New Ulm Economic Development Coordinator Brian Tohal has spent nearly the last 20 years of his life building a better New Ulm—one relationship at a time.
Brian Tohal has a lot on his plate.
As coordinator for the New Ulm Economic Development Corporation, he’s in charge of bringing new business to the city while cultivating the businesses that are already there. One day he could be discussing potential sites for a manufacturing business interested in moving to New Ulm, while the next he could be figuring out financial incentives that will help a local Mom-and-Pop store expand. It’s up to him to coordinate and facilitate the many partnerships that go into growing New Ulm’s business base, juggling interests from the city, the New Ulm Chamber of Commerce, business owners and even other area cities. And besides all this, he’s constantly looking for new ways to promote New Ulm to new businesses.
Yet he’s also aware of New Ulm’s heritage and the need to preserve its character. Known as the “German Town,” this bustling 13,500-person city boasts a higher German ancestry than any other city in the U.S. From its famous Glockenspiel to its many annual festivals, the city proudly displays its commitment to the old ways. Just read the motto: “A city of charm and tradition.”
On the other hand, the city also offers big-box retailers like Wal-Mart and Menards, and residents recently approved a $47 million project to build a new high school building. Melding old-world values with new-world progress can be a difficult compromise.
It’s a lot of responsibility, and Tohal is impressively good at it. He’s helped create two of the city’s thriving industrial parks, and just last year, New Ulm saw a boom in construction and expansion, with around 400-500 new jobs created. You’d think that’d be a feather in any economic developer’s cap. But Tohal isn’t one to brag about numbers. Instead, he’d rather tell you about a specific business that was able to grow into a new building, or a business owner who found a way to train new employees. It’s the individual stories he cares about.
Brian Tohal has a lot on his plate, but it all boils down to relationships.
Tell me a little about your childhood.
I grew up in Le Sueur. My mom worked as a charge nurse and scrub nurse in the Le Sueur Community Hospital, and my dad taught high school social studies.
I have six siblings: four sisters and two brothers. I’m the second oldest, and the oldest boy. All but one of my siblings live in Minnesota, so we get together a lot, multiple times a year, as a big family.
What lessons did you learn from your parents?
Both parents were very hard workers who worked long hours. Dad not only taught but also coached multiple sports, and Mother worked long shifts. So they taught me the value of work and the value of standing up for what you believe in.
The other thing my parents taught me was respect. You treat people with respect.
Do you have any examples of when they stood up for what they believed in?
Dad was the United Way president in Le Sueur, and he did a lot of volunteering for political organizations. He would go door-to-door knocking and would take us along once in a while.
Did that make an impression on you as you grew up? Do you volunteer a lot for special causes?
(Laughs) There are too many to list! I volunteer at my church (St. Paul’s Evangelical Lutheran Church) in multiple activities, at Minnesota Valley Lutheran High School and in other community activities.
So you invest a lot in others’ growth. Did you have people, besides your parents, who invested in your growth? Any special mentors?
Other than my parents, there were a few teachers in high school that stood out. One was a science teacher. He taught me curiosity. I didn’t know it then, but when I look back, that’s what he was teaching. He was teaching: be curious, think about things, learn about things, explore.
Later in my work life, there was an individual by the name of Elmo Dowd who was with the city of Mankato while I was an intern at the Mankato Industrial Incubator, and Elmo taught me about work ethic and about how to treat people. Elmo was a great man, and I consider him my work mentor.
Tell me about your studies and how you ended up in economic development.
I was a nontraditional student. I went to college at Minnesota State Mankato right after I graduated high school in 1976, but I didn’t finish my undergraduate degree right away. Instead, I took time off to earn money for tuition. Because of that, I was able to graduate with my undergraduate degree with zero debt, which just doesn’t happen now.
Where did you work during this gap between studies?
I worked for a small printing company in Mankato. This was pre-computer and pre-printer… Now everyone’s got their own printer, but back then, people ordered envelopes and forms and stationery. It was a very small shop, so I did a lot of different things, but mostly I ran a printing press. I was also in charge of the darkroom and did mock-ups. I did a lot of different chores. I worked there 13 years, until I went back to school in 1989. Then I graduated in 1991 with a bachelor’s in urban studies, and I dove right into graduate studies and earned a master’s in economic development.
