds, angel investors, venture capital-ists and the Minnesota Initiative Foundations (MIFs), which provide a form of gap financing.

Even when a bank is willing to loan money to a rock-solid customer, they often can’t loan the entire amount that a business needs to buy a new piece of equipment or add on to their facility, said John Elden, director of business finance for the Duluth-based Northland Foundation, one of six Minnesota Initiative Foundations.

“Businesses that have a reasonable track record and are in an expansion mode aren’t having a particularly hard time financing, but they might need financing partners to get them all the way,” he said.

“Small community banks like ours are especially hard-hit, because we have to live by the same restrictions as the big banks, but without the resources that they have.”

rob ronning, CEO of Pine Country Bank

tight times: Two Rivers Enterprises owner Robert Warzecha (left) and American Heritage bank presi-dent and CEO Jay Johnston (right) worked together throughout the economic downturn. Today, Two Rivers Enterprises is poised to begin a $1 million expansion.


In response, the MIFs offer gap loans to make up the difference between the capi-tal businesses have on hand and what the banks are able to lend.

“The goal of our lending program is simple: quality job creation or retention. We’re interested in working with business owners who want to create jobs that pay a living wage with benefits,” said Dan Bullert, business finance manager for the Initiative Foundation. “The Initiative Foundation’s focus has always been on economic growth, and partnering with companies who bring

in new revenue or keep it within the region is one of our key strategies.”

Warzecha said a past business financ-ing package for Two Rivers included a loan from the Initiative Foundation, and he’s eager to repeat the process in the upcoming expansion. The Foundation does not com-pete with private banks in the small busi-ness loan industry, but typically partners with a bank to construct a loan package that leverages a variety of funding sources, added Bullert.

American Heritage and Pine Country Bank are among the 60-plus banks and community development partners that have worked with the Initiative Foundation to approve nearly 900 loans since the foun-dation began lending in 1987. “We probably lean more heavily on the Foundation now because there are more gaps that we can no longer fill,” said Ronning.

And if a business is looking for a smaller loan (under $50,000) the Initiative Foundation will often direct them to microloan funds such as those managed by Region 5 Development Commission, St. Cloud State University, Southwest Initiative Foundation and other partners who are also focused on microenterprise development and support for entrepreneurs.

Small but VitalMany experts credit the Small Business Administration from keeping the business loan market from completely imploding

during the financial crisis. The guaran-tees it provided were essential to keep-ing businesses from folding, according to Johnston.

When the recession hit, Dubow Textile was in a strong enough financial position to look at expanding when the company started running out of space at its St. Cloud headquarters in 2010.

Because it had its finances in good order and a longstanding relationship with its lender, American Heritage Bank, the company was able to secure a

loan to almost double its headquarters, buy new equipment and add roughly 30 employees. But the expansion was much easier to accomplish because of favorable terms arranged through a Small Business Administration loan that American Heritage accessed. “We definitely took advantage of the favor-able rates and terms of it,” said CEO Rob Dubow. “It wasn’t a moneymak-er for us, but it made the difference between many businesses staying open and shutting their doors.”

outside the mainstreamIf a business has had recent economic trou-bles, or if an entrepreneur wants to start a new business, the picture can be more complicated though.

“There’s still money for a good idea, but it needs to be backed with a solid busi-ness plan and detailed, realistic estimates of its market and profitability,” said Barry Kirchoff, director of the Central Minnesota Small Business Development Center at St. Cloud State University. “Industries that have been hard-hit in the recession—banks are less willing to put up the money for them now than they were before.”

Nonprofits such as the Minnesota Initiative Foundations can provide some options, according to Elden. Gap loans that were typically directed toward help-ing a business expand went unused during the recession, and funds can sometimes be

continued on page 42

“The pendulum had swung too far toward easy credit for businesses before the financial crisis, and now has swung too far toward preventing another meltdown... Eventually, things will balance out, but it’s taking a while.”

