2008

ANNUAL REPORT

DRIVING THE ECONOMIC

WEALTH & STABILITY OF
OUR COMMUNITIES
 LETTER FROM THE
DIRECTOR
It is with much pride that we present our 2008 Annual Report to you, summarizing our economic development projects
and success stories for this past year. Again, the AAEDC, along with our communities, partners, and our businesses
experienced a very successful year.
The AAEDC continues to forge strong partnerships with our businesses, communities, and our local governmental units.
With assistance from our efforts, our businesses continue to create wealth for our communities through jobs, wages,
and tax base; three critical components in measuring economic success and vitality. Through the use of our economic
development programs, the AAEDC assisted many of our companies with opportunities to grow and prosper in the
Alexandria Area and throughout Douglas County.
Through the Advantage Alexandria Area Stewardship program, a new wave of dialogue and conversation began in 2008,
with our community leaders discussing a long-term strategic direction for our region. We strongly believe in uniting
our communities through leadership, communication, and commitment to a common future. Our communities have the
ability to grow and prosper, as long as we act with a unified voice and with a common vision for our future.
We know that 2009 will be challenging for all of us, working through a tough economy, state budget deficits, and an ever-
changing global marketplace. As we continue to work through our stewardship planning, we will strive to position our
resources to support our businesses and communities through these changing times.
By working together, we can continue to build economic vitality for our region. As stewards of our community, we must
work to build and care for the communities that we live and work in. By doing this, we will continue to be successful.
On behalf of the AAEDC Board of Directors, Staff and all of our partners, we wish you a successful 2009.
Best Wishes,

Jason Murray
Executive Director AAEDC STAFF &
BOARD OF DIRECTORS

Sarah Willhite David Kjos Jason Murray Kevin Gorghuber Patrick Kalina
AAEDC Alexandria Township AAEDC Carlos Township AAEDC

Rick Paulsen Corliss Stark Deena Steffl Dr. Kevin Kopischke Mary New Mark Grandgenett
City of Alexandria City of Alexandria LaGrand Township City of Alexandria Hudson Township Lake Mary Township
EX-OFFICIO MEMBERS/LIAISONS/INVITED GUESTS:
Al Crowser (Alexandria Light & Power), H. Dan Ness (City of Alexandria), Dan Olson (Douglas County),
Coni McKay (Alexandria Lakes Area Chamber of Commerce), Joel Dahlheimer (Alexandria Township),
and Dave Wolf (Gardonville Cooperative Telephone Association)

I ALEXANDRIA AREA ECONOMIC DEVELOPMENT COMMISSION

 MISSION
STATEMENT
The mission of the Alexandria Area Economic Development Commission is to drive the economic
wealth and stability of our communities.

The mission of the Lakes Area Economic Development Authority is to support the mission of the
Economic Development Commission by providing fair and equitable resources. The Authority, fully
implemented in 2004, was established to formalize the funding for economic development and to bring the
political subdivisions together for a unified economic development effort.

Through joint strategic planning processes between the AAEDC and the LAEDA, core initiatives and
strategies are defined to develop a shared vision of the future and to identify goals and objectives against
which progress toward achieving that vision can be measured.

In 2008, the AAEDC focused on the following key areas of service:

- Commercial Tax Incentives

The AAEDC works with new and existing businesses on startup and growth projects, some of which can be
supported through incentive programs, including: Tax Increment Financing (TIF), Tax Abatement, Industrial
Revenue Bonds, and the State of Minnesota’s Job Opportunity Building Zone (JOBZ) program.
- Demographics Information
The AAEDC strives to be a demographics, statistics, and information clearing house for our area and produces
multiple publications each year focusing on the growth and changes of our communities and all of Douglas
County.
- Community Stewardship
In today’s changing economic environment, it is becoming more important than ever to maintain
cross-organizational communication and a 360 degree vision for the future of our region. The AAEDC is
continuously working to be a convener of communication on the future of our communities and region.
- Revolving Loan Funds
In addition to commercial tax incentives, the AAEDC has a pair of Revolving Loan Funds at its disposal to
assist area businesses with growth and expansion projects. Funds are specifically used in coordination with
primary financing through a financial institution and cannot be used as the primary means of project funding.
- Business Planning
The AAEDC works with a large variety of businesses and individuals in the business planning process. Since
no two business ideas are the same, and no two businesses or ideas are at the same point in the planning process,
business planning assistance is tailored specifically to the individual’s or business’s needs.
- Site Selection Assistance
In a continuously growing effort to assist area realtors and property owners to market commercial properties
throughout the area, the state, and the nation, the AAEDC maintains two supplemental property listing
databases of “for-sale” and “for-lease” properties. These databases are free for the listing of commercial
properties in Douglas County, and can be easily accessed by individuals, businesses, and site selectors from
throughout the nation.
- Financial Packaging
As a part of business planning, the AAEDC helps individuals and businesses to create and analyze financial
projections to identify potential needs of the business. Within the financial packaging and planning process, the
AAEDC does not recommend any specific commercial lending institution(s) to clients.

