pbjanuary 2014

January 2014

Harnessing the HeatIndustry, researchers collaborate to utilize Bakken natural gaspg. 30

ALSOConnecting the DisconnectedBringing together business communities

in northern Plains, Twin Citiespg. 22

Smooth TransitionEide Bailly excels in

succession, expansion plan pg. 26

http://fargo.unitedcp.com

North Dakota. Doing Business Better. With support from the state of North Dakota, Blaise Energy is working totransform excess gas from the oil drilling process into a profitable sourceof electricity. Learn how the North Dakota Department of Commerce and companies in the state are doing business better at www.NDBusiness.com

Photo courtesy of Blaise Energy

North Dakota. Doing Business Better. With support from the state of North Dakota, Blaise Energy is working totransform excess gas from the oil drilling process into a profitable sourceof electricity. Learn how the North Dakota Department of Commerce and companies in the state are doing business better at www.NDBusiness.com

Photo courtesy of Blaise Energy

4 Prairie Business Magazine January 2014

|INSIDE|January 2014 VOL 15 ISSUE 1

FEATURES DEPARTMENTS6 Editor’s Note

BY KRIS BEVILLNew year, new additions

8 Business Advice BY MATTHEW D. MOHRMaking and marketing

8 Management MattersBY JOHN GIRARDThinking beyond the next quarter

10 FinanceBY CURT EVERSONLevel the playing field for lending institutions

12 Research & Technology BY KELLY RUSCHThe energy to find answers

14 Economic Development BY JARED STOBERNew Innovate ND program provides right resources at right time

16 Prairie News

20 Prairie People

22 Business DevelopmentConnecting the disconnected

24 ManufacturingTaking welding training where it’s needed

34 Research I Digital Edition OnlyBenchmarking boomtowns

36 Talk of the TownFrom boom to business

38 FinancePrivate equity fund takes hands-onapproach to investments

40 Entrepreneurship125 years and counting

42 Energy

48 Business to Business

50 By the Numbers

Next MonthThe February issue of Prairie Business magazine will cover the area's workforceshortage and the role universities can play in attracting and training new workers.The issue will also cover a group formed to provide small business guidance on aselective basis. Other topics include agriculture and health care.

Natural gas is flared in McKenzieCounty, N.D., on Friday, Sept. 6, 2013.Amy Dalrymple/Forum News Service

26 LEADERSHIPPassing the Torch Transition to new management team at Eide Bailly just one part of firm’s longevity,expansion plan

FLARINGBeating the HeatMultiple solutions expected to combat Bakkenflaring and utilize the region’s natural gas

30

Scan this with your smartphone'sQR Reader to visit our website.

Follow us on Twitterhttps://twitter.com/PrairieBiz

Check us out on Facebookhttps://www.facebook.com/PrairieBusiness

An aerial view of the nearly complete Williston AreaRecreational Center and the Williston State College campus. PHOTO: VERN WHITTEN PHOTOGRAPHY

NDSU Executive Education Business Owner Solutions Series ................................................Jan. 15 Fargo, N.D.................................................................................................................ndsu.edu/dce/execed

N.D. Women's Startup Weekend .............................................................................................Jan. 24-26 Fargo, N.D. .........................................................................................northdakota.startupweekend.org

2014 Precision Agriculture Action Summit ...........................................................................Jan. 20-21 Jamestown, N.D. ...........................................www.theresearchcorridor.com/precisionsummit2014

The Bakken/Three Forks Shale Oil Innovation Conference & Expo .......................................Feb. 10Grand Forks, N.D. .................................................................................www.bakkenoilconference.com

Small Business Innovations Summit ............................................................................................Feb. 21Fargo, N.D.............................................................................www.theresearchcorridor.com/sbsummit

EVENTS

http://www.discoverbismarckmandan.com


|EDITOR’S NOTE|

New year, new additions

There is no better time to make a change than at the beginning of the New Year. I’ve never been a

stickler for resolutions, they just don’t last, but I do believe that the start of a new year is a great time

for change — things like a product launch, a new job or a fresh outlook. So we’re happy to direct

your attention to several changes we’re making in the magazine, beginning with this first issue of 2014.

Each issue will include a short list of upcoming area events, which you will see on the contents page.

There are many high-quality, unique and interesting events in our region every month and we know what

a great opportunity in-person events provide to learn about specific topics and connect with other business

people. We want to help keep you informed on the growing number of great business-related events in the

area, so be sure to check out the list each month. And if you are planning an event, let us know so that we

can help spread the word. We also post a full list of upcoming events on our website, prairiebizmag.com.

This year also brings new faces to our line-up of columnists. I’m happy to welcome John Girard to our

fold as a monthly columnist. Girard is the founder of Sagology, a firm dedicated to the art of connecting

people, and is a professor of management at Minot State University. His monthly column, Management

Matters, will provide words of advice and encouragement specifically for business leaders in our region.

We’ll also be rotating in several new columnists to our monthly finance, research and technology, and eco-

nomic development columns. I’m particularly excited to learn more about the goings-on at the Sanford

Underground Research Facility, located deep below the Black Hills of South Dakota, in the May issue, but I

truly look forward to reading the varying viewpoints of all of our columnists, whether they are new to the

magazine or old friends.

Finally, you’ll notice that our energy section includes a new page of data generated by the U.S. Energy

Information Administration. In October, the agency updated its approach to assessing the productivity of

drilling operations in the country’s producing regions and launched a new monthly report to relay those

updated statistics. The agency says new technology for drilling and producing oil and natural gas has ren-

dered obsolete the traditional method of counting drilling rigs to estimate future production, so the updat-

ed data takes into consideration production rates from the first month of well operation, when production

is typically higher, and estimated changes in production from existing wells. We’ll provide you with some of

that data specific for the Bakken each month, as well as the EIA’s comparative data on all oil and gas-pro-

ducing regions of the country.

We will continue to deliver additional content through the magazine’s digital edition and provide you

with business news from the region on a daily basis through our website and our weekly e-newsletter,

Talking Points. We also recently began offering sneak peeks of our upcoming issues in a video post that we

share online about a week before the issue becomes available. Stop by the website or interact with us via

social media to check it out. Looking ahead, we’re unveiling the magazine’s first-ever Top 25 Women in

Business in our March issue. Nominations are due Jan. 17.

It’s been a busy time as we have prepared these additions and changes for you and we hope you enjoy

them. Also, staying busy keeps us warm.

KRIS [email protected]

7www.prairiebizmag.com

PrairiePrairie

northern plains business resource

BusinessMIKE JACOBS, PublisherRONA JOHNSON, Executive EditorKRIS BEVILL, EditorBETH BOHLMAN, Circulation ManagerKRIS WOLFF, Layout Design, Ad Design

Sales Director:JOHN FETSCH701.212.1026 [email protected]

Sales:BRAD BOYD - western ND/western SD800.641.0683 [email protected]

SHELLY LARSON - eastern ND/western MN701.866.3628 [email protected]

Editor:KRIS BEVILL701.306.8561 [email protected]

Editorial Advisors:Dwaine Chapel, Executive Director, ResearchPark at South Dakota State University; BruceGjovig, Director, Center for Innovation; LisaGulland-Nelson, Vice President, Marketing andP.R., Greater Fargo Moorhead EDC; Tonya Joe(T.J.) Hansen, Assistant Professor of Economics,Minnesota State University Moorhead; DustyJohnson, Chief of Staff for South Dakota Gov.Dennis Daugaard’s office; Brekka Kramer,General Manager of Odney; Matthew Mohr,President/CEO, Dacotah Paper Company; NancyStraw, President, West Central Initiative

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 in Prairie Business aretheir 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 at www.prairiebizmag.com

Address corrections Prairie Business magazinePO Box 6008Grand Forks, ND 58206-6008Beth Bohlman: [email protected]

Online www.prairiebizmag.com

If your organization is emphasizing green initiatives, try Spartan’s Green Solutions® line of products.

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001010396r1


|BUSINESS ADVICE|

Making and marketingBY MATTHEW D. MOHR

Producing a valued product is not simple, nor is it

easy to sell something just because it is a good

item. Our region has produced some spectacular

products and a number have become worldwide success-

es. The Bobcat skid loader is known worldwide, and the

mighty Steiger tractor was a sensation when it was in full

production. Of course, Mr. Bubble became a household

word in the years it was marketed by North Dakotans, as

did Great Plains Software. These are four great examples

of super successful design, manufacturing and market-

ing, but there are dozens more which have failed to

become successful despite being a great product.

We produce the world’s best agricultural products

and it seems natural we should turn these raw materials

into finished goods and have an easy road to prosperity. We

can turn our agricultural output into useful household and

commercial food products, but we will need to go to mar-

ket with them in a professional way.

During a discussion with the late Judge Rodney Webb

(one of the smartest men I have known), he said, “We cre-

ate a lot of great products and businesses in North Dakota,

but we just don’t market them very well.”

Judge Webb was a brilliant man in many ways and

not someone to argue with, and he summarized in one

sentence an issue we all need to face in every business if we

are going to succeed. If you have a great idea, product or

invention; before you build a factory to make it, be sure you

build an organization which can sell it. PB

Matthew D. MohrCEO, Dacotah Paper Co.

[email protected]

|MANAGEMENT MATTERS|

Thinking beyond the next quarterBY JOHN GIRARD

Generations of wise businessmen and women

from across our region have understood the

importance of cultivating long-term relation-

ships. To many of these prairie sages, investing time and

other resources in building strong, trustworthy partner-

ships was much more important than closing a short-

term deal. They recognized the value of these relation-

ships far and away exceeded the value of most assets list-

ed on the balance sheet.

Of course this relationship wisdom is no longer

commonplace across our country. It seems the closer one

gets to an ocean, the shorter the planning horizon

becomes. Lately we have seen too many examples in

Washington, New York, and Silicon Valley where leaders

are much more focused on the short-term wins than long-

term success. Let’s hope our regional younger profession-

als are not learning bad lessons from watching the man-

agement blunders by leaders myopically focused on

reporting quarterly results.

To be truly successful, leaders must have the vision to

think and act strategically. This truism moves from good

advice to absolute certainty in the global arena. The long-

term orientation of many international partners is rooted

in the same strong relationships that are woven into the

fabric of prairie leadership. As you consider the future of

your organization, remember that in most cases your busi-

ness was built on a solid foundation of relationships. So

don't allow the lure of a short-term gain to blur your long-

term vision. This is not the time to mimic the antics of

those breathing salt air. PB

John GirardProfessor of Management, Minot State University

Founder, [email protected]: @JohnGirard

http://www.greystoneconstruction.com


|FINANCE|

Level the playing field forlending institutionsBY CURT EVERSON

About six months ago, the South

Dakota Bankers Association board of

directors decided it was time to

increase general awareness about a couple of

very old provisions in the federal income tax

code which may not make as much sense

today as they did 80 to 100 years ago. Since

1916, lending institutions that are part of a lit-

tle known federal government sponsored

enterprise, the Farm Credit System, have been

totally exempt from paying federal income tax

and state income taxes on any income derived

from loans secured by agricultural real estate.

Likewise since 1934, federally chartered credit

unions have been totally exempt from paying

federal and state income taxes and from pay-

ment of state and local sales taxes on pur-

chased products and services.

