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Transcript of Prairie Business Oct. 2012
www.prairiebizmag.com
October 2012
ALSOHelp WantedStrong local economiesdemand more quality workerspg. 32
Gathering GasNew opportunities in the Bakkenas natural gas production increasespg. 36
GettingBigger
Sanford Health continuesto expand throughout
the regionpg. 28
4 Prairie Business Magazine October 2012
|INSIDE|OCTOBER ISSUE 2012 VOL 13 ISSUE 10
FEATURES DEPARTMENTS6 Editor’s Note
BY KRIS BEVILL
Thanks to technology
8 Business AdviceBY MATTHEW D. MOHR
What about EBITDA?
10 FinanceBY RICK CLAYBURGH
Good credit skills putdreams within reach
12 Research & TechnologyBY DELORE ZIMMERMAN
Designing aSTEAM-powered economy
14 Economic DevelopmentBY ALAN ANDERSON
Empowering energy diversity
16 Prairie News
20 Prairie People
24 Business DevelopmentGoogle brings websitemastery to local level
42 Red River ValleyGroundbreaking marksnew beginning for tiny town
44 South DakotaJoining forces
46 Western North DakotaMandan-led consortium gets$9.7 million for business loans
48 Energy
54 Business to Business
Next MonthNovember's agribusiness and higher education issue will explore new energy-related courses and degrees at area colleges. The issue willalso include a profile of a Fargo, N.D., satellite imagery company focused on providing its services to farmers and insurance companies toimprove the efficiency of farming and assist in calculating crop losses.
On the CoverThe Sanford Aberdeen Medical Center isthe first project Sanford Health has builtfrom the ground up. The facility beganoffering services to patients in July.PHOTO: SANFORD HEALTH
28 HEALTH CAREThe Benefits of BiggerSanfordHealth executives discuss how thenation's largest rural health care providermanages quality care across a vast region
JOBSHelp WantedStates and businesses aggressivelyrecruit newworkers to the northern Plains
NATURAL GASPrepare to GatherIncreased natural gas production in theBakken opens up the opportunity for new ventures
32
36
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6 Prairie Business Magazine October 2012
|EDITOR’S NOTE|
Thanks to technology
Forthoseofuswhocanrememberthedaysbeforesucheverydayconveniencesascellphonesorcom-
puters became engrained inour lives, it isworth it to take a stepback and think about howour jobs
would change without technology. For example, I’m writing this column onmy laptop computer
as I work remotely from themagazine’smain office, a featmade possible by a speedy Internet connection
and an equally speedy information technology (IT) support staff. I checked the latest headlines on my
phone earlier today and tweeted anupdate toourTwitter followers (@PrairieBiz for thoseof younot yet in
the loop),and I’ll be settingup interviewsvia email later today.For journalists, technology enables us to
do our jobs more efficiently and we in turn, are able to provide the world with news at a faster
rate than ever could have been imagined just a few decades ago.
But communicators are hardly the only ones affected by technology. For this issue, I spoke with
executives at Sanford Health, the largest rural health care system in the nation, to learn how the
organization is able to manage its vast network and still provide quality care. Not surprisingly, tech-
nology is a major factor in the organization’s operations. It has invested in developing an electronic
medical records system, which will allow providers at any of the organization’s locations to access a
patient’s chart, thus enabling more efficient, higher quality care, according to Sanford Health lead-
ers,who say the system is well worth themillions of dollars spent to develop it.Additionally, because
the geography of this region often means that small town doctors are serving a large number of
patients with varying afflictions, Sanford Health is utilizing technology to connect physicians in
remote locationswith specialists at larger facilities, allowing patients in smaller towns access to expert
input without necessarily having to travel long distances to visit the specialist in person.
For businesses and economic development agencies, the Internet has become a vital promo-
tional tool. In this issue,we highlight a group of economic development agencies in rural northeast
South Dakota that has embraced technology to spread the word of the area’s business-friendly
offerings through a dedicated website and social media marketing campaign. We also report on
Google’s efforts to increase the creation of websites by small businesses. This summer, the search
engine giant brought its Internet expertise to the area with a series of hands-on training seminars
designed to help small businesses create websites and utilize them to their best potential. While
most consumers turn to the Internet for information related to goods and services, a surprisingly
large number of small businesses still do not have websites. Google aims to help change that.
Of course, reliance upon technology in the workplace also creates a strong demand for IT pro-
fessionals. While IT is just one of many fields in need of qualified workers in our area, both states
project significant growth rates for IT positions over the next several years.
KRIS [email protected]
7www.prairiebizmag.com
An SBA AwardWinning Publication
MIKEJACOBS, PublisherRONAJOHNSON, Executive EditorKRISBEVILL, EditorTINAFETSCH, Production ManagerBETHBOHLMAN, Circulation ManagerJOEGREENWOOD, Multi-Media ConsultantKRISWOLFF, Layout Design, Ad Design
Sales Director:JOHNFETSCH701.212.1026 [email protected]
Sales:BRADBOYD - western ND/western SD800.641.0683 [email protected]
SHELLYLARSON - eastern ND/western MN701.866.3628 [email protected]
Editor:KRIS BEVILL701.306.8561 [email protected]
Editorial Advisors:Dwaine Chapel, Executive Director, SouthDakota State University Innovation Campus;Bruce Gjovig, Director, Center for Innovation;Lisa Gulland-Nelson, CommunicationsCoordinator, Greater Fargo Moorhead EDC;Tonya Joe (T.J.) Hansen, Assistant Professor ofEconomics, Minnesota State UniversityMoorhead; Dusty Johnson, Chief of Staff forSouth Dakota Gov. Dennis Daugaard’s office;Brekka Kramer, General Manager of Odney;Matthew Mohr, President/CEO, Dacotah PaperCompany;NancyStraw, President, West CentralInitiative
Prairie Business magazine is published monthlyby the Grand Forks Herald and ForumCommunications Company with offices at 3752nd Avenue North, Grand Forks, ND 58203.Qualifying subscriptions are available free ofcharge. Back issue quantities are limited andsubject to availability ($2/copy prepaid). Theopinions of writers featured inPrairieBusinessaretheir own. Unsolicited manuscripts, photo-graphs, artwork are encouraged but will not bereturned without a self-addressed, stampedenvelope.
Subscriptions Free subscriptions are availableonline to qualified requestors atwww.prairiebizmag.com
Address correctionsPrairie Business magazinePO Box 6008Grand Forks, ND 58206-6008Beth Bohlman: [email protected]
Onlinewww.prairiebizmag.com
8 Prairie Business Magazine October 2012
|BUSINESS ADVICE|
What about EBITDA?BYMATTHEWD.MOHR
In financial articles, especially those concerning merg-
ers and acquisitions, the acronym EBITDA often is
used. EBITDA stands for “earnings before interest,
taxes, depreciation, and amortization.” Many acquisitions
are often based on this measure because, in practice, it will
approximate the annual cash flow of a stable enterprise.
Before our current financial crisis, when borrowing was
easily available, EBITDA was used to support a request for
a business loan. Unfortunately, if capital improvements
were needed or if costs changed or saleswere not stable, too
much debt was often incurred, especially when “leverag-
ing” a business during an acquisition.
Looking back, it is easy to see that EBITDA was over-
used for business acquisitions and loan support. It seems
foolish today that our financial community thought loans
were safe if a business produced no profits but was theoret-
ically able to support a loan because of depreciation and
the loss of a tax liability. But even though EBITDA may
have once been over-used, it is still a prominent bench-
mark during financial negotiations.
As an entrepreneur seeking financial gain, the objec-
tive is to show growing profits and cash flow, not to carry a
business to “break-even.” Fluctuations in sales, profits and
cash flow occurwith all economic enterprises, and it is very
hard to predict what will occur economically day to day
and over time. EBITDAwill go up and down. Minimizing
debt can help stabilize cash flow over time, especially if the
debt has variable interest rates or is used for operating pur-
poses. Only through positive cash flow over time can debt
be repaid, and investors rewarded with dividends.
EBITDA is a good benchmark and provides useful
information, but understanding true cash flow will lead to
much better decisions, especially in regards to debt and
long-term financial rewards. PBMatthewD.Mohr
CEO, Dacotah Paper [email protected]
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10 Prairie Business Magazine October 2012
|FINANCE|
Good credit skills putdreamswithin reachBYRICKCLAYBURGH
Ask the average teen what they know about
“credit” and the response is usually something
about credit cards.Yet there’s so muchmore to
credit than simply cards. Young adults need to under-
stand how budgeting plays a role in managing credit
wisely, that reading and understanding their credit
report canmean the difference between landing a job or
holding them back before their career begins, and why
identity protection is everyone’s responsibility.
Today’s young adults are not prepared for finan-
cial responsibilities. Some 48 percent of teens are not
sure how tomanage a credit card and 46 percent don’t
know how to create a budget, according to Junior
Achievement and Capital One. In addition, Charles
Schwab’s 2011 Teens and Money Survey showed only
31 percent of teens know what a credit score is. With
these staggering figures, it is not surprising to learn
that only 13 states require students to take a personal
finance course as a high school graduation require-
ment. Teens are not getting as much of their money
management information in school as they used to.
According to Junior Achievement, in 2011, 58 percent
of teens reported learning how to manage money in
school or from teachers. In 2012, that number
dropped drastically to 24 percent.
To combat this problem, bankers across the
country have taken a proactive approach by partici-
pating for the past 10 years in a program sponsored
by the American Bankers Association called “Get
Smart about Credit Day.” This is a national campaign
of volunteer bankers who help young people develop
responsible credit habits. This year, Get Smart about
Credit Day will be celebrated on Oct. 18, giving
bankers an opportunity to get out of the bank and
into a classroom. Throughout the month of October,
bankers will raise awareness about the importance of
financial education and position themselves as trust-
ed partners in helping young people thrive.
Last year more than 3,300 bankers reached over
122,000 students with Get Smart about Credit les-
sons. Bankers are passing the message along that, no
matter your age or financial stance, it’s never too early
to get smart about credit. Learning the basic funda-
mentals of credit provides students and adults with a
foundation that will prove invaluable throughout
their lives.
There is another statewide organization, the
North Dakota Jump$tart Coalition, whose members
and partners strongly believe that having good finan-
cial skills is vital for a successful and prosperous life.
Established in 2006, North Dakota Jump$tart is
a nonprofit organization that actively works to
improve the financial literacy of the state’s citizens.
Coalition members educate the public through
speaking engagements and workshops, provide finan-
cial literacy resources and training materials, and col-
laborate with public and private organizations and
lawmakers on projects throughout the state. The
coalition can provide tools and connections for assis-
tance in personal or business money management as
well as classroom education. Anyone can join the
organization. For more information, visit
www.ndjumpstart.org. PB
Rick ClayburghPresident and CEO,
North Dakota Bankers [email protected]
12 Prairie Business Magazine October 2012
|RESEARCH & TECHNOLOGY|
Designing aSTEAM-powered economyBYDELOREZIMMERMAN
Apple’s ascendancy to the pinnacle of the busi-
ness world comes as no big surprise to me. I’ve
been using Apple products since the 1980s,
starting with the ill-fated LISA computer at work and
myMcIntosh 512k, now tucked away in the basement at
home. Today I have bonded with my iPad and eagerly
await the next must-have from Apple — the iPhone 5.