Funding provided by the Lakes Area Economic Development Authority (LAEDA) whose membership is
comprised of the City of Alexandria, City of Garfield, Alexandria Township, and LaGrand Township; with
supporting annual appropriations from the Townships of Brandon, Carlos, Hudson, Lake Mary, and Douglas County.

2008 ANNUAL REPORT 1

 JOBZ MINNESOTA
PROJECTS
At the close of FY 2003, Governor Pawlenty unveiled the Job Opportunity Building Zones (JOBZ)
program as a new rural Minnesota economic development plan. The goal of JOBZ is to stimulate
economic development in rural Minnesota by providing local and state tax exemptions to offer
assistance to value-added manufacturing and industrial, or high wage service-type businesses. Retail
and housing projects are not eligible to receive JOBZ benefits.
Local entities participating in the JOBZ program include the Cities of Alexandria, Brandon, Garfield,
and Osakis; and the Townships of Carlos and LaGrand. Designated industrial sites in these areas
offer growing and expanding businesses the opportunity to substantially benefit from tax exemptions
through December 31, 2015.
Tax exemptions apply only to qualified businesses. Businesses will become qualified for JOBZ through the execution
of a Business Subsidy Agreement (BSA). On an annual basis the company must report to the MN Department of
Employment & Economic Development and local units of government their progress in creating jobs and wages.

COMPANY: Quick AttachTM Attachments

PARTICIPATING ENTITY: Carlos Township
PROJECT TYPE: Expansion
SQUARE FEET: 7,200
BUSINESS DESCRIPTION: Manufacturing, sales, and distribution of
attachments for the skid steer and compact loader industries.
ESTIMATED PROJECT COSTS: $350,000
JOBS RETAINED: 45
1
JOBS CREATED: 5

COMPANY: 3M - Abrasive Division

PARTICIPATING ENTITY: City of Alexandria
PROJECT TYPE: Expansion
SQUARE FEET: 60,000
BUSINESS DESCRIPTION: Manufacturer of abrasive belts and discs.
HOURLY AVERAGE WAGE & BENEFITS: $19.26 - 65.00
ESTIMATED PROJECT COSTS: $48,850,000
JOBS RETAINED: 250
1
JOBS CREATED: 50
1
Jobs created figure confirmed in BSA agreement totalling full-time and full-time equivalent projections within 1-5 years.
Job numbers reported in BSA agreements are usually minimums and actual number may be much higher.

JOBZ ECONOMIC
IMPACT REPORT
ESTIMATED PROJECT COSTS: $49,200,000
NEW CONSTRUCTION SQUARE FEET: 67,200 sf
1
JOBS RETAINED: 295
2
JOBS CREATED: 55
1
Jobs retained figure totals full-time and full-time equivalent positions.
2
Jobs created figure totals full-time and full-time equivalent projections within 1-5 year.

2 ALEXANDRIA AREA ECONOMIC DEVELOPMENT COMMISSION

 2008 RLF
PROJECT HIGHLIGHTS
COMPANY: BLUE OX TIMBER FRAMES, LTD
Blue Ox Timber Frames has applied for and received a $50,000 Greater
Alexandria Industrial Network loan to assist with the construction of a
new facility in the Osakis Industrial Park. As a part of this construction
project and business growth, the company will be hiring an additional
two employees. Blue Ox Timber Frames specializes in the design,
engineering, and hand-crafting of timber frame structures, heavy timber
trusses, and hybrid timber building systems. The primary lender for
this project is Neighborhood National Bank with additional supporting
financing from West Central Initiative and the Osakis Economic
Development Association.