Supporters of continuing the status quo

for these tax-favored financial companies have

been quick to criticize bankers as being nothing

more than greedy, profit-hungry competitors.

Bankers do not fear competition, but would like

to be able to compete on a level playing field.

The primary motivation behind the SDBA’s

awareness campaign is to inform the general

public about changes that have taken place in

the business models of the Farm Credit System

and credit unions over the past 80 to 100 years.

Those folks can make up their own minds

about whether or not Congress should take an

objective look at the present-day justifications

for continuing or changing these old provisions

in the federal tax code.

Why did the SDBA decide that now is the

right time to raise these issues? In the wake of

the subprime mortgage-driven financial crisis

and subsequent passage of the Dodd-Frank

Act, bank regulators decided to take a closer

look at the challenges and threats facing the

nation’s remaining community banks. During

2012 the FDIC (Federal Deposit Insurance

Commission) conducted a formal study to bet-

ter understand the many forces putting pres-

sure on the community bank model. Last year,

the Conference of State Banking Supervisors

collaborated with the Federal Reserve on a sec-

ond study of challenges facing community

banks. In addition to pressures created by

increasingly complex, expensive regulations,

the studies reported that community banks are

also concerned by the aggressive, growth-

focused business model used by some of the

largest of these tax-favored financial service

providers and believe it poses a real threat to

their continued viability.

It is hard to imagine that Congress ever

envisioned a $1 trillion dollar tax exempt

industry dominated by multibillion dollar

credit unions when it granted a 100 percent tax

exemption to the single, common-bond credit

union charter back in 1937. By the same token

it is difficult to believe that Congress could have

envisioned that the Farm Credit System would

grow to be the $250 billion system it is today, a

system that enjoyed a combined federal and

state income tax rate of only 5 percent in 2012.

Congress is talking in a bipartisan way

about reforming the federal tax code. Don’t

these old exemptions deserve a second look? PB

Curt EversonPresident

South Dakota Bankers [email protected]

http://www.borderstates.com


|RESEARCH & TECHNOLOGY|

The energy to find answersBY KELLY RUSCH

Research serves to make building stones out

of stumbling blocks,” according to noted

chemical engineer Arthur D. Little. At

research universities such as North Dakota State

University, faculty, staff and student researchers

help businesses work to succeed, advancing the

region’s quality of life.

Researchers, similar to business leaders, are

motivated to answer questions and overcome chal-

lenges. We provide needed expertise to ask questions,

compile and analyze data that can lead to solutions for

a variety of market challenges. We provide expertise to

assist governmental entities to develop strategies as the

region adapts to an ever-changing environment. After

spending two decades working as an engineer in the

oil and gas state of Louisiana, I appreciate the tremen-

dous growth North Dakota is experiencing.

At NDSU, there are numerous ways we use

research to provide options to assist companies and

government in this economic boom. Researchers at

NDSU investigate workforce characteristics in the

Bakken of western North Dakota, assisting cities

with population projections to plan for the future,

compiling data on jobs and investment, and map-

ping historical sites. Faculty researchers assist law

enforcement and community leaders as they work to

match enforcement needs to population changes.

Other NDSU scientists analyze North Dakota

clay samples to determine composition and suitabili-

ty for processes used in oil extraction. Additional sci-

entists offer expertise in sensors that can monitor

equipment and expertise in corrosion that can lead to

pipeline degradation.

NDSU representatives, particularly from the

Extension Service, are among those participating

with the state to find answers to challenges such as

dust that affects crops, animals and people.

Natural resources expertise of NDSU faculty is

being used to evaluate native grassland reclamation

methods to reestablish native vegetation and restore

landscape in partnership with a pipeline company.

Research findings will be published to help support

future land reclamation related to the state’s energy

boom.

NDSU researchers are also looking at

nanoscale energy harvesting of the future, through

quantum dots or nanowires to generate solar ener-

gy. Others are evaluating coatings for wind turbine

blades and unmanned aerial vehicles. Still others

work in areas of biofuels and biomass, looking at

ways to use agricultural waste as building blocks for

additional energy resources.

The energy, finance and manufacturing sectors

and many others bring opportunity to the state. As a

land-grant university, NDSU can play a substantial

role in enhancing that success — through research,

through educating the state’s current and future work-

force, and through technology-led economic develop-

ment. The relationship between a land-grant research

university and the students and region that it serves,

truly represents a mechanism to provide opportunity.

Through research, we strive to provide an

innovative and scholarly human enterprise to solve

today’s challenges, anticipate those of tomorrow

and impact the economic well being of the region

and beyond. Put simply, we want to help you make

positive things happen.

We are opening new laboratories to continue

working with private sector partners to enhance

products and to bring NDSU-developed technologies

to market. We invite you to contact us to learn more.

PB

Kelly RuschVice President for Research and Creative Activity

North Dakota State [email protected]

Twitter: @NDSU

“

http://www.jlgarchitects.com


|ECONOMIC DEVELOPMENT|

New Innovate ND program provides right resources at right timeBY JARED STOBER

Since 2006, Innovate ND has served over 450 entrepreneurs,

startups, and early-stage ventures by providing a comprehen-

sive educational program and coaching through entrepre-

neurial centers to help entrepreneurs build new ventures. The

vision of Innovate ND is to grow a statewide entrepreneurial com-

munity/ecosystem that is supported by educational content, techni-

cal expertise and business resources to encourage, promote and

support innovation.

In an effort to further develop the program, research findings

were evaluated to develop a new Innovate ND strategic plan. Innovate

ND’s new program is now a reality and is intended to capitalize on pre-

vious successes and brand development efforts, and move to the next

level in fostering innovation and accelerating venture

formation/growth in North Dakota.

New Innovate ND FeaturesInnovate ND vouchers – Each participant receives up to $2,500

that can be used to advance their business. The money can be used for

coaching and consulting services at an entrepreneurial center, creating

a business plan or developing a prototype. Additional vouchers are

available to grow with the business.

Educational services: Entrepreneur Boot Camps will be held in

the spring and fall of each year and an online class will be available

when you sign up for Innovate ND. The educational services address

key topics and Innovate ND participants can attend at any stage in

their business development. The educational content is valued at

over $2,200.

Online resources: The newly developed Innovate ND website

will serve as a resource to entrepreneurs looking to start or expand

their business. Visitors will have access to new content and an online

forum to help build their entrepreneurial resources and contacts.

Business competitions: Innovate ND will hold an annual com-

petition in the spring of each year. There will be two categories for par-

ticipants to compete: an Idea competition and a Venture competition.

The Idea competition will provide an opportunity for startups to

compete based on their business ideas. This will also serve as a start-

ing point for Innovate ND participants to gain feedback and serve as

a launch pad to take their ideas to the next level. The Venture compe-

tition is targeted toward businesses that are ready for venture capital

or at an advanced stage. Innovate ND will work with venture capital

and angel investment firms so there may be an opportunity to make a

business deal during the competition.

The new Innovate ND program costs $250 and offers the oppor-

tunity to access up to $2,500 worth of services to help in the develop-

ment of business ideas through access to multiple resources. For more

information visit www.InnovateND.com or one of the following

entrepreneurial centers:

• University of North Dakota Center for Innovation Foundation

- Grand Forks at www.innovators.net

• North Dakota State University Research & Technology Park

- Fargo at www.ndsuresearchpark.com

• I.D.E.A. Center - Bismarck at www.ideacenternd.org

• Strom Center for Entrepreneurship & Innovation - Dickinson

at www.stromcenter.com

• MiSU Severson Entrepreneurship Academy - Minot at

www.minotstateu.edu/business/ent_academy.shtml PB

Jared StoberEntrepreneurship Program Manager

North Dakota Department of [email protected]

Twitter: @InnovateND

“Every successful business beginswith an 'A-ha!' moment (the sparkof an idea) and an 'It' moment(when the business forms intosomething special). For me,

Innovate ND was my 'It' moment.It provided a solid educationalbase, clear mentored guidance

and instilled the confidence in meto allow everything else to unfold.”

-Aaron Lamb, general manager,Lift’n Buddy, A Southworth Co.


northern plains business resource

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Prairie News Industry News & Trends

Fitness program targets mind,body wellness in schools

Patrick Kasper, founder of Fargo-based

Positive Motion: Movement with a Message, an

in-person health fitness, motivational, anti-bully-

ing program, recently launched an interactive ver-

sion of the program aimed at providing daily pro-

gramming for school students.

PositiveMotionTV.net is a collaborative effort

between Kasper and local fitness trainers that will

allow schools to access a variety of programs,

including Morning Motivation, Health Helpers

and Words of Wisdom, in a digital format, reduc-

ing the cost of the program and enabling schools

to streamline the content to meet their needs. The

program fee is currently based upon the number

of students in the school. Through corporate

sponsorships, Kasper hopes to eventually provide

the program at no cost to all K-12 students in

North Dakota. Fargo-based National Hospitality

Services, the Ramada Plaza Fargo, Mezzaluna

restaurant and Forum Communications are

among the program’s initial sponsors.

RDO buys ag irrigation company

RDO Equipment Co. acquired Water Tech

Ag Supply, a California-based company that pro-

vides total agricultural irrigation solutions, on

Nov. 1. The company has multiple locations

throughout California and in Yuma, Ariz. RDO

CEO Christi Offutt says the acquisition was a sig-

nificant strategy move for the implement

provider and will expand the solutions it is able

to offer its customer stakeholders.

Basin Electric signs wind contracts

Basin Electric Power Cooperative has

agreed to purchase wind energy from two new

wind generation developments planned in North

Dakota. Santa Barbara, Calif.-based Infinity

Wind Power is developing the 106-megawatt

Sunflower Wind Project in Morton County and

the 172-megawatt Antelope Hills Wind Project in

Mercer County. Both projects are expected to be

complete in 2015. The total capacity of these

projects — 278 megawatts — will increase Basin

Electric’s total renewable portfolio to more than

1,000 megawatts.

Sioux Falls web developer, adagency announce merger

Sioux Falls, S.D.-based Gage e-Services, a

website development and support company, has

merged with Sioux Falls-based advertising

agency The A Team. The new company is known

as The Gage Team and is co-owned by Matt Gage

of Gage e-Services and Brooke Christensen of

The A Team. Fred Gage will serve as CEO. The

merger will focus on website development and

management as well as full-service advertising

and marketing services.

NDSU, Sanford partner for nursing education

The Sanford College of Nursing board of

directors and the Sanford Health Bismarck board

of directors recently signed a memorandum of

understanding with North Dakota State

University to partner to provide nursing edu-

Connect Minn. releases business tech dataA 2013 business technology survey conducted by Connect Minnesota found that 76 percent of the state’s businesses have access to broadband technol-

ogy. An estimated 35,000 businesses do not have access to broadband technology, compared to 40,000 businesses in 2011. Of the businesses surveyed that do

have broadband access, nearly 40 percent says they earn revenues from online sales, amounting to a combined $38 million in annual revenues. Seven out of

10 businesses surveyed says it is important for new employees to have Internet-related skills, but nearly 40 percent of respondents says they also have a “diffi-

cult” or “very difficult” time finding those skilled employees.


|PRAIRIE NEWS|

cation at Sanford’s nursing college in

Bismarck. The partnership stems from a

Higher Learning Commission decision to

require all colleges to become separately incor-

porated to retain accreditation.

