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Doing Business the Mankato Way

Doing Business the Mankato Way

Why is the southwestern Minnesota city booming? Ask the businesspeople who live and work there.

 

When Julia Ketcham Corbett graduated from Hamline University Law School in St. Paul, Blethen Gage & Krause in Mankato offered her a job. She eagerly accepted it, thinking she would spend a few years with the law firm and eventually make her way back to the Twin Cities.

That was 18 years ago, and all thoughts of leaving Mankato have long since disappeared.

Today, Ketcham Corbett is a managing partner in the 116-year-old general practice law firm that has 14 lawyers on staff. “I fell in love with the community and the job,” she says. “I have great work-life balance here. It’s a growing community, which is good for our business, but I can still go to the grocery store and run into someone I know. It’s a safe community, where you know who your kids are going to school with. The cost of living and salaries are competitive, and it’s a beautiful area.”

1012_mankato_pic1.jpg Julia Ketcham Corbett, Partner, Blethen Gage & Krause

Ketcham Corbett’s story is not unusual. Situated on the banks of the Minnesota and Blue Earth rivers about 80 miles southwest of the Twin Cities, Mankato is home to an impressive and growing number of businesses that provide opportunities for workers seeking good jobs and good pay, while the city provides them with an enviable quality of life.

The many livability awards Mankato has earned in recent years is testament to its appeal as a great place to live and work. Forbes ranked the city 11th on its 2012 list of the 100 best small places for business and careers; in 2010, the magazine ranked Mankato 15th out of 126 U.S. cities as one of the best small cities to raise a family. The city’s amenities are a big reason for those rankings. It is home to five colleges and has more than 60 parks, eight golf courses, and 50 miles of paved walking and biking trails. And it offers residents and visitors myriad sporting and cultural events in an attractive setting. But it is the vitality of Mankato’s business community and the stability of its economy that typically is the initial draw for people from outside the city: The Mankato area boasts a $9 billion economy driven by a strong, diverse business community. Once people experience life in Mankato, like Ketcham Corbett, they often are hooked.

Way to Grow

1012_mankato_pic5.jpgKeith Boleen, CEO and President, Frandsen Bank & Trust

Keith Boleen moved to Mankato in 1985. Today, he is CEO and president of Frandsen Bank & Trust in North Mankato. “The size is an attraction,” he says. “[The city] has grown to be a regional center, and it’s only one hour away from the Twin Cities. There is a mix of retail, wholesale, and manufacturing, so we’re not completely dependent on one industry to do well. And we’re in the river valley. Put all that together, and that’s why we’ve stayed here.”

Boleen also praises area businesses’ commitment to the community and its residents. “One of the things that is notable . . . is that we have a community that strongly backs the United Way and other groups that support diversity and educational needs,” he says. “It’s a very giving community. Businesses take a real serious attitude in knowing that in order for their businesses to prosper, it takes a certain amount of giving.”

Jean Bye, CEO and president of Dotson Iron Castings, grew up in Mankato and, like many young people, thought she would not return to the area after graduating from Concordia College in Moorhead. Yet here she is, running a company and enjoying the quality of life she took for granted when she was younger. “I worked at Dotson during the summers while I was in college,” Bye says; when the company made her a good job offer, she accepted and has never looked back.

Dotson Iron Castings was founded in 1876 as a blacksmith shop, evolving over the years to what it is today: a foundry occupying a 115,000-square-foot building with a 10,000-square-foot addition under way, an impressive list of products and clients, and 160 employees. The company melts scrap steel and iron and pours the molten metal into sand molds for parts that range from brackets and foot pedals to tillage points for agricultural machinery.

1012_mankato_pic4.jpg Jean Bye, CEO and President, Dotson Iron Castings

“We have about 1,200 different parts,” Bye says. “We use technology in designing, so we get a sound, solid part, and our plant is exceedingly automated. The other thing that sets our foundry apart is a quick turnaround. Our standard lead time is two weeks, which is way [faster than] industry standard. And we have a 99 percent on-time delivery, which is way above the industry standard. We deliver high-quality parts on time with a short lead time, which helps our customers capture market share.”

Like Bye, Todd Reinmann, managing director and COO of MTU Onsite Energy Corporation, is a Mankato native who has found everything he needs, and wants, in the city. Next March, he will celebrate 30 years with MTU, which designs, manufactures, and delivers power generation systems. Last year, the company built and delivered 36 generator sets (an engine with a generator that will start automatically and produce power) to a client in Japan—and it did so in just three months.