The reasons for Apple’s staying power and success
in the techno-communications-entertainment world
are complex. Apple survived several mammoth fail-
ures, including the Next computer and the Newton
PDA. Under the leadership of former CEO Steve Jobs,
Apple institutionalized a culture and practices that fos-
ter relentless innovation.
Beyond the user-friendly gadgets, the technologi-
cal breakthroughs and the potent business model,
Apple’s key to success — the magic if you will — is its
genius for design. Apple’s logo is recognized every-
where on the planet, but what Apple’s customers most
fervently look forward to is the cavalcade of thrilling
innovations in “minimalist design plus unusual style.”
Technology and art go hand-in-hand. Apple has
proven that elegant design results in highly marketable
products, which in turn has meant higher profit mar-
gins and a company that is a global force for change.
There’s considerable discussion here in the region
and across North Dakota about taking our economy to
the next level. An important part of that discussion is
about intensifying efforts to prepare people for careers
in science, technology, engineering and math (STEM).
Since the competitiveness of every economy — from
the local to the national level— will rely on developing
or attracting a STEM-prepared workforce, this issue
must be a centerpiece of our strategies and invest-
ments. Fortunately our region has been at the forefront
of STEM initiatives, including the nationally recog-
nized Great Plains STEM Education Center at North
Dakota’s Valley City State University.
But as the success of Apple demonstrates, a flair
for and competency in the design arts can mean the
difference between a functional technology product
and one that generates excitement among a devoted
customer base spanning decades and continents. A
STEAM-powered economy, one that integrates the arts
with STEM, can generate high-impact benefits. Studies
show that training in the arts and music boosts atten-
tion, cognition and working memory; it leads to tangi-
ble improvements in math and reading fluency.
Participation in the arts can improve teamwork.
We are fortunate in this region to have many
vibrant arts programs at a time when other parts of the
country are forced to put theirs on the chopping block
because of fiscal constraints. A recent story on Scientific
American’s website characterizes such cuts as “educat-
ing young Americans out of creativity,” and being
short-sighted for any growth-oriented economy.
Continuing to make the arts a priority in our
schools and communities and becoming more inten-
tional about integrating the creative and design arts
into our products and services will yield meaningful
advances in innovation and competitiveness. By
enhancing these two essential pillars of a robust econ-
omy and society we will be able to go full STEAM
ahead into the 21st century. PB
Delore Zimmerman
President, Praxis Strategy Group
Executive Director, Red River Valley Research Corridor
14 Prairie Business Magazine October 2012
|ECONOMIC DEVELOPMENT|
Empowering energy diversityBYALANANDERSON
Partnerships between traditional energy indus-
tries and the emerging renewable industries are
a central component of North Dakota’s
approach to energy development. This strategy recog-
nizes that in order tomeet our state and country’s ener-
gy needs, all players in the energy industry need to be
engaged in the process together.
Prior to the establishment of Empower North
Dakota, a comprehensive energy policy strategy, each
energy sector would show up at the Capitol with their
legislative agenda every other January and, often times,
conflict would occur, resulting in less than perfect legis-
lation for everyone.With EmPower, these groups are at
the same table on a regular basis, learning and ques-
tioning each other on best practices and how to work
together to deliver better results for North Dakota.
Because of this approach, energy projects resulting in
significant investments in all sectors of the energy
industry are underway across the state. Following are a
few examples:
• North Dakota is the second largest oil-produc-ing state in the nation with production of 660,000 bar-
rels per day as of June 2012.
• The state supports 4,000 megawatts of ligniteand other coal generation at seven locations providing
low cost, reliable electric power to 2 million customers
in North Dakota, South Dakota, Minnesota, Montana
and Iowa. North Dakota is one of the country’s top 10
coal producing states,mining approximately 30million
tons every year since 1988, which results in an annual
economic impact of $3.5 billion and 17,000 direct and
indirect jobs.
•NorthDakota leads the nation in the productionof nine different agricultural commodities, including
two commodities used for liquid fuels.
• From 2007 to 2010, North Dakota increased its
energy production by 65 percent and is well on its way
to doubling statewide production by 2025.
• North Dakota continues to develop a thrivingethanol industry, which contributes more than $300
million annually to the economy and supports more
than 10,000 direct and indirect jobs.
• By the end of 2012, natural gas processing inNorth Dakota will have increased 383 percent over six
years. With the addition of a facility coming on-line
later this year, there will be 17 plants processing Bakken
natural gas.The state, through theOil andGasResearch
Council and its private partners,has investedmore than
$2 million in new technologies to capture and use nat-
ural gas at well sites.
• In 2012, North Dakota ranked tenth in thenation in installed wind energy capacity. The North
Dakota Public Service Commission has permitted over
2,900 megawatts of wind generation.
• The state’s only oil refinery has expanded by 20percent or 10,000 barrels per day. In addition, three new
refineries were announced and are at various stages of
planning, permitting and construction.
North Dakota is proactive and aggressive in
addressing energy development and serves as a model
for America in fostering innovative, long-term energy
development to meet our nation’s growing energy
demand and need for energy security in an environ-
mentally responsible manner. PB
AlanAnderson
Commissioner, North Dakota Department of Commerce
16 Prairie Business Magazine October 2012
Prairie News Industry News & Trends
Cirrus signs strategicaircraft supply deal
Cirrus Aircraft has agreed to become a key
strategic supplier partner for Southern
California-based sport plane manufacturer
ICON Aircraft. As part of the agreement, Cirrus
will produce composite airframe components for
ICON’s A5 amphibious light sport aircraft exclu-
sively at the Cirrus factory in Grand Forks, N.D.
Productionwill begin at the end of 2012.The first
production aircraft is scheduled to be completed
next summer.
Dale Klapmeier, CEO of Cirrus Aircraft, says
his company believes light sport aircraft and sport
pilots are “critically important” to the growth of
aviation. “Cirrus and ICON share the common
vision that exciting, innovative and safe new air-
craft are a key to unlocking the enormous poten-
tial within our industry,” he said in a statement.
NDSU alumnusprovides $1 million gift
North Dakota State University alumnus
Harry McGovern has given $1 million to the uni-
versity’s development foundation to support the
NDSU Alumni Center, which will bear his name
in honor of the donation.
McGovern earned a bachelor’s degree in civil
engineering from NDSU in 1966 and is now the
co-owner of MCM Construction Inc., a major
bridge and highway contractor with offices in
Sacramento and Los Angeles, Calif. The company
has constructedmore than 1,500 bridges through-
out California and consistently ranks within the
top 200heavy engineering contractors inAmerica.
TheNDSUAlumniCenter is a 30,520 square
foot facility that houses Alumni Association
offices, a banquet facility and other various con-
ference rooms and offices. It was officially dedicat-
ed on Oct. 8, 1999.
Minnesota facility gets grantfor home med study
The Minnesota Department of Human
Services has awarded PioneerCare of Fergus Falls
a $116,000 grant to assemble a community collab-
orative and study electronically monitored med-
ication management. The grant will allow 100
participants in west-central Minnesota to trial the
MedSmart Home Medication Management sys-
tem for three months. The system can be loaded
with medications and programmed for up to six
doses per day and can transmit dispensing histo-
ry through a phone line. It was designed as a
strategy to help elderly people stay in their
homes rather than move to nursing homes,
according to PioneerCare.
$1 million grant to aid NDrural health care efforts
The Health Resources and Services
Administration has awarded $1 million to the
Department of Family and CommunityMedicine
at the University of North Dakota School of
Medicine and Health Services to fund curriculum
development, learning enhancement and faculty
development to train physician’s assistants who
provide care for rural communities. The goal of
the grant is to help faculty develop curriculum
that will enrich and expand the knowledge and
skills of graduates to deliver high-quality primary
care in rural and underserved areas of the state.
Nearly 95 percent of North Dakota counties
have been deemed as either health professional
shortage areas or medically underserved areas,
SanfordHealth has provided a $20mil-
lion donation to the University of South
Dakota to assist in building a 6,000-seat bas-
ketball and volleyball area that will serve as
the cornerstone of a $70 million project.
When complete, the complex will include
track and field and soccer facilities, and foot-
ball and basketball practice facilities. The
project cost also includes planned renova-
tions to the DakotaDome. As of early
August, the university had received commit-
ments totaling $9 million for the project in
addition to Sanford’s donation. A portion of
Sanford’s $20million gift will be used to sup-
port scholarships, faculty and the university’s
health services program.
Sanford Health will also serve as the
exclusive sports medicine provider for the
university’s athletics programs for the next
15 years. It has been the university’s sports
medicine provider since 2005.
Sanford Health gives $20 million to University of South Dakota
PHOTO: UNIVERSITY OF SOUTH DAKOTA
17www.prairiebizmag.com
|PRAIRIE NEWS|indicating that patients must travel signifi-
cant distances to receive health care services.
SD tourism departmentselects marketing firms
Sioux Falls, S.D.-based Lawrence &
Schiller and Kansas City-based MMGY
Global have been selected to serve as themar-
keting firms for the South Dakota
Department of Tourism. Lawrence &
Schiller’s three-year contract, up to $5 mil-
lion, includes development of the depart-
ment’s overall creative strategy, production of
traditional media and traditional media
planning and placement. MMGY Global’s
three-year contract, up to $2.5 million,
includes digital marketing strategy and place-
ment, market research and communications
strategy. Each contract includes the option of
two, one-year renewals.
Minot, ND, cliniccompletes expansion
St. Alexius Medical Clinic in Minot,
N.D., has completed an expansion and reno-
vation project, increasing itsmedical space by
50 percent. The clinic now houses 21 patient
rooms and has increased its services to
include technology to test for osteoporosis
and ultrasound capabilities. The clinic has
also hired two additional providers, bringing
the total number of providers to seven.
Eide Bailly addscost segregation practice
Certified public accounting and business
advisory firm Eide Bailly LLP has acquired
Minneapolis-based Cost SegAssociates LLC, a
cost segregation practice. Rod Axtell, certified
public accountant and managing partner of
Cost Seg Associates, has joined Eide Bailly as a
partner.OtherCost SegAssociates staff joining
the firm include Robert Lehmann, business
development senior manager; and Kris
Peacock, Travis Mlodzik and Joe Sawatske,
construction engineers.
Eide Bailly has previously provided cost
segregation services to its clients, but the
addition of Cost Seg Associates will provide a
higher level of services to clients by bringing
those services in-house, according to Ron
Hecht, head of Eide Bailly’s national tax
office. A cost segregation study can improve
a client’s cash flow and minimize their taxes
through proper tax planning, he says.
1-800-908-BANK (2265)Bremer.comMember FDIC. © 2012 Bremer Financial Corporation. All rights reserved.
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If you’re fired up about the prospects for your operation, countus in. Bremer Bank has nearly $8 billion in assets and thefinancial solutions you need to help your business thrive andgrow. And your hometown Bremer banker has the know-howto put them all to work for you. Talk to a Bremer businessbanker near you.
