Mankato & North Mankato

Central attraction

Owners like ability to draw employees from all over

by Matt Krumrie   Like many technology companies, Winland Electronics of Mankato saw tough times as the century turned. But it’s back.

“Many technology companies experienced difficulties from 1999 to 2000,” says Lorin Krueger, who runs the maker of custom electronic control products and systems. “But since that time we have refocused our markets, curtailed spending and focused on building our balance sheet. We are starting to see record earnings.”

Winland reported revenue of $19.5 million in 2003, up from $18.1 million in 2002. During the year, Winland also retired more than $854,000 in long-term debt, a reduction of 34 percent from 2002. Winland also more than doubled its cash position from 2002 and ended the year with $1.4 million in cash.

Those results bode well for one of the mainstays of the Mankato economy.

Mankato combined with the neighboring city of North Mankato has a population of 44, 245 and is about 75 miles southwest of Minneapolis, on Highway 169. It is known to many Minnesota residents as the home of the Minnesota Vikings Training Camp, and the home of Minnesota State University-Mankato.

But it also serves as the hub of business activity throughout the Region Nine area (Blue Earth, Brown, Faribault, Martin, Le Sueur, Nicollet, Sibley, Waseca and Watonwan counties).

Mankato and North Mankato, separated only by the Minnesota River, has experienced tremendous growth over the past decade, evolving into a regional retail, manufacturing, health care and trade center.

Greater Mankato’s economy is built around manufacturing, health care, agriculture, technology and retail. The community provides services to a population of 222,790 within the surrounding counties that comprise Region Nine.

“Over the past decade the cities of Mankato and North Mankato have witnessed tremendous growth in numerous industries,” says Julie Nelson, program director for the Greater Mankato Economic Development Corp. “It is certainly the regional center of activity for Southern Minnesota.”

The big three
The three largest employers in the Greater Mankato region are Taylor Corp., a printing and marketing company that employs more than 4,000 workers and is owned by Minnesota Timberwolves owner Glen Taylor; Immanuel St. Joseph’s Hospital, part of the Mayo Health System, which employs 1,540 workers; and MSU-Mankato, which employs more than 1,400.

But the heart and soul of Greater Mankato is the small business, with Winland Electronics serving as Exhibit A.

Winland Electronics has called Mankato home since 1976, and employs 88 people (and up to 115 when temporary workers are brought in) at its 62,000-square-foot facility in the Eastwood Industrial Centre. Winland designs and manufactures custom electronic control products and systems for the OEM marketplace, as well as proprietary products for the security/industrial markets.

With clients worldwide, Krueger says the company has found Mankato a more than adequate home to its business. The original business owners were from Mankato, and it is also where Krueger has lived his whole life.

“There are a lot of positives about being in Mankato,” says Krueger. “The quality of life is great, we’re not too big and not too small. And we are in a good location where we can pull employees from throughout southern Minnesota, and still close enough to the Twin Cities where we can attract some from there, too.”

What Krueger especially likes is the ability to find good quality workers from the resources in Mankato. In addition to MSU-Mankato, the Greater Mankato region is also home to Rasmussen Business College, Bethany Lutheran College, South Central Technical College and Gustavus Adolphus College, which is 10 miles north on 169 in St. Peter.

“I know we have employees on our staff from every one of those places,” says Krueger. “We’re really able to recruit some young up-and-coming talent and get them to stay with us, which is important.”

Another longtime local business, which relocated to the Eastwood Industrial Centre with the help of a tax-increment financing program from the city of Mankato, is Katolight Corp. This company is a Mankato staple since 1952 that provides emergency power generators. Katolight began its dependable power story by serving agribusiness in the heart of the Midwest farm belt.

Now Katolight generator sets can be found in thousands of places around the world, such as the National Institutes of Health in Washington, D.C.; the Beijing Newspaper in China; Telesat-Satellite Communications in Macau; Bonneville Power Authority of Oregon and Washington; and in hospitals, factories and government installations across the United States.

