A visionary with the enthusiasm to accomplish his dreams
While spraying out ideas like bullets from a Gatling gun, Blue Earth’s Neil Eckles, 59, leans forward to make another salient point about the Internet. “If we could speed that up,” he says rat-a-tat-tat, “man, there’s no end to that thing.” His mind seems perpetually locked on rapid fire and sometimes his mouth has a hard time keeping up with all his ideas. He has a boyish enthusiasm about his work.
All this rat-a-tat-tat comes out in very humble fashion though. Neil doesn’t take any fast-credit at all for his many successes and when he does note them he usually inserts “we” instead of “I.” It’s nearly always a team effort. Friends call him “quiet,” “unassuming” and “approachable.” He agreed to be interviewed in Connect Business Magazine only because he felt the regional exposure would benefit Blue Earth.
Neil Eckles inherited his father’s telephone company and on his own branched out into the Internet, retail stores, real estate and property management, and banking. He has his hands in lots of pots. If you’re from outside Blue Earth or Faribault County, odds are you haven’t heard of him or his business interests. He has left his imprint on Faribault County the way Glen Taylor has on Mankato and North Mankato. Ask any foundation president about his generous philanthropy.
But all isn’t coming up roses in Blue Earth these days. A recent Minnesota Planning population projection says Faribault County may lose 20 percent of its population by 2025. So does that frighten Neil? “I am a survivor,” he says as if he would welcome a good street brawl. And of the population projection, he adds confidently, “I think we can overcome [it].”
This writer doesn’t take much stock in population projections. For instance, Minnesota Planning’s 1990-2000 projections for Brown and Blue Earth Counties are off by nearly 2,000 each on the low side. Although somewhat useful as a rough estimate, a major drawback with such projections are their inability to account for future technological advances that could change the population ebb and flow. Nor can it account for enthusiastic leaders like Neil Eckles who have vision and the means to do something about it.
CONNECT: What all do you own or have an interest in?
ECKLES: With Blue Earth Valley Communications, I have an interest in five telephone companies and ten exchanges, and a start-up Internet company. I am president and CEO of Blue Earth Valley Communications. We own some Radio Shack enterprises. We have a real estate company, Eckles Properties, which is primarily in property management.
With Eckles Properties we have the Fairview housing subdivision and the Faribault County Ag Center. We also have a 50,000 square foot warehouse that used to be leased to Seneca Foods. We’ve leased that to a couple of start-up businesses.
CONNECT: As a board member of the local economic development authority, how difficult is it to attract a large company to Blue Earth?
ECKLES: If you bring a large company here you have one problem – and it’s the same statewide – it’s the State of Minnesota, with its taxation problems and workers’ comp rates. Regardless, it’s difficult to lure a large company to a rural area, mainly because of the labor situation.
I would rather see a dozen small companies come here and start from scratch. It’s healthier for the community. You don’t have the “hostage” concept a large company would bring. Smaller companies have an in-built loyalty to the community. It’s like what Glen Taylor did in Mankato. He bought umpteen dozen small companies – of course, he’s built them into big companies since – but still, basically, they were originally local. We have been able to hang on to our businesses. Businesses that pass us up usually do so because another rural community has given them a better deal.
CONNECT: Someone who knows you well describes you as a true entrepreneur. Would you agree with that assessment?
ECKLES: I would. I love to see things grow. I like to see things start, metabolize, and come together. When the ventures are successful, I move on and try something else.
CONNECT: What’s your take on the Telecommunications Act of 1996. Was it positive or negative for you?
ECKLES: The Telecommunications Act was very positive for us. It let us get out of the traditional telephone mode, where we were regulated and basically just a local carrier. AT&T handled all the toll calls. But the Telecommunications Act opened up new opportunities. We’re in a number of partnerships now. In one of those we own toll facilities from Sioux Falls to Blue Earth to Owatonna. In some stretches there are four, three or two partners over different segments of the route. Before the Act we could never have entered any of those ventures. The Act enabled us to look at wireless, cellular, and now we’re looking at becoming an agent for long distance.
In the case of long distance, we’ll buy the minutes of use from a toll company and resell them. We’ll have it labeled under our name. We’ll do all the billing and be the subscriber’s local long distance company.
CONNECT: Do you think cellular will ever replace land lines?
ECKLES: I don’t think so. That was predicted originally. Cellular really hasn’t cut into our telephone business because the old telephone lines are turning over to Internet and video usage. We haven’t seen any loss in land line usage. In some areas people are utilizing it more.
CONNECT: Do you see your Internet company competing with cable for that service in the near future?
ECKLES: Oh, sure. Very definitely. When that time comes we’re ready for them. We’re definitely looking into competing in other Internet areas. We’re not too far away from having video customers over the Internet. They have the technology now where you can run that into a neighborhood and get within 3,000 feet of a subscriber and then backhaul. If you carry that copper to a fiber node, which is a junction point where numerous subscribers can tap in, you can then take it to a central distribution point.