18 Prairie Business Magazine October 2012
|PRAIRIE NEWS|
Unit train crude terminalopens in Trenton, ND
Savage, a Utah-based supply chain solutions company, has com-
pleted work on a crude petroleum terminal near Trenton, N.D., that
will connect directly to Burlington Northern Santa Fe Railway Co.’s
main line track. The terminal has been transloading crude from truck
to rail on a manifest basis since December 2011, according to Savage.
The fully complete terminal is now capable of loading unit trains and
will operate 24 hours per day. A double-loop track at the terminal can
hold two 118-car unit trains. The terminal also provides inbound gath-
ering access through truck receiving stations, pipeline connections and
crude oil tankage.
The terminal has been designed and constructed with future
expansion plans in mind. Savage says the terminal will grow to accom-
modate continued Williston Basin expansions and the increasing need
for receiving and handling.
Altru pledges $10 million to UNDAltru Health Systems will provide $10 million to the University of
NorthDakota over 30 years to support a newUNDathletics complex on
the university campus and replace the football turf at the Alerus Center
in Grand Forks, N.D. According to UND, $9 million of the gift will be
dedicated to the new sports complex, which will include a practice and
training facility for football, track and field and soccer teams, a student-
athlete academic center and sportsmedicine space for all UNDAthletics
teams. The facility will also serve as a host site for youth athletics camps
and college and youth track and field meets.
Altru has served as UND’s sportsmedicine provider formore than
20 years.The indoor sports complexwill include space for academic and
clinical studies on human performance and conditioning, which UND
President Robert Kelley says will enhance both the university’s and
Altru’s roles in sports medicine.
SD to fund air base water treatment plantSouth Dakota’s Board of Water and Natural Resources has
approved a $16million low-interest loan to the South Dakota Ellsworth
Development Authority to construct a regional wastewater treatment
system.The systemwillmeet the needs of both EllsworthAir Force Base,
located about 10miles northeast of Rapid City, and the nearby commu-
nity of Box Elder, according to state officials.
Existing separate wastewater treatment facilities at the air base and
Box Elder are in need of upgrades to comply with surface-water dis-
charge standards. The decision was made to construct a regional facility
after a feasibility study concluded that about $8 million in cost savings
could be had by building one regional water treatment compared to
constructing and operating two separate systems.
The state loan will cover the total estimated cost of the treatment
facility. Financing is being provided by the state’s clean water revolving
fund,which provides loans for wastewater, stormwater, and non-point-
source pollution abatement projects.
TheAudubonNationalWildlife Refuge has received a 2012 Federal Energy
andWaterManagement award from the U.S.Department of Energy in recogni-
tion of the building’s outstanding performance in energy efficiency and use of
renewable energy.
Completed in 2010, the $6.1million visitor center and office building uses
40 percent less energy than buildings of similar size and use. It features a 37-ton
hybrid ground-source heat pump system that includes passive solar elements.
Hot water is provided by the systemwith an electric back-up.Mechanical venti-
lation is treated separately by an energy recovery unit that contributes to the
energy savings.
Widseth Smith Nolting, a multi-disciplined firm with offices in Grand
Forks, N.D., and Alexandria, Baxter, Bemidji, Crookston, East Grand Forks, Red
Wing and Rochester, Minn., led the design team as the architect for the project
and provided various engineering and land surveying services. Fargo-based
MartinMechanical Design Inc. designed the heating and cooling systems.
The buildingwas certified LEED(r) Gold in 2011.Deb Parrott, an architect
withWidseth Smith Nolting managed the LEED administration process.
The Audubon National Wildlife Refuge is located near Coleharbor, N.D.,
approximately halfway between Bismarck and Minot along U.S. Highway 83 in
the Prairie Pothole region of North Dakota.
Audubon National WildlifeRefuge receives energy award
PHOTO: WIDSETH SMITH NOLTING
19www.prairiebizmag.com
|PRAIRIE NEWS|
Air medical equipmentmanufacturer recognizedfor job growth
Fargo, N.D.-based Spectrum
Aeromed, a designer and manufacturer of
custom air medical and air ambulance
equipment for fixed and rotor wing air-
craft, has been named to the Inc. 5000
Fastest Growing Companies list for the
second consecutive year. In 2011, the com-
pany was recognized for having achieved a
nearly 800 percent growth rate in three
years. Company President and CEO Dean
Atchison said in a statement that recogni-
tion on the list proves customers in the
fixed wing and rotorcraft markets
throughout the world continue to demand
SpectrumAeromed products.
The Inc. 500/5000 list ranks privately
held, U.S.-based companies that have a
revenue of more than $2 million in 2011
by overall revenue growth over a three-
year period.
20 Prairie Business Magazine October 2012
|PRAIRIE PEOPLE|
Avera exec earns fellow statusRochelle Reider, vice president of patient
services at Avera Queen of Peace Hospital in
Mitchell, S.D., recently became a fellow of the
American College of Healthcare Executives, a
national professional society for healthcare leaders.
Reid fulfilled multiple requirements to obtain fel-
low status, including passing a comprehensive
examination, meeting academic and experiential
criteria, earning continuing education credits and
demonstrating professional and community
involvement. As a fellow of the society, she will
undergo recertification every three years and has
committed to ongoing professional development.
Chamber names BruceFurness 2012 legacy leader
Former Fargo mayor Bruce Furness is the
recipient of the Fargo Moorhead West Fargo
Chamber’s 2012 Legacy Leader award. The award
recognizes and emphasizes the important role
and contributions of long-time local leaders in
shaping and serving the chamber, the community
and the region.
Furness served as the mayor of Fargo from
1994 to 2006 and is the city’s fourth longest-serv-
ingmayor.During his time asmayor, Fargo under-
took the redevelopment of its downtown and
endured the Red River flood of 1997.
Houston Engineeringadds employees
Houston Engineering, an engineering, con-
sulting and environmental consulting firm based
in Fargo,N.D., has added two new employees to its
Fargo office.
Sean O’Brien has joined the company as a
geographic information system (GIS) technician.
O’Brien worked previously as a GIS intern in the
planning and economic development department
for St. Paul,Minn.He earned a bachelor’s degree in
geography and a master’s degree in GIS from the
University of Minnesota–Twin Cities.
Joe Talago has joined the firm as a designer.
Talago is a certified professional engineer in North
Dakota, Wyoming and Indiana. He previously
worked for the North Dakota Department of
Transporation, Yellowstone National Park and the
Indiana Department of Transportation.
Rochelle Reider
Bruce Furness
Mike Schumacher
David LandeckerGary McDaniel Aaron Skattum
Eileen Hess
Ulteig welcomes 4 new hiresEngineering, surveying and consulting firm
Ulteig recently added four new employees at two
of its eight offices.
David Landecker has been hired to serve as
market leader in land services in the Fargo office.
He is a licensed professional land surveyor in
North Dakota and Minnesota and previously
owned his own business.
GaryMcDaniel is a survey technician in land
services in the Bismarck, N.D., office. McDaniel
worked previously for the North Dakota
Department of Transportation after spending sev-
eral years as a high school science teacher.
Aaron Skattum accepted the position of
land surveyor at the Fargo office. He is a licensed
professional land surveyor in the Dakotas and
worked previously for Kadrmas, Lee & Jackson.
Eileen Hess has taken on the role of market
development manager — power industry in the
Fargo office.Hess has more than 20 years of pro-
fessional technical sales experience in industrial,
commercial, utility and construction industries.
Bismarck Cancer Centerappoints board of trusteesmember
Mike Schumacher recently joinedMedcenter
One in Bismarck, N.D., as the chief financial offi-
cer and has been appointed as the newest member
to the Bismarck Cancer Center board of trustees.
He replaces Paul Morth, who retired from his
position as the vice president of finance at
Medcenter One in July after 29 years of service.
Schumacher previously worked for Eide Bailly
LLP in Fargo, N.D., for 21 years, serving most
recently as an audit partner for the firm.
The Bismarck Cancer Center, a radiation
therapy center, is a cooperative venture of
Medcenter One and St. Alexius Medical Center.
Sean O’Brien
Joe Talago
22 Prairie Business Magazine October 2012
|PRAIRIE PEOPLE|
AE2S adds to staffAdvanced Engineering and Environmental
Services Inc.(AE2S) recently addedengineers at threeof
its offices inNorthDakota.
Sanford Case joined the firm as a senior project
manager andwill be based at its headquarters inGrand
Forks.Casepreviouslyworked formore than20years as
a vice president and senior project manager at Huitt-
Zollars Inc. inDallas.He is a licensed professional engi-
neer in 15 states and is Leadership in Energy and
Environmental Design certified.
Jared Heller has joined the firm’s Fargo office as a
project manager and will be responsible for overseeing
several projects in Fargo-Moorhead, Minn., as part of
the firm’s water group. Heller specializes in hydraulic
modeling and water infrastructure management issues
and worked most recently at Moorhead Public Service
as a water distribution engineer.
Alec Bry will serve as an engineer in the firm’s
Williston office. Bry will be a part of the firm’s western
area water supply project team and will be responsible
for performing construction observation and design.
Bry recently earnedabachelor’sdegree incivil engineer-
ing fromNorthDakota StateUniversity and interned in
Florida, where he participated in the construction and
upgrade of a water reclamation facility.
Sanford Case
Jared Heller
Alec Bry
Member FDIC
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24 Prairie Business Magazine October 2012
|BUSINESS DEVELOPMENT|
As consumers’ lives become increasingly
entwined with technology and the
Internet,havingawebsiteversusnothav-
ing one can be the difference between success and
failure for a business. Given that most people use
the Internet every day, the number of businesses
that have yet to embrace the technological age is
surprisingly high. Research funded by Internet
powerhouse Google recently determined that
while 97 percent of consumers search online for
information about products and services,
nearly 60 percent of businesses nationwide
do not have websites.
Armed with those statistics, Google
launched a state-by-state program known as
Get Your Business Online about a year ago
with the goal of assisting small businesses in
improving their web presence. This summer,
Google brought its road show to the prairie,
hosting events for a total of about 800 partici-
pants in Bismarck, N.D., Sioux Falls, S.D., and
Bemidji, Minn. Attendance at the events
exceeded Google’s expectations, according to
Joe DeMike, head of small business advocacy
at the company, who attended the Sioux Falls
event and has been involved with Google’s
BYOB events in all 50 states. In Sioux Falls,
both sessions were standing room only, total-
ing more than 300 attendees. Bismarck’s
event also provided training to about 300
business owners.
According toDeMike, the primary reason
Googlebringswebsitemastery to local levelInternet giant offers state-by-statewebsite training for small business ownersBY KRIS BEVILL
Google representatives offer hands-on website training to small business owners at a Get Your Business Online event in Sioux Falls, S.D., in August.PHOTO : GOOGLE
continued on page 26
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|BUSINESS DEVELOPMENT|
small business owners don’t have websites is
because they think they don’t have enough
time to do it. However, by not having a web-
site, the business is also virtually shutting the
door on a large customer base. “If you are a
small business without a website, you become
invisible to people who could potentially pur-
chase from you,”DeMike says.Many business
owners also believe establishing and main-
taining websites will be too complicated, or
that if they choose to hire an agency to com-
plete those tasks it will be too expensive. “So
we designed the program literally to be fast,
easy and free in order to counteract those
things,” he says.