COMPANY: PFENINGER WAREHOUSING, LLC

Pfeninger Warehousing, LLC has applied for and received a $40,000
Greater Alexandria Industrial Network loan to assist with the
construction of their 50,000 sq. ft. warehousing facility located in
Hudson Township. Pfeninger Warehousing is a central warehousing
and distribution center that provides their clients with additional
warehousing space. The completion of this project will require the
company to hire an additional 5 to 7 full time employees within the
next two years to meet the company’s increasing demand for product
handling and distribution services. The primary lender for this project
was Eagle Bank of Glenwood with additional supporting financing from
Minnesota Business Finance Corporation and West Central Initiative.

COMPANY: STEUSSY DIESEL, INC.

Steussy Diesel has applied for and has been approved for a $50,000
Greater Alexandria Industrial Network loan to assist with the
construction of an additional 6,800 sq. ft. building in Hudson Township.
Steussy Diesel offers a complete medium and heavy duty truck/trailer
repair facility, a Goodyear tire and alignment facility, heavy duty truck
and trailer towing, tire repair roadside assistance, mechanical roadside
assistance, and a full service shop with a full line of truck parts. This
additional building will allow the company to expand its parts and
storage ability and to increase its engine repair services. Steussy
Diesel currently employs 10 individuals and will be hiring 3 additional
employees in coordination with this project. The primary lender for
this business expansion project was First State Bank of Alexandria with
additional supporting financing provided by West Central Initiative.

ADDITIONAL APPROVED PROJECTS (FUNDS NOT UTILIZED):

CARLOS CREEK WINERY
PRAIRIE LAKES DENTAL

2008 ANNUAL REPORT 3

 2008 TIF/PROJECT
HIGHLIGHTS
COMPANY: ALEX TELECOM
The owners of Alex Telecom have worked with the AAEDC staff on
business planning for a recent business expansion into the old KCCO
building located at 720 Hawthorne St. in Alexandria. Alex Telecom
sells, installs and services IP and traditional telecommunication
equipment for small to mid-sized businesses in the Midwest. Additional
services include Dell computer equipment and service, hosted PBX’s,
voice and data networking, and VOIP services. They will be utilizing
the Hawthorne St. facility as a secure, environmentally-controlled off-
site data storage (colocation) facility for commercial clients throughout
the region. The colocation center is projected to open around Jan. 1,
2009.

COMPANY: KNUTE NELSON SENIOR LIVING COMMUNITY

Knute Nelson Corp. of Alexandria has received assistance from the
AAEDC in requesting and securing Housing Tax Increment Financing
(TIF) benefits from the City of Alexandria to assist with infrastructure
costs on the construction of a new 205,000 sq. ft., 40 acre Senior
Housing Campus to be built east of County Road 106 and north of 50th
Ave E in Alexandria. The campus is planned to consist of Independent
Senior Apartments, Assisted Living Senior Apartments, Wellness
Center, and resident community spaces. In conjunction with this
project Knute Nelson will be hiring an additional 24 FTE and 32 PTE
employees. Anticipated construction is scheduled to begin in Spring
2009 and finish in Spring 2010. In conjuction with the Housing TIF,
20% of the units will be dedicated for residents who’s income is 50% or
less than the area’s median gross income.

COMPANY: LEGACY OF ALEXANDRIA

Ground was broken on August 28th to begin construction on a 116
unit multi-family apartment complex in Alexandria. The Legacy of
Alexandria will be completed in two phases beginning with 62 units in
phase one with a total estimated project cost of $10 million and 165,845
sq. ft. of new construction. The AAEDC assisted the developer (INH
Property Management) with applying for and securing Housing Tax
Increment Financing (TIF) from the City of Alexandria. In return, the
developer will commit 20% of the units to individuals/families who’s
income is 50% or less than the area’s median gross income.