Jay Johnston, President & CEO of American Heritage Bank

thE 5 c’s oF crEdit

Numbers aside, most lenders consider a handful of subjective guidelines when considering a loan application. Although the weight of each one may vary from bank to bank, the elements are the same: a profitable idea, financial stabil-ity and the borrower’s unwavering commitment to business success.

cASh FloWDon’t confuse cash with profit. Lenders must be convinced that your business will have enough cash to pay its debts at any given time. This includes payroll, suppli-ers, utilities and, of course, your business loan.

cAPitAlHow will you make it through the proverbial “tough times?” Will there be enough money to sustain and grow your venture?

chArActErAre you honest, competent, deter-mined, savvy and adaptable? Prove it to your lender, and bring along a good credit score.

collAtErAlLenders are trained to protect their investments. By securing valuable assets, they can sell (or liquidate) them if you can’t repay the loan. Such assets include real estate, equipment, inventory and yes, even your personal property. In fact, a personal guarantee of repayment is non-negotiable. No collateral? No loan. It’s that simple.

conditionSHow healthy is the overall economy and the market for your product or service? Is your industry booming or sagging? Who are your com-petitors? In the razor-sharp minds of lenders, external conditions are equally as important as your busi-ness idea.

3rd Quarter 2012 31

For about a century, residents could pick up milk, bread and sundry supplies at Pete’s Grocery at 410 Elm Street in Waverly. Some customers

arrived by foot or bicycle. But as young families began filling new homes in the town’s nearby residen-tial developments, Pete’s began to falter.

“The owner had been in the business for 25 years,” said Waverly Mayor Connie Holmes. “He really want-ed to retire. He was tired out. Things were falling apart, and there was no one to pick it up. It’s a very difficult business and it’s not for everybody.”

The death of Pete’s Grocery was a painful, drawn-out process. Shelves weren’t restocked and equipment didn’t get the needed repairs. For months, the owner — and, eventually, the City — tried to find someone to take over the business, but prospects were discour-aged by the deteriorated condition of the building (renovations to bring it up to code would cost as much as $200,000), and the City had little in its coffers to make the upgrades needed to attract a new inves-tor. When Pete’s finally closed for good in February 2012, it seemed unlikely that the store would ever open again.

In the months since Waverly lost its grocery store, the town’s 1,300 residents have adjusted, Holmes said. Many of the town’s young families had already been doing their shopping on their way home from jobs in the Twin Cities, and the older residents who favored Pete’s started shopping in nearby Howard Lake, Delano or Buffalo.

Life goes on in Waverly without Pete’s, but Holmes and many other residents still feel the sting. “In a com-munity like Waverly, losing a mom-and-pop grocery

Bare MarketRural grocers offer wealth, wellness and aisles of community connections. But can they be saved?

By Andy Steiner | Photography by John Linn

3rd Quarter 2012 33

store often means losing more than a sense of nostalgia,” said Don Hickman, Initiative Foundation vice president for economic and com-munity development. “When people start traveling out of town to buy food, they usually do the rest of their shopping out of town, too.”

Holmes said that she worries about Waverly becoming little more than a “bedroom community.” “Small towns need to have a grocery store to stay healthy,” said Holmes. “It’s a strong center, a place where people stop by, hang up notices about garage sales, see their neighbors. It’s a gathering place, the heart of a town.”

Grocery stores are often small-town anchor businesses, Hickman said, central to the economic vital-ity of their communi-ties. Last September, t h e Fo u n d a t i o n hosted a workshop called “Saving Your Hometown Grocery Store” for community and business leaders interested in establishing or sustaining food retail stores in rural towns. The event emphasized the importance of having reliable sources of food in smaller com-munities and how different ownership structures, such as coopera-tives, are growing in popularity.

Particularly challenging for grocers is the spectrum of large national chain stores like Wal-Mart and Target that sell a mix of con-sumer goods and groceries at discount prices. In 2006, when nearby Rockford lost its locally owned grocer, owners said that big-box competition made it impossible to sustain their business. Efforts to attract a new grocer have not yet been successful, which means that Rockford residents must drive at least 10 miles to buy their food. “We all tend to think that driving for groceries is an inconvenience, but that’s assuming that all people have access to a driver’s license and reliable transportation. If you’re a senior citizen or a family in poverty, this situation impacts your life, your budget and your health,” continued Hickman.