Katolight employs 185 people at its 80,000-square-foot facility, adding 50 new employees in the past year. The reason for that is simple, says President Lyle Jacobson. An economic upturn has resulted in new construction, and the result of that is the need for more power.

While Jacobson says the company originally was located in Mankato because of family roots — his father-in-law Cecil Jones was a successful local businessman from the 1920s through the 1950s — its proximity to rural Minnesota is today a key factor in attracting employees.

“We draw quite a few of our production employees from agricultural backgrounds,” says Jacobson. “They are often handy with tools and know how to fix things, which is important in our industry and for what we do.”

While wages are lower compared to Twin Cities firms for entry-level workers — production personnel start at $9 per hour — Jacobson says an outstanding health care and wellness program, 401(k) program and other benefits, along with the lower cost of living, make it an attractive place to work.

On February 17, Katolight Corp. was inducted into the Mankato Chamber of Commerce Business Hall of Fame. This honor is reserved for companies in the Greater Mankato area that have been in business at least 15 years and have made significant contributions to the economic and civic well-being of the community.

Another longtime company is Volk Transfer Inc., which employs 47 workers and has been in Mankato doing business for 56 years. Volk Transfer is a privately held corporation that operates as a regular and irregular route common carrier, providing LTL, truckload, logistics, warehouse and cartage transportation throughout southern Minnesota and the United States.

President Troy Volk says the company does about 75 percent of its business in Minnesota, but is still active in the lower 48 states.

“We have remained small enough to quickly react to the changes in our industry, while continuing growth has made Volk a vital part of the shipping needs in the southern Minnesota area,” says Volk.

Without disclosing numbers, Volk says the company has experienced tremendous growth — as much as 100 percent to 175 percent — every year since 1997.

“Mankato is a town that is diverse in all aspects to help a transportation company grow,” says Volk. “We have a retail mall that has multiple anchor stores and many chain stores that receive products by truck every day. We have Taylor Corp. that has 14 or more shipping facilities and produces millions of tons of freight each year.

“The local company owners like to keep it local. That’s key when you can have a trucking company service this town from anywhere in the nation. Mankato continues to grow and so will we.”

Land available
While the established manufacturing and tech companies in the Greater Mankato region have rebounded from a slow economy, the two cities have not been able to fill their industrial parks. The Sakatah Industrial Park has 117 acres available, the North Port Industrial Park has 66 acres of land available, and Eastwood Industrial Centre has 44 acres available. The Greater Mankato region also has 87 acres of approved tax-free zones. Job Opportunity Building Zones (JOBZ) is a new initiative to help new and expanding companies lower their costs and facilitate growth.

“The cost of land is reasonable and the businesses there are thriving, so I don’t understand why new businesses aren’t coming,” says Dr. Scott Johnson, dean of the College of Business at MSU-Mankato. “There is a lot of potential there.”

As it has between the northern Twin Cities suburbs and St. Cloud, recent construction projects on Highway 169 in the southwest suburbs have smoothed the trip from the Twin Cities to Mankato. That has been a key reason Dr. Teresa Marshall, president of Mankato Chiropractic and Acupuncture Center, has been able to grow her business, while commuting about an hour there and back each day from her home in Chaska.

Mankato Chiropractic and Acupuncture Center employs 23 people and provides alternative health care services to the Greater Mankato region. The clinic features a 6,000-square-foot facility at 31 Navaho Avenue in Mankato, and among the many reasons for its growth, says Marshall, is its business hours go past 5 p.m.

She also cites the general desire of people to live a healthier lifestyle, with alternative forms of care, exercise and therapy as a part of that lifestyle.

Marshall attracts clients from a 100-mile radius, and she has regular clients who drive up to 2 1/2 hours to come to the clinic. Marshall, who came to the clinic in 1992 (she has owned the business since 1993), has seen it grow from 20 patients a week and grossing approximately $50,000 a year to now seeing up to 400 patients a week and grossing more than $1 million per year in 2002. She has typically seen 15 percent growth every year.