COMPANY: PEACEFUL BLISS ASSISTED LIVING, LLC

The AAEDC has assisted the ownership of Peaceful Bliss Assisted
Living in requesting and securing Housing Tax Increment Financing
(TIF) benefits from the City of Alexandria to help offset infrastructure
costs on a new 18,000 sq. ft. facility. This facility will include 22 units
of assisted living and 10 units of specialty memory loss care and is
projected to employ 18 FTE’s within two years from completion. 20%
of the housing units will be dedicated for residents who’s income is 50%

4 ALEXANDRIA AREA ECONOMIC DEVELOPMENT COMMISSION

 2008 PROJECT
HIGHLIGHTS
COMPANY: SUNOPTA, INC
The AAEDC staff has assisted SunOpta, Inc of Alexandria with
the purchase of an industrial lot for future facility expansion in the
Alexandria Industrial Park. Prior to this purchase, the SunOpta Aseptic
plant in Alexandria had completely developed all of their property in
the Industrial Park and the purchase of this additional lot will allow the
company to continue expanding in Alexandria. The SunOpta facilities
in Alexandria produce and package shelf stable soymilk and ricemilk
beverages and employ approximately 200 people locally.

COMPANY: RIVERSIDE SUPPLY, INC.

The AAEDC staff providing technical assistance and conditional
use permit application assistance to Riverside Supply of Belle River
Township for the construction of a 2,000 sq. ft. facility.
Riverside Supply is a customer focused company supplying fasteners
and consumables to the manufacturing and assembly industry.

COMPANY: ALEXANDRIA AREA YMCA

The AAEDC provided assistance to the Alexandria Area YMCA in the
application for approval of Industrial Revenue Bonds from the City of
Alexandria to assist with financing the 2009 construction project of a
56,000 sq. ft. facility at the intersection of County Roads 45 and 82 in
Alexandria. The $8,885,000 estimated project will include a variety
of program areas to meet the needs of children, adults, seniors, and
families including a multi-use aquatic facility, gymnasium, indoor
walking/jogging track, outdoor field space, day care, and more. Upon
completion, the Alexandria Area YMCA will employ 17 full-time
employees and many part-time employees.

TOTAL PROJECT ECONOMIC

IMPACT REPORT
ESTIMATED PROJECT COSTS: $98,879,453
NEW CONSTRUCTION SQUARE FEET: 578,045 sq. ft.
1
JOBS RETAINED: 861
2
JOBS CREATED: 175
REVOLVING LOAN FUND DOLLARS UTILIZED: $140,000
REVOLVING LOAN FUND DOLLARS APPROVED: $250,000
Jobs retained figure totals full-time and full-time equivalent positions.
1

2
Jobs created figure totals full-time and full-time equivalent projections within 1-5 years.

2008 ANNUAL REPORT 5

 BUSINESS
RECOGNITION
Distinguished Economic Development Partner Award
In an effort to acknowledge the commitment and investments that Douglas County businesses make in the
local and regional economy, the AAEDC honors multiple companies each year by presenting them with
our Distinguished Economic Development Partner Award. During 2008, the AAEDC honored Brenton
Engineering and Rural Cellular Corporation (Unicel) with this award and a ceremony to honor each
company.

The Distinguished Economic Development Partner Award was designed to honor companies that the
Alexandria Area Economic Development Commission directly serves and works with to better our
community. The award is presented to local companies that add significantly to the economic vitality and
stability of our communities. Receiving companies are often those that have utilized economic development
tools (i.e. financing, business planning/growth assistance, etc.) and have exceeded the requirements for job
creation and retention mandated by those tools.