Today, a group of community members in Rockford and nearby Greenfield are working to form a local food cooperative, a nonprofit organization that will be member-owned and provide low-cost, healthy foods. The Initiative Foundation is assisting the group in their efforts, connecting them with successful rural food co-ops. The Foundation also awarded a small grant to help leaders develop a business and marketing plan.

Maintaining a healthy core of locally owned businesses is a key to rural economic strength, according to Craig Thorvig, owner of Chris’ Food Centers in Sandstone and Pine City. His father pur-

chased the Sandstone store in 1974 and oper-ated it until 2003, when Craig moved back home and took over the business. He purchased Pine City’s struggling grocery store and now

employs about 130 workers in the two locations. It’s a gamble, Thorvig acknowledges, especially since the Wal-Mart Supercenter is less than a mile down the road.

“We try to provide value for our customers,” Thorvig said, add-ing that his business isn’t looking for customers who shop there out of pity but rather out of choice. “Value doesn’t always mean a better price. Value also includes customer service and proximity. A small town is like an ecosystem. We all support each other. If Chris’ does well, we will reinvest in our town. If Wal-Mart does well, will they will reinvest in Bentonville, Ark.?”

No matter the structure or size, studies suggest that if a business is independently owned, more of the customer’s dollars are rein-vested in that same area, thereby contributing to local and regional economic growth. A 2011 study by the Maine Center for Economic Policy found that every $100 spent at locally owned businesses con-tributes an additional $58 to the local economy while $100 spent at a chain store yields just $33 in local economic impact.

“Value doesn’t always mean a better price. Value also includes customer service and proximity. A small town is like an ecosystem. We all support each other.”

Craig Thorvig (right), owner of Chris’ Food Centers in Sandstone & Pine City

“Small towns need to have a grocery store to stay healthy. It’s a strong center, a place where people stop by, hang up notices about garage sales, see their neighbors. It’s a gathering place, the heart of a town.”

connie holmes, Mayor, Waverly Minnesota


Many small and mid-sized communities are served by grocers that may not be owned by someone living within the city limits but rather have headquarters in the region. Based in St. Cloud, Coborn’s, Inc. has 19 Coborn’s or Cash Wise stores in central Minnesota, 12 of which are located in smaller communities, outside of the St. Cloud area. In 2007 Coborn’s established an employee stock ownership program (ESOP), so their 6,500+ employees could share equity in the company.

In Morrison County, Gosch’s Store in Randall is known for its meat department that features special homemade sausages. The store attempts to set itself apart with promotions like the “Brat of the Week” during which Gosch’s creates new varieties of bratwurst (recent examples include “Lumberjack” and “Gummy Bear”). Denny Mueller, who bought the 110-year-old institution in 2004 with his wife, Lori, said that such creative promotions attract cabin-bound customers who are likely to purchase other items like produce and bakery goods. He also added that the highway stopover provides opportunities for other local businesses.

The Muellers said they believe that the economy of their 650-resident community depends heavily on the health of local businesses. Two years ago, they helped to create a local business-owners group, founded to preserve the vitality of Main Street businesses. The 30-member group, “Vision Randall,” received training and grant funds from the Initiative Foundation Thriving Communities Initiative.

The Foundation assisted Vision Randall by inviting the Minnesota Design Team to assess the condition of their business district. A vol-unteer group of 15 community planners, architects and engineers toured the downtown area and offered advice on how the com-munity could maintain its economic vitality. Recommendations included planting trees to buffer the impact of railroad tracks as well as planting community gardens and building convenient housing within walking distance of local businesses.

As ideas are put into action, Gosch’s still has to deal with compe-tition from area retail chains. A partnership with a co-op wholesaler

has kept Gosch’s prices reasonable on many items. Mueller said that he works hard to emphasize the more intangible value that comes from local owners and employees.

“We stress quality,” said Mueller. “We have gone back to the old-fashioned ways of making things here. I always say that in our store, you can tell when our guys are making potato sausage. They are standing around in a little circle crying because they are chopping the onions. That’s the kind of authentic place I want to run. You can’t put a price tag on that.”