“I have always tried to bring new techniques in the medical community to the clinic,” says Marshall. “The cookie-cutter approach that everyone will respond the same to a treatment does not exist.

“I’m always trying to learn new techniques and bring new equipment into my clinic if I think it can help my patients achieve greater health.”

A boom in residential housing construction has also helped businesses like Marshall’s. The population is growing, although the population varies when the majority of college students return home for the summer. Still, there is enough growth to support new retail, says Larry Hoffrogge, president of Hoffrogge Development, a general contractor building upscale residential neighborhoods throughout Mankato and North Mankato.

Hoffrogge spent 28 years in the sheet metal industry, and one month later he was developing homes.

“There is opportunity to grow in the city of Mankato. I am an example of that,” says Hoffrogge. “We have worked with a number of local businesses and subcontractors to keep the work we hire out local.”

Catering to students

Roger Peters, a longtime area business executive and developer who owns the AmericInn hotel in Mankato, is putting together a renovation of University Square. This is a 127,615-square-foot project across from the MSU-Mankato campus, which will feature a Chipotle Restaurant, a Cold Stone Creamery, Noodles and Company, a coffee shop, renovation to two movie theaters, and new apartments on top of the already existing building. The apartments will be geared toward housing college students.

“It’s something the area could use and with the college students and the college being such a center of activity, it was a good fit,” says Peters. “There are a number of restaurant/retail businesses that have come to Mankato recently, but each seems to have their own little niche.

“We’re close to the campus and draw business from there, while for example, tenants at River Hills Mall attract clients from all over the region who come to do their shopping. I think there is enough activity going on to attract business from different sources.”

Bryan Paulsen, president of Paulsen Architects, agrees. He is the architectural firm working with Peters on the University Square project. Among other projects, his company is also working on a renovation at Rasmussen Business College. The company also does business throughout the United States.

Paulsen Architects has been in business since April of 1995 and employs 19 people. The company provides architectural and interior design planning and development to corporate, retail and industrial clients.

The company has recently completed projects in Iowa, North and South Dakota, Wisconsin, Florida and Las Vegas. Paulsen estimates that up to 70 percent of its business is done in Greater Mankato.

Paulsen says he sees a community that is growing, but going through growing pains right now it hasn’t seen before. He thinks the addition of new housing, new retail and numerous additional medical facilities — and improvements to current facilities — will help the city position itself as the hub of southern Minnesota activity for a long time to come.

Paulsen says his company has seen a giant increase in requests for proposals for small office buildings, mostly in the 7,000- to 8,000-square-foot range. Paulsen says because of lower interest rates, many business owners see now as the time to stop renting and to build their own facility.

“The economy is stabilizing and those who have outgrown their current needs feel like now is the time to do it,” says Paulsen, whose company has completed about $175 million worth of projects and increased revenue as much as 12 percent every year since 1995.

But growth has not come without pain for some, Paulsen says.

“I think some people have become frustrated because there are now some traffic issues at times,” says Paulsen. “Some people like it smaller, without all the retail and growth the city has experienced. But the city is working hard to maintain the small-town feel with the big-city amenities.

“Sure there might be a traffic jam from time to time, but people have everything they need right here. That’s why people come to Mankato.”

[contact]
Larry Hoffrogge, Hoffrogge Development: 507.625.3007; La***@******************nt.net; www.hoffroggedevelopment.net. Lyle Jacobson, Katolight Corp.: 507.625.7973; Ly***@*******ht.com; www.katolight.com. Lorin Krueger, Winland Electronics: 507.625.7231; le*******@*****nd.com www.winland.com. Dr. Teresa Marshall, Mankato Chiropractic Center and Healing Touch: 507.345.4035; st***@**********ro.com; mankatochiro.com. Julie Nelson, Greater Mankato Economic Development Corp.: 507.345.4519; jn*****@************to.com; www.greatermankato.com. Bryan Paulsen, Paulsen Architects: 507.388.9811; br***@**********ch.com; paulsen-arch.com. Troy Volk, Volk Transfer: 800.388.1780, tv***@**********er.com, www.volktransfer.com.