Jodi’s Journal: Minnesota, don’t write off your neighbor to the west

Nov. 20, 2022

You know things have changed when a Chick-fil-A struggles to stay open.

That was the case for more than two years nearly every time I passed by Concourse C at the Minneapolis-St. Paul International Airport.

There were times the passenger traffic was so light flying through in 2020 and 2021 that it was hard for me to find anywhere to grab something to eat during a layover, especially after lunch hours.

I took this photo over the summer — not on a Sunday.

I flew through again this past week, and the classic chicken sandwiches were once again being cranked out for a line of customers. So it’s a sign, let’s hope, that maybe things are feeling a little more normalized for our friends in the Land of 10,000 Lakes.

They are not, however, the same.

While the pandemic era brought an influx of people to Sioux Falls and South Dakota, growing tax revenue and more new business openings than I can sometimes corral, Minnesota took a hard hit.

The Minnesota Chamber of Commerce described it as a “shock to the economy” that was “staggering,” with the loss of more than 400,000 jobs in the spring of 2020 and more than $36 billion in GDP output – “To put this in perspective, Minnesota’s 2020 job losses exceeded the size of North Dakota’s entire workforce,” it reported.

Then came the death of George Floyd, the resulting riots, a reported 1,500 businesses damaged or destroyed and a rise in crime.

More people moved out than in during the past couple of years. The state ranked in the top 10 nationwide for out-migration at the start of this year.

There are signs Minnesota and the Twin Cities are rebounding – far beyond a reopened airport restaurant – but there’s simply no overlooking the fact that Minnesota and South Dakota are significantly different places than they were, say, in 2013 – the last time Sioux Falls-based Sanford Health and Minneapolis-based Fairview Health Services pursued a merger.

At that time, Sanford pulled out following concerns about the deal from the Minnesota attorney general.

And, sure enough, hours after the new attempt was announced came another statement from the current Minnesota attorney general.

“We are aware of the proposed merger between Fairview and Sanford,” John Stiles, a spokesman for the attorney general’s office, saId in a statement reported by multiple media outlets.

“We have opened an investigation into the proposed transaction’s compliance with charities and nonprofit laws. We are also evaluating any possible effects on competition along with state and federal partners.”

So maybe not that much has changed.

Now I understand there’s a need to look at actual, legitimate anti-competitiveness concerns in any merger of this scale.

But I kind of wonder if maybe, possibly, this might kind of, sort of, have more to do with the fact that the combined organization would be based in Sioux Falls and not Minneapolis, and bear the Sanford name.

In case you missed this column, circa 2021, I put some significant information in it.

Bill Gassen was months into his new role as CEO and confirmed for me that in what he called  “a firm decision by the board” of trustees, Sanford had committed to keeping its headquarters and CEO based in Sioux Falls.

“So – at least as it stands today – if there are other merger opportunities, they will be entertained only if those criteria are met for Sioux Falls,” I wrote in 2021.

“We also believe we owe it to the communities that have invested in us and have believed in us and have given us their philanthropic dollars. They’ve partnered with us in business and given us their people, and their children have come to work for us, and we owe it to these communities to make a recommitment back to them,” Gassen said.

“To know one of the greatest health care providers in the world is going to remain here.”

But here’s the thing, Minnesotans. That’s not a bad deal for you, either.

If you’re an organization betting on the future, you’d do well to look west too.

For instance, you’ve probably heard of C&B Operations, the company owned by the Burwell family, which owns a significant number of John Deere dealerships.

Earlier this year, I interviewed CEO Peter Burwell, a lifelong Twin Cities resident who moved with his family, including his two brothers, to Sioux Falls in 2021. Their business will be moving into the top of the new downtown Steel District office tower next year.

“It’s been incredible,” he told me. “I’m really enjoying it. It’s a nice-sized community for us.”

Then there’s Josh Thoma, the restaurateur behind Twin Cities restaurants such as Smack Shack, Burger Dive and The Lexington. He’s bringing three restaurants to Sioux Falls next year, including two new concepts, and is always enthusiastic about what he has discovered in our market when we talk.

Even in the Twin Cities, they’re “hearing more buzz” about “what a happening town Sioux Falls is,” he told me when we caught up a couple of months ago. “Plus people traveling here and moving here.”

Or maybe you’d be interested in hearing from Brian Slipka, the owner of the region’s largest business brokerage firm – the Minnesota-based office of Sunbelt Business Advisors and True North Mergers & Acquisitions.

He described the contrast of doing business in Sioux Falls versus Minnesota for me recently as nothing less than “darkness versus light” as he praised how seamless it was get things done here and how people genuinely seemed happy to welcome him and offer support along the way.

“You guys probably don’t see it as well because you’re in it every day,” he told me. “We see it, which is what attracted us to … invest in Sioux Falls. When you have governments promoting growth, that’s a big part a lot of folks don’t like to talk about, but then you also have the working class here that’s fundamentally different. It’s a hardworking culture.”

From the perspective of the combined organization of Sanford Health, Sioux Falls makes a lot of sense for a headquarters.

The very nature of this merger, as its CEOs described to me, is the melding of urban and rural geographies. Sioux Falls represents the intersection of those populations. And it’s even better positioned to be the headquarters of a $13 billion organization than it would have been a decade ago.

“This will be something really special in the state of Minnesota,” Gassen said when we talked last week. “To allow the combined organization to meet the needs of rural Minnesota and urban, more metro communities.”

I then asked Fairview CEO James Hereford how he planned to “sell” his state and community on the idea of combining with a system based in South Dakota.

He’s a native of Montana, he began, “but in the interactions I’ve had, there is this complementary nature of our cultures, of people coming together,” he said.

“I swear there are only about three degrees of separation between every citizen in Minnesota, North Dakota or South Dakota. Everyone knows each other. I think that (controversy) is more manufactured than reality, and I have every confidence we’re going to be able to drive from common cultures and common purpose to really come together and do something fairly special.”

Now, clearly, it’s not like this merger means all corporate jobs leave Minnesota. There’s still, as Gassen put it in the Star Tribune, a “very material corporate presence” envisioned there.

But embracing ties to South Dakota has proven beneficial for many of Fairview’s counterpart Minnesota organizations. I’d urge all involved to keep an open mind.

Sanford Health signs letter of intent to merge with Minneapolis-based Fairview Health Services

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Jodi’s Journal: Minnesota, don’t write off your neighbor to the west

Sanford’s proposed merger with Fairview Health Services could become the latest example of a Minnesota organization benefiting from looking west.

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