According to the USDA, “food deserts” are low-income areas where at least one-third of the population lives 1-10 miles from the nearest grocery store. This map suggests that more than 83,000 central Minnesota residents may have challenges in finding fresh, healthy food. The USDA identifies 206 total food deserts in the state, which often have higher rates of poverty and limited public transportation options.

To learn more visit: www.ers.usda.gov/data/fooddesert

Food deserts in central minnesota

Sausage Sells: Denny and Lori Mueller draw customers to Gosch’s Store in Randall with a meat department that is known for its sausages and “Brat of the Week” promotions.

Food Desert

Central Minnesota’s business land-scape is dotted with coffee shops, energy companies and second-

hand stores. All sell a product in the hopes of turning a profit. Now, some are also fueling nonprofit organizations with their proceeds.

Nationwide, foundation assets - one of the primary sources of funding for many nonprofits - fell by an unprecedented 17 percent in 2008. Although grantmaking has stabilized, the long-term impact and out-look seems uncertain.

So as more organizations compete for less grant money and government funding becomes less reliable, a growing number of nonprofits are turning to social enterprise to ensure their organizations’ fiscal health. In basic terms, a social enterprise model uses entrepreneurial, revenue-generating strategies for earned income. Those strate-gies and activities are directly tied to the nonprofit’s mission.

“Social enterprise models can broad-en the scope of funding opportunities for some nonprofits,” said Kate Barr, the execu-tive director of the Nonprofits Assistance

DoubleBottom LineEnterprising charities measure success by both purpose and prosperity.

By Rachel Reabe Nystrom | Illustration by Chris McAllister | Photography by John Linn

Fund in Minneapolis. “Not only can it make them more financially stable but it can lead to greater impact in the community.”

In the same way that entrepreneurs create new businesses, social enterprises are change agents for social issues. “You combine the brains of a business model with the hearts of the social sector and it can help solve the chronic problems of poverty, homeless-ness, hunger, unemployment and lack of opportunities for young people,” said Linda Holliday, vice president for organizational development at the Initiative Foundation.

A recent survey of nonprofits in central Minnesota indicates close to 60 percent operate some kind of earned income or social enterprise activities, mostly using a fee-for-service model. Outside of those activities, the most common form of social enterprise is thrift shops, which sell donated used goods and then contribute the profits to a wide range of nonprofits.

Experts say that central Minnesota has distinct strengths and challenges when it comes to social enterprise. “The most suc-cessful social enterprises tap into a real mar-ket opportunity and demand,” said Barr,

who explained that nonprofits in rural areas are very close to the community and can get a good understanding of the real demand and competition more quickly than in urban centers. On the other hand, “the market for customers is smaller, so the enterprises have to be at the right scale,” she said.

Partnering with the Nonprofits Assistance Fund, the Initiative Foundation is hosting a Purpose & Prosperity Conference on November 15 for central Minnesota nonprofits interested in social enterprise. The event will bring together people who have launched social enterprise models with social venture investors and business and finance experts.

Following the conference, the Initiative Foundation and its partners plan to launch a year-long pilot project to help nonprofits develop business and marketing plans fol-lowing the conference. “We know that non-profit organizations play a significant role in thriving communities and economies,” said Holliday. “We want to improve thier effectiveness and sustainability.

Here are three central Minnesota social enterprises that are doing just that.

3rd Quarter 2012 37

cyber café, WadenaEat, chill, click…get connected. That’s

the slogan for Wadena’s Cyber Café, a gath-ering place for area teens since it opened in 2001. “Wadena is a small community of 4,200. We have our school, one theater and a bowling alley,” said Ann Pate, Cyber Café’s chairman of the board. “There really weren’t places for kids. We needed a youth center.”

That wish became a reality when a size-able gift from a local benefactor created a nonprofit to serve the youth of Wadena County. The money helped purchase an empty 100-year-old building in the middle of downtown Wadena.

That building turned out to be more than just a meeting place. “We offer com-puters and high-speed wireless connection,” said Randy Jahnke, a recent college graduate from Wadena who runs the youth center. “In a poor county, it’s important that all of the kids have computer access.” The Cyber also has ping-pong and pool tables and hosts tournaments and dances.

With almost 50 young people coming in every day, the Cyber was a success. When grants were cut substantially, the board of directors explored alternate funding sources to cover the $100,000 annual budget.