Each event lasts about three hours and
includes information on search engine opti-
mization, search engine marketing, analytics
and cloud computing.Ninetyminutes of each
session is devoted to providing attendees with
hands-on help to build websites. Paul Ten
Haken, president of Sioux Falls, S.D.-based
online marketing, website design and digital
strategy firm ClickRain Inc., assisted in pro-
moting Google’s South Dakota event and says
he found the hands-on training to be themost
unique aspect of the session. “It’s one thing to
sit by your computer and watch tutorial
videos and try to figure this stuff out, but for a
small business owner to actually have some-
one standing over their shoulder, pointing at
the screen, saying ‘This is how this works,’… I
think that was pretty cool,” he says. “You just
don’t see that kind of personal interaction
from such a large brand very often.”
In addition to hands-on training, web-
sites have been created for each state —
northdakotagetonline.com; southdako-
tagetonline.com; minnesotageton-
line.com, etc.— that offer a full year of com-
plimentary website training for any interested
business person.
Google doesn’t track the types of busi-
nesses that register for its events, but DeMike
has noticed a mix of service providers, prod-
uct developers and typical Main Street busi-
nesses at each event. About half of the atten-
dees already have websites, he says, but they
want to learn how to improve them and
increase traffic to their sites.
Google plans to return to communities
approximately every six months to offer simi-
lar training, according to DeMike, so he
expects to return to the northern Plains this
winter. “These events are not just a one-time
thing,” he says. “We want to stay a part of the
community.” Google partners with local and
national groups for each event, including
Intuit Websites, SCORE, which is a nonprofit
association focused on providing education to
entrepreneurs, and small business develop-
ment centers. PB
Kris BevillEditor, Prairie Business
701-306-8561, [email protected]
For years Trinity’s CancerCare Centerhas been a destination of hope, providingexceptional care to our patients.
Today, Trinity Health is growing to meet theneeds of the region, and our new CancerCareCenter offers even greater access to themost advanced Cancer fighting technologyavailable.
Trinity Health offers a supportiveenvironment for both patients and theirfamilies, along with exceptional caredelivered by an experienced team that willnever give up on you.
Together we’re making cancer history inNorth Dakota.
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28 Prairie Business Magazine October 2012
Health care mergers can be scary prospects for communities but the
fears associated with merging are oftentimes unwarranted. Such is
the case with Sanford Health, according to the organization’s lead-
ers. The blue lights of Sanford Health have become a common sight on an
increasing number of buildings across the northern Plains in recent years as
the organization steadily expands its network, often through mergers with
existing health care providers. But while the deals may have been met initial-
ly with contention by some community members, the mergers have so far
proven to be beneficial to those communities.
Hesitation and skepticism are natural reactions to health care mergers
considering the emotional investment communities make in local health care
facilities, says Dave Link, senior executive vice president at SanfordHealth.And
health care facilities are often the largest employer in a community so it is
important that communities make the right decision. Becky Nelson, chief
operating officer at Sanford Health, compares concern with health care merg-
ers to the concern often displayed when small schools consolidate. “People’s
financial and emotional attachment in schools in communities is significant,”
she says. “And there is a misconception that ‘we’re going to merge so we’re
going to lose our identity.’”
But in fact, when it comes to health care mergers, communities are often
enhanced by the change because a large system allows for operational enhance-
ments that wouldn’t otherwise be possible. In Fargo, N.D., for example, nearly
$20 million has been saved in supplies and services since the merger between
The Sanford Aberdeen Medical Center is the first project SanfordHealth has built from the ground up. The facility began offeringservices to patients in July. PHOTO: SANFORD HEALTH
|HEALTH CARE |
The Benefitsof BiggerSanford Health executivesdiscuss how the nation'slargest rural health careprovider manages qualitycare across a vast regionBY KRIS BEVILL
29www.prairiebizmag.com
|HEALTH CARE|
Sanford Health and Meritcare in 2009. “It’s
been our experience in all of the communities
that we’ve been a part of throughout the region
that we can provide more services to these
communities over time by leveraging the value
of our entire health system,” Link says.
Keeping it LocalSanford Health is the largest rural health
care provider in the nation and the largest
employer in the Dakotas. The vastness of the
region which it services also makes Sanford the
largest health care system in contiguous geog-
raphy in the country, encompassing more than
200,000 square miles and 126 communities.
Despite its size, Sanford Health is committed
firmly to retaining health care services in small
communities. “We really mean it when we say
we want to keep health care close to home,”
Nelson says. “We believe that health care is
every community’s asset. As a health care sys-
tem, we don’t need everything in the larger
towns. It’s just fine to be in the small commu-
nities. That’s what we’re about.”
Servicing such a widespread region may
be Sanford Health’s greatest commitment but
it is also its biggest challenge. Nelson says the
organization has developed a unique structure
to bring all of the separate pieces under one
umbrella, the cornerstone of which is technol-
ogy driven. “We couldn’t do what we do today
without that electronics connectivity,” she says.
Video conferencing and telemedicine pro-
grams are utilized to connect doctors in outly-
ing areas with specialists at larger facilities, for
example. The connectivity also allows hospital
leadership to share ideas and operational
updates with ease.
Another technological feat being carried
out by Sanford Health is expected to revolu-
tionize the way health care is provided
throughout the area. The organization has
been rolling out its electronic medical records
(EMR) system for the past five years. The sys-
tem basically creates one electronic chart for
each patient and can be accessed at any Sanford
facility. Earlier this year, Sanford Health per-
formed what Nelson calls “the big bang” in
Fargo— everyone was brought into the system
simultaneously. The system is expected to
improve the quality of health care by stream-
lining themethod in whichmedical records are
stored and accessed. Gone will be the days of
patients carrying x-rays from room to room or
caregivers at one facility having to spend time
tracking down the history of care given to a
patient at another location.“It’s going to have a
profound change on what’s available to the
patient,” says Nelson, who compares the signif-
icance of the switch to EMR with the move
from landlines to cell phones.
The technological advancement doesn’t
come without a hefty cost, however. Sanford
Health’s annual IT (information technology)
budget weighs in at more than $100 million,
which is another reason why consolidation
can benefit smaller communities, Nelson adds.
The significant financial investment necessary
to make EMR a reality is simply beyond the
reach of smaller organizations, but by being
part of a large system, they can gain access to
the latest advancements.
Construction andConsolidation
To date, the majority of Sanford Health’s
growth has come in the form of mergers. The
most recent consolidation has been in
Bismarck, N.D., where Sanford and Bismarck-
Mandan-based MedCenter One celebrated
their merger on Aug. 29 with a celebration and
unveiling of the 228-bed hospital’s new sig-
nage, symbolizing the final step of a union that
was officially forged earlier in the summer.
Sanford Health plans to make Bismarck-
Mandan the epicenter of western expansion
for the organization as providers work to keep
pace with oil and gas-related development
activities. The organization plans to break
ground on a super clinic in Dickinson, N.D.,
this fall, a project which Nelson says stems
from energy industry growth in the area,
adding that the expansion is being made
easier by the recent merger in Bismarck. A
completion date for the super clinic had not
been set by mid-September, but preliminary
infrastructure work was being conducted at
the site.
Despite its massive size, new construction
is a fairly new undertaking for the organiza-
tion. Sanford Health’s network includes 34
hospitals, but the first project to be built from
the ground up just opened in July. The Sanford
Aberdeen Medical Center, a $60 million proj-
ect, opened July 16 in Aberdeen, S.D., after
approximately two years of construction. The
48-bed medical center connects to Sanford
Health’s previously existing clinic and has
exceeded the organization’s expectations since
opening, according to Nelson. The center plays
a key role in connecting the system’s offerings,
serving as a convenient halfway point between
the organization’s dual headquarters in Sioux
Falls, S.D., and Fargo.
In Fargo, Sanford Health made headlines
earlier this year when it held an official ground
Updates at Sanford Health's existing Fargo medical center are expected to be carried out afterconstruction of the organization's new medical center is complete in 2016.PHOTO: SANFORD HEALTH
30 Prairie Business Magazine October 2012
|HEALTH CARE |
breaking ceremony for what is said to be the largest private construc-
tion project in North Dakota’s history. In 2016, the Fargo Medical
Center is expected to open its doors to serve more than 4,200
patients each day in a facility that will cover 1.3 million square feet,
equivalent in size to 22½ football fields. The project is estimated to
cost $541 million and will employ 2,000 staffers when finished.
While construction in Fargo is just beginning, another $60
million medical center is further along in Thief River Falls, Minn.
That facility will include a 25-bed critical access hospital and will
expand upon services offered at the organization’s existing clinic.
More than 500 people will be employed at the medical center when
it is complete in 2014, according to the organization. In September,
Sanford Health also began constructing a 45,000-square-foot clinic
in Moorhead, Minn., which is scheduled to open in July 2014. That
facility is set on 27 acres of land along Interstate 94 and will include
lab services, a pharmacy, gift shop and deli, in addition to various
medical services and programs.
Various projects are being undertaken elsewhere in Sanford
Health’s network. A 160,000 square foot sports complex known as
The Pentagon is being constructed at the Sanford Sports Complex
in Sioux Falls. Billed as a “game-changing destination,” the five-
sided facility will house nine basketball courts of varying sizes and
will serve as the epicenter of the larger complex that includes foot-
ball, tennis and soccer amenities.
In Bemidji, Minn., Sanford Health broke ground April 12 for
an orthopedics and sports medicine center which is expected to
open in the spring. The $9million construction project encompass-
es a two-story expansion to the existing hospital. When complete,
integrated services and clinicians from applicable departments will
be centrally located within the hospital. The medical center also
recently received a $100,000 donation from Friends of Sanford
Health which will be used to support the facility’s advanced cardi-
ology program by establishing a dedicated cardiology suite and
allowing for 24-hour cardiac care.
Globally, the organization is also expanding.On Jan. 1, it began
operating its first clinic in Cape Coast, Ghana, Africa. By next sum-
mer, Sanford Health expects to have five clin-
ics in operation at locations throughout
Ghana. In West Dublin, Ireland, a children’s
clinic is expected to be operational in 2013,
also as part of Sanford Health’s world clinic
initiative. A children’s clinic in Israel is sched-
uled for completion in 2014.
A total of $1 billion in construction
projects are planned over the course of the
next five years, according to the organization.
Nelson says Sanford Health will continue to
evolve and grow domestically as needed,
although no additional consolidation proj-
ects are in the immediate plans. “We’ve had a
lot of inquiries because it’s happening in the
industry,” she says, adding that health care
systems across the nation are realizing that
consolidation can achieve necessary economies of scale in order to
control costs. Sanford Health does not seek out consolidations,
however, according to Nelson, who says the organization instead
simply “answers knocks at the door.” From there, merger discus-
sions continue depending on the circumstances of each unique sce-
nario. “Sometimes we ask them to stay for dinner, sometimes we
don’t,” she says.