MTU Onsite’s clients include data centers, treatment plants, office buildings, and hospitals; it also has customers in the agriculture industry. “Our clients are worldwide—anyone who has a need for backup for their power needs,” Reinmann says, adding that the company builds to clients’ specific standards. Generators for hospitals, for example, “have to be up to speed and carrying full loads in 10 seconds,” he says. “We sell a whole solution, which includes software and switching.”

1012_mankato_pic3.jpg Troy Volk, CEO and President, Volk Transfer

MTU Onsite has 350 employees in Mankato, which includes the corporate headquarters, an 85,000-square-foot production facility, and a 90,000-square-foot inventory control site. “More than 50 percent of our workers [come] from outside the Mankato area,” Reinmann says. “That’s unique. We get a lot of support from Minnesota State University, Mankato, for engineering people and for internships.”

Mankato native Troy Volk is the third generation of his family to run Volk Transfer. Started by his grandfather in 1948, then run by his father, Volk Transfer transports products and goods throughout the United States and Canada. Troy Volk took the reins as CEO and president in 1997. Last fall, Volk Transfer completed construction of a 32,000-square-foot facility, quadrupling its space.

Volk credits the area’s industry mix and strong leadership for driving the local economy. “Mankato and North Mankato have a dynamic mix of manufacturing and retail,” he says. “The two cities and the public leaders have done a good job of promoting both. There is a lot of downtown revitalization, and Greater Mankato Growth [the area’s chamber of commerce and chief economic development organization] is progressive and proactive, and understands what our needs are.”

One of those needs is ready access to skilled workers. Jon Rippke, chairman of the board of Bolton & Menk, says he finds much of the talent the engineering firm needs from Minnesota State University, Mankato, and from South Central College in North Mankato. “One of the benefits of being in Mankato is the access to students at the various institutions,” he says. “The Mankato area has a strong and varied education foundation, from public and private high schools to postsecondary institutions.”

Bolton & Menk often hires students to fill part-time positions, which allows the company to evaluate their skills for future full-time employment while providing those students with valuable experience. “The institutions of higher learning are also very open and receptive to improving their programs in order to provide graduates who meet the current requirements of our industry,” Rippke says.

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Made in
Greater Mankato
(Annually)

 
  • The only man-made quartz countertops and surfaces
    Cambria

  • More soy beans processed than in any other city in North America
    CHS, Inc. and Archer Daniels Midland Company

  • 370 million pounds of cheese and 10 million pounds of whey protein
    Davisco Foods International, Inc.

  • 25 million pounds of finished ductile iron castings used to make 75 percent of all North American semi-trucks
    Dotson Iron Castings

  • Sophisticated electronics for the military, med-tech manufacturers, DUI-vehicle ignition interlocks, among others
    EI Microcircuits

  • Cabling used in the manufacture of half of all North American recreational vehicles
    Kato Cable, LLC

  • 58 million gallons of ethanol from 19 million bushels of corn
    POET, LLC

  • Printing and related solutions for 275 of Fortune 500 companies and 3 million-plus small businesses
    Taylor Corporation

  • Limestone used throughout the world—from Target Field to the U.S. embassies in Moscow and Abu Dhabi
    Vetter Stone Company





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Founded in 1949 in nearby St. Peter, Bolton & Menk moved to Mankato in 1966 and today has 10 offices in Minnesota and two in Iowa; it has 300 engineers, technicians, and technical specialists on staff, who work on projects throughout the Upper Midwest. The firm has earned a host of awards, including the Minnesota Council of Airports 2008 Project of the Year for the Mankato Regional Airport runway extension. “The diverse industrial and manufacturing base, together with a robust ag economy, makes the greater Mankato area a solid regional center for growing a business and attracting and retaining high-quality staff,” Rippke says.

A Supportive Community

Tim Tupy, a relative newcomer to the Mankato area, represents a new and growing segment of business owners in the area. He came to Mankato as a college student in 1987. After earning a bachelor of science degree in finance from Minnesota State University, Mankato, and working for several years at two technology companies in the city, the entrepreneurial bug bit. Tupy and his wife, Tamera, started LIV Aveda salon and spa in 2002; the Tupys have grown the business to an employee roster of 59, with numerous services that draw customers from a 100-mile radius.

Three years ago, Tupy, who had been brewing beer at home for several years, decided to get into the brewery business. It was, he says, part of his heritage; his great-great-great-grandfather had opened the first brewery in New Prague in 1884. Tupy purchased a former beer distribution building in North Mankato, started Mankato Brewery, and began brewing beer in January. “We have two kinds of beer—Mankato Original and Stickum, which is a darker-style beer,” he says. “We’re in about 60 retail liquor store locations.”

