Mike & Cathy Brennan

Photo: Kris Kathmann

Mutual Partners

Mankato couple two of many businesspeople trying to help transform downtown Mankato into something special.

If a tee shirt were made that read “All I Learned About Business I Learned in Cedar Rapids,” Mike and Cathy Brennan of Mankato-based Brennan Companies likely would buy a gross.

From 1991-1994, the Brennans lived in Cedar Rapids, where Mike was a project manager in a branch of Minneapolis-based Ryan Construction. While there, they saw firsthand—and in Mike’s case, actually helped begin—the process of downtown renewal. When moving in 1994 to Mike’s hometown, Mankato, they realized the “Key City” was perhaps ten years behind Cedar Rapids, but on an almost identical path.

Said 55-year-old Mike in a Connect Business Magazine interview, “Being in Cedar Rapids was a great education.” Apparently so, because for years the Brennans have been trying to apply their real-world education here.

Mike and Cathy are partners in every sense. They co-own Brennan Companies, which includes Brennan Construction and Brennan Properties, with the former completing such high-profile projects over the years as AgStar headquarters, The Marigold, USBank (2012), Landkamer Building, and Bolton & Menk headquarters. Besides the Landkamer Building, Brennan Properties owns and manages Old Town Center and two other commercial buildings, and has been developing the former Ember’s site that could become home for the Children’s Museum of Southern Minnesota.

In terms of community partners, Mike, who has an MBA and an engineering degree, has been a leader with Kiwanis, South Central College Foundation, Community Bible Study, and Blue Earth County Historical Society. Cathy, a CPA, has been a leader with Twin Rivers Council for the Arts, Greater Mankato Diversity Council, and City Center Partnership.

As for that other partner, in many ways, the Brennans owe a great deal to one city in Iowa.

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Fill our readers in on your backgrounds.

Cathy: I come from a middle class family of five kids. Swimming was our family activity eleven months a year and I swam from about age nine to through high school. In 1974, I competed in Minnesota’s first high school girls swim meet. Every weekend, we kids would compete in meets and my parents would come along and play cards with other swimming parents who became lifelong friends. Besides a good AAU coach, we had a great high school coach.

What did you learn from your coach?

Cathy: His name was Elmer Luke and he has been inducted into five Halls of Fame. He went 100 dual meets without a loss over a ten-year span, including the time he coached me. A big piece of who I am came from Elmer. As a little girl, I was swimming backstroke between two docks at Shady Oak Beach in Hopkins and came upon a high school group throwing a ball around. I panicked, couldn’t stand up in the water, and starting choking. I almost drowned. Because of that incident, when it came time for me to swim in deep water, I would leave and go to the locker room.

That really must have terrified you.

Cathy: Yes. And Elmer saw me leaving. So one time, after he brought me over to swim across the deep end, I started running toward the locker room. But he had locked the door so I couldn’t leave. I clung to the door and started crying. Clearly I wasn’t getting over my fear of deep water, so my parents bought private lessons for me with Elmer, which wasn’t something we would normally do in our family.

In the water, Elmer put me on my back, held my head, and said, “Cathy, we’re going to take a little walk.” Before I knew it we were at the big dock and he was saying we would swim back to the shallow water. I asked, “Will you swim next to me?” He said he would. That’s how I got over my fear.

He was an important man in my life. Not long ago, we were emailing back and forth about seeing each other again for the first time in 35 years. I asked for his address and offered a time for a meeting. He said, “Great, I won’t lock the door on you.” This was 35 years later—and was so cool. His daughter told me he tells my story all the time.

Mike: The 50-yard freestyle was Cathy’s specialty. She won’t say it, but she held a state AAU record for it back in the ‘70s.

What about you, Mike? Give our readers a taste of your experiences growing up.

Mike: Through my mother, Diane, I learned to go with the flow of life and not get too shaken when bad things happen. She grew up rather poor in a single-parent household. My mother has inner strength and is one of the most remarkable women I know. Cathy would echo that.