ND Housing Incentive Fundreceives multiple contributions

Bremer Bank contributed $750,000 to the

North Dakota Housing Incentive Fund in

December, targeted toward family-friendly

workforce housing projects in Burlington,

Grafton and Minot, a homeless housing devel-

opment in Bismarck, and a senior apartment

complex in Fargo.

In November, Gate City Bank contributed

$3 million to the fund. The bank provided $1.25

million to HIF in 2012. Combined with this

year’s donation, Gate City Bank is now the largest

overall HIF contributor. This year’s contribution

will be divided between projects in Bismarck,

Devils Lake, Fargo, Hettinger, Jamestown,

Mandan and Minot.

Dickinson, N.D.-based American Bank

Center contributed $220,000 to HIF in

November. The contribution will be divided

among nine affordable housing projects.

American Bank Center has contributed to the

fund four times, totaling $420,000.

Slawson Exploration, a Denver-based pri-

vately held oil and gas exploration company,

contributed $300,000 to HIF in October. The

contribution is targeted to a 40-unit family-

friendly workforce housing development in

Burlington, N.D.

Williston, N.D.-based American State Bank

& Trust Co. contributed $250,000 to the fund,

which will be used for housing projects in

Williston and Watford City. The bank has con-

tributed a total of $375,000 to the fund since 2011.

HIF was established by the 2011 state legis-

lature to encourage the development of afford-

able housing projects. Funds are used to provide

developers with low-cost financing if units are

earmarked for essential service workers and low-

to moderate-income households. In 2013, HIF

was allocated $15.4 million in state funds and

authorized to issue $20 million in state tax cred-

its for private contributions. By early December,

all authorized funding had been committed to a

total of 34 projects.

DFC Consultants names customers of the year

DFC Consultants, a gold-certified

Microsoft partner, has named Bismarck, N.D.-

based Pride Inc. its cloud customer of the year.

Development Homes in Grand Forks, N.D.,

was named the company’s Dynamics customer

of the year. Businesses were selected based on

their use and knowledge of software systems as

well as their success and productivity within

their industries.

Essentia recognized for stroke care

Essentia Health-Fargo recently received an

award from the American Heart Association in

recognition of it meeting eight core stroke meas-

UND alumni center becomes ND’s first LEED Platinum buildingThe U.S. Green Building Council recently awarded LEED (Leadership in Environmental and Energy Design) Platinum certification to the University

of North Dakota Gorecki Alumni Center. Designed by JLG Architects, it is the first Platinum-certified building in North Dakota and the first Platinum

alumni center in the country.

The center reduced energy use by 40 percent compared to similar buildings during its first year of operation, saving more than $38,000 in energy costs.

The building also uses nearly 40 percent less water than traditional buildings of similar size and brings in 25 percent more outside air than comparable

buildings. Waste was reduced by about 98 percent during construction, cutting waste costs in half.

Grand Forks, N.D.-based JLG Architects designed the University of North Dakota Gorecki Alumni Center, whichrecently received LEED Platinum certification from the U.S. Green Building Council. PHOTO: JLG ARCHITECTS


ures. Essentia has also been recognized as a

Primary Stroke Center. The facility expanded its

stroke and neurovascular services in 2012, mak-

ing it the first hospital in North Dakota to offer

24-hour enhanced care for stroke victims.

Lignite Energy Council,Australia group partner

Bismarck, N.D.-based Lignite Energy

Council and Brown Coal Innovation Australia

have partnered to develop and pursue coopera-

tive opportunities associated with lignite coal. As

part of the partnership, representatives from area

lignite facilities will travel to Australia to review

Australian research and development projects

and determine their applicability in North

Dakota. The organizations will also establish a

travel scholarship to support the cost of travel for

researchers working on collaborative projects.

Bismarck State College tooffer entrepreneur classes

Bismarck (N.D.) State College has been

awarded a $15,000 grant from the National

Association for Community College

Entrepreneurship and the Coleman Foundation

to integrate entrepreneurship classes into

requirements for several of its technical pro-

grams, including carpentry, graphic design and

communications, welding and automotive colli-

sion technology. Content will focus on feasibili-

ty, marketing and business plan. The college will

also offer a non-credit class to the public.

Sioux Falls Hilton Garden Inn opens

The Hilton Garden Inn Downtown, a five-

story hotel located in downtown Sioux Falls,

S.D., developed by Sioux Falls-based Hegg Cos.

and Lloyd Cos., has opened for business. The

hotel includes 136 guest rooms, 6,000 feet of

meeting space and a restaurant/bar that features

a video wall and an outside patio with fireplace.

The restaurant will be managed by Sioux Falls-

based Pinnacle Hospitality. Hegg Cos. will man-

age the hotel.

Bell State among best banks to work for in US

Fargo-based Bell State Bank & Trust has

been ranked among the 35 best banks to work for

in the country. The financial institution ranked

fifth among banks with assets under $3 billion on

a list compiled by America Banker Magazine and

Best Companies Group, which based their rank-

ings largely on employee surveys.

Sanford Health announcesworld clinic in China

Sanford Health is collaborating with a

state-owned company in Kunming, China, to

develop a pediatric clinic as part of its world

clinics initiative. The two-story, 18,000 square

foot Sanford World Clinic in Kunming will have

the capacity to hold up to 10 primary care pedi-

atric physicians. State-owned YMCI Calmette

will own the facility and Sanford World Clinic

will manage the day-to-day operations and pro-

vision of medical services. The clinic will also

have connection to Sanford Health in South

Dakota. Zhiguang Guo, a research scientist with

Sanford, previously worked with YMCI

Calmette physicians and made possible the con-

nection between the two entities.

St. Paul-based contractor, engi-neer expands to Fargo area

St. Paul, Minn.-based industrial general

contractor and engineering firm Corval Group

recently opened a location in Hawley, Minn.,

located about 20 minutes east of Fargo-

|PRAIRIE NEWS|

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Member FDIC

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Moorhead. The company said its new location

will allow it to more easily market its capabilities

to an expanding client base in the area, including

oil and gas clients.

California developer relocates to Minot, begins Tioga hotel project

Graham Development Co. recently relocat-

ed its permanent headquarters from California

to Minot, N.D., and has begun construction of

an 89-room Mainstay Suites extended stay hotel

in Tioga, N.D., located in the heart of the Bakken

region. The hotel will be managed by Indiana-

based Dora Hospitality. Graham Development

plans to begin building an identical hotel in

Stanley, N.D., in the spring.

DSU offers MBA in flexible format

Dakota State University has begun offering

a master’s of business administration in a HyFlex

format, allowing students to virtually attend

face-to-face classes at University Center Sioux

Falls. The format was selected to better serve stu-

dents who also work full-time jobs. The HyFlex

format allows students to attend face-to-face

classes if they choose, but will not limit them to

one type of course delivery method throughout

the program.

Delta adds Rapid City-Atlanta route

Rapid City Regional Airport announced

Delta Airlines will add nonstop air service from

Rapid City, S.D., to Atlanta beginning June 7.

Service will run through Aug. 30. Cameron

Humphries, airport executive director, said the

added service will provide a boost for the area’s

tourism industry by allowing more convenient

access for tourists from Europe and elsewhere via

Atlanta, which is the world’s busiest airport.

ND named best-run state two years in a row

An annual survey conducted by 24/7 Wall

St. ranked North Dakota the best-run state for

the second consecutive year. The survey evalu-

ates fiscal management, taxes, exports and GDP

growth by sectors as well as quality of life com-

ponents. Wyoming, Iowa, Nebraska and Utah

filled out the top five slots on the survey.

Minnesota ranked seventh among all states.

South Dakota was ranked ninth.

Sanford, Beacom donate $5million for DSU tech center

T. Denny Sanford and Miles Beacom have

pledged to donate $5 million to Madison, S.D.’s

Dakota State University to turn the Madison

Community Hospital into the Beacom Institute

of Technology building. The facility will include

a secure compartmented information facility

(SCIF), which will allow faculty and students to

perform secure work for the government and

will be one of only 20 such facilities in the nation,

according to the university.

Sanford is the owner and founder of First

Premier Bank and the benefactor of Sanford

Health. Beacom is the President and CEO of

Premier Bankcard and a graduate of DSU. Their

$5 million gift makes them the university’s

largest donors.

Allegiant adds Fargo-Tampa Bay service

Las Vegas-based Allegiant Travel Co. has

added service from Fargo to Tampa Bay, Fla., via

St. Pete-Clearwater International Airport. Flights

are offered twice weekly. The added service

brings the number of Allegiant destinations

from Fargo to five.

|PRAIRIE NEWS|

http://www.prairiebizmag.com

http://www.abbusiness.com


|PRAIRIE PEOPLE|

St. Alexius CEO named ‘leader to know’

Gary Miller, president and CEO for St. Alexius

Medical Center in Bismarck, N.D., has been recog-

nized in Becker’s Hospital Review as one of the 300

Hospital and Health System Leaders to Know.

Leaders named to the list are recognized for show-

ing dedication to health care delivery at local,

regional and national levels.

Miller joined St. Alexius in 1984 as director of

fiscal and information systems. In 1988 he became

chief financial officer. He served as senior vice pres-

ident and chief financial officer before being named

to his current position in 2011. He serves on a num-

ber of boards of directors in the Bismarck area and

is a member of many community organizations.

Engelman named NDGT vicepresident, commercial services

Andrew Engelman has been promoted to vice

president of the commercial services unit at North

Dakota Guaranty and Title Co. in Bismarck, N.D.

His promotion coincides with the launch of the

new commercial services unit, created to address

the growing title needs of the commercial, industri-

al and energy segments of North Dakota’s econo-

my. Engelman joined NDGT in 2009 as a residen-

tial title officer and served most recently as com-

mercial title officer.

Wangler named assistant controller at St. Alexius

Nathan Wangler recently joined St. Alexius

medical center in Bismarck, N.D., as the assistant

controller in fiscal operations. In this role, he will

assist in the completion of the annual budget

preparation, complete quarterly bond disclosure

information and coordinate activities with inde-

pendent auditors in addition to other duties.

Wangler is a certified public accountant and

earned a bachelor’s degree in finance from

Minnesota State University Moorhead. Before join-

ing St. Alexius, he was a financial analyst with the

North Dakota Insurance Department.

Ritz receives Spirit of SiouxFalls award

Larry Ritz, a retired partner at the former

Henry Scholten and Co. accounting firm, was pre-

sented with the 2013 Spirit of Sioux Falls (S.D.)

award during the Sioux Falls Development

Foundation annual meeting on Nov. 21. The award

recognizes leadership excellence and dedication to

the Sioux Falls business community and its eco-

nomic growth.

Ritz is a member and past president of the

South Dakota CPA Society, former president of the

Sioux Falls Chamber of Commerce, and has served

on the board of directors for multiple organiza-

tions, including the Sioux Falls Area Community

Foundation, Junior Achievement, the South

Dakota Airshow and others.

His fundraising efforts have benefited multi-

ple organizations, including the United Way, South

Dakota Achieve, the University of Sioux Falls and

Habitat for Humanity, among others. His commu-

nity leadership has been recognized with honors

from Junior Achievement, the South Dakota CPA

Society, the Cosmopolitan Club of Sioux Falls and

the South Dakota National Guard. He is also a

recipient of the South Dakota Governor’s

Philanthropist of the Year award.

