Mike Drummer

September 1, 2007 Daniel Vance

The consummate rural rags-to-riches tale: rising-star Mankato developer and small business owner emerges from modest beginnings.

One day, Minnesota author Garrison Keillor might write St. Clair native Mike Drummer into one of his folksy, best-selling novels. Baseball cap covering his head, summer open-toe sandals and winter flannel, a love affair with growling earth-moving equipment, one of ten children, his dad serenading the milk cows with polka music – 45-year-old Drummer at times seems more from Lake Wobegon than a Greater Mankato land developer and small business owner.

It took him every bit of six years to finish a teaching degree because he had to pay his own bill. By his own admission, he grew up “damn poor.” While attending Minnesota State University, he milked the family cows, cared for the neighbors’ hogs, coached high school basketball, and in the spring worked for landscaping and garden center businesses. After beginning a small business with wife Julie in 1991, Drummer earned extra money as a substitute teacher, basketball coach, and Tires Plus employee.

Today, sixteen years later, Mike Drummer owns or co-owns Drummer Construction, Westwood Business Park, Microtel Inn & Suites, Famous Dave’s, Drummer’s Garden Center, several strip malls, and Green Mill Restaurant. Land that he and others have developed has added 700 new homes and 530 new beds (150 apartments) to Greater Mankato’s housing inventory, no small achievement, and with more arriving. The project that put his career in high gear was the 88-acre, 180-home Rolling Acres housing subdivision (see right) that he and Realtor Bob Tonneson began in 1998.

Even Drummer will admit he doesn’t possess a brilliant business intellect. What he does have—loyal employees and family members, an exceptionally strong work ethic setting a drum beat for others to follow, and a penchant for being in the right place at the right time—has carried him along quite well.

Where did you grow up?

Along the Le Sueur River on a 200-acre dairy farm between St. Clair and Mankato. The highest number of cows we ever milked was 35. I did a lot of milking when young and we were pretty much married to the business. We worked nearly all the time, which is where we get our family work ethic. I come from a family of ten children (six brothers and three sisters). We never took a day off work, but that’s what you do on a small farm that has so many mouths to feed. We had to work. We also raised chickens and pigs. In the 1970s, especially, I remember walking the beans in the summer, shoulder-to-shoulder, with my brothers and sisters. We got our work ethic from our parents. Dad is 74 and still farms and delivers the morning newspaper. Mom retired in June from MRCI.

You were on the family dairy farm until age 18?

I stuck around a while after high school. During my first years at MSU, I was still helping out with the milking. For all my six years of attending MSU I also worked on a neighbor’s hog farm. I learned how to work. To make ends meet I also coached high school basketball during my six years in college. At MSU I studied a bit of everything—I started in the pre-law program majoring in political science. In 1984, I decided I didn’t want law school, so I turned my coursework into a social studies teaching degree and a coaching certificate. I graduated in 1987.

And so you began teaching?

Besides all the other jobs I mentioned earlier, I also worked during the spring months for various garden center and landscape businesses. One of those was the old Orr’s Farmer’s Seed and Nursery in Mankato next to Mexican Village. When I graduated from high school I took a job there managing the garden center for a year. In 1988, after graduating from MSU, I accepted a position at St. Clair High School teaching social studies and math. However, within six weeks of accepting that position I turned it down in order to start my own landscaping business. Other than substitute teaching later, I never taught a single day of school.

Why turn it down?

At that point I suddenly realized I wanted to own a landscaping business. I did use my degree a bit in the late 1980s and early 1990s when I did substitute teaching. I started my landscaping business without any customers and made a lot of cold calls. Julie (my future wife) and I would drive around Mankato looking at property that seemed to need landscaping work, such as new businesses or houses. There’s an old axiom: All you need to be a landscaper is a wheel barrel, pick-up truck, and a shovel. At that point I didn’t own a pick-up. I noticed the grounds around Perkin’s Restaurant could use improvement, so I gave them a quote. The same happened with Budget Mart. That’s how it started.

What did you enjoy about landscaping?