Sanford Health President and CEO Kelby Krabbenhoft said
recently that the organization’s $3 billion in annual revenues allow
it to take on the long list of development projects. The organization
also benefits from a sizeable piggy bank provided by its namesake,
Denny Sanford, who has donated nearly $700 million since 2007,
and holds the title of delivering the largest gift ever to a U.S. health
care organization— $400million in 2007. Sanford’s donations have
enabled the expansion of the Sanford Research division, which
employs about 230 researchers focusing on specific areas including
diabetes, breast cancer, cardiovascular health, children’s health,
sports medicine and health outcomes and prevention. Researchers
working on The Sanford Project, a quest to cure Type 1 diabetes,
recently completed enrollment for a clinical trial which will test two
medicines to determine their effectiveness in controlling blood glu-
cose levels with less or no insulin. Fulfilling enrollment for this
study was a significant milestone because the study required recent-
ly diagnosed children to participate, a demographic which is usual-
ly difficult to fill. The Edith Sanford Breast Cancer Foundation is
dedicated to curing the disease to which Denny Sanford lost his
mother, Edith, when he was a small child.
A devotion to research and advancement is evident elsewhere
throughout the Sanford Health network, notably among some of the
device inventions achieved by staff physicians. Earlier this year, Corey
Teigen, chairman of Sanford Health’s interventional radiology
department, performed the first abdominal aortic aneurysm stent
graft in the U.S. at Sanford’s Fargo medical center using a device he
developed. Teigen had been developing the device for years, prior to
the Sanford-Meritcaremerger, but he says Sanford has been very sup-
Workers unveil the new Sanford Health signage at the former MedCenter One building inBismarck, N.D., on Aug. 29, marking the final step in the health care providers' merger.PHOTO: SANFORD HEALTH
|HEALTH CARE |
portive of the research since the organization
entered the pictutre.
Link, who oversees Sanford Health’s
research division, says the organization’s com-
mitment to research and advancing overall care
helps to attract and retain the most talented
physicians, resulting in improved care and qual-
ity for the patient. Additionally, because the
research centers are closely connected to treat-
ment facilities, there is less lag time between
break throughs and implementation, allowing
patients more access to cutting-edge procedures.
Despite the size of the network and the
growing number of services and specialties,
Nelson and Link both say the mantra of the
organization is quite simple: provide the best
care to people in the areas where they live.“We
don’t grow big just for the sake of growing
big,” Nelson says. “We focus on our core busi-
ness and areas that are important to the peo-
ple we serve.” PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
31www.prairiebizmag.com
32 Prairie Business Magazine October 2012
|JOBS|
We’reall familiarwith thesaying,“goodhelp
is hard to find.” In our region, that senti-
ment has never been truer. The recent
period of economic activity in the upperMidwest has
spurred significant job creation, but the number of
available workers in sparsely populated states like
North Dakota and South Dakota hasn’t been able to
support the number of available jobs, leaving some
employers struggling to fill vacant positions. To cope
with this unique situation, businesses, organizations
and government agencies are employing a variety of
methods to attract not just any candidates to the
region’s workforce, but the right ones.
S.D. WINSSouth Dakota’s leaders view the state’s short-
age of adequately skilled workers as a long-term
issue. This year, state agencies began implementing
policies to address the workforce situation in the
Mount Rushmore State. In January, Gov. Dennis
Daugaard announced the launch of these initia-
tives, known collectively as South Dakota WINS,
with the goal of attracting and developing a
stronger, better-educated workforce. “Just as much
of the rest of the country is experiencing, our pop-
ulation is aging and retiring from the workforce,”
says Daugaard policy advisor Kim Olson. “That
trend, in combination with South Dakota’s strong
business growth and economy, means we have
more jobs than workers. It’s a good problem to
have, but we recognize the need to fill the gap to
assist further business growth.”
Twenty programs are housed under the S.D.
WINS umbrella, each categorized into one of four
goals: preparing youth, skilled jobs training, rural
health occupations and recruiting new South
Dakotans.The programs are geared toward alleviat-
ing ongoing shortages in sectors that are expected to
be most in need of workers — engineering, finan-
cial services, health care, information technology
(IT),manufacturing and STEM (science, technolo-
gy, engineering and math) teachers. Some of the
programs required legislative action during the
2012 session and so were not launched until the
new budget began in July, according to Olson, but
all programs presented to legislatorswere approved.
HelpWantedStates and businessesaggressively recruitnew workers to thenorthern PlainsBY KRIS BEVILL
33www.prairiebizmag.com
|JOBS|A variety of approaches are being taken to
make the initiative successful, but money always
talks, so a number of the programs will utilize cold
hard cash to achieve their goal. For example, under
the Preparing OurYouth program, the state award-
ed six university-public school partnerships with
about $50,000 each to improve science and math
education.The state also plans to offer bonus pay to
STEM teachers. To improve the skills of available
workers, approximately $1 million of South
Dakota’s federal Community Development Block
Grant allocation has been distributed to fund local-
ized job training efforts.
Other recruitment strategies have more of a
grassroots feel. Former state residents, people
who were raised in South Dakota but moved
away for college or a job opportunity, for exam-
ple, were an early target group for potential
recruitment so the South Dakota Department of
Labor and Regulation created
www.DakotaRoots.com, a website designed to
entice out-of-state workers to return home. This
summer, the labor department also collaborated
with South Dakota universities to issue a mailer to
alumni who have moved out of the state, remind-
ing them that jobs are available in South Dakota.
Response to both campaigns has been impressive.
DakotaRoots.com boasts more than 13,000 regis-
trants since its launch, representing individuals
from every state in the nation. Traffic to the website
nearly quadrupled after the alumni mailer, accord-
ing to Dawn Dovre, public affairs director at the
state labor department. Of the registrations
received as of early September, approximately 2,500
people had accepted positions in the state, she says.
But considering that the average age of employees
being placed in jobs through the program is 36, it is
likely that the returning workers are bringing fam-
ilies with them, thus boosting the state’s population
and future workforce pool even further.
The labor department has also targeted older
workers and stay-at-home parents as existing
groups that could contribute to the workforce.
South Dakota is projected to have more jobs than
workers through 2020, according to Dovre, so
every nontraditional groupwithin the state is being
examined for its potential.
Dovre and the governor’s office suggest that
businesses in need of employees utilize the state’s
resources to help them fill the positions. They rec-
ommend posting job openings with the labor
department and reviewing the department’s list of
job seekers to find a potential match. Olson says
many South Dakota businesses also work directly
34 Prairie Business Magazine October 2012
|JOBS|
with post-secondary schools to ensure students
are receiving adequate training for fields in need
of workers.
Another S.D. WINS program, called 1,000
New South Dakotans, provides a unique opportu-
nity for businesses to recruit neededworkers in the
areas of manufacturing, IT, engineering and finan-
cial services. The state contracted national recruit-
ment firm ManpowerGroup to fill 1,000 jobs in
those sectors by May 2014, focusing on in-state
recruitment for the first 30 days of a job listing and
expanding the searchnationwide afterward, specif-
ically targeting surrounding states and areas with
depressed economies. By early September the firm
had recruited more than 1,200 possible workers
and submitted 655 people for potential positions,
according toClintonBrown,programmanager for
Manpower’s Sioux Falls office.
Brown says the biggest hesitation for out-of-
state workers considering South Dakota is simply
relocation. However, once the firm provides peo-
ple with an analysis of wages and cost of living
comparisons between their current location and
South Dakota, “we’re usually pretty successful at
that point,”he says. Brown,who is himself a trans-
plant to SouthDakota, believes strongly that when
people do make the decision to move to the state,
they don’t regret it. “Midwest states have great
benefits, (such as lower income tax rates) andonce
people come here and realize the quality of life,
they stay,” he says.
In his experience as a recruiter, Brown has
found the companies that are the most successful
in attracting new employees are those with creative
perks. Insurance packages and flex accounts are
pluses, but other benefits can tip the scale in the
employer’s favor. For example, Brown says several
Manpower clients have addedhealth centers to their
facilities; others offer relocation plans. “Any extra
thing you can do in this environment can go a long
way,” he says. “Companies are realizing that if they
have some good fringe benefits along with a good
wage, they will attract good employees.”
If South Dakota is to meet its need for work-
ers, an increasing number of people need to be con-
vinced that the move will be worth it. The number
of nurses and IT positions in the state is expected to
increase by 20 percent from 2010 to 2020.
Manufacturing jobs, financial positions and engi-
neering professions are also expected to increase
significantly over the next decade.
Manpower is predicting similar scenarios in
some of the same sectors on a wide-spread scale.
“There is a talent shortage that is global and it will
continue that way,” Brown says. He attributes the
long-term issue to inadequate education. There
may be enough people in the U.S. to fill the short-
ages, but they lack the necessary skills for the avail-
able jobs. “You can’t just go to high school and
think that you’re going towork these jobs,”he says.
“You’re going to have to get the skills necessary to
work in those jobs.”He commends SouthDakota’s
efforts to boost offerings at technical colleges to
train workers for in-demand jobs and says its ini-
tiative to address the overall workforce shortage
situation sheds light on an issue other state leaders
are choosing to ignore.
‘The First Fargo’The growing technology sector was the spe-
cific focus of a recent gathering in Fargo, N.D.
The one-day conference, subtitled “The Next
Generation of Jobs in North Dakota,” was hosted
by the Fargo Moorhead West Fargo Chamber of
Commerce and included speakers from several of
the metro area’s cutting edge technological com-
panies who offered their insights into recruiting
employees in the highly competitive technology
jobs market.
Speakers at the event agreed that despite the
challenge of recruiting workers, Fargo is an attrac-
tive location for businesses because it offers
employees a quality of life not found in other states
and has a strong economy to support business
activities.An increasing number of technology and
biotechnology firms are basing their operations in
Fargo, a scenario which can assist in recruiting
qualified workers to the area, according toMichael
Chambers, president and CEO of biotechnology
firm Aldevron. “It’s hard to bring people in if
there’s only one game in town,”he said.
Manycompany leaders saidFargo’s closeprox-
imity to multiple universities assists their recruit-
ment efforts and they like that they are able to work
directly with the colleges to groom new crops of
workers for the industry. They also utilize social
media, specifically theprofessionalnetworkingweb-
site www.LinkedIn.com, to quickly and cost-effec-
tively spread the word when seeking new employ-
ees. Jim Traynor, director of client management at
health care software firm Intelligent Insites, said
social media sites such as LinkedIn are a great way
for the company to connect with people who may
have left the state and want to return. His compa-
ny is aggressively recruiting new employees to its
Fargo headquarters using a variety of methods,
including social media. Traynor said the firm has
doubled in size to about 70 employees since the
beginning of the year and expects to employ more
than 100 workers next year.
Sen. JohnHoeven,R-N.D., co-sponsored the
daylong event and offered words of praise for the
state during his welcome speech, noting that
North Dakota has succeeded in building a strong
legal, tax and regulatory environment that is
attractive to businesses. He credited the energy
industry in the western part of the state for a large
part of the state’s economic growth, but said the
eastern part of the state boasts a healthy technol-
ogy sector with ample potential for growth.
Companies at the event represented a “glimpse
into the technology development that is driving
this country,” he said. “This really is the future.”