NDSU architecture professor among mostadmired educators

Stephen Wischer, associate professor of archi-

tecture and landscape architecture at North

Dakota State University, has been named by

DesignIntelligence as one of the 30 Most Admired

Educators for 2014. The award honors excellence

in education and education administration.

Honorees are selected by DesignIntelligence staff

with input from thousands of design professionals,

academic department heads and students.

Wischer joined NDSU in 2005. He is a

graduate of the University of Alberta and the

University of Calgary.

Andrew Engelman

Gary Miller

Nathan Wangler

Larry Ritz

Stephen Wischer


|PRAIRIE PEOPLE|

Amy Durbin Janet MindtKim Settel Karin Rudd

Skabo, Kivisto promoted atMDU

Jay Skabo has been appointed vice president

of electric supply at Montana-Dakota Utilities Co.

Nicole Kivisto has been appointed vice president

of operations.

Skabo served most recently as vice president

of operations, a position he has held since 2008.

He joined the company in 2003 as an environmen-

tal manager. He will replace Andrea Stomberg,

who will retire Jan. 3 after working 23 years with

the company.

Kivisto served most recently as vice presi-

dent, controller and chief accounting officer, a

position she has held since 2010. She joined the

company in 1995.

Gate City Bank hires 2, promotes 2Gate City Bank has hired Amy Durbin as the marketing manager for its headquarters in down-

town Fargo. A native of West Fargo, Durbin received an accounting degree from Minnesota State

Community and Technical College in Moorhead, Minn. She has 15 years of marketing experience.

Kim Settel has been hired as the personal lending assistant manager for the bank’s downtown

Fargo headquarters. Settel is a native of Sabin, Minn., and earned a degree in mass communications

from Minnesota State University Moorhead.

Karin Rudd has been promoted to assistant to the chairman/president. A native of Fargo, she

earned a degree in English writing from Concordia College in Moorhead, Minn. She has worked at

Gate City Bank since 2007.

Janet Mindt has been promoted to senior customer service and sales supervisor of the bank’s

Veterans Boulevard location in West Fargo, which will open in 2014. Mindt joined the bank as a

teller in 2004 and has since served in a variety of positions, most recently as personal banking super-

visor at the bank’s Hornbacher’s at Village West office.

Jay Skabo Curt Zaske

Nicole Kivisto

Wells Fargo names new business banking managers,Sioux Falls market president

Curt Zaske has been named business bank-

ing manager and market president for Wells Fargo

in Sioux Falls, S.D. Amange Aware has been pro-

moted to business banking manager.

Zaske joined Wells Fargo in 1977. Since 2006,

he has served as a business banking manager for

parts of Sioux Falls and Worthington, Minn.

Aware joined Wells Fargo in 2002. He served

most recently as a relationship manager for the

business banking team.

Amange Aware


|BUSINESS DEVELOPMENT|

The leadership of OTA-Pollen doesn’t just want to connect

business people. They want people throughout the Dakotas

and Minnesota to collide in a petri dish of thought and

inspiration, only to come out on the other side with totally new ideas

and connections that might otherwise have been improbable, if not

totally impossible.

In other words, the newly formed organization focuses on net-

work building, not to be mistaken for networking, which OTA-Pollen

CEO Hugh Weber views as “just an excuse to hand out business cards

and have an adult beverage.” The group wants to connect the previous-

ly disconnected business communities of their respective geographical

Connecting the disconnectedNonprofits OTA, Pollen merge to foster network building between Twin Cities, northern Plains communitiesBY KRIS BEVILL

Network building group OTA-Pollenemploys a shared leadership model.From left, Meghan Murphy, creativeexecutive director; Jamie Millard,executive director, and Hugh Weber,CEO. PHOTO: ABBY BISCHOFF


|BUSINESS DEVELOPMENT|

focuses — the Dakotas and western Minnesota, and the Twin

Cities metro — through a unique online and in-person presence.

The effort is already under way at OTA-Pollen.org and will soon

be materialized in person as representatives of the organization

visit communities and thought leaders across all three states as

part of its “We Must Be Bold” tour. Following that, the first group

event will be held in April in Sioux Falls and is expected to draw

1,000 people from all sectors of business throughout the region.

“We feel our charge is to help create connections across the hubs

of leadership, whether they’re geographic or sector based, both

in-person and online,” Weber says. “We will have failed if we

don’t draw a diverse audience with those diverse backgrounds.”

Sharing StrengthsOTA, which stands for the shared last three letters of

“Dakota” and “Minnesota,” was formed about five years ago by

Weber to connect the widespread and sparse community and

business leaders of South Dakota, North Dakota and greater

Minnesota. The organization hosts events that typically feature

nontraditional speakers and single-track programs so that each

attendee has the same experience and is encouraged to interact

with people who may not typically reside in the same network

channel, but who may produce an unexpected lead or profes-

sional relationship. By connecting people in this way, Weber says

he has seen new businesses formed, pro bono support converted

to direct business results, and long-term relationships launched.

The effectiveness of OTA’s style of events garnered the group a

$1.5 million Bush Foundation grant earlier this year to further

develop its platform. But while OTA’s physical network was suc-

cessful and had potential for expansion, the group lacked a digi-

tal presence and desired to grow that networking aspect in a

meaningful way.

Enter Pollen. The Twin Cities-based digital networking

community was formed several years ago by Lars Leafblad in

response to the recession taking a toll on job numbers and a feel-

ing of isolation among job seekers. The group began by produc-

ing a digital newsletter featuring job postings, but soon expand-

ed as self-proclaimed group members, dubbed Pollenites, started

submitting recognition requests for newly employed members,

board of director openings and other items. About two years ago,

Jamie Millard and Meghan Murphy, co-founders of literary arts

magazine Paper Darts, joined Pollen to expand its digital pres-

ence to include storytelling about its members. Pollen now

boasts about 7,500 members, primarily in the Twin Cities metro,

many of whom work at the CEO/executive level of their profes-

sion. About 65 percent of the group’s members work in the pri-

vate sector, but there is a strong representation of nonprofits and

the creative arts community as well.

Like OTA, Pollen received a $1.5 million Bush Foundation

grant earlier this year. Opposite of OTA, Pollen exists only in the

digital sphere. However, the group has long craved a physical

presence to connect its members face-to-face, according to

Murphy, who now serves as creative executive director of OTA-

Pollen. Therefore, to achieve each group’s desire to expand into

previously unknown territory, they recently decided to merge

and share their grant money in order to begin developing a com-

plete connectivity package for thought leaders and business

community members throughout the entire three-state region.

OTA-Pollen will utilize the digital platform expertise of

Pollen with the in-person event expertise of OTA to encourage a

more effective, cohesive regional business atmosphere. The

group's inaugural tour of the region over the next two months is

focused on visiting communities and community members who

embody the group’s “We Must Be Bold” ethos. The group began

soliciting nominations for community members who fit the

mantra in December and planned to identify communities of

interest through that process. “We’re really hoping for a self-iden-

tification towards the ethos to shape where those spotlights are

coming from,” Millard, executive director of OTA-Pollen, says.

People who exemplify the ethos could work in any industry or

creative field, but should have some type of impact at a national

level, she says. “Not necessarily boldness for the region, but

something that elevates them to a level that is exciting for the

country.”

At the core of OTA-Pollen is a shared desire to encourage

collaboration between business and civic-minded communities

in the Dakotas and greater Minnesota with the Twin Cities

metro. “Pollen is an organic, very trusted [organization],” Millard

says. “If you’re going to try to break down some of those barriers

in the Twin Cities, a partnership with an organization like Pollen

is a way to do that organically.”

Weber says the group will make it “as easy as possible” for

Twin Cities Pollenites to attend OTA-Pollen events in Sioux Falls,

Fargo and elsewhere around the region. “We’re going to do

everything we can to make sure that they know the value of

what’s happening in this direction and that they are a part of the

community,” he says. “That’s where the partnership and merger

with Pollen is so significant is that it allows us an opportunity to

make clear our commitment to the metro, but also the metro’s

commitment to the rest of the region.” PB

Kris Bevill

Editor, Prairie Business

701-306-8561, [email protected]


|MANUFACTURING|

Taking welding training where it’s neededM State’s mobile welding trailer offers on-site training for students, employeesBY KRIS BEVILL

Good welders are hard to find and becoming even harder to find. Working welders are

often recruited elsewhere and many are nearing retirement age. In western

Minnesota, a lack of training facilities has further impacted the region’s welder short-

age in recent years. A mobile welding training facility operated by Minnesota State

Community and Technical College serves as a sign of change for the region and is expected to

help alleviate at least some of the labor issues for area manufacturers.

G.L. Tucker, dean of custom training and business and entrepreneurial services at M State,

says that while the college offered welding at one time, the program was discontinued several years

ago. However, as manufacturers have ramped up operations post-recession, M State recognized

the need to provide welding training, not only for students but potentially for working welders as

well, and made the decision to invest more than $200,000 in a mobile training unit. “There’s a great

need for welding training,” he says. “We felt like this was a good way to give us the flexibility to

serve not only one campus or community, but the whole area.”

The 53-foot trailer houses 12 training stations equipped to provide a range of training,

including gas metal arc welding (MIG), gas tungsten arc welding (TIG) and stick welding, and the

training can be customized to fit the client’s needs. “We can work with anybody,” Tucker says,

adding that for businesses in need of employee training, the mobile unit offers the convenience of

on-site training and is a less-expensive alternative to classroom training.

The trailer has been in steady use since hitting the road last May, primarily for training pro-

grams offered in collaboration with Rural Minnesota CEP and Northwest Private Industry

Minnesota State Community andTechnical College’s mobile unitallows businesses to provide on-sitewelding training for current and newemployees. PHOTO: MINNESOTASTATE COMMUNITY AND TECHNICALCOLLEGE


|MANUFACTURING|Council. Funding for training programs held in Little Falls, Detroit Lakes

and Fosston, Minn., was provided through the Minnesota Job Skills

Partnership Low Income Worker Grant and enabled more than two dozen

previously unskilled workers to become certified welders through a 160-

hour mobile trailer training course. The vast majority of course participants

were employed in the area within about a month of receiving their certifi-

cation and some had job offers even before completing their training,

according to CEP spokespeople.

Brian Gapinski, team leader for RMCEP in Little Falls, says the train-

ing course held there in late summer filled up within four days of announc-

ing its availability and about 15 people are awaiting a chance to participate

in a future training course. In Detroit Lakes, most of the program partici-

pants were hired at area businesses, including various dock and lift busi-

nesses as well as traditional manufacturing facilities. “There’s a lot of indus-

try in a 50-mile radius that requires welding,” says Kelley Nowell, RMCEP’s

Detroit Lakes team leader.