I enjoy the gardening and plants. It’s different now—if you open up the Mankato Yellow Pages today you will probably find 35 or more landscapers. In 1989 I was only the sixth. Even so, in the beginning it was a struggle financially. As I’ve said, to make ends meet, I worked odd jobs, such as a basketball coach, at Tires Plus, as a substitute teacher—whatever I could find.

Did you receive any financial assistance from your parents?

No, and not from my wife’s parents either. Julie graduated from MSU in 1988 with a business degree and out of college she worked as an assistant manager in a video store and as a bank clerk. That’s all the work she could find starting off. In 1990, we approached Menard’s with the idea of starting a garden center in their parking lot. They let us put one up, but only through the Fourth of July that year. The next year they allowed us to rent from them a “permanent” location, on the corner where Snell Motors is today. Back then Menard’s was at the edge of town.

From there, in 1994, you and a brother started Drummer Construction?

A couple of years before that, we purchased a backhoe to perform grading and digging work. My older brother Harold had been working for a construction company doing excavating. We partnered in that business almost six years, mostly digging hog pits, and ended the partnership in 2000. We both still do excavation work, but as separate companies. His is known as HJ Drummer Construction, ours as Drummer Construction.

When did your big break occur as a developer?

When I met Bob Tonneson, a real estate agent then with Century 21 Atwood Realty. He was involved in constructing apartments off James Avenue when someone recommended me to do his excavation work. We met at a North Mankato cafe and hit it off right away. I remember starting off the conversation by saying I could save him money on his project by redesigning the storm water off his property.

He and I became business partners in 1998, and we soon developed Rolling Acres, which became an 88-acre subdivision near Stadium and Pohl. That was our first attempt at development.

When buying that property, Bob and I were very nervous. If our development failed, we would own the most expensive farmland in Blue Earth County. In 1998, there wasn’t that much new home construction in Mankato. Our partnership made sense because he was in the real estate end and I was on the “digging” end of development. We took a big chance.

Today, that 88-acre subdivision has more than 180 homes. Rolling Acres, along with Clair Haefner’s Southbrook development and Gary Hiniker’s Lion’s Park development, seemed to spur Mankato forward in new home construction. All of a sudden a lot of new contractors had work. The pent-up housing demand and the drop in interest rates didn’t hurt either. As for building the homes in Rolling Acres, we sold off our lots to about a dozen contractors. At that time in the market in Mankato, if you wanted to build a house and buy a lot, you had to buy them from a builder/developer. But we were open to any builder, and are to this day.

After Rolling Acres, Bob and I bought another 35 acres and called that development Parkside. We were 50-50 partners in both ventures. We also did the project where Willowbrook stands on now, off Victory Drive. Also, we did the Westwood Commercial Centre together, where Drummer’s Garden Center stands today, north of Highway 14. Eventually we ended our partnership in 2001 and split up that property north of Highway 14. He still has land there to sell. The partnership was great while it was going and served its purpose.

You and your wife started Drummer’s Garden Center in 1990, only a couple years after being married. Do you still play a role in the day-to-day operation of Drummer’s Garden Center?

My part in Drummer’s Garden Center has diminished greatly. My wife runs it and does a fantastic job. She is honest and devoted to customers. She provides service at a reasonable price and gives customers attention. In the spring, we still carry flowers and other products for customers out to their cars. Customers can get their questions answered. That’s how we compete with the discount stores. Even in the beginning she ran the garden center part and I was out landscaping, except for May, the peak month for garden center retail.

What other businesses do you own in full or part?

Most of the companies we own have spun off from our development work. We developed the land around Drummer’s Garden Center on Victory Drive, near Menard’s. When Microtel Inn & Suites was looking for a franchise in Mankato, we put the work we did on the land as our portion of the investment. I am one of three investors—another is Larry Hoffrogge. One thing we really enjoy seeing is other local business owners starting or expanding in our developments.

As for Famous Dave’s BBQ, we are one of four owners. We also own the Famous Dave’s building and lease it back to the business. The strip mall we own next to the garden center contains Captain Jack’s Liquor, which is owned locally, but not by us. We are also one of nine owners of Green Mill Restaurant.