After graduate studies, or a part of graduate studies, most people do an internship, and mine was the city of Mankato’s newly formed Mankato Industrial Incubator. Elmo was my immediate supervisor.
Take me through your career path.
After the internship was concluded in 1992, I got a job as the economic developer for Sibley County. I was in charge of the economic development for the entire county, and I did that for three years. Then I took this job in New Ulm and have been here nearly 20 years. So my career’s not very complicated or interesting.
You just found what you wanted to do very early on.
In my early college years, I took a class called Urban Geography. Following that, I took a class in Urban and Regional studies: Urban Architecture. Those two classes convinced me that there was a career that would fit me very well. Originally, I thought I would go on a planning track and be a community planner, but as I learned more about economic development, that’s where my interest laid.
And why does that fit you so well?
Persistence, patience, trust. You have to build relationships. And it’s the type of job that is unpredictable. I can come into the office and think I’m going to do something all day, but with one phone call or visit, it goes out the window. So it’s never the same thing; it’s always something different.
The other thing that I really enjoy is that I get to work with people. Interaction with a wide variety of people keeps things interesting.
What about the flip-side? What are some of the challenges in this position?
The difficulties—or we’ll call them opportunities—can be, often, your work is influenced by things you can’t control, whether it be someone else dragging their feet or a lack of appropriate resources or tools. There’s always more that could be done, but paying for it, finding the time, that kind of thing can be difficult at times.
Were you doing the same thing in Sibley?
In some ways, yes. In some ways, no. The Sibley County job was seven small communities, all expecting that you promote them. And often that couldn’t happen all the time. However, with New Ulm, it’s a very defined geography; you’re working for one community. And New Ulm is a little bigger, so there’s more activities and more things happening. But I enjoyed my time in Sibley County greatly and made a lot of good friends over there.
What made you decide to move to New Ulm?
There was more opportunity: a bigger community, more chances to get things done, more chances to have an impact.
And do you feel you’ve had an impact?
I hope so. There are some memorable projects that I’ve been heavily involved in. I won’t say names, since I don’t know if that’d be fair. We had one project that was a manufacturer who was, quite frankly, struggling, but had a plan. The owner and I trusted each other, so I knew he was going to work very hard, and we put together a financing package that included 13 sources. That’s unusual, and it took a lot of time and a lot of coordination, but we got it done. All 13 sources were approved in time.
Another very memorable project was a four-way swap where we were owning a building and we had a tenant, and the swap involved three buildings and three empty lots, so four different parties all had to be coordinated. But it was the right thing to do for the business. Again, it was the type of situation where I knew the owner of the manufacturing business we were seeking to help very well, and he trusted me, and so we put it together.
Then there are a number of other businesses that are new to New Ulm that I’ve worked to attract. (The NUEDC) has been involved in developing industrial parks since the early 1950s, and I’ve been involved in the development of two of those industrial parks. And again, a lot of attracting a new business is the business itself. They’re the ones that create the jobs. I don’t create jobs; I just help businesses when I can. I see myself as a facilitator.
But I think the most memorable thing is the relationships that you build over 19 years and the people you get to know. You can’t do this job without building relationships and building trust in both directions.
Speaking of building trust, your corporation works with both the city of New Ulm and the New Ulm Chamber of Commerce, along with countless businesses. What’s it like juggling so many interests, especially on the city side of things?
I think New Ulm is very fortunate to have the people who work at city hall that they do. The city has a very strong role in economic development, and they’ve been very supportive historically. In particular, the city manger, Brian Gramentz, has been a strong supporter of economic development, and the community development director, Dave Schnobrich, has also consistently supported it. Both of those two have done quite a bit to promote New Ulm as a place for industrial growth and expansion. In addition, councils over the years have also been very, very supportive.
Besides working with so many different groups, your corporation itself is made up of a board of 11 volunteer directors. When you add your employee position as their coordinator, that’s 12 people with 12 different viewpoints. How does that work when it comes to making decisions?
It works very well. My board consists of business people who understand what needs to happen. They’ve been very supportive over the years, very supportive.
The New Ulm Economic Development Corporation started in the 1950s as New Ulm Industries. How has it changed over the years?
When it started in 1952, it was an all-volunteer board. People promoted New Ulm on their own dime because they were business leaders and they knew that what was good for all of New Ulm was probably good for their business, whether it’s business owners or bank presidents. In 1991, we changed it to a nonprofit for tax reasons. We changed the name, too.