From my dad, Bernie: He just liked people. He was a commercial Realtor for 20 years and before that was in the oil business, owning at one time six gas stations in Mankato, St. Peter, and New Ulm. Many people knew him and he was well liked. From him, I learned how to enjoy working hard. I would ride my bike down after school to the gas station to help him clean and paint for 25 cents an hour.

Was there a particular challenge he had in business?

Mike: The first oil embargo hit in the early ‘70s and he worried a lot about his businesses. He eventually got out of the industry and leased out his stations except one. He was a true entrepreneur who changed careers at midlife to enter the commercial real estate field. Through him, I grew up seeing firsthand an entrepreneur’s life.

How did you two meet?

Cathy: At Grace Church in Edina, now in Eden Prairie. It’s a non-denominational mega-church and they had a “college and career” group of more than 100 singles in their 20s. We first met at a Christmas party and married in 1985.

What did you like most about each other?

Mike: Right from the beginning, we were able to have good, long, deep conversations.

Cathy: I would say the same.

Mike: One of our first dates was a two-hour dinner over pizza. We found out we could talk about a lot of things together.

Cathy: And we still do.

What do you like to talk about most?

Mike: Well, our faith is right up there. Cathy and I talk about questions we have concerning our faith. Over the last couple of years we have gotten out of the cookie-cutter way of expressing or defining our faith. Our faith is strong as ever, but after thirty-some years of being fairly knowledgeable believers, we have gotten more into the historical context of Scripture, what was going on back then, and how that applies to today. I want to hear the other side of arguments and don’t want to go my whole life without asking the questions. Some people don’t like hearing the questions. We’ve been asking each other these questions about faith the last few years, and I’ll say I’ve been able to answer some of them, but it has taken work.

Cathy: We both take our faith really seriously. We’ve been in many Bible studies, youth groups, and different ministries. Mike’s a co-leader in Community Bible Study now. We’re questioning things now not because of any specific doubts, but just because we want to learn more. I like learning new things. We are challenging ourselves to be what God wants us to be rather than what a denomination wants us to be.

You are inquisitive.

Cathy: Yes. Somebody just told me I’m naturally curious. I’m used to being different because I went into what used to be a man’s profession—accounting. We’re used to being different. We really enjoy being around all kinds of people with all kinds of experiences.

In other words, you’re not afraid to do things differently.

Mike: I would say that’s true. It’s a challenge for us sometimes not to be fiercely independent. Every good attribute in a person has something not so good attached.

Cathy: One thing we’ve learned is that we don’t have the answers to all of life’s questions. We continue to have plenty of questions and as for answers are going with what we know right now.

What did you two do in the time between marrying in 1985 and starting started your business in 1994?

Cathy: First, I graduated from the University of Minnesota in 1982 with a major in accounting and began working as a public accountant/CPA. In 1986, I went with Ameriprise (American Express) to write financial plans from a tax planning perspective for people with large estates, helping them save on income and estate taxes. When our first son, Joe, was born in 1987, American Express allowed me to work on a contract basis and I leased a computer to start working at home. I loved the independence of it. I really wanted to be home with Joe. After our second son, Jonny, was born in 1990, my work ran out at American Express and I became a stay-at-home mom. Meanwhile, Mike was working for Ryan Construction and we moved to Cedar Rapids, Iowa, where his company started a satellite office.

What happened to you after school, Mike?

Mike: After graduating from the University of Minnesota with a degree in civil/structural engineering, I worked as a structural engineer with Ellerbe Becket and with Setter Leach & Lindstrom in the ‘80s while getting an MBA from St. Thomas at night. Back then, I was trying to figure out how I could combine business and engineering because I liked both and soon realized general contracting was the way to do it. I started out as a project manager in the late ‘80s with Ryan Construction—a large Midwestern contractor/developer now doing business all over the country.

Was there a person important to your career development?

Mike: Not so much a person, but just the act of going to Cedar Rapids and becoming part of their new office. I liked their vice president and we worked well together. I saw what it was like being in a start-up office in a new market in a Midwestern city going through challenges. While there, Cathy and I thought about starting our own company, which was why we came to Mankato in 1994. When we arrived, it didn’t take long for Cathy and I to see that the issues here were almost identical to the ones in Cedar Rapids.