Many South Dakota counties are in need of more workers to meet growing demands from businesses.State officials and recruitment specialists agree that while the state may be losing some prospectiveworkers to North Dakota’s oil and gas industry, it also gains workers who have been in the Bakkenregion and want to escape the rigorous demands of oil field work.IMAGE: SOUTH DAKOTA DEPARTMENT OF LABOR AND REGULATION
|JOBS|
Jeff Davis, manager of enterprise evan-
gelism for Google, told the event’s 300 atten-
dees that as technology advancements are
more readily incorporated into businesses, the
most desirable qualities in potential employ-
ees are also changing. Jobs are faster-paced
than they used to be and often require a
“mash-up of skills,” which increases the value
of a person’s creativity and problem-solving
skills versus an educational degree, he said.
From the employee’s perspective, Davis
said research has shown that while salary and
benefits may have traditionally been the main
drivers for employment, thenext-generationof
employees rank access to technology, such as
smart phones or other devices, over salary
when choosing an employer.
Doug Burgum, entrepreneur, venture
philanthropist and founder of Great Plains
Software-turned-Microsoft campus, deliv-
ered a keynote speech on how to utilize tech-
nology and make companies more attractive
to future employees. He encouraged busi-
nesses to confront assumptions related to
business structures and re-evaluate those
ideas. For example, many businesses assume
that when a new employee is hired, that per-
sonmust have space within an office. In fact,
that employee may not need to work in an
office setting because technology exists to
maintain connectivity and collaborative
efforts fromanywhere.Hewarned employers
that the younger generation is inherently
more tech-savvy and urged business leaders
to embrace advancements or“be run over by
the next generation.”
Following Burgum’s speech, his son,
Joe, who also happened to be the youngest
attendee of the conference, askedwhat Fargo
can do to make itself known in the technol-
ogy realm as “the first Fargo” rather than a
second Silicon Valley. Burgum cited the
state’s wealth and supportive leaders as being
two unique aspects, but settled on the
strengths of the people living andworking in
the area as being its most valuable assets.
“We have an opportunity to think about cre-
ating our own future,” he said. “But we can’t
be complacent.We need risk takers.” PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
35www.prairiebizmag.com
36 Prairie Business Magazine October 2012
|NATURAL GAS|
Prepare toGatherIncreased natural gasproduction in the Bakkenopens up the opportunityfor new venturesBY KRIS BEVILL
Just as businesses and residents of
western North Dakota were begin-
ning to catch their breath after half a
decade of unprecedented petroleum-
related development and settle in for an
anticipated two decades of boom times, a
recent study predicts that the nextwave of
development is soon on its way in the
form of natural gas production.
According to energy market ana-
lysts at Bentek Energy LLC, the amount
of natural gas produced at well sites in
the Williston Basin could triple in the
next 10 years, making vital the need for
expanded gas gathering pipelines and
processing facilities throughout the
area. The needed expansion work will
likely usher in a new period of opportu-
nity for construction projects, service
providers and fossil fuel energy workers.
Because the supply of gas will be so
abundant, it also provides the opportu-
nity for demonstrations of ingenuity by
those developing unique ways to utilize
natural gas. North Dakota is ready for
this new challenge, says state
Agriculture Commissioner Doug
Goehring, who points to a history of
self-sufficiency and the innovative
nature of Midwesterners as proof that
new strategies are likely to be
deployed in order to put the abundant
resource to its best use. “We are truly
pioneers in many respects, so I think
there are opportunities and I think
people will continue to look for areas
we can improve upon,” he says. “The
sky’s the limit.”
Goehring, along with the governor
and attorney general, serves on North
Dakota’s three-member Industrial
Commission, a group tasked with over-
seeing certain state interests, including
the renewable energy program, the lig-
nite energy program, oil and gas
research and the North Dakota Pipeline
Authority. Earlier this year, the Pipeline
Authority and the Industrial
Natural gas is flared at an oil well in Williams County, N.D.SOURCE: AMY DALRYMPLE/FORUM COMMUNICATIONS
37www.prairiebizmag.com
|NATURAL GAS|
Commission asked Bentek to analyze future natural gas
productivity in the region and explore what pipeline
infrastructure, if any, would be needed to accommodate
the supply. Justin Kringstad, director of the North
Dakota Pipeline Authority, says the commission’s inter-
est in a natural gas study was prompted by increasing
natural gas ratios currently being experienced at older
Bakken oil wells in Montana. North Dakota leaders
wanted to know if the younger oil wells in their state
could be expected to perform the same. “The conclu-
sions came back that, yes, we can expect to see growing
gas-to-oil ratios as these wells age, and that has a significant impact once
you start looking at another 30,000 wells in North Dakota,” Kringstad
says. “The volume adds up very quickly and so the infrastructure — the
number of gas plants and pipelines — will be affected greatly.”
Connecting the SitesNatural gas processing infrastructure already lags behind the supply
simply because of the nature of the production process.Of the twomajor
sources tapped at well sites — gas and oil — oil is the more desirable
product and can be captured and trucked from the well site to process-
ing facilities whereas natural gas, which is considered a secondary prod-
uct, cannot be gathered for processing without pipelines. Therefore, wells
are initially drilled for oil and if the well is fruitful, pipelines are put in
place later to handle gas production in response to supply and demand
metrics. While dry natural gas prices are at historic lows, the Bakken’s
natural gas is “liquids-rich,” meaning it contains other valuable liquids
such as propane and ethane, and therefore commands a higher market
price, making infrastructure investments worth the cost. However, it
takes time to install natural gas gathering pipelines once a well site has
been deemed worthy and oil wells have been drilled at a rapid pace, cre-
ating a situation which has made gas flares a common sight in the west-
ern North Dakota sky. If there are no pipelines to collect the gas, pro-
ducers simply burn it off.
Thousands of miles of small-diameter gathering pipelines are
already in place in areas of theWilliston Basin, but they do not stretch far
enough into all areas of the region to adequately handle increased pro-
“We are truly pioneers inmany respects, so I thinkthere are opportunitiesand I think people willcontinue to look for areaswe can improve upon. Thesky’s the limit.”
- North Dakota AgricultureCommissioner Doug Goehring
A map of existing natural gas plants and pipelines in the Bakken region offersan indication of what areas have yet to be developed and will likely becometargets for expansion. SOURCE: NORTH DAKOTA PIPELINE AUTHORITY
38 Prairie Business Magazine October 2012
|NATURAL GAS|
duction rates. According to Kringstad, the sheer size of the area is the
industry’s biggest challenge as it begins to expand its gathering and
processing capabilities. “We’re looking at an oil field that is 15,000
square miles,” Kringstad says. “Prior to the Bakken, that was simply
unheard of, to have an oil field of this size.” The harsh climate of the
northern Plains also means that construction activities are difficult to
execute during the winter months. Additionally, in order to place
pipelines companies must negotiate with landowners for easement
areas, some of whom may have become skeptical of further develop-
ment if they have had bad experiences with oil and gas developers in
the past. Goehring says he is sympathetic to landowners’ concerns and
encourages companies to limit their impact on the land as much as
possible, but he also reminds landowners that increased pipeline infra-
structure will limit the amount of flaring at wells and will add to North
Dakota’s growing role in providing energy for the entire nation.
Kringstad also emphasizes reduced flaring as a positive aspect of the
growth, pointing out that as more pipelines are put into place, new oil
wells may not flare gas at all because there will be an existing pipeline
network to gather gas, allowing for the immediate hook-up to freshly
drilled wells.“We’re getting the snowball rolling down the hill,” he says.
“As this footprint grows, as we expand our reach of these gathering sys-
tems, each new well drilled in the future is going to be that much clos-
er to a pipeline system.”
Investors at the ReadyNorth Dakota’s current natural gas processing capacity rests at
about 900 million cubic feet per day. As of August, proposed
projects were expected to boost that capacity to approxi-
mately 1.4 billion cubic feet per day by 2014. However, the
Bentek study found that as much as 3 billion cubic feet of
natural gas could be produced each day in the region by
2025, suggesting that natural gas processors must expand
their capabilities even further. “That’s what the industry is
working on right now — trying to understand the produc-
tion growth, what the timing would need to be for new
plants or infrastructure,” Kringstad says. “We don’t need
enough plants today for 3 billion cubic feet, but when is the
appropriate time to get these projects moving forward?
That’s one of the big questions right now.”
Oklahoma-based ONEOK Partners LP currently oper-
ates four natural gas processing facilities in the Williston
Basin and is the largest operator of natural gas gathering and
processing facilities in the area. It is expected to bring three
additional processing plants online by 2014 and will install
additional pipeline infrastructure to gather the gas, increas-
ing its total processing capacity to 490 million cubic feet per
day and bringing its total investment in the region to
approximately $4 billion. “We’re there for the long term and
will be there as long as our services are necessary,” company
spokesman Brad Borror says. Borrer admits the industry is
always playing catch-up to accommodate natural gas pro-
duction and says the Bakken region is no different than
other gas plays in the nation in that respect. “We work with
producers to time it as best we can to connect to their rigs as they
come on-line,” he says. “Sometimes there’s a delay.”
ONEOK is no doubt one of many processors evaluating the need
for expansion in the Williston Basin. Established players such as
ONEOK may have some advantage for future projects, but Kringstad
says he’s seen a few new players enter the field recently and he expects
more to come. “It’s very competitive,” he says. “There are numerous
companies that are looking for opportunities in North Dakota.” The
industry’s anticipated new investment in natural gas pipelines and
processing plants over the next few years is already approaching $4 bil-
lion, he says.
Unique OpportunitiesPerhaps the most intriguing aspect of increased natural gas pro-
duction, according to those involved at the state level, is the opportu-
nity for value-added production projects. Goehring says he has had
multiple conversations with companies interested in producing vari-
ous products derived from the liquids in natural gas, such as plastics
or polyurethanes. “There are so many things that can be done with
petroleum products,” he says, adding that he is encouraging of those
types of projects but none have moved beyond preliminary discus-
sions at this time.
Two proposals that are on the table, however, would utilize gas for
fertilizer production. Proponents of the projects say fertilizer plants are
a perfect fit for the area because they can utilize some of the ample gas
supply to create a product that is in high demand locally at a more
The current capacity of North Dakota’s natural gas processing facilities isapproximately 900 million cubic feet per day. As of August, proposed projectsfor the Bakken region will bring that capacity up to about 1.3 billion cubic feetper day by 2014. However, a recent study suggests that the amount of naturalgas produced in the region could be more than double that amount by 2025,leaving a significant gap for processors to fill.SOURCE: NORTH DAKOTA PIPELINE AUTHORITY
continued on page 40
39www.prairiebizmag.com
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40 Prairie Business Magazine October 2012
|NATURAL GAS|
affordable price than current options. One of the
projects is being spearheaded by Northern Corn
Development Corp. and calls for a $1 billion
investment from the region’s farmers to establish
a cooperative-type plant in the Oil Patch that
could produce enough dry product fertilizer per
year to service 10 million acres. So far the state
has provided two small grants to assist in the
development of this project. Another proposal,
suggested by N-Flex LLC, would utilize natural
gas at the wellhead by locating mobile processing
units at sites to produce up to 3.3 tons of anhy-
drous ammonia per day per unit. The product
could be sold within a small radius of the plants,
reducing transportation costs and lessening traf-
fic on overworked Oil Patch roads. Company
founder Neil Cohn has requested a $1 million
grant from the Industrial Commission to offset
some of the costs of the initial unit. The unit
would need to be modified to accommodate
North Dakota’s harsh winter climate, therefore
the first few mobile processing plants could cost
more than $4million each, but future units could
cost closer to $1 million as the design process is
perfected, according to Cohn. The Industrial
Commission had not yet approved Cohn’s
request for funding by late August but the state
was supportive of the project and Cohn expected
to eventually receive the green light to commence
development.“We’re pretty confident this project
will move forward and we’re very confident that
this project makes sense,” he said.