Recently, we started Westwood Business Park behind Famous Dave’s. Having office space was my way of diversifying, of providing a balance to our residential developing. In the early 1990s, Menard’s asked us to open garden centers at other Menard’s locations. Instead, we decided to stay hands-on with our business in Mankato. To diversify we started Drummer’s Construction, and then later a development company. Everything we do is in Greater Mankato. Westwood Business Park contains the regional offices for DuPont International/Pioneer Seed Corn, and soon for Minnesota Pork Producers and Minnesota Soybean Growers. It was 50 percent full its first year. We also sold land there to DeGrood’s and Floor to Ceiling.

Do you own the nearby land where Rasmussen College is building?

No. But we did outbid the developer of that land and another developer in 1999 for the 35 acres we do own near there, purchasing that property from the Lutheran Church Missouri Synod. A farm family living there had donated that property to the church. Bob Tonneson and I paid $9,500 an acre. Bob still has lots to sell on that property. We have already developed ours.

We’d really been hoping to win that bid. Back in 1999, we knew that our Drummer’s Garden Center fed off of Menard’s business, and when Menard’s moved to the other side of Highway 14, that we should be moving also. Life is all about timing. We were in the right place at the right time. The church had just inherited the land. Buying that land along Highway 14 was still a risk, though. Consider we built Drummer’s Garden Center on a gravel road that didn’t have an off-ramp to Highway 14 and without a bridge to Madison Avenue over the ravine. We were at the end of a road. Menard’s was up the street, but they were where the road ended before it turned gravel. We built Drummer’s Garden Center with the philosophy of “build it and they will come.” In addition to moving to be near Menard’s, we also knew that perhaps two major garden center retailers were looking at Mankato sites, including Frank’s Nursery and Crafts. Our decision to build a large, year-round facility was also an effort to get competitors to shy away from Mankato.

Has developing land been easy?

It was quite smooth in the late 1990s. Over the last ten years regulations seem to have gotten tougher across the board, including building codes, pollution control, and city requirements. We’ve never really asked the city for help. For the most part, we’ve done our own street and utility work. The exceptions have been Parkside and Cougar South. We haven’t wanted to put out bids to do sewer pipe and water mains because we own a construction company. Our businesses are about synergy. We try feeding the landscaping business to the garden center, and feeding the development company to our excavation business, for instance. We’ve been able to keep our construction company busy and growing by developing land.

What housing developments do you have now?

We started with 88-acre Rolling Acres. Then we started 35-acre Parkside, which is just off Mayan Way. These were both in partnership with Bob Tonneson.

Separate from Bob, we did the 37-lot Quail Path off Pohl Road, which has housing designed mostly for seniors. We developed it, put the streets in, and Wilcon Construction eventually bought the lots. They are finishing the final units. We also developed Stadium Heights, which consists of seven, three-story apartment buildings off Stadium Road near the University on Heron Lane. It has 252 beds, mostly for college students. This was a fun project because we kept it all in the family. Three of my brothers and a brother-in-law own a portion. My brother-in-law Dan was the supervisor on that job, which eventually led to the creation of Heartland Homes.

Larry Hoffrogge and I partnered on Isaiah Estates, which has 63 units over 40 acres near Lor Ray Drive in North Mankato. I did the development and he did the building. That project is almost completed. Larry and I also did Jacob Estates, which has 50 lots of single-family housing over 30 acres. Also, Jacob Heights (apartments) consists of 278 beds at Monks and Woodhaven Circle, near MSU’s parking lot. We also did the commercial project Stadium Center, near the college, where Pioneer Bank and Green Mill Restaurant do business.

Separate from Larry, our next project was the 45-acre Cougar Estates, which has 153 homes next to Mankato East High School. Then came Cougar South, which is on the other side of the road with 35 acres. Doing these two projects was when I began believing that real estate really was all about location, location, location. Until then I didn’t believe “location” affected people’s housing choices that much. It soon became apparent that people were buying there simply because of a proximity to Mankato East. Their kids could walk to school. That’s why all the lots sold in 17 months.

Our newest developments are the 12-building Westwood Business Park (office space) and another 36 acres just east of the hilltop Hy-Vee, which will be commercial only. We are diversifying. We are doing residential, apartments, commercial office, and commercial retail. Our office park is doing really well. We aren’t just doing residential. We are trying to do a little of everything, and keep some of each in inventory, so if one particular segment gets hot we can fall back on it.