Tucker says the college anticipates demand for new welders in the

region to remain strong for the foreseeable future. Beginning this month,

the trailer will be located at M State’s Moorhead, Minn., campus and will

offer a 120-hour noncredit training class to cover the basics of welding for

interested parties. The college is also considering adding an on-campus pro-

gram and will continue to market customized training through the mobile

unit to area businesses. PB

Kris Bevill



http://www.forumprinting.com

http://www.ulteig.com


|LEADERSHIP|

Passing the TorchTransition to new management team just one part of Eide Bailly's longevity, expansion planBY KRIS BEVILL F

or some business leaders, knowing when to step aside is the

most difficult decision of their career. Some wait too long, and

their companies suffer for it. Others fail to put a succession

plan in place and end up ready to retire with an inadequate pipeline

of new management replacements. For Jerry Topp, retiring from his

role as CEO of firm Eide Bailly after a decade at the helm of the

regional accounting firm was a strategic move designed to avoid

either of those missteps for the betterment of the company. Yes, age

and a desire to slow down a bit were also factors in his decision to

retire, he says. But more importantly was the need to ensure that the

firm would have leadership with the energy and training to continue

its recent impressive growth plan into the future. For those reasons,

Topp decided last year to step down from CEO and begin transition-

Dave Stende has been transitioning into the role ofCEO/managing partner at regional accounting firmEide Bailly since May. The former chief operatingofficer replaces Jerry Topp, who is retiring. PHOTO:JUSTIN EILER, EIDE BAILLY


|LEADERSHIP|

ing out of the firm as a new management team, led by Dave

Stende, takes the reins.

“It seemed prudent to do that earlier than later and hope

for a good transition in the firm,” he says. “I know the firm is

better off with the decision I made.”

Topp, who now serves as chief executive partner, began

serving as CEO/managing partner of Eide Bailly in 2003. He

has since led the firm through an impressive period of expan-

sion, tripling the firm’s size over the course of 10 years, from

nine offices, about 650 employees and $54 million in net fees to

22 offices, more than 1,200 employees and net fees of $171 mil-

lion in 2013.

While the firm had a history of growth since its formation

in 1998 as a merger between Fargo-based Eide Helmeke & Co.,

and Charles Bailly & Co., Topp says industry changes spurred

the firm’s most aggressive growth plan in the early 2000s.

The infamous Enron scandal in 2001 had resulted in the

dissolution of Arthur Anderson, one of the world’s largest audit

and accountancy partnerships, leaving its clients in need of new

audit firms. Meanwhile the accounting industry was also begin-

ning to experience consolidation. “In the profession there was a

move to try to get these bigger clients that were falling through

the cracks from the bigger firms because everybody was mov-

ing upstream with the size of the clients,” Topp says. “Our firm

made the conscious decision that we were either going to play

in this market or wait for five or six years and all this activity

would go by us and we’d look back and say we should have

taken advantage of that.”

The firm chose to play, and began acquiring other firms

in the Midwest and Mountain regions of the country, grow-

ing at a rate of about 10 percent each year. It also began

adding specialty services to compete with other firms’

expanded service offerings.

By the time the global recession took hold, Eide Bailly had

grown substantially and was operating successfully, but it was

not entirely immune to the economic downturn. Growth

slowed at the firm during that time, down to between 3 and 5

percent, as acquisitions and the roll-out of additional service

offerings were put on hold, to the dismay of some of the firm’s

partners, but unlike many other businesses around the world,

the firm was able to continue to operate profitably, thanks in

part to Stende, who served as chief operating officer from 2006

until his appointment to CEO/managing partner last May.

Topp credits Stende and the rest of the firm’s management

team for their careful management of staff and costs during

that time, allowing the firm to successfully navigate through

the recession.

With the recession now in the rear view and the transi-

tion from COO to CEO going smoothly, Stende plans to con-

tinue building on the firm’s tradition of growth. “Our five-year

vision is to continue growing in the region west of the

Mississippi, specifically in the Great Plains and inter-Mountain

states,” he says.

In fact, the firm’s five-year plan anticipates Eide Bailly

doubling in size. Half of that growth is expected to stem from

acquisitions of firms in the desired region, with an immediate

emphasis on growing its presence in Nebraska, Kansas and

Iowa, Stende says. Topp will make use of his industry contacts

to aid in this goal over the next two years, concentrating his

remaining time at the firm on relationship building and merg-

ers and acquisitions. The firm also operates a group of non-

competing CPA firms called Practicewise, and Topp will con-

tinue to provide leadership for this group as well as provide

leadership training within Eide Bailly for the short term.

One of the firm’s most recent acquisitions speaks to the

increasing emphasis on technology in the accounting industry.

Denver-based Next Business Systems recently joined Eide Bailly

to boost the firm’s ability to provide business management

through cloud computing. Owners of Next Business Systems

train end-users and Eide Bailly staff on NetSuite Inc. and help

the firm consult, promote and implement the web-based busi-

After serving as CEO/managing partner at Eide Bailly for a decadeand overseeing an aggressive expansion plan that tripled the firm’ssize, Jerry Topp is transitioning into retirement. As part of the transi-tion, he will remain on staff for several years to focus on continuingthe firm’s external growth. PHOTO: JUSTIN EILER, EIDE BAILLY


|LEADERSHIP|

ness software. Stende says technology has been one of the

two biggest changes to the accounting industry that he’s wit-

nessed in his 32 years with the firm. Not only has technolo-

gy drastically changed the way Eide Bailly delivers its servic-

es, but the cost associated with implementing technological

changes has also altered the industry in that it is not as eco-

nomically feasible for new accountants to launch firms as it

was a few decades ago, he says. “It’s no longer easy to hang

out a shingle and start a practice, which creates the oppor-

tunity for more industry consolidation,” he adds.

The other half of the firm’s growth over the next five

years is expected to be achieved internally through addition-

al specialty services, an increase which represents a signifi-

cant shift in the firm’s focus.

In 2013, specialty services accounted for only about 20

percent of the firm’s total revenues. The vast majority of rev-

enues continued to be earned through traditional tax,

accounting and auditing services. Within the next five years,

however, Stende expects Eide Bailly’s revenues from special-

ty services to double. Areas expected to experience the most

growth include technology consulting, international tax

activity and estate planning. “Deep niche” tax consulting

services for states and municipalities have also grown in

demand recently as a result of the recession and will contin-

ue to grow, Stende says. “They’ve become much more

aggressive on pursuing companies to make sure they get

their fair share of sales tax, income tax, use tax, that sort of

thing,” he says. “We have a group where that’s all they deal

with is state and local tax issues and the enhanced enforce-

ment that we’re seeing at state levels.”

Increased regulations in the banking and health care

industries will also require specialized services, and Eide

Bailly expects to provide the expertise its clients need.

“There has been an explosion of regulations coming from

the government and put onto our clients; we are helping our

clients through all those issues and, therefore, it is a huge

growth area,” Stende says.

Changing health care regulations as a result of the

Affordable Care Act has represented an area of significant

opportunity for the firm. The firm created an analytic tool

for its clients to evaluate differences between providing care

for employees or sending them to an exchange and on Dec.

10, the firm announced the launch of a private insurance

exchange system known as Eide Bailly Private Exchange.

The system is geared toward businesses that no longer qual-

ify or can’t afford group health plans, offering them the

opportunity to contribute a fixed dollar amount for

employees’ personal health insurance rather than pay tradi-

tional premiums.

“Cost and regulations are making group health insur-

ance plans less and less viable,” says Linda Heuer, principal

of Eide Bailly Employee Benefits. “This approach allows

even the smallest of businesses to offer their employees qual-

ity health-related benefits, while maximizing the IRS-

approved tax savings for both the employer and employees.”

As the firm’s size continues to grow so will its number

of employees. Stende says additional employees will be

added at the firm’s Fargo headquarters over the next few

years, although most new staff members will join the firm

through its acquisitions. And while growth through acquisi-

tions can sometimes cause challenges in terms of employee

management, Stende and Topp say many of the firms

acquired by Eide Bailly have had long-standing relationships

with the firm and are easily “tucked in” with existing Eide

Bailly offices. The firm has also fostered a strong culture that

emphasizes work-life balance and professional growth

which has helped to attract and retain quality employees

and firms that blend well with the existing staff. “Eide Bailly

is very proud of the culture we’ve created over the past 15-

year period and most of these firms are looking to aspire to

our culture, not pull us toward what they may have had

prior to that time,” Topp says. “The firms that we have

expanded into know that we take the culture pretty serious-

ly. We walked away from a huge deal in the past two years

largely because we didn’t believe it was going to be a culture

fit, so we’ve been pretty serious about that.”

As any good manager knows, positive culture starts

with management. Topp and Stende convey that through a

commitment toward bettering the firm which stems from a

true love for the company and career. Both men say the

highlights of their careers have been receiving the opportu-

nity to lead the firm. For Topp, the opportunity resulted in

a successful run that he will now be able to look back upon

with pride. Stende’s run as CEO may have just started, but it

signifies the height of success after a long career which began

as a job at an accounting firm and soon became something

more. “When I started here in 1981, interest rates were 20-

some percent, the job market was terrible, I was just happy

to get a job and was just going to do the public accounting

thing for a few years,” he says. “But I’ve loved every day I’ve

worked here.” PBKris Bevill

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Beating the HeatMultiple solutions expected to reduce Bakken flaring and utilize the region’s natural gasBY KRIS BEVILL

Flaring of natural gas in the Bakken continues to hover at around 30 percent while producers and researchers explore a variety of potential utilization methods. PHOTO: US DOE ENERGY AND ENVIRONMENTAL RESEARCH CENTER

|FLARING|


|FLARING|

No one wants to set $1 billion on fire and watch

it disappear into the atmosphere in a fantastic

display of flames. And yet that is precisely what

has been happening in the Bakken region as the rate of

natural gas flaring continues to outpace the infrastruc-

ture and technology needed to harness its potential as

an economic resource.

A study released in July by nonprofit research firm

Ceres concluded that flaring at Bakken oil wells in 2012

resulted in the loss of approximately $1 billion in fuel.

Further, the study determined the flaring of that gas added

4.5 million metric tons of carbon dioxide to the atmos-

phere, which is the equivalent of adding 1 million cars to

the road.

Monthly statistics released from the North Dakota

Department of Mineral Resources have shown the per-

centage of natural gas flared from Bakken wells hovering

at around 30 percent since reaching a historical high of 36

percent in 2011. Efforts have been under way to reduce

that percentage, but Ceres researchers cautioned that

while the percentage of gas flared may be reduced as new

infrastructure comes online and utilitization technologies

are introduced, the overall amount of gas flared in the

Bakken will continue to increase as the gas-to-oil ratio

increases at aging wells.

“Some individual companies have shown leadership

in curbing flaring, legislators have introduced incentives to

limit flaring and several billion dollars have already been

invested in additional gas pipeline and processing infra-

structure. In addition, the state has set a goal to limit flar-

ing to no more than 10 percent of produced gas,” Ceres

report authors Ryan Salmon and Andrew Logan said in

the study. “However, Ceres’ analysis of North Dakota oil

and gas production data indicates that absolute volumes

of flared gas have more than doubled between May 2011

and May 2013. … even if the state’s goal of 10 percent flar-

ing were achieved, total volumes of flared gas in 2020

would still exceed the amount flared in 2010. These find-

ings underscore the importance of solving the problem of

flaring in order to limit both environmental impacts and

economic waste.”

Flaring FactorsCurrently, North Dakota law allows producers to

flare natural gas for the first year of the well’s production

in order to give the producer time to collect data and

determine the gas-gathering requirements for the well site.

After 12 months, the producer must cap the well, connect

to a gas gathering system or deploy a gas utilization

process in order to avoid financial penalties. Producers

may also request an extension to the well’s flaring

allowance if they can demonstrate that connecting gather-

ing infrastructure to the well site or deploying an on-site

utilization technology such as a bi-fuel electrical generator

is uneconomical. Because of the high cost of installing

pipelines to the Bakken’s remote well sites, the vast major-

ity of extension requests are granted. In fact, according to

the Ceres study, the North Dakota Industrial Commission

approved 95 percent of the extensions requested between

2011 and 2013.