Is it basically the same thing?
The original entity was technically a for-profit organization that had shares, so it had a local base of ownership. We’re now a non-profit so shares don’t exist. Our funding doesn’t come from members; it comes from the city and our own funds that we’ve earned, from our own assets.
We also used to have the New Ulm Retail Development Corporation, which I oversaw as president, but now the duties of retail development promotion and coordination have been assumed by the Chamber, so that entity is no longer functioning.
I know a lot of cities struggle with how to bring in new businesses while maintaining their culture, and I’d suspect that’s a real question in New Ulm since the city is so well known for its German heritage.
It’s a balance. New Ulm has a brand—it’s known as the German Town, and the town that has a lot of festivals. You don’t ever want to stomp on that. You don’t even want to go near stomping on that. But at the same time, it’s normal for businesses to open and close, so we need to maintain a healthy economic environment. And that means that you provide assistance to businesses that want to grow and need some help, and you work to attract new businesses to town. That just makes good sense.
What are some of the trends you’ve noticed in New Ulm recently?
A number of our manufacturers are in the middle of expansions or planning expansions. Last year was a big year for new construction, and not just in manufacturing: apartment buildings, office buildings and other large building projects. We’ve seen a spurt of growth and I would anticipate that would continue in 2015.
So is New Ulm seeing more current businesses expand right now, instead of new businesses coming in?
There’s some of both. The businesses that have relocated here or started up that didn’t exist before recently are small, but most of them have fantastic potential for growth. Small businesses that are locally owned are important.
What’s more important for a city, helping current businesses expand or attracting new businesses into the area?
Without placing importance, but talking about where most of the new jobs come from, it’s expansion of the existing businesses. You can infer importance from that if you want.
What are some of the challenges New Ulm businesses are facing right now?
I think the biggest challenge in New Ulm right now is the availability of workforce. Just about every manufacturer is hiring. If you can’t hire the number of qualified people you want, it restricts your business growth. And I think we’ve seen some of that in New Ulm.
What can you do to address these workforce concerns?
One example would be we’re working with South Central College right now to try—I’m going to emphasis “try,” since it hasn’t been approved or funded—to establish a truck driving school. New Ulm has one of the largest truck driving companies in the state (J & R Schugel Trucking), but truck drivers are in short supply. The other thing that we try to do is we try to promote the state’s program called the Job Skills Partnership, which funds job training. Through this, businesses can work with community colleges for more workforce education.
Are there other concerns New Ulm business owners have?
I know there are a number of businesses that have expressed concerns over the availability of nontraditional financial resources. Sometimes, there’s a need for nontraditional financing beyond a bank, and that can be difficult.
Does New Ulm offer financial incentives to help with these concerns?
We offer a lot of different incentives. Probably the most popular is tax increment financing, and up until recently, we also had the JOBZ incentives offered through the state of Minnesota. New Ulm also offers an incentive that provides businesses with cash payments for job creation and a cash rebate on their utility bill. They’re not huge, but they’re multiple thousands of dollars twice a year. Besides those, New Ulm offers a couple of different revolving loan funds where they’ll partner with a bank to provide financing for job growth and business expansion.
Do you ever get into battles with other cities as businesses try to pit your incentives against each other?
When that does happen, and a business tries to pit us against another community, the first thing I do is pick up the phone and call the other community. Does it happen? Yes, it does. Not very often. We typically try and identify what a business needs, as opposed to the business saying, “I want everything I can get.” Instead, we ask, “What do you need to be successful?” A lot of that leadership comes from Brian, the city manager. Have we lost businesses to other communities, other states? Yep, more than I’d like to admit.
I think that’s just inevitable. You can’t get them all.
No, but we want more than our fair share (laughs).
Years ago, MnDOT did long-range planning to increase Hwy 14 to a four-lane to New Ulm, saying it’d be done in 2018. Now we know it won’t. How does this affect your city?
First, New Ulm sends a lot of trucks out and accepts a lot of trucks in, with Kraft, 3M, and the other trucking companies. So trucks can get in and out of New Ulm already. But for a lot of people, perception becomes reality: “You don’t have a four-lane? You must have difficulties getting trucks in and out.” It’s a perception, not a reality. Having said that, often the existence of a four-lane to your community is site-selection criteria. So for those who decide there has to be a four-lane, we don’t make their list. So it has a negative impact.