Brenton Engineering was selected to receive the

Distinguished Economic Development Partner Award
on January 23, 2008 for the company’s continued
commitment to the Douglas County area. In late 2007,
Brenton Engineering completed a massive expansion
and remodeling project at their facility in Carlos
Township that resulted in 105,000 sq. ft. of new and
remodeled space, with the commitment of hiring at least
62 additional employees. (L to R) David Kjos, AAEDC Board; Scott Luescke, Brenton
Engineering; Kevin Gorghuber, Carlos Township & AAEDC
Board; Dan Olson, Douglas County

Rural Cellular Corporation (Unicel) was selected

to receive the Distinguished Economic Development
Partner Award on May 5, 2008 in acknowledgement of
the numerous contributions that the company has made to
the Alexandria Region. Each year, the organization has
encouraged employees to participate in volunteer activities
that better our communities and also donates significant
amounts of money to support regional philanthropic
organizations that improve the quality of life for residents
throughout the Douglas County area.
(L to R) David Kjos, AAEDC Board; Richard Ekstrand, RCC;
H. Dan Ness, City of Alexandria; Dan Olson, Douglas County

6 ALEXANDRIA AREA ECONOMIC DEVELOPMENT COMMISSION

 ADVANTAGE
ALEXANDRIA AREA
The Advantage Alexandria Area program began in October 2007 as a discussion by the Alexandria Area Eco-
nomic Development Commission (AAEDC) Board of Directors and staff about the need to build connectivity
and community strength in the Alexandria area. Following a number of conversations with Dave Hengel of
the Center for Community Stewardship in Bemidji, MN, the AAEDC met with groups of community leaders
and citizens from throughout the Alexandria region to determine if there was an interest and a need for such a
program.

Based off of the overwhelmingly positive response to the idea of a local Stewardship program that will act as
a catalyst for community growth and vibrancy for the entire Alexandria Regional Community, nearly 40 indi-
viduals stepped forward to form the Alexandria Regional Community Stewards group.

The Advantage Alexandria Area program is based off of the highly successful Bemidji Leads! program and
is designed to bring together individuals and leaders from throughout the Alexandria Region. The Stewards
represent a wide variety of businesses, organizations, and communities and understand that all of our regional
communities are connected, and that what is good for one is good for all. By working together to strengthen all
of our communities, all of our businesses and organizations will grow stronger.

To begin the Stewardship process, the Advantage Alexandria Area Stewards created and distributed a “Com-
munity Perception Survey” to the Alexandria region. The survey asked participants to rank different aspects
of the area on a scale, indicate whether each aspect has improved or declined within the last five years, identify
which aspects of the community are important, and to provide comments throughout the survey. The survey
process ended in late September with over 1,050 completed surveys being received from throughout the region.

Based upon the survey data, additional information gathered about the region, and feedback from our regional
communities, the Advantage Alexandria Area Stewards will be creating a Destiny Statement and releasing a
series of goals titled “Destiny Drivers” in early 2009. We are confident that by working together as a commu-
nity to achieve these goals, organizations throughout the Alexandria region will increase their ability to work as
a cohesive group to maintain and improve the aspects of our region that were identified in the Regional Percep-
tion Survey as crucial to our region’s future.

Advantage Alexandria Program Sponsors:

Otto Bremer Foundation, West Central Initiative, Bremer Bank, Alexandria HRA,
Alexandria Light & Power, Glenwood State Bank, Mid-Minnesota Federal Credit Union,
First State Bank of Alexandria, Alexandria Technical College, State Bank & Trust,
Runestone Electric Association, West Central Sanitation, and the AAEDC.

2008 ANNUAL REPORT 7

 COMMUNITY
EVENTS
Business & Industrial Appreciation Day
The boards of directors of the AAEDC and the Alexandria Lakes Area Chamber of Commerce selected Cullen’s
Home Center of Alexandria as the recipient of the 2008 Business & Industrial Appreciation Day (BIAD) Award,
which was presented to the company at the annual BIAD Luncheon held on October 31st at the Arrowwood Resort
& Conference Center in Alexandria.

The Business & Industrial Appreciation Day Event has been taking place annually since 1984, and honors a local
business or organization which has met the following criteria:
• Growth in number of employees; the impact of the business on the job market
• Increase in sales and/or unit volume; an indication of continued growth
• Capital Investment; an indication of commitment by the
business to increase community capacity
• Community Contributions; evidence of the business’s
investment of time, skills and resources to assist in
community oriented projects

Cullen’s Home Center of Alexandria was selected to

receive the 2008 BIAD award based upon the following
accomplishments:
• The company’s continued growth in employees (over 100)
• The numerous expansion and remodeling projects that
have taken place at their Alexandria location and other
locations throughout west central Minnesota
• The continued growth in the variety and selection of
products and services available to customers The 2008 BIAD Trophy presentation to Cullen’s Home Center owners
Kathie & Tim Cullen (center) by David Kjos (AAEDC Board President)
• The continuous commitment to improving the lives and Thomas Jacobson (Chamber Board President).
of all that they serve; customers, employees, owners,
vendors, and the community.

