Keith and Brenda Horne, owners of Northland Distributing & Manufacturing in International Falls, started construction recently on a 30,000-square foot warehouse and wood boiler manufacturing facility.
The facility will open as a shipping warehouse in January, with manufacturing starting next fall. The building and inventory value totals approximately $2.5 million.
Keith Horne is acting as his own contractor, and consulted with the Minnesota Office of Enterprise Technology to conduct the “flowability” design layout to make plant operation more efficient.
Starting as a home based business in 1995, Northland has plans to manufacture 1,500 Crown Royal Outdoor Furnaces annually. They would like to produce 3,000 units a year in combination with two other manufacturers if demand allows.
“Everything is actually going good now,” said Keith. “Our growth is unreal.”
The couple says it is important to them that more business and good jobs are drawn to the area. They plan to double their full-time staff to more than 25 with additional sales people and skilled laborers. Their three grown children also work with the business.
“We really want to see the community grow,” said Keith. “It doesn’t matter if a business hires two people or 10 people; it will all help out the community.
“We like being able to create more jobs in International Falls and being able to stay and keep the kids in the community,” said Brenda.
A new showroom to showcase wood stoves and hot tubs will open in December. Northland will install and carry water chemicals for all models of hot tubs.
Northland also sells wood pellet stoves and boilers that integrate with existing heating systems, whether forced air, central heating, radiant or hydronic systems.
“Radiant is the best out there,” Keith said.
Wood pellets are a biomass commodity that is compressed to less than an inch in size. The consistency of the pellet allows for controlled burn using manual and automatic feeding systems with thermostats.
“You can call home and tell the stove to turn itself on,” he added.
Northland has traditional American colonial style stoves, and is the sole North American distributor of the Ecotek brand. Senior Ecotek management staff were at Northland last month from Italy to upgrade training.
Keith said that the pellet stove is designed for urban homes that cannot use the outdoor boilers. The pellet stoves can set up without a lot of additional renovations.
“The pellet boiler is a nice addition that you can put in the house anywhere,” he said.
Keith made modifications to the Ecotek models for United Laboratories approval, and then went the extra step for an EPA certification.
“We didn’t have to, but we chose to,” he said. “It was expensive testing.”
There were many hurdles to getting the project off the ground.
Keith said that Jenny Dougherty, director of the Small Business Development Center in International Falls, was instrumental with financial package preparations that he did not expect to be so challenging.
“If it wasn’t for her (Dougherty), I would have stopped a long time ago, with all of the financial paperwork and the reports that financial institutions require,” he said.
Koochiching Economic Development Authority assisted Northland with applying for JOBZ status. It temporarily waives state and local taxes in exchange for construction and creation of a certain amount and type of jobs.
“This is a tremendous project for the community and the area at a time when people are pulling back with the energy crunch and everything,” said Paul Nevanen, director of the KEDA. “Keith and Brenda have put a lot of energy in this and worked hard to find a niche and that entrepreneurial spirit and timing is good.”
The project encountered wetlands issues and Keith said it took a year for authorization to expand on his property. The city stepped in to purchase 1.5 acres of mitigated wetlands credits for approximately $18,000.
“The city of International Falls has been phenomenal,” said Keith. “I can’t ask for a better city to do business.”
Rod Otterness, city administrator, said the city supported Northland as a project that represents economic development activity and expansion with new jobs creation.
“It’s the kind of economic development and small manufacturing that certainly should be encouraged,” said Otterness.
Otterness said Northland illustrates a serious issue in the Falls — the bureaucratic tangles which prevent development where mitigated wetland credits are likely to be allowed. He said entrepreneurs must navigate multiple agencies to acquire expensive privately created banked credits that can run anywhere from $10,000 to $20,000 per acre.
The solution, he added, is a “customer friendly culture” that assists owners and developers with a simplified process to obtain mitigated wetlands permits. Projects are gauged on risk, he said, and planning requires knowledge of the approximate time and money it takes to transfer credits, or it will drive development elsewhere.
“The city is involved in multiple strategies to create or locate mitigation credits to minimize the economic impact to property owners,” he said. “The price is going up and the city is extremely concerned about the cost of credits and its impediment to our development.”
Dave Serrano, a wetlands consultant, is working with the Minnesota Board of Soil and Water Resources and the U.S. Army Corps of Engineers to streamline a process of transferring likely mitigated properties for shovel ready development in the city business corridors.
“In general the hurdles that business and private landowners have overcome in this area in order to develop property are huge,” said Serrano.