Goehring says both projects offer potential
to benefit the entire region. The projects will
produce different fertilizers which are both in
high demand from farmers in the area. The
Northern Corn Development project would
service a massive area, which makes it desirable
for the agriculture industry throughout the
northern Plains and into Canada, whereas the
N-Flex project offers reduced environmental
impact because it isn’t reliant upon pipeline
infrastructure. “That’s a big plus because if we
don’t have time to get gathering lines into wells,
this provides an opportunity to immediately
reduce flaring, collect the gas, turn it into fertil-
izer and create revenue for the mineral owner
and the state,”Goehring says.“It has a lot of pos-
itive attributes to it.” PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
continued from page 38
42 Prairie Business Magazine October 2012
On Aug. 25, agriculture equipment manu-
facturer Horsch Anderson LLC broke
ground on a 100,000 square-foot manu-
facturing facility in Mapleton, N.D., marking the
start of what is expected to be a time of significant
growth for the town of about 800 people.
“This company is going to be a game chang-
er for our town,” says Mapleton Mayor Eric
Hillman.“It’s one of the things we’ve been work-
ing on for some time, is to get somebody in that
can help our city grow.”
Mapleton is a bedroom community for
nearby Fargo and has experienced some difficul-
ty retaining its individual identity over the past
several years. The town’s school, which has about
100 students in grades kindergarten through 12,
has narrowly avoided the chopping block three
different times, according to Hillman. Now, the
potential for an increasing population means the
school may need to consider expanding in a few
years as opposed to shutting down. Indeed, with
an anticipated workforce of up to 300 in five
years, Horsch Anderson has the potential to pro-
vide a major boost to the town and would be
considered a “get” for a city of any size, Hillman
says. “Fargo is even jealous,” he adds.
Workers at the Horsch Anderson plant
could live in Fargo and commute the five miles to
Mapleton, but Horsch Anderson President Kory
Anderson hopes his company will breathe new
life into the small town. “We want to be a part of
their growth and development,” he says.
Anderson began his relationship with
Mapleton last year when he purchased an exist-
ing manufacturing business to serve as a parts
manufacturing plant for the current Horsch
Anderson assembly facility in Andover, S.D.
When Horsch Anderson determined the criteria
for an additional location — proximity to a
major city with available skilled workers, conven-
ient interstate access and good visibility — he
knewMapleton was an ideal candidate.“It’s right
off the interstate [I-94] and it’s only a few miles
west of Fargo so it’s kind of the perfect situation
for having a business,” Anderson says.
Anderson informed Hillman of his compa-
ny’s interest in Mapleton and the city formulated
a tax increment financing package to assist with
infrastructure costs for the $12 million project.
Now that construction has begun, the project
should move ahead quickly. Some management
positions have already been filled and the plant is
expected to begin production by June 1. The
facility will initially employ 40 to 50 workers but
will quickly ramp up to 80 full-time employees.
In the first year of production, Anderson expects
400 machines could be produced in Mapleton,
increasing the company’s sales by 50 percent
from 2011’s total of $20 million. The company
expects to expand the facility within a few years
and employ 200 to 300 workers.
Anderson attributes Horsch Anderson’s
steady growth to innovative products that
increase farmers’ profitability and efficiency.
When the company was launched in 2000
through the combined efforts of Anderson
Industries, Germany’s Horsch Maschinen GmbH
and Harper Industries of Harper, Kan., its initial
focus was air seeding equipment,which ismarket-
ed mainly to small grain farmers in the Dakotas
and Canada. The introduction of a tillage tool
called the Joker in 2009 expanded the company’s
market area and is responsible formuch of its cur-
rent rate of growth. “It really expanded our busi-
ness into new markets and has taken off very
quickly in the past few years,”Anderson says. “We
have a huge demand right now for our production
and we have to make a move quickly to increase
our production to keep up.”
Anderson, whose family farms 5,000 acres
near Andover, says farmers have become more
interested in innovative equipment as land
prices have skyrocketed in recent years. “When a
farmer has to pay so much more for his land or
the cash rent, he has to do everything possible to
maximize his efficiency and his profitability so
he can make money farming that land,” he says.
Even in down times, such as nationwide
droughts, “farmers are still going to be farming
and the successful farmers are still always look-
ing at ways to be more efficient and maximize
their profitability.” PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
|RED RIVER VALLEY|
Groundbreakingmarks newbeginning fortiny townAg equipment manufacturerexpands to Mapleton, NDBY KRIS BEVILL
Company and government officials participate in a ceremonial groundbreaking Aug. 25 at thesite of Horsch Anderson LLC’s 100,000-square-foot manufacturing facility in Mapleton, N.D. Leftto right: Kory Anderson, president, Horsch Anderson; Traugott Horsch, director, HorschMaschinen GmbH; N.D. Gov. Jack Dalrymple and Mapleton Mayor Eric Hillman.PHOTO: HORSCH ANDERSON LLC
43www.prairiebizmag.com
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44 Prairie Business Magazine October 2012
|SOUTH DAKOTA|
Joining forcesEconomic development groups launch regionalwebsite to attract and expand businessBY KRIS BEVILL
For rural community leaders, the task of promoting their
towns to prospective businesses in a global landscape can
easily make one feel as though they are the needle in the
proverbial haystack. There may be a number of project developers
and businesses seeking compatible sites that would make a great
fit with the community, but drawing site selectors’ attention to
lesser known regions of a state with minimal resources can be a
gargantuan challenge. Many economic development divisions in
rural communities consist of just one person working with a tiny
operating budget. How can they compete with more populated
regions of a state and stand out from the crowd?
In northeastern South Dakota, 16 small communities stretched
across 30 counties and GROW South Dakota have come together to
combat that challenge through a collaborative web-based economic
development portal designed to entice site selectors to their region. The
SouthDakotaPrairieGatewaywebsite—www.SDPrairieGateway.org—
provides informationrelated toreal estate,availablework forceand incen-
tives packages for the entire region aswell as for each individual commu-
nity. It is believed to be the first project of its kind in theU.S. to promote
anentire region through the combinedefforts of the area’s communities.
Communities involved represent an extremely rural region of
the state. Aberdeen, with an approximate population of 25,000, is the
largest community affiliated with the project. Funded in part by a
$149,000 grant from the USDA Rural Development agency, South
Dakota Prairie Gateway’s mission is to attract and expand businesses
in areas thatmay not otherwise have themeans to effectively promote
their strengths to prospective businesses, according to Paula Jensen,
funds development director for GROW South Dakota.
GROW South Dakota served as the project developer for
SDPrairieGateway.org. Little Falls, Minn.-based Golden Shovel
Agency was selected to create andmanage the website and social mar-
keting plan. Jensen says Golden Shovel won the project because it is
focused solely on economic development. “Golden Shovel has a net-
work of national and regional economic development partners, years
of experience in the industry and tailor their web development to eco-
nomic development organizations,” she says, adding that because the
majority of site selectors seek initial information about communities
from the Internet, a website is a community’s most important busi-
ness recruitment tool.
Social media has become a crucial aspect of a web marketing
plan and that phase of South Dakota Prairie Gateway’s project began
in late July with the launch of a Facebook page and Twitter account.
In late August, Jensen said the impacts of those efforts had been
growing weekly.
Ultimately, Jensen and others involved the Prairie Gateway proj-
ect would like it to serve as a model for other rural regions of the
prairie to emulate. “It’s obviously something that can be replicated,”
she says. Prairie Gateway developers are willing to provide guidance
and documents to economic development groups in other regions to
give them a head start with their own plans. “There’s no need to cre-
ate the wheel again,” she says. PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
· Aberdeen Development Corporation· Absolutely! Aberdeen· Campbell County Economic Development· Clark County Economic Development· DeSmet Economic Development Corporation· Deuel Area Development Inc.· Eureka Community Development Company· Faulkton Economic Development· Glacial Lakes Area Development· Grant County Development Corporation· GROW South Dakota· GROW Spink· Ipswich Community Economic Development· On Hand Development Corporation· REED Fund· Sisseton Economic Development Corporation· Webster Area Development Corporation
Membersof SouthDakotaPrairie Gateway include:
Development agencies in rural northeast South Dakotahave joined to promote the area's overall businesspotential. SOURCE: SOUTH DAKOTA PRAIRIE GATEWAY
45www.prairiebizmag.com
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46 Prairie Business Magazine October 2012
|WESTERN NORTH DAKOTA|
Mandan-ledconsortium gets$9.7 million forbusiness loansFunding designed forbusiness owners withgood credit, lack of equityBY KRIS BEVILL
By December, businesses in at least 38 municipalities through-
out North Dakota will have the opportunity to apply for a
small business loan program that could, for some, make the
difference between starting up and giving up.
The State Small Business Credit Initiative, signed into law in 2010,
is a $1.5 billion federal program designed to provide support for small
businesses by awarding states funds for programs which can be used to
assist credit-worthy small businesses that may not qualify to receive
loans on their own. InAugust, a consortium of municipalities led by the
city of Mandan finalized an agreement to receive $9.7 million from the
U.S. Department of the Treasury under the program. The Lewis and
Clark Regional Development Council in Mandan will serve as the pro-
gram administrator and is currently putting the finishing touches on
the details, according to Ellen Huber, business development and com-
munications director for the city of Mandan.“We anticipate having the
loan participation program up and running and available to business-
es no later than the beginning of December,” she says.
Eligible businesses must have no more than 750 employees and
emphasis is given to businesses with 500 or fewer employees. “It does
exclude some North Dakota businesses, but the vast majority of our
existing businesses and start-up businesses would be eligible,” Huber
says. Funding can be used for any aspect of business, including prop-
erty purchases, expansion projects, operating expenses or inventory
costs. The average loan amount is anticipated to be about $100,000,
but the program is able to accommodate loans ranging in size from
$10,000 to $1 million.
Both start-up companies and potential expansion projects can
apply for funding through the federal program. However, it can be
especially helpful to start-ups because those business owners often do
not have the equity banks require in order to approve loan requests,
Huber says. Banks typically ask business owners to provide 30 percent
equity. This program can reduce that amount to just 10 percent.
Huber expects that up to 265 loans could be awarded before the
federal portion of the program ends in 2017. However, the program is
designed so that municipalities could continue to provide funding past
the federal end date if they choose to do so.“As long as the funds are used
responsibly, the program could go on in perpetuity,”Huber says, adding
that the program also does not require matching funds from the local
community, which made it attractive to consortium organizers.