CONNECT: Do you think prepaid cellular service is going to make a big splash?
ECKLES: At the present time, with what I’ve seen so far, I’d have to say, No. The buying habits of people are so established with credit cards. We’ve had debit cards out for four or five years. We don’t see it increasing any. We’ve reached a certain plateau and it’s just stayed there. It’s the same people, and the market is saturated.
CONNECT: What do you see in the next five years for cellular?
ECKLES: We’re a cellular reseller. What we do is bulk buy minutes of use from Midwest Wireless. Then we resell all over southern and western Minnesota. I see cellular usage going up. We have reached right now the second-tier subscribers. These are subscribers not using it on a consistent basis, but they have it for security. Next will be the third-tier user, such as kids carrying it to school. Eventually I see cellular having features such as data or video.
CONNECT: You’re also on the board of directors of First National Bank of Blue Earth. The trend in banking is toward consolidation. Why are bigger banks buying up smaller ones at a fast clip?
ECKLES: The big regional banks are going after the urban areas. They are picking up customer volume and assets by buying smaller banks. In those urban areas that’s the only way they can expand. The old concept of a community bank, such as First National Bank of Blue Earth, involves another approach. First National Bank has gone out after the individual customer. It started with $22 million in assets and today has $95 million. Right now we want to remain a community bank and don’t have a desire to be acquired at the present time.
CONNECT: Do you think rural Minnesota banks are ready for a farm crisis?
ECKLES: Psychologically, they are much more ready than in 1985 during that ag crisis. In 1985 we were just coming out of hyper-inflation. Everybody thought inflation would continue, and ag values and land prices would remain high. When land prices went down, people started losing equity. It surprised the banks. They weren’t prepared. This time banks have been much more cautious and consistent.
CONNECT: Bob Weerts, who is a major employer in Winnebago, tried to help solve that town’s housing shortage by building apartments on his own for profit. Would you have an interest in replicating that in Blue Earth?
ECKLES: Yes, we would have an interest in that. [Bob] was the first to do it. I have to commend him for that. People like him pave the way for the rest of us, and then the rest of us learn from their methodology.
In Blue Earth or Winnebago we don’t have enough starter housing where people can come in with families and establish themselves with their first home. There is plenty of subsidized housing here for low-income people, and plenty on the high end of the spectrum. We’re missing that gap in the middle.
CONNECT: Housing would seem like an acute problem in Blue Earth because a good portion of the housing stock is pre-1939. Is there a concerted effort in town to increase the quality and quantity of the housing?
ECKLES: The Economic Development Authority has done something about it. They’ve acquired a piece of property northeast of Blue Earth. Their intention is to develop it with starter housing.
CONNECT: What are the risks involved in developing a housing subdivision?
ECKLES: Having nobody come to the party. The Fairview addition was the first time Eckles Properties had been involved in housing. We were lucky. We haven’t had some of the problems that other developers have had.
The addition came about when the school said they had access property they didn’t need. They suggested we purchase it from them at cost, which we did, but under the provision that we use it for housing development. We convinced the city council that it would be to the community’s benefit that they put in infrastructure – such as streets, water and sewer – while keeping assessments at $10,000 assessment per lot, which is reasonable. Then we built the homes and resold them at cost. Everything clicked. We had a progressive school board, city council, and an EDA that pushed for it. If any one of those elements had been absent, it wouldn’t have taken place.
Blue Earth has had some successes lately. It has good schools, a good hospital, and it hasn’t been hit by unemployment. The community feels good about itself. It’s very progressive. The community is willing to go out on a limb and try these ventures.
CONNECT: You are on the board of the new Minnesota State University, Mankato, Center for Rural Policy & Development. What will that group try to accomplish?
ECKLES: Primarily, it will be an information center. It will analyze rural problems and perhaps find solutions. On the same token, it will be a resource for legislators and people in policy positions. They can rely on that information and make things happen for rural Minnesota. Most people in policy positions at the legislature are from the Metro area. I don’t think they understand rural as we understand rural. Hopefully this center can develop actual and factual criteria.
CONNECT: Why do you have your own airplane?
ECKLES: I enjoy flying. I fly for transportation. I used to drive to Minneapolis three or four times a week and just tired of it. Then the company grew to where we could afford a plane – we couldn’t justify one, but we could afford it. I got hooked. It cuts the trip to Minneapolis down from two hours to forty minutes. We have a pilot on our payroll; he also works in drafting and engineering.
CONNECT: In your view, should major employers – besides the jobs and services they provide – give something extra back to their communities?
ECKLES: Without question. It’s a social obligation. Employers in a position to do so should give back to the community with their time and resources. Without that you’d end up with an employer that takes – and if you take long enough there’s nothing left. It’s a two-way street.
CONNECT: How did you arrive at this belief?
ECKLES: My parents. It’s been like that in the family all the way down the line. That’s one reason why our family has stayed in the business – so we can follow that philosophy and help the community.