Mankato Brewery has only two people on its payroll right now, but Tupy says the company will produce 1,000 barrels of beer—nearly the equivalent of 57,000 six-packs—during its first year of operation. He is glad he remained in Mankato and is excited about the future of both of his ventures. “This is a community that is supportive of its people and its businesses,” Tupy says.

Corey Brunton, the CEO, president, and owner of Brunton Architects, founded his firm in 2007. “I started in my basement, which lasted about one month,” he says. Brunton had a business relationship with a general contractor doing design/build work who “handed me $12 million worth of design work the day I opened my doors,” he recalls. Brunton moved the company twice and quickly outgrew each location before building a new office in North Mankato last fall. “And we’re outgrowing this one,” he says. “We have 12 employees, and one is working in the conference room.”

Brunton’s firm has a wide-ranging portfolio that includes fire halls, strip malls, churches, banks, restaurants, and retail stores throughout Minnesota and neighboring states. “Easily 50 percent of our work is right here in the city limits,” Brunton says. “Mankato has one of the best retail hubs in the state; that sector is strong and growing and draws a lot of people. Other businesses draw off that. A strong retail industry is a big reason there is so much going on here. The other thing I think really makes Mankato an optimal location to live, work, and look for business opportunities is that the community is very proactive.”

John Finke agrees. He is CEO and president of HickoryTech, a 114-year-old regional communications provider with headquarters in Mankato and 500 employees in Minnesota, Iowa, and North Dakota.

“The community is progressive, innovative, and constantly adapting to change and committed to enhancing the vitality of the community,” Finke says. “With four colleges within our community and several others nearby, HickoryTech can draw from a pool of qualified and skilled employees.”

Like the area itself, HickoryTech has experienced tremendous growth; its roots were as a local, independent telephone service provider, but it has diversified over the years to provide business and residential broadband services and IP-based voice, data, communications, and business solutions. The company is in phase two of its $24 million Greater Minnesota Broadband Collaborative Project, which will bring high-speed broadband capabilities to rural communities in northern Minnesota. About two-thirds of this project is being funded by a grant from the federal National Telecommunication and Information Administration’s Broadband Technology Opportunities Program.

Workforce of the Future

The diversity of Mankato area businesses accounts in large part for its economic vitality and stability. The diversity of its residents also has a strong, and positive, impact on the area’s economy. Mankato has a population of about 50,000 and residents speak more than 34 different languages, according to Bukata Hayes, executive director of the Greater Mankato Growth Diversity Council, which works with businesses to prepare them to employ what he calls “the workforce of the future.”

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“As our community continues to grow, those communities within it also continue to grow,” Hayes says. “Projections are that, by 2030, we will have an increase of about 117 percent in non-white population and only about a 3 percent increase in white population in our area.”

As the workforce changes, particularly as baby boomers retire, Hayes says, it will become increasingly important to provide access to job opportunities to those new and diverse members of the community. “We know there will be a lack of labor to sustain business, so one of the ways we can counteract that is to engage new community members to provide access and opportunities to the workforce,” he says. “We’re being proactive. We want to minimize the hurdles and barriers. The benefit of an integrated society is that our employers will have a larger talent pool to reach into; that’s a tangible thing.”

It is that type of forward thinking, combined with a spirit of cooperation among community leaders who are dedicated to growing the economy and ensuring that the needs of the area’s residents are being met, that is attracting—and retaining—a new generation of businesses and people. Ketcham Corbett says that she could not have landed in a better place—professionally or personally.

“I’ve had an opportunity to take leadership roles in the community and to have an ownership interest in my business,” she says. “I am also vice chair of the Greater Mankato Growth Board of Directors, which drives a huge economy and is concerned with the community as a whole. My work, family, and volunteer lives are well-balanced here.”

 

 

MANKATO HAS TALENT— AND IS HUNTING FOR MORE

The demand for qualified workers continues to rise in several industry sectors.

An available and skilled workforce is critical to the growth and success of any business—and area. That fact is not lost on Greater Mankato Growth. Earlier this year, the economic development organization issued a Talent Supply & Demand Report, which is helping it work with area educational institutions to design programs to attract, develop, and retain a workforce to meet the current and future needs of area businesses. The report, says Jonathan Zierdt, CEO and president of Greater Mankato Growth, is “a springboard for future work.”

In July, the unemployment rate in the nine-county South Central region of Minnesota was 5.6 percent; the unemployment rate in Blue Earth and Nicollet counties, which make up most of Greater Mankato, was 5.3 percent. The statewide July rate was 5.8 percent.