It doesn’t sound like New Ulm can really help that…
New Ulm has been involved in the Hwy 14 Partnership (an advocacy organization formed in 1998 that includes local governments, private businesses and other organizations) for as long as I’ve been in town. And the city has actively promoted the expansion of Hwy 14 for many years, to legislators, St. Paul, Washington and MnDOT.
MnDOT has announced that they will be expanding from Nicollet to North Mankato starting this year. The next leg, from Nicollet to New Ulm, has not been funded and is not currently on any long-range plans. So that’s the next target, to get that stretch back on their long-range plan. I’m confident that it’ll happen eventually. It’s a very busy road, and it’s a dangerous road. And I think that’s more important than anything—there’s been too many deaths on that road. I think most people in New Ulm know someone who’s either died or been in an accident on Hwy 14.
What have been the pros and cons of big-box stores like Menards and Wal-Mart moving to New Ulm?
I think the pros to both of those large big boxers moving into town is that we’re bringing shoppers into New Ulm that wouldn’t have normally come here. They aren’t going to Mankato. They aren’t going to wherever else they went to before for their Walmart and Menards items. So it brings people in. On the negative side, obviously, it’s got to hurt the locally owned hardware stores and locally owned businesses that compete with them.
Could local businesses combat this loss of foot traffic by going online and investing more in e-commerce?
There are a number of businesses in New Ulm that lend themselves to e-commerce, especially specialty retailers. I’m probably not going to buy a pair of shoes online, but I might buy a cuckoo clock, or a German hat, or German chocolates. New Ulm businesses that sell those items utilize the internet in some way.
I think the biggest issue with the internet right now is its speed. For the providers, it’s very difficult to keep up with the new technologies, particularly if you’re a provider in a small community, as opposed to a very large, maybe national-style provider of internet services. It’s a continual investment, and people—businesses—are expecting faster and faster speeds all the time. At one time, I was at a conference where some recent college grads were speaking, and they said that they chose their community because of the speed of the internet that was available. That was amazing to me. And that’s been a few years, so I think that trend continues.
I understand that New Ulm passed a referendum last year approving $47 million for a new high school and renovations to current schools. If I remember right, it was a pretty tight vote.
Actually, it was a surprisingly strong vote in favor. Not huge, but bear in mind that New Ulm has multiple K-12 school systems and a relatively high elderly retired population. I’m not saying anything as a rule, but it’s harder to get a public school referendum approved when you have those things. I think what it says to the rest of the world is: New Ulm values education and we’re willing to put our money where our mouth is.
And how does this affect businesses, beyond the upcoming construction jobs?
Beyond the construction, there’s a ripple effect. Construction companies spend money on a lot of different things, and that money gets cycled through the community. Then, from a marketing standpoint, it’s a tangible thing we can point to and say, “This is a progressive community. Our youth are important. We invest in education.” If I move to a community, that’s important to me. I want to be in a community that values education and youth and has good schools.
One New Ulm community leader, Denny Warta, has said we should have a regional Economic Planning Authority. The likely choice would be Greater Mankato Growth. Do you ever see yourself handing over economic development responsibility to them?
The reality is, there is already a regional planning entity. It’s called the Region 9 Development Commission, and it assists communities as needed with a wide variety of things.
As for merging with Mankato, I think that New Ulm needs to maintain its autonomy. There’s no one that promotes your community better than people in your community. I know regionalism is important. There are certain things that can be done regionally more easily: promotion, marketing, those types of things. Many regions across the country promote themselves as a region, and when you do that, what you’re doing is you’re saying there’s a population base of 200,000 instead of 13,500, and there are more resources available. So it’s a very common thing to do promotion and advertising on a regional basis. But if I get a phone call from an industry that’s looking to expand and wants to know where there are some available buildings, I’m going to keep them in New Ulm, and I’m not going to share that lead. And I would expect other economic developers to be similar.
Does that mean that you see other cities as competition?
No, not really. We meet as regional economic developers on a monthly basis. I know the economic developers in southern Minnesota. I certainly have known Jonathan Zierdt in Mankato for many years, and I think very highly of him.