What were they?

Mike: They were the same as what was happening all over the country: big box retailers would locate on the edges of a town, and then so would large malls, which then would draw retail businesses to the outskirts. Downtown areas all across America, such as those in Cedar Rapids and Mankato, had to redefine themselves. We saw it firsthand in Cedar Rapids, where I was involved through Ryan Construction in that city’s downtown renaissance. Being in Cedar Rapids was a great education.

You came here right before the Civic Center was built?

Mike: That opened in 1994. We were seeing many of the same challenges in Mankato. What a great time to start a construction company that would evolve into a construction and development company.

What were they doing in Cedar Rapids that worked in terms of downtown revitalization?

Mike: Ryan Construction was there as part of a development consortium of businesses and a bank that had full support from local government. They all realized they had to do something to move downtown forward. Cathy and I went to Cedar Rapids last spring and it was amazing driving through downtown. Many of the things we had talked about in the early ‘90s had become reality, including some larger buildings and commercial/office developments. There were downtown condos. Cedar Rapids is now what Mankato will be in five to ten years. We’re on that path.

I went to the Quad Cities five years ago with an offshoot group of Envision 2020. We learned there that downtown renaissance usually goes through a four-step process. The first group to revive a downtown usually are the arts and coffee shops. Arts alone won’t sustain a downtown. The next step involves the creation of more commercial and Class A space, followed by more diverse occupants arrive, such as nicer restaurants, a civic center perhaps, and public entities. The last step, which we are just seeing, is downtown residential. Rob Else and Tony Frentz have started that process with the USBank building in Mankato, and Van Moody in lower North Mankato is doing it at the The Marigold project.

How did your business get off the ground in 1994 in Mankato?

Mike: Cathy and I had been talking about it for three for four years. We’ve always asked ourselves when making decisions this question: Can we live with the worst that can happen? In 1994, the worst that could happen was it wouldn’t work, and we’d find jobs doing something else.

The first thing we did here was join the Mankato Golf Club to meet people. Step two was finding an office. I remember talking with Curt Fisher over the telephone about an office. While we’re talking, in mid-sentence, he stopped to say, “And you’re Bernie’s son?” (Laughter.) Instantly, we had a connection that helped us hit the ground running. Curt and Tim Lidstrom gave us a chance on projects early on.

Cathy: So moving here, we still owned our house in Iowa while buying one in Mankato. I don’t know how that happened because we didn’t have any income. We had left our home furnishings behind to help sell that home. We had no work, two little kids, I was home, but I was never worried because I had full confidence in Mike’s abilities.

What was your first project?

Mike: One of Curt’s tenants needed a new doorway. My estimate was $500 to furnish and install the door. Our employee put the door in and I remember invoicing Barb Church and thinking that $500 check was a lot of money. (Laughter.)

A lot of our early growth came from connections with Curt and Tim. It snowballed. In 1994-95, we were scratching trying to build up equity to get bonded. We lived pretty lean. In 1996, we did our first $1 million project, the AgStar headquarters in Mankato, a project Curt was developing. We were low bid. That same year, we did Blockbuster and Texaco—a real breakout year. Our gross sales went from $50,000 in 1994 and about $100,000 in 1995 to $2.5 million in 1996.

Cathy: When Mike was working at Ryan in his late 20s, he managed a $6 million project. I knew he could do AgStar because he had the ability and experience. That project wasn’t any more difficult.

Mike: The biggest challenge starting out wasn’t my work but Cathy’s, which involved her setting up a cost accounting system. Anybody in business knows the importance of what she does. Our business plan had said, “Cathy will work part-time to get the business going.” Neither of us realized the importance of the accounting function as a general contractor. My job was relatively easy those early years compared to hers. Not only were we starting a new business, Cathy wanted to be there when the kids got home from school.

In 2000, you became involved with owning and managing commercial properties. That isn’t too common for a construction company.

Mike: It was a natural segue. We had two good opportunities come up at one time. I wanted to do both Old Town Center (on North Riverfront Drive) and CarX (adjacent to Walmart). We bought the Old Town Center building from Bolton & Menk. We later added a small strip mall on Belgrade Avenue in North Mankato and then the Landkamer Building in 2004.