Their innovative solution was to open a coffee shop in the Cyber Café, utilizing

the morning and midday hours when the students were in school. “It’s been very suc-cessful,” according Pate. “It’s like a Starbucks with specialty coffee drinks. Business people stop in on the way to work and it’s a meeting place for community groups. Tech students appreciate the wireless connection.”

The coffee shop also provides employ-ment opportunities for area teenagers by teaching workforce skills—which furthers the organization’s mission. “It’s great to be around here with friends,” said Zachary Hassa, a high school sophomore in Wadena and a part-time worker at the Cyber Café. “We have five computers, two Xboxes, a bunch of TVs. There’s not much else to do

randy Jahnke: manager, Cyber Café

in this town. If this wasn’t here, we would be hanging outside or stay home.”

The revenue from the coffee shop has allowed the board to pay off the mortgage on the building and contribute almost half of the annual expenses for the Cyber Café. The organization also raises funds with a farmers’ market, monthly rummage sales and an annual fundraiser.

Pate credits the Cyber’s success to its strong volunteer base. “We’ve been open for 12 years and have outlived most youth centers,” she said. “We are committed to our mission—providing a safe and chemical-free zone for area young people to hang out.”

As more organizations compete for less grant money and government funding becomes less reliable, a growing number of nonprofits are turning to social enterprise to ensure their organizations’ fiscal health.

In basic terms, a social enterprise model uses entrepreneurial, revenue-generating strategies for earned income. Those strategies and activities are directly tied to the nonprofit’s mission.


Bridges of hope, BrainerdShoppers at the stylish Common

Goods north of Brainerd hunt through attractive collections of antique, vintage and second-hand goods. Many have no idea that their purchases support local families who are in crisis.

Bridges of Hope, which operates Common Goods, serves Crow Wing County and surrounding communities by connecting families facing temporary crisis situations with existing resources. Last year Bridges of Hope served 2,500 households. “For ten years we’ve been helping families who need emergency assistance with rent or utilities, parent-ing skills, mental health issues, abuse or medical crises,” said executive director Jana Shogren. “We have so many agencies in Crow Wing County to help people. We work to connect people to the right place for help and fill in the gaps when they arise.”

That includes tenants who were recently displaced after a fire tore through their Brainerd area apartment building. Bridges of Hope worked to rally the con-tributions of volunteers and connect families to the support they needed.

Even though Bridges of Hope had become essential to its community, rely-

ing on grants and donations in addi-tion to state and county contracts for funding was growing more and more unpredictable. “If we missed a grant, we had to think about saying no to families in need,” Shogren said. “Our board and staff discussed how we could operate a sustainable business to provide stable funding for the organization.” After much thought and research, they decided to open an upscale thrift shop. They worked with the Small Business Development Center at Central Lakes College to devel-op a business plan.

It was not an easy decision. “We were worried that it could take focus away from our mission and day to day operations,” said Shogren. But Common Goods, now three years old, caught on right away. “Our location on Highway 371 was a key to success as well as having the right manager. The store has raised the profile of Bridges of Hope in the community. We have signs and literature in the store about our organization and we try to share the stories of the clients we serve.”

The goal for Common Goods was to break even in two years. The com-munity received it so well that the

store turned a profit after its first year. “It has helped plug the holes,” said Shogren. “It now provides 20 percent of our budget. We have been able to keep up with the needs of our families and grow as an organization.”

There was a risk that the success of Common Goods might lead funders to

assume Bridges no longer needed finan-cial support. In fact, their entrepreneurial spirit turned out to be an asset. “We have generated more interest and enthusiasm from our supporters because we want them to be part of the solution,” Shogren said. “It’s what we ask of our clients. We want them to work as hard as we do to help them.”

Jana Shogren: executive director, Bridges of Hope

“We have generated more interest and enthusiasm f rom our supporters because we want them to be part of the solution.”

3rd Quarter 2012 39

rural renewable Energy Alliance, Pine river

Jason Edens is a man with a mission. He wants to make solar energy available to everyone, regardless of income. Edens started by incorporating solar heat into the federal energy assistance program. “I grew up in a family that intermittently had to rely on energy assistance,” he said. “I know how it works and how critical it is.”