It’s poor economic development strategy to try and go steal somebody else’s business because that just doesn’t make any sense. That’s not economic growth; that’s shuffling the deck. Most of the economic developers in our area don’t do that. Occasionally other economic developers in other communities will say, “I got a phone call from a manufacturer in your town, and they’re looking for x.” And I’ve done the same. If somebody from a neighboring town calls, I’ll call their economic developer and say, “Have you visited with these people?”
That’s different from maintaining some autonomy. You can support each other and still be autonomous.
What’s the process once a business approaches you with the interest of relocating to your city?
It’s all over the board. We have one manufacturer in town that we had contact with over a 7-year period. Others, it can be a few months. So everyone is different.
One trend that we see in economic development is that a lot of the larger businesses and national-style prospects use site selectors. Site selectors do their due diligence online, so we may not even know we’re on a list; we might not know, and I’m sure it happens frequently, that we don’t make it to the final five. We might be in the final 10, but we just never know that, because the site selector’s gathering information on the internet.
Say you make it to the top of the list. Then what happens?
Typically, we like to sit down with the city manager and the community development director very early on, because the city is the one that provides the incentives, not NUEDC. We’re the coordinator, the marketing arm, per se. The actual cash incentives are provided from the city. So we need to get them involved right away and make sure that everyone’s working together.
Typically if there’s a request for assistance from the city, it goes to the city council, and with things like tax increment financing, there’s a requirement that there be a public hearing. So that all needs to be scheduled, and there are certain things you need in hand to make the public hearing viable. You need to have at least the beginnings of a development agreement in place. The development agreement spells out what the business will do and the city will do. For the business, it’s usually an identified amount of capital investment and a number of jobs to be created in the period of a year or two. For the city, it’s what we will provide in terms of TIF, revolving loan fund, tax abatement, etc. The whole process is prescribed by state statute.
So then what?
You finalize the development agreement, or the loan agreement in the case of the revolving loan fund, and then you stay in contact with the business to verify their performance.
Most of the reporting is done by Dave Schnobrich, but at times I’ve contacted businesses to gather information. And a number of the businesses that are participating in some of the incentives, I contact at a regular basis to get information about new hires, capital investment, etc.
Maintaining a relationship with those people is important. If a business is considering an expansion and they’re putting together some financial modeling, and we can have a possible impact on that financial modeling as a community by providing incentives, then the business should know about that. So by maintaining a relationship, my hope is that the business owner or the managers would have a comfort level in picking up the phone and having an informal conversation, saying, “Now if we were going to do this, what would be available to us, and can you give me some rough numbers?”
Does that happen to you a lot?
It happens to me frequently. A trust relationship is something that’s earned and should be maintained. And I place a high value on that.
Economic development in New Ulm is about partnerships. And the success of economic development activities is based on the strength of those partnerships. We don’t do it alone. It’s not just about the NUEDC; it’s about the community as a whole.
Getting to know you: Brian Tohal
Birthplace: Le Sueur, Minnesota.
Currently Living In: New Ulm, Minnesota.
Job Title: Coordinator of the New Ulm, Economic Development Corporation.
Education: A bachelor’s degree in urban studies and a master’s in economic development, both from Minnesota State University, Mankato.
Family: Wife Katherine, daughters Jackie (26), Sarah (22) and Samantha (18).
Hobbies: Golf, reading, taking walks and spending time with family.
Favorite Books To Read: Anything related to history, especially historical fiction set in southern Minnesota. Right now, he’s reading about World War II.
The History Of NUEDC
At the start of the 1950s, New Ulm’s largest employer was the Eagle Roller Mill, the largest rye flour producer in the country, which employed 350 people. However, the growing demand for white bread eventually forced the mill to close its doors in 1951.
“Business leaders in the community said, ‘What are we going to do?’” Tohal explained. “So they formed a for-profit corporation and sold shares.”
This corporation started as New Ulm Industries when it was first incorporated in 1952, with members collecting $40,000 of capital to build their first factory spec building (which is now part of the 3M building in New Ulm). Two years later, the corporation was able to attract a Kraft Foods plant to the city, which continues to be one of the largest employers in New Ulm.
In 1991, New Ulm Industries was converted to the nonprofit New Ulm Economic Development Corporation.
New Ulm Economic Development Corporation
Address: 1 North Minnesota Street, New Ulm, Minnesota