Did you learn to diversify from being in the garden center business, which tends to struggle after July 1?

Yes. As for running a business in general, I learned a lot from Chuck LaGow, Floyd Palmer, and Warren Smith. I listened when they gave advice. I also learned watching others make mistakes, such as expanding too fast. You have to be able to pay your employees first, the government second, and anything left over goes to your vendors before you get paid.

Chuck LaGow taught me diversification. He was building apartment buildings, single-family housing, buying property and remodeling it, and building twin-homes for seniors, as in Cree Point. From Floyd Palmer I learned how to deal with employees. From Warren Smith I learned how to work with the city, site selection and layout, zoning, and the process it takes to get a project developed start to finish.

The bottom line of Drummer Companies is that we are family. My brothers Pat, Jim and Dave work here and Dave is my right-hand man. My brother-in-law Dan works here and so does my nephew Joe. Several other nieces and nephews work or have worked part-time for us. My sister Mary manages all our apartments. It’s like we are all still on the dairy farm. We all know our roles, and it works for us because everybody pulls their own weight and no one steps on any toes.

As for Famous Dave’s, have you met founder Dave Anderson?

No. I want to meet him and they keep saying he’s coming down. He sounds like a fascinating guy who has done a lot in life. I’ve read his book. He started the first Famous Dave’s in Hayward, Wisconsin.

Were you actively involved in getting that Famous Dave’s franchise to Mankato, and in getting the Green Mill Restaurant?

With Famous Dave’s, the other three owners are all Famous Dave’s people. One of them started with the corporation when they were opening their third location, and another during their fifth. They did the legwork opening here. The Mankato location is one of 136 nationally. With Green Mill I was involved from the beginning. We drove to other cities and checked out other Green Mill Restaurants, and looked into their corporate numbers, and met with its owners, who visited Mankato. We developed the land from what I owned, while Larry Hoffrogge constructed the building. Our Green Mill Restaurant has nine, hands-off owners. It is more of an investment group.

What do you envision the land around Menard’s looking like in ten years?

Oh my. All the way out to Wickersham Campus will be filled in. If the corner down on Highway 14 and County Road 3 could land a big company, on land Fisher Development owns, growth in that area could accelerate. Curt Fisher owns perhaps 30 acres near the ramp to Highway 14. The Wal-Mart distribution center is coming on the other end of County Road 3.

As for other areas, I believe the Adams Street connection going east may become the next Madison Avenue. You will have Highway 14 visibility on that Adams Street extension going past Hy-Vee and out to a new overpass near the Wal-Mart distribution center. That whole section from the new overpass to Hy-Vee will include a lot of retail.

A couple of years ago Drummer Construction was sued—along with Heartland Homes and an individual—because of an accidental death. You settled out of court. Most businesspeople worry about having a fatal accident on their watch. What went through your mind when you first heard of it? Newspaper reports say fumes overcame a person using one of your generators indoors.

I was the second person on the scene and made the 911 call. A lady was using a generator while painting her new home. It was a sad situation for everyone, in particular because she was so full of enthusiasm and was finally getting the opportunity to be a homeowner. That morning, we were digging a basement for a nearby home and soon were going to be digging her driveway. I was walking across a field at Cougar Estates when people coming out of a house began yelling and asking if I had a wireless telephone. It was an accident. I have done a lot of second-guessing. What happened made us as businesspeople a lot more cautious about what we will do in the future. It was our generator. She was trying to paint her new house. My company loaned the generator to her as a favor.

What is your relationship to Heartland Homes?

It is owned by my brother-in-law, Dan Nourie, and brother, Dave Drummer. It initially was set up to build on lots I own. They helped push my lot sales along and the company grew rapidly. They pay attention to detail and quality, and they follow through with customers.

You still do business with other contractors, don’t you?

A friend of mine several years ago reminded me of the 80/20 Rule. I used to have the mindset of wanting to grab every customer and bid every job. Then I realized: 20 percent of my customers did 80 percent of the business. Why not cater more to that 20 percent? So we developed a rule of seven. For the most part, we deal only with seven homebuilders, and with seven commercial builders. We rarely deviate from that list. Heartland Homes is just one of the seven. I also live by the rule that I do business with those doing business with me. For instance, Dave Gosewisch built Drummer’s Garden Center, in part because we had been doing, and still do, most of his site work.