Municipalities in the Mandan consortium include: Almont,
Beach, Beulah, Bismarck, Bowman, Carson, Casselton, Crosby,
Dickinson, Dodge, Dunn Center, Fargo, Garrison, Glen Ullin, Halliday,
Hazelton, Hazen, Hebron, Hettinger, Killdeer, Lincoln, Linton,
McClusky, Minot, Mott, New England, New Salem, Regent, Sentinel
Butte, Steele, Turtle Lake, Underwood, Watford City, West Fargo,
Williston andWilton.
A total of $13.1 million was available for North Dakota. Funds
were divided between theMandan consortium and a consortium led by
the city of Carrington based on population. PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
47www.prairiebizmag.com
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BROOKINGS, SD | MINNEAPOLIS, MN
Ideas. Owned.™
48 Prairie Business Magazine October 2012
In July, Beulah-N.D.-based Coteau Properties
Co. welcomed a new dragline into operation
at the nation’s largest lignite coal mine,
Freedom Mine, north of Beulah. The 13-mil-
lion-pound Bucyrus Erie Model 2570 walking
dragline, dubbed Freedom’s Frontier, had been
purchased in 2003 but sat unassembled for sev-
eral years, patiently waiting to be called into duty
when the need to access deeper seams of coal
required its use. And now its time has come.
Coteau Properties, a subsidiary of Texas’
North American Coal Corp., has operated the
mine since 1983 and supplies 15 million tons of
coal annually to Basin Electric Power
Cooperative’s Dakota Coal Co., which in turn
markets the product to several North Dakota
power plants as well as to the Great Plains
Synfuels Plant in Beulah. Ultimately, those 15
million tons of coal produce a combined 1,600
megawatts of electricity each year as well as nat-
ural gas and other products. Prior to July, two
draglines identical to Freedom’s Frontier had
been able to efficiently move the massive
amounts of clay material at the mine — known
as overburden in the mining industry — to
access the coal that rests below, but shallower
seams of coal have been mined through over the
past two decades and additional equipment has
become necessary in order to efficiently mine
deeper sources of coal.
“We’re getting to a point in time where
demand from Dakota Coal is still at 15 million
tons but the amount of overburden is growing,
so we’ve got to move more earth to get the same
Freedom’s Frontier digs inAdditional dragline at lignite mine allows access to deeper coalBY KRIS BEVILL
Freedom’s Frontier, one of threeidentical massive draglines used atthe Freedom Mine near Beulah, N.D.,to remove the layer of earth abovelignite sources, stands 215 feet talland has a boom length of 340 feet.PHOTO: NORTH AMERICAN COAL CORP.
49www.prairiebizmag.com
number of tons out of the ground,” says David
Straley, manager of government and public
affairs at North American Coal. “By far, when
you look at the number of yards that we move,
the best and easiest option is the dragline.”
Each of Coteau Properties’ draglines can
scoop up 150 tons of earth per minute in mas-
sive buckets that hold the equivalent of four
4-wheel drive Suburbans. Without Freedom’s
Frontier, Coteau would need to employ a
truck and shovel fleet or some other type of
moving equipment to remove the additional
overburden, but that option wouldn’t be as
economical, Straley says. He declined to
release the cost of the Frontier, which is not a
new model and was previously used at a coal
mine in Illinois, but says new draglines could
cost as much as $180 million. The two
draglines already in use at Freedom Mine
were purchased for $40 million each in the
1970s, according to Coteau Properties.
Even though shallow seams of coal have
been mined through, Freedom Mine is far
from being depleted of its lignite. According to
Coteau Properties, North Dakota is estimated
to have enough lignite to last 800 years at the
current rate of use. The current 15 million-
ton-per-year supply contract with Dakota
Coal runs through 2035 and the addition of
Freedom’s Frontier will allow Coteau
Properties to meet that demand at the best
cost, Straley says. Life of mine plans offer an
indication of how deep the coal will be 25
years from now and Straley assures it won’t be
a situation where deeper digging is continu-
ously required to meet supply demands. “Even
though it’s deeper than it was in the past few
years, it’s not going to be so deep that it will
make it uneconomical to mine,” he says.
“We’ve got access to coal for as long as they
would ever want.”
Fifteen new employees were hired in
direct relation to the commissioning of
Freedom’s Frontier. Coteau Properties entire
staff includes nearly 400 employees. PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
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50 Prairie Business Magazine October 2012
|ENERGY|
Fracking, the use of hydraulic pressure to
release natural gas and oil from shale,
has the potential to meet energy
demands with U.S. resources and stimulate the
economy. However, the practice also carries
possible environmental and public health
risks, most notably water contamination.
A University of Minnesota research team
is addressing this challenge by developing
innovative biotechnology to purify fracking
wastewater. Headed by Larry Wackett, a pro-
fessor in the College of Biological Sciences,
the team includes Alptekin Aksan, professor
in the College of Science and Engineering,
and Michael Sadowsky, professor in the
College of Food, Agriculture and Natural
Resource Sciences.
The effort has earned a new $600,000
grant from the National Science Foundation’s
Partnerships for Innovation (NSF-PFI) pro-
gram, which pairs academic researchers with
companies to transfer academic knowledge to
the private sector and produce innovative tech-
nologies that benefit the public. This is the first
NSF-PFI grant awarded in Minnesota.
Wackett, Aksan and Sadowksy, as well as CBS
Dean Robert Elde, are co-investigators. Elde’s
role is to lead interaction between the
researchers and the companies. If the project is
successful, the team will be eligible for addi-
tional NSF funding.
The three scientists, all members of the
university’s BioTechnology Institute, are using
naturally-occurring bacteria embedded in
porous silica materials to biodegrade contam-
inants in fracking wastewater, a technology
they originally developed to remove agricul-
tural pesticides from soil and water. They now
have the ability to customize the technology to
degrade chemicals in water used for fracking.
Their goal is to make the water suitable for re-
use in fracking of other wells and significantly
reduce the amount of water used by industry.
The team will work with Tundra
Companies of White Bear Lake, Minn. on sili-
ca encapsulation technologies, and Luca
Technologies of Boulder, Colo. on a related
effort--using encapsulated microbes to recov-
er natural gas from depleted coal beds. Neither
company is involved in fracking. However,
they see a business opportunity in helping the
U.S. meet its energy needs domestically in an
environmentally responsible fashion. The uni-
versity’s role is to further develop a platform
technology that could be used by these and
other companies.
Evaporation and filtration, the current
frack water treatment methods, are expensive.
Moreover, they don’t eliminate chemicals; they
simply reduce them to a concentrated form.
Industrial scale evaporation and filtration are
energy intensive, and both methods leave
behind a chemical residue that presents a dis-
posal challenge.
The research team understands public
concerns about the environmental impact of
fracking, as well as industry concerns about
misinformation related to risks, Elde says. The
University of Minnesota has reached out to the
business community, via its large alumni net-
work, to work together on these issues. “The
University of Minnesota is not taking sides in
the fracking debate, but as a land-grant
research institution, it is uniquely positioned
to carry out necessary and beneficial research,”
Wackett says. “There are many efforts ongoing
to improve the treatment of water used in
fracking and we feel that biotechnology can
play a significant role in the overall effort.” PB
Scientists explorebiotechnology toclean up frack waterFederal grant will assist in development effortsBY UNIVERSITY OF MINNESOTA
52 Prairie Business Magazine October 2012
|ENERGY|
Otter Tail Corp. is getting out of thewind indus-
try. The diversified energy producer
announced Sept. 6 a deal to sell DMI
Industries, its wind turbine manufacturing division, to
Texas-basedTrinity Industries Inc. for amere$20million.
The sale includes all property, plant and equipment at
DMI’s facilities inWest Fargo,N.D., Ft.Erie,Ontario, and
Tulsa,Okla.
Otter Tail will fill tower orders set for delivery
in 2012 before the sale to Trinity Industries is com-
plete. The sale is expected to close no later than Jan.
3. The transaction for DMI’s West Fargo plant,
which employs more than 700 workers, is scheduled
to be complete in November. Trinity Structural
Towers Inc., a subsidiary of Trinity Industries, cur-
rently operates wind tower manufacturing facilities
at two locations in Texas, as well as locations in
Illinois, Iowa and Mexico.
Otter Tail attributes its decision to exit the
Manufacturersregroup in face ofwind credit expirationUncertainty regarding the future of federalproduction tax credit affects local productionBY KRIS BEVILL
|ENERGY|
53www.prairiebizmag.com
industry to the looming expiration of a federal
tax credit for wind turbine production. The
Production Tax Credit provides 2.2 cents per
kilowatt hour for the production of electricity
from wind turbines and was established in 1992
to help wind energy producers compete with
cheaper fossil fuel energy. The credit was meant
to provide assistance until the wind industry
matured and could compete on a level playing
field with other forms of energy. However, while
the industry is not quite there yet, the credit may
be allowed to end this year. According to Otter
Tail, uncertainty surrounding the credit’s future
has reduced demand for wind towers and signif-
icantly impacted the market value for DMI’s
assets, contributing to the company’s decision to
sell and refocus its efforts on utility growth.
“Our decision to divest DMI is consistent
with the course we’ve set to optimize our portfolio
of companies, reduce risk and create a more pre-
dictable earnings stream to support the dividend
and future growth,” Otter Tail President and CEO
JimMcIntyre said in a statement.
The entire wind industry strongly supports
Congressional action to establish a long-term tax
credit. Some manufacturers remain confident that
demand for turbines will continue without the
credit, just not fromU.S. producers.
Denmark-based LMWind Power is one of
those manufacturers. It employs approximately
630 people at its blade production facility in
Grand Forks, N.D., to produce approximately
1,800 blades annually, equating to 20 percent of
the company’s global production. Bill Burga,
head of manufacturing, Americas, for LMWind
Power, says he is “confident” blade manufactur-
ing will continue at the company’s U.S. plants,
although it is adjusting its capacity to reflect
anticipated demand changes. To date, most of
the demand for LM Wind Power’s products has
come from the U.S., Canada and Brazil, but
company officials expect destination markets
will shift elsewhere without the U.S. tax credit.
“In 2012, demand has focused on the U.S. mar-
ket due to the rush to finalize installations before
the end of the year because of the expiration of
the PTC,” Richard Pettifor, commercial director,
says.“In 2013, demand in the U.S. drops bymore
than 80 percent as the PTC expires and key mar-
kets for Grand Forks become export oriented—
Canada, Mexico, Panama, Brazil and Uruguay.”
One potential beneficiary of increased
exports from Grand Forks are the twin ports of
Duluth, Minn., and Superior, Wis., known col-
lectively as the Port of Duluth-Superior. LM
Wind Power has been utilizing the port to export
blades from the Grand Forks facility for several
years, according to Pettifor, who says Duluth’s
port is attractive because it is efficient and can be
less expensive than shipping to Houston. Blades
sent through the Port of Duluth-Superior reach
Brazil in just 16 days shipping time. PB
Kris Bevill
Editor, Prairie Business
701-306-8561, [email protected]
“In 2013, demand in the U.S.drops by more than 80 percent asthe PTC expires and key marketsfor Grand Forks become exportoriented—Canada, Mexico,Panama, Brazil and Uruguay.”
- Richard Pettifor,commercial director,
LM Wind Power
54 Prairie Business Magazine October 2012
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