Years later, when Edens was in graduate school, he needed energy assistance again. This time he took a different approach. “Instead of applying for assistance, I asked for a loan for a solar energy system,” he said. “They said no. So I found a discarded solar heater system and put it to work. I was no longer in need of energy assistance.”

In 2000, Edens formed a nonprofit organization to offer solar energy for low-income households. Located in Pine River, the Rural Renewable Energy Alliance (RREAL) is the only organization in the country that is actively incorporating solar heat into the energy assistance program. “Our objective is to transform the way the

nation delivers energy assistance and lead by example,” said Edens.

RREAL has installed some 250 solar heating systems in low-income house-holds. “We find them by partnering with Community Action Agencies that admin-ister the energy assistance program,” Edens said. “We have a waiting list of 400 people.”

After concentrating on the charitable mission for five years, Edens said it was clear they needed to establish financial support for the work ahead. The organiza-tion started offering solar installations for the residential and commercial sectors at market prices. They also developed their own solar panel in 2006. “We had been purchasing equipment from across the country. It came with a mark-up and ship-ping costs,” Edens said. “We realized we could develop and design our own prod-ucts. It expanded and grew. It’s all part of our nonprofit mission.”

In the last five years RREAL has devel-oped a manufacturing and distribution

business. “We have 70 dealers nationwide using our solar products on residential and commercial buildings. It generates revenue for our nonprofit work and helps us weather the storm of funding,” said Edens. “One of our long term goals is to share solar technologies with partners in other parts of the country.”

It’s a challenge to operate a nonprofit organization along with a business that generates profit to fund the philanthropic work. “At this point our revenue from the for-profit program is starting to reach parity with our charitable and education-al programs,” Edens said. “It’s tough. I bounce from program to program. We have a million dollar business and need to keep our eyes on the prize.”

Edens predicts they will split off the pro-grams and establish them as self-standing entities partly owned by nonprofits. “This is a big, exciting opportunity for non-profits and our organization is a novice. We’re very much in the learning stage.”

“We realized we could develop and design our own products. It expanded and grew. It’s all part of our nonprofit mission.”Jason Edens, Founder & Director , Rural Renewable Energy Alliance


EichMotor.IQ.W12.ad_Layout 1 12/21/11 12:31 PM Page 1

With a Total Connect Security System, you can:

• Mind your store

• Protect your business

• Arm and disarm the system

• Watch for shoplifters

• Control employee theft overthe Internet, with cell phones,or other web-enabled devices.

People’s Security offersbasic security systems,

Closed Circuit TV and a varietyof commercial options.

I know life doesn’t come with a schedule. That’s why at State Farm you can always count on me for whatever you need – 24 / 7, 365.GET TO A BETTER STATE™.

CALL ME OR VISIT US ONLINE TODAY.

Anytime.Anywhere.Any day …That’s when you can count on State Farm®.

1101198 State Farm, Home Office, Bloomington, IL

Paul Gazelka Ins Agcy IncPaul Gazelka, Agent15229 Edgewood Drive, Suite 100Baxter, MN 56401Bus: 218-829-9694 Toll Free: 800-269-9694

RESIDENTIAL

COMMERCIAL

INDUSTRIAL

u Aggregates u Washed sand and rock

u Landscape rock u Pre-cast concrete

u Concrete sealer u Ready-mix concrete

u Concrete pumping and conveying

www.KnifeRiver.com

(218) 829-4726 | (800) 450-4726Baxter | Pine River | Crosslake | Deerwood | Staples

3rd Quarter 2012 41

Nisswa Community Center | 218-963-008522x40 dance floor | 299 occ. cap. | smoke-free

bar rental | kitchen | clean-up | tables and chairs all includedwww.ci.nisswa.mn.us/cc/index.htm

Ye Old Pickle Factory | 963-0085Downtown Nisswa | Open Daily | www.yeoldpicklefactory.com

Spirits of Nisswa | 963-7488Across from Schaefer’s Grocery | www.spiritofnisswa.com

CityNisswa.IQ.W12.ad_Layout 1 1/13/12 10:32 AM Page 1

redirected toward providing a life-line to businesses that need work-ing capital to sustain them until the economy picks up again. Despite the end of the recession, Elden said “the need is still there” for many of those sustaining loans.