In addition to the expense associated with installing

gas gathering infrastructure is a short but complex list of

other factors contributing to the Bakken’s flaring problem.

A North Dakota Petroleum Council task force on flaring

cites several key factors that it says are making widespread

collection of Bakken gas difficult. Factors hindering wide-

spread utilization include the chemical make-up of the

gas, the time required to build out gathering and process-

ing capacity, and the harsh climate and widespread geog-

raphy of the Bakken region, according to the group. And,

ironically, while technology is what has made the Bakken

boom possible in the first place, technological advances

are also outpacing infrastructure capacity, so even some

well sites that are connected to gathering infrastructure are

flaring because the infrastructure wasn’t built large

enough to handle the well’s actual output. Flaring on trib-

al lands presents another unique hurdle to overcome,

according to the task force.

Ron Ness, president of the NDPC, says the task force

was created in September at the direction of the group’s

board of directors and urging by Gov. Jack Dalrymple and

the Industrial Commission to bring together various par-

ties involved with the production, capture and processing

of natural gas. The goal of the task force is to address the

situation and improve the Bakken’s overall flaring rate.

“Individually, companies feel like they’re doing well at

addressing it, but holistically the number is likely too

large,” Ness says. By bringing involved parties together on

a regular basis to discuss the challenges and potential

remedies, the group hopes to more quickly identify solu-

tions to Bakken flaring. The 35-member group met 15

times between September and early December to discuss

potential technological solutions, according to Ness. The

task force plans to present its recommendations to the

Industrial Commission this month. (A value-added study

being commissioned by the Empower Commission will

also be complete this month and should provide further

information related to potential uses for Bakken gas.)

Ness says the natural gas task force represents the

first time he’s seen such a concentrated focus by the

industry to address a specific issue and is unique in

that companies which historically have kept their best

practices tightly held for competitive and anti-trust

reasons are now coming together with the intent of


transparency regarding flaring mitigation tactics.

The industry's new effort at transparency is largely because the

Bakken’s natural gas is a one-of-a-kind challenge. “Bakken gas is a

unique gas that’s really unlike other gases anywhere in the world, so the

types of equipment, the processes you can utilize to remotely capture

that gas, the things that work all vary here in the Williston Basin versus

what they see across the country and the rest of the world,” he says.

One of the things that make the Bakken’s gas so unique is its liq-

uids content. Liquids such as propane, ethane and butane that can be

extracted from the gas have more value than the gas itself, so the

Bakken’s liquid-rich gas is a boon in that sense. However, the tech-

nologies required to separate the liquids from the gas are quite cost-

ly and don’t economically scale down to well-site size. Therein lies

just one of the struggles associated with making Bakken gas capture

an economical process.

Utilization EffortsThere are “an amazing set of great minds” from around the

world working on the entire utilization issue, Ness says, but the

stand-outs so far appear to be the North Dakota-developed solu-

tions, which he believes is because they have a better understanding

of the region’s weather extremes and other unique considerations.

At the U.S. DOE Energy & Environmental Research Center

(EERC) in Grand Forks, N.D., researchers have been exploring

Bakken-specific gas utilization technologies for several years already.

This summer, the center launched a more concerted effort to address

the issue via the Bakken Production Optimization Program. The

program is a joint venture between the EERC, the NDIC and several

of the Bakken’s major producers. It seeks to evaluate the issue using a

systems engineering approach in order to develop solutions that ade-

quately address the overall challenge, according to John Harju, asso-

ciate director for research. To accomplish this, the center is commu-

nicating directly with producers to learn what their needs are and

what types of solutions they would like to see developed. Results

from the request for information are expected to be rolled out in con-

junction with the task force’s report.

Harju says that by “drawing a box around the challenge instead

of the technology,” as the EERC seeks to do, the odds of developing

economical solutions are improved. “I think this is what has frus-

trated technology providers over the long haul is that they believe

they have some solution and they don’t really evaluate the solution

in terms that their customer evaluates it,” he says. “Part of this is

technology and the capital side of things, but another part is the

business model.”

For example, he says, a technology that utilizes well gas might

address the producer’s desire to reduce flaring, but if the technolo-

gy costs $3 million to install at a well that produces a few thousand

dollars worth of gas each day, the producer may never break even

on the investment.

Harju firmly believes there is not one solution to the Bakken’s

flaring problem, but that several gas utilization solutions will be

required to effectively address the challenge, including non-techno-

logical solutions such as innovative leasing or service offerings from

technology providers that will reduce costs for producers. Harju

believes the EERC’s research program will help to shed light on the

various types of solutions that can be put to use. “I think we’ll begin

to elucidate some of these variables that I don’t think have been thor-

oughly investigated from a systems engineering perspective,” he says.

On the logistical side of the issue, the task force intends to con-

tinue working to address the need for new gas gathering lines and the

expansion of existing gathering systems to handle production capac-

ity. To accomplish that goal, the task force must also address

landowner fatigue and the increasingly significant issue of right-of-

way and easement approval. The task force has also set its sights on

coordinating with the various entities involved in approving right-of-

way needs on the Fort Berthold reservation, where the rate of flaring

is currently double that of elsewhere in the Bakken.

Long-Term PotentialLong-term utilization plans primarily center on the widespread

installation of gathering and processing infrastructure, but it will be

some time before that infrastructure is in place. Oklahoma-based

ONEOK Partners has invested billions toward this effort, most

recently announcing plans to build its sixth and largest Bakken nat-

ural gas processing plant in McKenzie County, increasing the compa-

ny’s natural gas processing capacity to about 800 million cubic feet

per day. But it will be more than a year before that plant, along with

other infrastructure expansions planned for the region, will be com-

plete. Other large projects such as the proposed fertilizer plants near

Jamestown and Grand Forks, N.D., offer additional significant long-

term uses for the fuel, which Ness says encourages natural gas pro-

ducers to continue building infrastructure and processing plants.

Harju and Ness both expect significant headway to be made

toward utilizing Bakken gas this year. Harju predicts a combination

of various well-site and multiwell pad technologies will begin to

reduce flaring and will be aided by the creation of a regional market

for the product. “There won’t be one solution, there will be a tool crib

of solutions and there’s going to be a multitude of them,” he says.

Ness also says that the more the state and region can utilize

Bakken gas, the better the market will be and the greater the chances

that flaring will be more quickly reduced. “It’s a remarkable resource

and it’s going to have a substantial impact on North Dakota’s energy

future,” he says. “Yes, it’s frustrating that it’s flared right now, but at

the end of the day when we end up with a couple of billion-dollar fer-

tilizer plants and some of these other projects that we’re beginning to

hear about across North Dakota, it’s going to be a huge economic

driver in our state.” PB

Kris Bevill



|FLARING|


EXCUSEOUR MESS

PROGRESS

Will!stonwww.willistonlife.com

Progress happens here!


|RESEARCH| DIGITAL EDITION ONLY

Businesses use benchmarking to improve performance

by identifying and applying best demonstrated prac-

tices. Communities can do the same thing. By analyz-

ing the successes, failures and lessons learned by other ener-

gy-impacted communities, perhaps western North Dakota

can more effectively and successfully navigate the challenges

and opportunities it faces today as well as those it will

undoubtedly face in the future.

The Western North Dakota Energy Project's Boomtown

Series is a webinar series that focuses on answering questions

and offering solutions.

The series is hosted by the Strom Center for

Entrepreneurship & Innovation at Dickinson State University;

project partners include DLN Consulting Inc. and the Center

for Rural Entrepreneurship. The series is made possible with

financial support from the Bush Foundation.

Don Macke, the Center for Rural Entrepreneurship’s

director of entrepreneurial communities, notes that he began

working with western North Dakota when he was asked over a

decade ago to research and speak on the challenging issue of

depopulation of western North Dakota at Dickinson State

University’s Population Summit. Today, western North Dakota

has changed in a way that very few people could have expected,

creating immense challenges and immense opportunities for

the region.

The project’s goal is to bring information to leaders in the

impacted communities by looking at benchmark regions both

nationally and globally that have dealt with similar situations in

a positive way. Macke calls these “solution models” — models

that can provide insight into short-term management and

ensuring long-term prosperity.

The first step in developing the webinar series was to

undertake research to locate areas that had experiences with

boom cycles. The next step was to decide how to make these

solution models widely accessible. Webinar technology was

selected as the communication method.

The webinars, all available electronically to anyone inter-

ested in bettering their communities, address topics such as

other areas’ experiences in energy policy, taxation and position-

ing for long-term development. For example, the Marcellus

Shale development in Pennsylvania and the Pennsylvania legis-

lature’s experience in creating policies and programs via state

government are offered as insight. The Sublette County

Wyoming Case is discussed as an example of the Boomtown

Syndrome by a Cornell University faculty member who has

intensively studied the boomtown literature. The Iron Range

Resources and Rehabilitation Board experience is shared by that

program’s director. More discussion on the IRRRB model and

how it might be adapted into western North Dakota is featured

on the just-released webinar, “Western North Dakota Regional

Legacy Trust.”

The project is open to public feedback. Comments are

sought on what type of information or research local, state and

national leaders feel is essential as western North Dakota

moves through what researcher Jeffrey Jacquet calls the

Boomtown Process.

The boomtown processThe team believes that western North Dakota is currently

moving from “crisis” to the “adaptation” phase. Crisis is the

phase in which the boomtown struggles to catch up in areas

where it is overwhelmed. Adaptation is catching up and even

getting ahead of the development.

One of the areas the team is particularly interested is in

post-boom prosperity issues. The “crowding out effect” means

that the total focus on energy can begin to divert attention away

from other things the region needs to ensure its long-term pros-

perity. The region, according to Macke, wants to avoid a post-

boom economy that is weaker than it was prior to the boom.

Debora DragsethProfessor of Business

Dickinson State [email protected]

Benchmarking boomtowns Strom Center webinar series evaluates similar boom cycles toprovide insight into western North Dakota’s future BY DEBORA DRAGSETH

001012395r1

order States has provided inno-vative products and supply chain

solutions for the construction, in-dustrial and utility markets for more than 60 years. Throughout the U.S., our 1,600 employee-owners proudly serve our customers with industry and product knowledge, making us a powerful supply chain partner.

Through the ups and downs in the Bakken oilfi eld of North Dakota, we have built solid relationships with longstanding customers by providing the materials and technical expertise needed to keep their electrical and automation systems up and run-ning. We offer products and services for industrial automation; industrial maintenance, repair and operation (MRO); electric and natural gas utility; electrical construction; data communications; and plumbing.

Our services are tailored to meet our customers’ needs. When faced with limited manpower and getting material on site, we provide job site trailers to ensure our customers have the material when and where they need it. Job site trailers keep material secure and protected from the weather. And, by ensuring crews have the material they need at the job site helps our customers increase productivity and reduce labor costs.

When one of our customers needed a security solution to provide Internet and telephone connectivity into a drilling site, we developed a solu-tion that provided both voice and

high-speed Internet wirelessly from the customer’s closest existing telephone cable. An especially unique part of this solution is that all of the equipment is powered remotely via the existing telephone cable. Even with the hills and rough terrain of the Bakken oilfi eld, we managed to create a workable and re-deployable solution.