What was there about the Bolton & Menk building that appealed to you? Did you have a vision for it?

Mike: The building had good bones, a willing buyer and seller, and we had just built Bolton & Menk’s new headquarters up in the industrial park. I have some personal history with them, too. I surveyed for them for two summers during college and liked the people there. Some of the people I knew in the ‘70s are still working there. We renovated the building, and put our office inside. For a while, we were just about the only tenant, which was a bit stressful because here we had taken out two commercial mortgages at once. This was something new to us and it was tough seeing our debt obligations on one side of the ledger and not much income on the other.

Cathy: The CarX building was the first time we had built something from the ground up for ourselves.

Then came the Landkamer Building. With what happened with your other buildings, you should have been gun shy. Why do it?

Cathy: It goes back to our being in Cedar Rapids and seeing that whole process develop of the malls being built, the downtown drying up, and downtown revitalization starting. Mike liked the bones of the building. We felt strongly this was the kind of building that could be renovated to create some Class A office space and bring energy downtown.

The Landkamer Building had so much potential, and we were completely in agreement on it. It filled up slower than we thought, however. We have to give all kinds of credit to Gislason & Hunter law firm for believing in downtown and establishing their business in our building. Without their decision to lease from us, we couldn’t have bought it.

Mike: I can’t say enough about Gislason & Hunter either. We went ahead and bought the Landkamer Building with little more than a handshake deal with Gislason & Hunter. We didn’t have a lease agreement beforehand with them.

You mean you purchased the Landkamer Building based on having only a handshake agreement with a lawyer?

Mike and Cathy: (Laughter.)

Seriously. In the big city, that would never happen.

Cathy: If you knew Andy Willaert (of Gislason & Hunter), you would know you could trust him.

Mike: The Landkamer Building had a perfect storm to make it happen. First it was the City being receptive to the requested TIF and Gislason & Hunter wanting to be the first tenant. (Curt Fisher introduced Gislason & Hunter to the building.) And then David Wittenberg, our banker, believed our numbers and was willing to look at our proposal of building it out in phases. Dave put his career on the line for this project. Our employees see this property as the anchor of the company. Having them do work here helps us get through the slow times in construction.

Why don’t more construction companies do something like this?

Mike: I do it because I saw Ryan Construction do it. I saw the model work.

Cathy: The advantage of our being a construction company is we’ve built buildings for ourselves, so we know what an owner wants. We have seen it from both sides.

In November 2009, you offered Blue Earth County $250,000 to purchase the Nichols Office Building. They turned your proposal down and later sold the building to a nonprofit organization for one dollar. What happened?

Mike: Our involvement began with a discussion that was started at an Envision 2020 Inter-City visit over a glass of wine. The County wanted to spend $600,000 demolishing the Nichols Office Building. I didn’t think that was a good idea because I knew the building was structurally sound and one of the few wonderfully built buildings in the city. The dialog began, and so did the development idea process. I first expressed an interest in making the building into condos, which fit my belief in the process of downtown renewal that involves housing returning to downtown as the last step. Rather than have the County pay $600,000 to knock it down, I suggested they pay me $300,000 and I would renovate it and place it back on the tax role. Then the idea evolved into the building being mixed-use, with the Blue Earth County Historical Society on the bottom two floors and condos I would construct on the upper three floors.

So you were willing eventually to pay $250,000 for the property.

Mike: My (last) proposal was for the County to give it to Blue Earth County Historical Society (BECHS), and I would have bought the upper floors for $250,000 from BECHS to help offset their renovation costs. I had two goals for the building: 1) to not have it knocked down, and 2) to see it developed with the idea of having mixed use.

Cathy: Again, Mike and I also were thinking of the fourth element of bringing renaissance to the City Center: downtown housing.

Mike: VINE ended up with the entire building for $1. They are a good organization and I wish them the best.