And even though times are tough, experts remind businesses that the situation isn’t permanent. According to the Federal Reserve Bank of Minneapolis, Minnesota banks loaned out more money in the second quarter of 2012 than in the same quarter last year, the first time in three years that the state’s banks as a whole showed a quar-terly gain.

“On the political side, they want you to lend to get the economy going again, but on the regulation side, they tell you not to lend unless it’s a sure thing,” said Johnston. “Eventually, things will balance out, but it’s taking a while.”

rob ronning, Pine Country Bank CEO

continued from page 31


Visit our website at www.anderson-center.orgfor forum dates and locations,to meet our Discussion Leaders, andto learn more about how the Anderson Center can be usedto develop and strengthen leaders andcreate value in your organization.

Challenge yourself. Challenge your organization.

Experience it.

www.anderson-center.org l 320.251.5420

Se

e w

ha

t w

e

ca

n d

o f

or

yo

u.

ad

ve

nt

ur

ea

dv

er

tiS

ing

.co

m

US

| B

ra

ine

rd

| M

inn

ea

po

liS

| S

t. C

lo

Ud

aU

| S

Ur

fe

rS

pa

ra

diS

e

3rd Quarter 2012 43

Guiding You To and Through Retirement

Community leader. Teacher. Grandparent. Everyone has a unique life story — and a vision of retirement that’s just as individual. Since 1992, we’ve been helping clients define their goals and put the pieces into place to make them possible. In the process, we’ve come to call them friends. And almost all of the time, there’s coffee involved.

If you’d like to discuss your retirement vision, we’d be honored to be part of the process. For a no-obligation visit, call or visit us today.

It all begins with

Investments, insurance and advisory services offered through Fintegra, LLC an independent broker/dealer, and SEC Registered Investment Advisor, member FINRA/SIPC. Larry DeGraaf is a registered representative of Fintegra. DeGraaf Financial and Fintegra are not affiliated. Office of Supervisory Jurisdiction phone 763-585-0503.

320-251-6968 • DeGraaffinancial.comP.O. Box 7396 | 215 Park Avenue South, Suite 100 | St. Cloud, MN 56302

SimplifyingLendingMicro-loan Fund $1,000 – $35,000

Revolving Loan Fund $35,000 – $100,000

Septic System & Water Well Loans available to rural land owners

Contact Joe Schulte Region Five Business & Loan Developer218.894.3233 x2 [email protected]

Co n s u l t i n g, in C.

le h m a n& as s o C i a t e s

Keeping Your Business Healthy

Brian Lehman

cell. 218.838.4158 • nisswa.com [email protected]

D o c T o R

TheBusiness • Marketing & Advertising

• Business Reviews & Assessments

• Business Planning & Development

• Management Services & Strategizing

• Public Relations & Communications


190 2nd Ave SW, P.O. Box 38Milaca, MN 56353

(320) 983 - 3101

“Our goal is financingto help our communities grow”

MILACA - ISLE - GILMAN

www.fnbmilaca.com

FIRST NATIONALBANK OF MILACA

“Community Banking Since 1897”

3rd Quarter 2012 45

By Maria Surma Manka | Photography John Linn

Water Works, Cambridge

UndEr PrESSUrEThe amount of force per square inch used to form the metal is more than double the pressure at the deepest point in ocean. That’s about seven miles deep!

EffIcIEncyHydroforming is more time-efficient than other processes. The part shown here can be formed in less than a minute while the traditional manufacturing method—which includes stamping, welding and then grounding the seams—takes more than 10 minutes.

JUST Add WATErThis faucet piece is shaped with little more than highly pressurized water. A metal tube is placed in the machine and water pressurized to 30,000 pounds per square inch (psi) is pushed through the rod, expanding it to the mold’s shape.

Sheet shaping. Water Works will soon have a sheet hydroforming process that uses water to create a form from a sheet of metal. This can be used to make a range of products, including oven hoods.