But, it’s not just about being a great supplier—we are also a good neighbor. When the Red Cross was looking for help when they needed to purchase a critically needed vehicle, trailer and fi rst aid supplies for Western North Dakota, they came to us. Working with our key customers in the area we responded by raising enough to purchase a vehicle, trailer and supplies.

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customers and expand our ability to serve them, we built new facilities in Dickinson, Minot and Williston, North Dakota; and Midland and Lub-bock, Texas; and added new locations in Duluth, Minnesota; and Greeley, Colorado. Most recently we expanded into Utah with the purchase of Elec-trical Wholesale Supply of Utah.

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customers and expand our ability toserve them, we built new facilities in Dickinson, Minot and Williston, North Dakota; and Midland and Lubbock, Texas; and added new locationin Duluth, Minnesota; and Greeley, Colorado. Most recently we expandeinto Utah with the purchase of Elec-trical Wholesale Supply of Utah.

We look forward to continued mutual growth and success. With unmatched local sales, inventory, and service to our customers, we wibe there with the tools, technology and know-how to help our custom-ers successfully meet their business goals.


|TALK OF THE TOWN|

An aerial view of the WillistonArea Recreational Center, center,and Williston State College.PHOTO: VERN WHITTEN PHOTOGRAPHY

For several years now, overwhelming growth

related to the Bakken oil boom has pushed

Williston, N.D.’s infrastructure and amenities to

its breaking point. But in 2013, the community began

to see a light at the end of the tunnel. Shawn Wenko,

assistant director of Williston Economic

Development, says development has begun to catch up

with demand in the oil hub and the town has moved

“from a boom to a business model.”

That’s not to say business activity or interest in new

ventures has slowed. The Williston Economic

Development office logged more than 1,500 developer

contacts in 2013, including in-person inquiries, phone

calls and emails. And the business climate continues to

be the envy of the nation. “I would say it’s almost

extraordinary,” Wenko says.

The oil and gas industry grew by 10 percent or

more in 2012-’ 13, but other industries logged even larg-

er growth numbers, which Wenko says is an indicator

that Williston is settling in for long-term growth. He sees

it as part of a succession plan of growth to saturation

which began several years ago with crew camp housing,

followed by hotels, then apartments and other housing

and, finally, supporting service industries. In the last

three years, 1,600 hotel rooms have been added to

Williston and a record number of apartment units are

coming online. Wenko dubbed 2013 as “the year of the

restaurant.” Thirteen restaurants opened in Williston in

the past year, including national chain restaurants and

individual eateries such as Williston Brewing Co., which

plans to model a national franchise on its flagship loca-

tion in Williston.

Wenko believes this year will be the year of retail.

“We should see some big announcements in 2014 for

retail and that’s going to be exciting because it’s what the

people of Williston have wanted for a long time and

they’ve been very patient,” he says.

Other quality of life improvements are on tap for

Williston in the coming year, including the opening of

the Williston Area Recreational Center in March. The

impressively sized $70 million facility, designed by JLG

Architects, will feature a water park, tennis courts, bas-

ketball courts and an elevated walking track among

other amenities. When finished, it will be the largest

facility of its kind in North Dakota.

The economic development office and community

leaders are also focusing more intently on combating

some of the negative perceptions regarding the commu-

nity. Not all issues can be immediately remedied, howev-

er. One of the biggest challenges facing developers in and

around Williston is what Wenko calls the “area energy

inflation factor.” Land prices and goods and services gen-

erally cost 10 to 15 percent more in that area compared

to elsewhere in the region, and labor shortages are an

ongoing concern.

Other issues, such as crime rates and housing, are

From boom to businessWilliston development begins to catch up with breakneck growthBY KRIS BEVILL


|TALK OF THE TOWN|often exaggerated through misinformation,

according to Katie Long, communications

director of Williston Economic Development.

In an effort to alleviate misconceptions about

the town, Long is spearheading an initiative

known as “The Real Williston” which will focus

on providing in-depth information on 10 major

issues in Williston. The initiative will cover each

topic in three parts, providing details on the

past, present and potential outcome of each

issue. Issues to be covered include housing,

crime rates, infrastructure, quality of life, city

government, medical care, education, area eco-

nomics-inflation, the energy industry’s impact

on economic development and advocating state

support for oil impact funds. The initiative will

launch this month with a three-week series on

housing. Long says the goal of the campaign is

to give temporary and long-term Williston resi-

dents a feeling of pride about their community

and provide them with accurate information on

those issues. “I think it’s going to alleviate a lot of

concerns and misinformation,” she says. “The

more informed we can make a resident, a citizen

or a business owner, that’s one more person who

knows the real Williston.” PB

Kris Bevill



Williston StatisticsBuilding permits issued in 2013

(as of Nov. 30):

674Building permit valuation in 2013

(as of Nov. 30):

$349 million(SOURCE: WILLISTON BUILDING DEPARTMENT)

Estimated 2012 permanent population:

18,000 Projected 2017 permanent population:

28,500(SOURCE: NORTH DAKOTA STATE UNIVERSITYAGRIBUSINESS AND APPLIED ECONOMICSDEPARTMENT)

http://www.ae2s.com


|FINANCE|

After spending 17 years in Chicago’s

investment banking and private equity

sector, South Dakota native Blaine

Crissman returned to his home state two years

ago and launched his own private equity firm,

Badlands Capital.

The Sioux Falls-based firm is focused on

investing in mid-sized ($10 million to $40 million

in revenues) value-added manufacturing and busi-

ness services companies located in the Midwest

and northern Plains. Crissman says his experience

in managing portfolio companies scattered

throughout the country during the recession

taught him that private equity investors need to be

actively involved in their companies, so he plans to

take a hands-on approach to the management of

Badlands Capital companies. Therefore he will cap

his investments at two to three companies located

within a 400-mile radius of Sioux Falls, primarily

in second-tier communities in the Dakotas, west-

ern Minnesota, Iowa, Nebraska and Colorado.

“Once you get into central and eastern Minnesota,

there’s plenty of money there already,” he says,

adding that a key part of his investment strategy is

finding niche manufacturing or business services

companies located in communities that are large

enough to enable growth and attract a talented

workforce, but small enough to avoid auction-type

scenarios where the highest bidder wins. “I’m look-

ing more to partner with a current owner or

owner-founder who started a business 30 years ago

and doesn’t know how to monetize and retire or

maybe doesn’t have a manager to buy the business

from him,” he says.

In late October, the firm, along with Sioux

Falls-based Nordic Venture Partners and Chicago-

based Aldine Capital Partners, bought its first com-

pany — Sioux Falls-based fiberglass storage tank

manufacturer Design Tanks LLC — from a private

equity firm in Philadelphia. The company, which

generates about $10.5 million in revenue annually

and employs about 45 people, designs and pro-

duces 50,000-gallon liquid storage tanks for the

agriculture and industrial wastewater treatment

industries, and both industries are stable and grow-

ing. However, the company has a history of only

passively marketing its products and Crissman saw

an opportunity to change that. “They have a good

reputation and the phone keeps ringing, but I think

there are ways to be more outbound in sales and

marketing, so I’ll be involved in that,” he says.

One area of immediate potential growth for

the company is in supplying the Bakken region,

although Crissman is realistic in his demand expec-

tations. “They’re the closest fiberglass tank manu-

facturer to the Bakken, which has had meaningful

growth in demand for steel and fiberglass tanks in

the last five to eight years, and Design Tanks didn’t

sell any to the Bakken — tank manufacturers from

outside the region did,” he says. “Some of that was

strategy, some of it was they just didn’t have the

relationships. Just because there’s a demand for

Private equity fund takeshands-on approach toinvestments Sioux Falls’ Badlands Capital emphasizes activeinvolvement in portfolio companiesBY KRIS BEVILL

Blane Crissman, partner, Badlands Capital


|FINANCE| product doesn’t mean you can go up there and

sell it. It is an opportunity but everyone is trying

to glom onto it.”

Shortly after Badlands Capital purchased

Design Tanks, the company began hiring for a

second shift, a process which has been difficult

due to the state’s manufacturing workforce short-

age. Crissman says that while he’s long believed

the Great Plains could compete with China as the

U.S.’s main supplier of manufactured goods, the

lack of workers could soon hinder the sector’s

recent growth in South Dakota. “We’re at the

functional floor for employment,” he says. “One

of the things we’re running into as a challenge

with adding a second shift is there are a lot of jobs

like that, so everyone competes for the same labor

pool. People are just trading employees and hav-

ing to pay more for them.” And with typical wages

for modestly skilled laborers at $10 to $14 per

hour, Crissman is skeptical of the industry’s abil-

ity to attract new workers.

Marcia Hultman, South Dakota’s labor and

regulation department secretary, confirms that

manufacturers throughout the state are strug-

gling to find welders and other production

workers and are increasing wages in order to

remain competitive.

Kim Olson, policy adviser to Gov. Dennis

Daugaard, stresses that the skilled worker short-

age is not an issue unique to South Dakota, how-

ever. “Although the tight labor market in the

manufacturing industry challenges growth

nationally, the state of South Dakota supports

manufacturing development by working with

businesses to increase the skills of our incumbent

workforce, train additional individuals entering

the labor market and recruiting skilled workers

from other regions,” she says.

Meanwhile, Crissman will continue seeking

investments in the northern Plains and beyond,

focusing on his niche area and the advantage he

has in being a local investor. “What I’ve certainly

found is this region does not like carpet baggers,”

he says. “They want to be able to check you out by

making two phone calls, not running a back-

ground check and talking with 10 people. There

are millions of dollars of capital available, and I

think larger companies in our region could cer-

tainly attract interest from larger funds, but as far

as people who live here and work here there are

few funds focused on this area.” PB

Kris Bevill



http://www.bjkadramasinc.com


|ENTREPRENEURSHIP|

When Alvin T. Shotwell opened a floral

landscaping shop in downtown Fargo in

1888, the city was young and growing

and in need of trees. A.T. Shotwell Floral and Nursery

Store supplied the need and grew his business along

with the town, eventually adding several small green-

houses as the floral shop expanded. His son joined

the company in 1908 and the business changed its

name to Shotwell Floral Co. The floral shop contin-

ued to thrive and evolve with the community for the

next several generations of family members, sustain-

ing a gas explosion at one of its locations and several

other location changes along the way.

Today, 125 years after Alvin opened Shotwell’s

doors, the $2 million company has consolidated its

four previous locations into one large store in south

Fargo in an area that Alvin surely would never have

envisioned one day becoming a bustling part of the

sprawling community. Other aspects of the business

have changed as well. Trees are no longer a primary

product for the company. Instead gift products and

online ordering have become new areas of focus. But

one thing has remained constant throughout the busi-

ness’s long run — family leadership.

J.D. Shotwell serves as vice president of the

company and is the fifth generation to have an inter-

125 years and countingFive generations contribute to floral business’ long-running successBY KRIS BEVILL

J.D. Shotwell is the fifthgeneration of his family tooperate the family’s Fargofloral business. ShotwellFloral celebrated 125 yearsof business in 2013. PHOTO: SCOTT THUEN PHOTOGRAPHY


|ENTREPRENEURSHIP| est in the floral business. He says he grew

up in the business but never felt like he

had to take part in it or that he would

one day take it over. Instead, his family,

for at least the past three generations, has

maintained the mentality that the busi-

ness would be taken over by the upcom-

ing generation only if they expressed an

interest in doing so. “It was one of those

things over the years I kind of fell in love

with and decided that’s what I want to do

for a living,” he says.