If a homeowner from one of our subdivisions wants us to dig a basement for them, we’ll do it, absolutely. But if a homeowner in Wells or Winnebago wants us to dig, we say no, because if we do that we can’t regularly service the people that have been faithful to us.

If all your housing developments were full, how many homes would they contain?

Since 1999, in partnership with Tonneson and Hoffrogge, and on our own, we have built about 700 homes, three strip malls, quite a few commercial buildings, and more than 500 apartment beds for college students.

How many employees work for all the various Drummer Companies?

About 65, not including employees at Famous Dave’s, Microtel Inn & Suites or Green Mill Restaurant.

Are you a workaholic?

I am not the workaholic I was at one time. My favorite day of the week in the winter is Friday. My 5-year-old son Jacob comes to the office and we do “Daddy Day.” We both have a blast. The best deal of all is being dad

What is next for Drummer Companies? There is only so much land in Greater Mankato to purchase and much of the best is spoken for.

Back in 2005 we saw a coming downturn in the housing market and stopped developing subdivisions then. We had been doing a subdivision or two a year. Now we are probably going to focus again on housing. We miss it. Believe it or not, the bottom line for whether we do a project or not is whether it will be fun. If we aren’t going to have a good time, we don’t want to do it.

You and Bob Tonneson purchased those 88 acres only nine years ago. Do you sometimes have to do a reality check and say, I can’t believe our success?

This whole interview is a reality check. Seriously, I save your magazines. You have put Jerry Bambery and Glen Taylor on your cover, and the last issue you had Flip Schulke, a world-famous photographer. I read his article. I’m not even close to being in the same class with those guys. My life the last nine years has been one of having my nose to the grindstone. We haven’t had time to reflect on our success. It just happened. We have taken risks, but if you were to ask our banker, all our risks have been conservative. We just don’t stick our neck out there. Maybe shying away from risk comes from the way we grew up—from being so damn poor. My dad always said I was lucky and I do think I have been. He said I could fall into a pile of manure and come out not stinking.

I hope this interview doesn’t come off sounding like I did it all myself. Our partnerships with Bob Tonneson and Larry Hoffrogge did a lot. Much of the credit goes to employees and family. I have two brothers running excavators, my brother Dave is our CFO steering the ship, and my sister Mary runs the Stadium Heights apartment building, which has had 100 percent occupancy since the day it was built. That was all because of her. We also have prospered because of strong partnerships, such as with I&S Engineering, GreenCare, Blue Valley Sod, Mechanical Resources, and Survey Services. It has been a team effort. I guess I’m the quarterback. The most important partner I have is my wife, Julie, who is a classy businessperson and the hardest-working woman I’ve ever met.

DRUMMER, ON EMPLOYEES

When hiring, what do you look for in an employee?
We believe we can teach a new employee what they need to know. The potential employee must have a pleasant personality. At Drummer’s Garden Center you want someone outgoing and able to work with customers. As for Drummer’s Construction, you try to feel out potential employees to see if they are hardworking. If they are, and are willing to learn, we are willing to teach. In the construction business, we have hired people without an appropriate driver’s license to drive dump trucks. But we train them and help them get their Class A license. We have hired people without experience running an excavator. In those cases we let them get in on jobs where they are just loading dirt and it’s not costing the customer money. They learn that way. We’ve developed a lot of people into being skilled operators of heavy equipment.

What negative trait bothers you most when it’s present in an employee?
I have my pet peeves. Being late is at the top of the list. Work starts at 7:00, not 7:05. Another is when people call in sick because they have something else to do, not because they are sick. I can honestly say we don’t have a lot of people doing that here. We don’t lay people off in the winter—we keep them employed all winter. We try to find other projects to keep them off the unemployment roles.

Getting To Know You: Mike Drummer

Born: December 22, 1961.

Home: Raised in St. Clair, lives in Mankato.

Family: Wife Julie, children Jacob and Noah.

Education: St. Clair High School, Minnesota State University (1987).