You also have had an evolution of ideas involving the development of the former Ember’s restaurant site near the Veterans Bridge. You own the land. Nothing is written in stone yet, but after a number of ideas fell through over the last few years, now it looks as though the Children’s Museum will be building on that site.

Cathy: The Children’s Museum has a great business plan, great people involved, and they have been thoughtful in developing their idea. We have confidence in them.

Mike: I was on the Children’s Museum facility search committee for about a year and we looked at perhaps half a dozen sites. The Ember’s site never seriously grabbed anyone’s attention until one day when the Executive Director, Peter Olsen, called to ask about it.

Cathy: It took us two years to buy that property. Second Street hadn’t gone through yet, but we knew the plan was it would. We see that piece of property as the center of this community. If you open a map, it’s just about on the centerfold. We call it Bridge Plaza because it bridges many things: our past with the future, i.e., this is near the site of the 1862 hangings; downtown with Old Town; Mankato with North Mankato; and the Children’s Museum bridges today with our future, our children. We feel strongly something important should be on that site.

That’s not a place for a gas station.

Cathy: This is more than what Mike and Cathy want. It’s a community project. We are excited about the prospect for a Children’s Museum because it’s a good match with the library next door and the parking flows right through. We also feel the other building destined for the site needs to blend in with the Museum.

Mike: The second building on the site (besides the Children’s Museum) will be mixed use non-residential, which could be offices and a restaurant on Second Street.

Cathy: What we’ve learned is that development isn’t just having an idea and staying with it, but rather often it’s an evolutionary process that involves being open to improving and honing the original idea.

Which is what you are doing with your faith?

Cathy: Oh man, I’ve never realized that.

Mike: (Laughter from both.) Maybe that’s the way we’re wired.

Cathy: That’s interesting. And a side note, Mike and I are sure specific events have been orchestrated over the years by God to move us in different directions with our lives.

But as for talking about development as a process, it’s hard sometimes for us not to get stuck on one idea for a development. For example, as a developer, you have to be very persistent and keep pushing and pushing your idea and yet on the other hand you can’t be stuck with it. It’s a double-edged sword. Fortunately, we have each other to bounce ideas off. We enjoy working on and refining ideas from different angles and asking others their opinions.

Sell me on the City Center Partnership.

Cathy: It started out of Envision 2020. Downtown needed a group and I was one of the original people involved. Any downtown is like the hub of a wheel: if you don’t have a strong hub, the spokes eventually fall apart. I’m a strong believer in downtown. That’s why we did the Landkamer Building and that’s why we purchased Old Town Center.

The idea with the City Center Partnership is if we can get business owners to join together on projects and ideas for renewal, along with the Cities of Mankato and North Mankato, that can help draw more visitors and make this a better place to live, work, and play. We have many independent businesses in the City Center who are independent thinkers, too. I would say we’re a group that has lots of energy.

Where are you going to build condos downtown?

Mike: I don’t know now that the Nichols Office Building didn’t work out. But I love what Rob Else and Tony Frentz are doing at the USBank Building to get things started. Steve Rentz owns property along Sibley Parkway and is building some town homes near the river. Revitalization happens in layers. The need for downtown housing here isn’t as great as in larger metro areas where you might have an hour commute to work. In Mankato, you can live on the outskirts and only have to drive ten minutes to downtown. So we have to create an environment where people want to live downtown. Cathy and I have an empty nest now, and if we could sell our home for a fair price and find the right condo downtown, we definitely would consider moving. We are encouraged looking forward to Mankato and North Mankato’s future. There’s a lot of hard work to be done and we’re going to enjoy the process.

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Getting to know you: Cathy Brennan

Born: April 25, 1960.
High School: Hopkins Lindbergh ‘78.
College: University of Minnesota, accounting, 1982.

Getting to know you: Mike Brennan

Born: January 31, 1957.
High School: Mankato West ‘75.
College: University of Minnesota, civil/structural engineering, 1980; St. Thomas, MBA, 1987.
Children: Joe (24) and Jonny (22).

THE ESSENTIALS

Brennan Companies

Headquarters: 124 East Walnut
Mankato, MN 56001

Web: bcofmn.com

Telephone: 507-625-5417