The area has a diverse industry makeup that includes agriculture, manufacturing, health care, and social assistance. Manufacturing accounts for 17.7 percent of the area’s economy, employs large numbers of people, and pays higher than average wages. During the past 11 years, the education and health services sectors saw the largest increase, adding more than 3,000 jobs combined. Employment growth in the company management, finance and insurance, and transportation and warehousing sectors is likely to produce growth in other industries as well, according to the report.

Occupations showing the highest need in terms of vacancy rates include health care support, transportation and material moving, office and administrative support, production, and management. Personal care, health care support, and health care practitioners are expected to have some of the highest levels of new job growth. Even where the number of jobs is not expected to grow and might even shrink, the report says, replacement will drive need.

The Greater Mankato area is home to a highly educated workforce. Approximately 47 percent of the regional population over age 25 has some level of education beyond high school, which is higher than many regions. The area also has a higher number of residents with associate and bachelor’s degrees than the rest of the region, which should help attract businesses.

As a whole, the Mankato–North Mankato Metropolitan Statistical Area’s annual talent supply is almost equal to the annual talent demand in the agriculture, food, and natural resources career fields. Overall, the area is relatively close to meeting the projected annual talent demand in the engineering, manufacturing, and technology career fields; however, it fell short in transportation and some engineering and production occupations.

The annual talent supply in Greater Mankato exceeds the annual demand in health sciences, however, making it an attractive location for businesses that employ people in the communications disorders, nursing, dental hygiene, and athletic training/fitness fields. The growing population of older residents also will increase the demand for health care professionals.

In general, the Talent Supply & Demand Report notes, there is a shortage of talent in Greater Mankato in a number of sectors. However, it maintains that the opportunities for business growth exist in several sectors, including corporate/business support services, accounting, market research and financial operations, bio-businesses and industries, computer/information technology, technical writing, arts and communications, the sciences, and automotive and other types of engineering.

 

GROWING A GREATER MANKATO

The Greater Mankato Growth organization has been a chief driver of the area’s economic development.

Five years ago, a group of Mankato-area business leaders took a long, hard look at how various organizations were supporting existing businesses and recruiting new ones. The consensus was that it made sense to create an integrated organization that could more effectively and efficiently serve the area’s business community. Thus was born an organization called Greater Mankato Growth.

“t’s very much about collaboration and cooperation, and it spills over into the Regional Economic Development Alliance we have created with our neighbors,” says Jonathan Zierdt, the organization’s CEO and president.

Whatever Greater Mankato Growth’s contribution to the area’s economic success has been, there’s no denying that there has been success. The number of jobs in the area has increased for 23 consecutive months, growing from 51,483 in July 2011 to 53,683 in July 2012, a 4.3 percent increase.

“Over the past year, we’ve been a leader in percentage of job growth in the state,” Zierdt says. “As far as a regional marketplace in the state, we’re the new kid on the block. We’re the smallest, but percentages let us compare with the big guys. We have a $9 billion economy. We need to help our community and the state better understand the depth, magnitude, and strength of this marketplace and the impact it has on the state.”

In 2011, 52 businesses opened, expanded, or announced plans to open in the Mankato area, and 57 entrepreneurs were helped by the Greater Mankato Business Accelerator in starting their ventures. In addition, more than 150 businesses became partners in the Buy & Build Greater Mankato program, where they commit to purchasing a majority of their products and services from businesses in the region.

Greater Mankato Growth also realizes the importance of attracting and retaining the workers its businesses need to grow and succeed. “One of the things we did immediately was make a keystone commitment to talent development,” Zierdt says. Each year, he adds, approximately 5,000 students graduate from colleges in and near Mankato: Gustavus Adolphus, Bethany Lutheran, South Central, Rasmussen, and Minnesota State University, Mankato. “We want to do everything we can to embrace them and keep them here,” Zierdt says.

Keeping early-career talent in the area is important for a variety of reasons. “If a company loses a young professional in the first three years, it can cost that company $50,000 to $100,000 because of training and lost opportunities,” Zierdt says. “That percentage retention rate has somewhere north of a $4 million impact. Those businesses can put that money to other uses.”

One of the many tools in Greater Mankato Growth’s recruitment arsenal is its website, which includes geographic information system (GIS) technology providing in-depth business and demographic data. Visitors to the website can search for available buildings and sites using specific criteria, explore existing businesses by general and specific industry classifications, and identify locations in greater Mankato that match specific demographic, labor force, transportation, and geographic profiles.

One indication of the strength of the Mankato area’s economy is the number of businesses that are developing or expanding. During the past three years, area businesses have reportedly invested more than $237 million in renovation and new construction. This year alone, more than 74 projects are under way, representing an investment of some $147 million and almost 2.1 million square feet of new and renovated space. “That’s pretty robust,” Zierdt says. “And the numbers come from every sector of our economy.”