J.D. has been seriously involved with

the business since about 1993. His father,

John, remains owner of the business and is

still somewhat involved in the business.

“He’s a worker,” J.D. says. “He loves to

work, he still loves his job. If he wants to

work forever, I’m going to love it.” John’s

wife, Annette, is also involved in the fami-

ly business and serves as president of the

company. There has never been a time in

the business’ 125-year history where the

family considered closing, J.D. says. “We’ve

been very fortunate to have a strong fami-

ly focus on the business.”

J.D. says the floral industry has

changed drastically over the years and

especially over the past 15 years as online

ordering has become more common-

place and customers have dictated

changes in the store’s offerings. As a

result, the company’s gift shop has grown

significantly in square footage while the

greenhouse portion of the business is not

as strong of a contributor to the bottom

line as it once was. In the future, J.D. envi-

sions embracing technology to better

serve customers and continuing to focus

on making the south Fargo shop a desti-

nation location. While the offerings may

change over the years, the company

remains firmly committed to providing

top-notch customer service, a focus

which J.D. believes is to be credited for

the company’s longevity. “Quality and

customer service are the two basic things

that help small businesses,” he says. “I

think as long as you can stay that way you

can be successful in the community.” PB

Kris Bevill



http://www.PTSLAW.com


Awaking North Dakota’s ‘sleeping giant’? Company targets area outside oil patch for exploratory drillingBY AMY DALRYMPLE

An oil and gas company is working to wake what it calls a sleeping giant

in an area of southern North Dakota far outside of the state’s tradi-

tional drilling region.

Strata-X Energy has received permits to drill four wells in Emmons and

McIntosh counties as part of an exploratory program known as wildcatting, the

North Dakota Oil and Gas Division announced Dec. 11.

The company, headquartered in Denver, says on its website the wells will tar-

get natural gas in the shallow Niobrara Formation, a significant petroleum system

the company says has been overlooked in the southeastern Williston Basin.

The permits, approved Dec. 11, give Strata-X permission to drill two wells

near Wishek and two wells near Linton, says Alison Ritter, the division’s

spokeswoman.


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resourceful. naturally.

The Oil and Gas Division issued a press release on the

permits because it’s so rare for permits to be approved that far

east of U.S. Highway 83, says Director of Mineral Resources

Lynn Helms.

The state has no record of either county ever producing oil

or gas, Ritter says. Another company attempted a drilling pro-

gram in 2006 in Emmons County, but the wells were not eco-

nomically successful, the Oil and Gas Division says.

“It’s pretty exciting to issue some permits that are outside

what we consider the 19 oil and gas producing counties,”

Ritter says.

Strata-X Energy calls its plan the Sleeping Giant Gas Project.

“The Niobrara Formation in this area has been overlooked

despite gas shows and small flares being reported,” the company

says on its website.

If the wells are successful, other operators will likely follow

and do more exploration, Ritter says.

“If successful, any type of serious drilling would really be

years away,” Ritter says. “We have to wait and see what they find

out before anyone should get too excited.”

North Dakota has some natural gas wells, but most drilling

in North Dakota targets oil.

Strata-X Energy, which did not respond to questions

requesting comment, says on its website that two interstate natu-

ral gas pipelines run through the area, which could facilitate mar-

|ENERGY|

http://www.westconindustries.com


keting the gas.

It’s unknown when the company plans to begin

drilling, but Ritter says she anticipates it will be soon because

the company was eager to have permits approved.

Oil field geologist Kathy Neset of Tioga, N.D., says

it’s exciting that the company is exploring and testing

the formation.

“Niobrara is hugely productive in Wyoming,” Neset

says. “To me, this leads toward many different formations

that have potential in this Williston Basin.”

Neset estimates the Niobrara wells would be less than

4,000 feet below ground in North Dakota, compared to typ-

ical Bakken wells that are about 10,000 feet below ground.

In Wyoming, the Niobrara Formation is primarily tar-

geted for oil, but also produces significant natural gas, says

Mark Watson, petroleum engineer with the Wyoming Oil

and Gas Conservation Commission.

Operators use horizontal drilling and hydraulic fractur-

ing techniques to produce from the Niobrara, Watson said.

“It’d be the same as what you do with the Bakken and

the Three Forks,” Watson says.

Strata-X is also involved in oil and gas exploration and

development in California, Texas, Illinois and Australia. PB

Amy DalrympleReporter, Forum News [email protected]

Know a creative, confi dent, successful businesswoman in the area? Nominate her for Prairie Business magazine’s Top 25 Women in Business issue in March.

To nominate someone, please go to prairiebizmag.com and click on the “Top 25 Women in Business” tab.

Submission DeadlineJanuary 17, 2014

We are looking for women who are not only business leaders, but also excel in other areas such as leadership, community service, mentoring, entrepreneurship or balancing family and work.

|ENERGY|

mailto:[email protected]

http://www.kljeng.com

http://legacy.prairiebizmag.com/pages/top25womeninbusiness

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investments isn’t a company, but a city.investments isn’t a company, but a city.

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That’s what happens when a city has added more than 10,000 residents in the last several years. And is home to 53 energy and oil companies with almost 3,000 employees—in a city where more than half the business community is affected by the oil industry.

Because of energy’s impact on Minot, we have more than $350 million slated for improvements to roads, our airport, water and sewer mains, the landfill, buildings, and more. There’s no better region in the nation to put your investments. As a city, we’re raising our own taxes to keep pace, and continued state investment feeds an economic engine.

To learn more on the amazing potential of Minot, please email [email protected] or call us at 1-701-852-1075 to sign up for our comprehensive e-newsletter to stay informed on all of our latest news.

Downtown Minot Redevelopment


|FEDERAL DRILLING DATA|

d

SOURCE: U.S. DOE ENERGY INFORMATION ADMINISTRATION

http://www.mdu.com


To Advertise:John Fetsch 701.238.9574 [email protected]

Brad Boyd1.800.641.0683 [email protected]

Shelly Larson 701.866.3628 [email protected]

|BUSINESS TO BUSINESS|NATIONAL PERSPECTIVE.

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R001988519

Business TransactionsCommercial Law – Litigation

Construction LawOil & Gas Law

http://www.pearce-durick.cp,

http://www.sperion.com

http://www.fisherind.com


Interest Rates

Oil |BY THE NUMBERS| | SPONSORED BY |

Jan2000 Jan2002 Jan2004 Jan2006 Jan2008 Jan2010 Jan2012 Jan2014

7

6

5

4

3

2

1

0

Perce

nt

E ective federal funds rate10-year treasury constant maturity rate

Data provided by David Flynn, chair of the University of North Dakota Department of Economics. Reach him at [email protected].

Sept. '13

9,682*Sept. '12

7,798

Producing Wells

+1,884

Sept. '13

931,940*Sept. '12

793,548

Average Daily Production(barrels)

+138,392

Sept. '13

287Sept. '12

273

Total Permits

+14

Sept. '13

183Sept. '12

190

Average RigCount

-7* All time monthly high * All time monthly high All time monthly high:

370, Oct. 2012

All time monthly high:

218, May 2012

Aug. '13

$92.96Aug. '12

$84.98

Priceper barrel

+7.98All time monthly high:

$136.29, July 2008

Sept. '13

1,060,380*Sept. '12

793,548

Gas(MCF/day)

+266,832* All time monthly high

Sept. '13

2,342Sept. '12

2,279

Coal(ThousandShort Tons)

+63All time monthly high:

2,924, March 2004

Sept. '13

29%Sept. '12

30%

Gas(% Flared)

-1All time monthly high:

36%, Sept. 2011

EmploymentUNEMPLOYMENT RATE EMPLOYMENT

Sept.-13 Sept.-12 Sept.-13 Sept.-12

North Dakota 2.80% 3.20% 389,665 381,028Bismarck MSA 1.8 2.3 60,199 59,735

Fargo MSA 2.5 3 116,797 115,949

Grand Forks MSA 2.9 3.3 51,545 52,927

Dickinson MiSA 1.1 1.4 22,022 20,349

Jamestown MiSA 2.2 2.6 9,854 10,492

Minot MiSA 2 2.3 36,438 35,423

Wahpeton MiSA 2.8 3.1 11,439 11,692

Williston MiSA 0.6 0.7 45,912 35,155

South Dakota 3.70% 4.40% 432,607 425,825

Rapid City MSA 3.4 4.1 65,917 64,532

Sioux Falls MSA 2.9 3.6 131,564 125,944

Aberdeen MiSA 3.1 3.2 22,713 22,400

Brookings MiSA 2.7 3.1 18,703 18,070

Huron MiSA 3.1 2.8 9,681 9,749

Mitchell MiSA 2.7 3.1 13,352 12,939

Pierre MiSA 2.8 3.0 11,797 11,737

Spearfish MiSA 3.4 3.9 12,480 12,400

Vermillion MiSA 3.2 3.4 7,147 7,342

Watertown MiSA 2.9 3.1 18,812 18,621

Yankton MiSA 3.2 3.5 11,515 11,295

Minnesota 5.00% 5.60% 2,821,038 2,800,958

Duluth MSA 5.60% 5.90% 135,025 136,189

Minneapolis-St. Paul MSA 4.5 5.2 1,784,950 1,765,755

Alexandria MiSA 3.6 4 20,277 20,345

Bemidji MiSA 5.6 6.3 20,670 20,834

Brainerd MiSA 5.8 6.2 44,334 44,168

Fairmont MiSA 4.4 5.0 10,765 10,493

Fergus Falls MiSA 4.2 4.5 29,763 29,594

Hutchinson MiSA 4.7 6.0 18,968 18,552

Marshall MiSA 3.7 3.9 14,053 14,518

Red Wing MiSA 4.5 4.7 24,330 24,739

Willmar MiSA 3.8 4.4 24,033 23,177

Winona MiSA 4.2 4.6 28,087 28,238

Worthington MiSA 3.5 3.9 11,056 11,120

Gas Captured/Sold

71%

13%

16%

SOURCE: N.D. PIPELINE AUTHORITY

Gas captured and sold

Flared from wells selling at least 1 mcf

Flared from wells with zero sales

http://www.SalomonJamesFinancial.com

basinelectric.comtouchstoneenergy.coop

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Co-ops work for

YOU.Natural disasters happen. Unfortunately, we’ve seen more than our fair share lately. From tornados to fires, floods and blizzards, our region has been hit with destructive force, often destroying the electric system we depend on. Through all of it, the cooperative spirit remains strong. Committed to restoring power quickly, cooperative employees work in some of the harshest conditions to bring electric service back to your homes. They’ve traveled across the country to help fellow cooperatives in times of need, and have even taken in stranded travelers, providing shelter and food at the co-op offices. It’s not a job; it’s a way of life. People helping people. Cooperation among cooperatives. It’s what we do.

24 hours a day, 7 days a week, we’re working for you.

1:24:12 PM

http://www.basinelectric.com

http://www.touchstoneenergy.coop

pbjanuary 2014

Documents

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