Other natural elements. Water Works just purchased Interlaken Technology Corporation. This will allow them to explore shaping techniques that push the boundaries of metal forming, including using heat and air to create even more shapes, such as a seamless metal box.

fUTUrE ProJEcTIonS

dAILy USEFrom seat-back frames to exhaust pipes, other everyday items are also made with the hydroforming press.

Yes, Water Works may be the coveted utility in the Monopoly board game. But it’s also the name of a Cambridge-based company that’s dominating a nearly untapped market in the U.S.

Hydroforming—a metal-forming technology—uses highly pressurized water to shape metal into everything from motorcycle parts to kitch-en faucets. Prior to Water Works entering the market, hydroforming was only cost-effective for industries like auto manufacturers, which order millions of the same part.

Like most businesses, this central Minnesota success story has endured its share of chal-lenges. In 2007, Water Works was looking to buy a second hydroforming press and need-ed more warehouse space. At the eleventh hour, it found Cambridge Metals and Plastics (CMP), which was on the verge of closing its doors. With support from community partners like the Initiative Foundation, Water Works purchased CMP.

Since then, it has nearly doubled its work-force and combined the expertise of both companies to create a match made in indus-trial heaven. Here’s an in-depth look at one of the products created by using the unique process: the modest faucet fixture.

Home Made

LESS IS MorEHollow pieces, like this faucet piece, have traditionally been made out of several parts. For instance, an exhaust pipe was previously made out of five stamped parts that were then welded together. With hydroforming, that component is now two parts and one weld seam; creating a more durable and reliable product.


Strategy makes all the difference in attracting the resources you need to carry out your mission. Contact us for your nonprofit’s next board planning session.

Simply doing good isn’t good enough anymore.

HBHConsultants.com 877-853-9960

The Resilient Region website is an excellent source of information pertaining to economic vitality, environmental stewardship and quality of life factors.

ResilientRegion.org

The new website extensively covers Housing, Land Use, Transportation and Economic Development and provides resources such as InCommons, (a place to engage in hosted relevant conversations) maps and access to webinars. This site is a result of the HUD Sustainable Communities Regional planning initiative, contributions come from many regional, state and federal sources and is maintained by The Region Five Development Commission.

BECOME A MEMBER TODAY!

Alexandria | BaxterBrainerd | Crosby | Little Falls

Pequot Lakes | Staples

(218) 829-0371www.mmfcu.org

60432 IQ Chuck_2.417x9_Layout 1 12/1/11 10:07 AM

3rd Quarter 2012 47

Think you know? Send your best guess to [email protected] by December 15, 2012.

Three winners will be chosen, at random, to receive a $25 GiveMN.org gift card to support the charity of their choice.

Hint: This isn’t a place to tread lightly.

Where is IQ?


How can weHelp yousucceedtoday?

Client success is our passion (bordering on obsession) at Range. Our unique,

full-service marketing communications company combines the very best cross-

media solutions—including print, digital communications, creative executions,

and comprehensive marketing consultation.

everytHing in one place.

Print, creative, marketing, fulfillment, mailing and more. Business speakers say,

“Synergy.” Aristotle says, “The whole is greater than the sum of its parts.” We

say having control of the entire process helps us deliver more return on clients’

marketing investments.

Enough about us. LEt’s taLk about You.

All you have to do is contact Range and say, “Here’s my challenge.” We look forward to helping you succeed.

rangedelivers.com218.829.5982

©20

12 No

r-Son

, Inc.

All rig

hts re

serve

d. ND

Lic. #

2536

1 MN

Lic. #

BC00

1969

Homes I We make it welcoming. You make it home.

Healthcare I Healing environments with a touch of home.

Consulting Design/builD general ContraCting ConstruCtion management

Nor-Son, Inc. An Integrated Consulting, Design & Construction Services Firm n 800.858.1722 n www.nor-son.com

Hospitality I Create a comforting experience for every guest.

Commercial I Function and comfort aren’t mutually exclusive.

comfort is our business.w o o d, s t e e l a n d s t o n e a r e o u r m at e r i a l s , b u t

see all we Doat nor-son.Com

iq magazine - summer fall 2012

Documents

kara lynn fausch

right time

community banks

orgmyhealth online access

good idea

power of permanent endowments

target market

right message