CONNECT: Your father owned Blue Earth Valley Communications at one time.
ECKLES: And my grandfather before him.
CONNECT: What pressure did you go through to follow in your father’s – and grandfather’s – footsteps?
ECKLES: You can’t really follow in their footsteps. You have to run your own show, run your company, and follow your own philosophy. That philosophy may be their philosophy. But regardless, you can’t sit and worry about what they would have said or done. I have a philosophy that I never look at the past. I look ahead.
My father trained me in the telephone business for years and years, and I felt very ready to take it over. Even though I was ready, some things we’ve entered into have been through trial and error. Like most pioneers we’ve received a few arrows in the back, but we’ve learned.
CONNECT: What do you think your dad would say of what you’ve accomplished?
ECKLES: My father died in 1982. He would be pleased to see the company today. He came into the business in an era of total monopoly. He could operate in those constraints, but he couldn’t operate out of those constraints either, and how well he did was determined by regulators. That’s no longer the case. We’re still regulated, but we’re given a lot more freedom.
CONNECT: There are a lot of small telephone companies in southern Minnesota. How can they survive the next ten years?
ECKLES: It depends on the company. The company, philosophically, has to look ahead and join partnerships, which we have a number of in this industry such as MEANS Corporation (Minnesota Equal Access Network System). It’s a partnership of fifty companies. They’ve thrown their collective resources into the toll business. They’ve built their own lines. It’s like Midwest Wireless, which originally started in RSA 10 (Blue Earth and Faribault County and surrounding areas) as twelve companies, and since then has formed partnerships with others. By joining partnerships you can tap into someone else’s income stream and survive. But if you’re waiting for the old days, and if you don’t get out and do things, you’re a goner. It’s really too late already.
Industry partnerships are the vogue. Everybody does them. It’s ironic that some are forming partnerships made up of one entity, and forming a different partnership with a different entity and competing on a different level – and it’s working. In some of these partnerships, you have family companies like ours, private companies, public companies, and you have co-ops. Philosophically, they all get along.
CONNECT: This region has a labor shortage. How do you recruit new employees?
ECKLES: We have 75 employees with Blue Earth Valley Communications. What we’ve been doing is looking for kids that went north to college, and who still have ties here. After they graduate, we go after them. We give them good jobs and wages, and a challenge. We give them a chance to do their thing.
CONNECT: What personal qualities have made you successful?
ECKLES: I’m a survivor. I’m intent on surviving. I believe you’re either dying or growing. So you’ve got to grow.
CONNECT: What do you do for recreation?
ECKLES: I work, hunt, and fish, which I like because of the people that go with me. I like the fellowship, getting away, talking smart, having fun.
CONNECT: When hiring a potential employee, what character traits are you looking for?
ECKLES: Work ethic and intelligence. I’m also looking for somebody who will work well with subscribers, customers, and fellow employees. Also somebody who can show initiative and develop quickly.
I don’t mind mistakes. In fact we encourage employees to take risks and make mistakes – if that happens. You can learn from mistakes. We’re very loose here. We promote the team concept.
CONNECT: Why did you develop the Faribault County Ag Center, which is essentially a shopping mall for farmers?
ECKLES: The one natural resource we have here is farming and farmers. We thought, Why not get farm-related businesses together and centrally locate them? We surveyed and found that every farmer in Faribault County would have to visit that building at least two or three times annually. The original idea and concept came from Pat Miller at EDA, and Carolyn Pawlitschek at the Chamber of Commerce. They had talked with business owners ahead of time and asked them if they’d be willing to relocate. That building, a former mall, had been vacant for ten years.
It’s a 75,000 sq. ft. mall, and we’re adding another 25,000 sq. ft. The building we started with was all prestress construction, so we had a good building where we could put windows and doors anywhere. We put the atrium in the center so everyone could have a front door. It’s been up and running for five years, and it was all through Eckles Properties.
CONNECT: Any predictions for the future?
ECKLES: For our Internet service, we’re getting a T1 line out to 3,000 feet from every subscriber. That’s our objective. We’re halfway there. Then we’ll be able to carry high-speed data. With the Internet we’re just scratching the surface. Right now the stumbling block is the communications end. If we could speed that up, man, there is no end to that thing. The computer will one day replace the telephone. It has already replaced the word processor. The TV will be replaced too.
CONNECT: What makes this area special?
ECKLES: The Blue Earth, Winnebago and Wells communities really have a cooperative spirit. They look at new ventures, they search out new horizons. This is what helps these towns survive. You see very few naysayers here. We are willing to try new things.
CONNECT: And all this despite poor population projections for Faribault County. Instead of rolling over and playing dead, it seems like you’re tackling the problem.
ECKLES: Without question. If we didn’t have a positive outlook in our community, we would be dead ducks. The City of Blue Earth lets you try new things. I think we can overcome the population problems.
©1997 Connect Business Magazine