Manufacturers & Support Industries Breakfast

The week of October 20-24, 2008 was celebrated throughout the state of Minnesota as
Manufacturers Week. In local recognition of the contributions of our manufacturing and
support industry businesses, the AAEDC hosted the 3rd Annual Manufacturers & Support
Industries Breakfast on October 21st at the Alexandria Technical College.

In the continued tradition of this event, a complimentary breakfast was provided to the
Bob Kill,
President & CEO
130+ event attendees, and a keynote presentation was provided by Bob Kill of Enterprise
Enterprise MN Minnesota on “The Changing Face of Successful Manufacturers.” Following the keynote
presentation, attendees had the opportunity to tour the ATC manufacturing labs and classrooms and meet with
students and instructors to learn more about the educational opportunities being provided locally. Over 40 people
participated in the tours and provided a very positive response to the opportunity.

The 2008 Manufacturers & Support Industries Breakfast was sponsored by Alexandria Light & Power, Alexandria
Technical College, Bremer Bank, Runestone Electric Association, and Viking Savings Association.

The 2008 Manufacturers & Support Industries Breakfast was organized in coordination with the Alexandria
WorkForce Center/DEED.

8 ALEXANDRIA AREA ECONOMIC DEVELOPMENT COMMISSION

 EMERGENCE AS A
REGIONAL CENTER
To illustrate the strong and vibrant regional-center economic climate in the greater Alexandria
Area, a sampling of the 2008 commercial investments in the public and private sectors with an
estimated project cost minimum of $80,000 included:

Professional/Service Estimated Project Cost Square Footage Type of Project(s)

GER Holdings LLC $150,000 3,077 sf Alteration
Dentistry Properties $400,000 6,023 sf Alteration
Mid-States Hydraulic & Mach. $136,000 1,800 sf New Construction
Utah Group LLC $826,088 7,794 sf New Construction
Gate City Bank $1,464,172 4,030 sf New Construction
Hens Developers - Midway Mall $350,000 Alteration
Hawthorne Street LLC $160,700 3,214 sf Alteration
Hawthorne Street LLC $187,000 3,749 sf Alteration
The Regeneration Center $84,000 Alteration
Steussy Investments LLC $400,000 6,800 sf New Construction
Lodgepole Pine LLC/Indigo Plaza $3,234,100 45,989 sf New Construction
Utah Group LLC $818,650 9,857 sf New Construction/Addition
PrimeWest Health $636,303 6,004 sf New Construction
Wark Rental Investments, LLC $112,656 1,063 sf New Construction
Jolted, LLC $215,457 2,033 sf New Construction
Hens Investments LLC $636,303 6,004 sf New Construction
Retail
WM3D Properties (Truck Stop) $2,065,848 37,800 sf New Construction
TNT Real Estate LLLP $85,000 Alteration
Convenience Store $510,000 3,455 sf New Construction
Government/Education
Douglas County Public Works $6,725,178 54,089 sf New Construction
District 206 - Elementary School $20,935,000 125,000 sf New Construction
Douglas County HRA $304,500 2,947 sf Alteration
Alexandria Lakes Area Sanitary Dist. $250,000 4,078 sf New Construction
Industrial
Minn. Mining & Mfg Company (3M) $48,850,000 60,000 sf New Construction/Addition
Multi-Family/Senior Housing
The Legacy of Alexandria LLC $10,000,000 48,890 sf New Construction
Lakewood Apartments $5,200,000 50,072 sf New Construction
Peaceful Bliss Assisted Living $2,365,006 18,000 sf New Construction
Amusements
Alexandria Area Arts Association $83,000 Alteration
Minnesota Lakes Maritime Museum $485,000 4,907 sf New Construction/Addition

Source: 2008 public record commercial building permit activity - City of Alexandria.

2008 ANNUAL REPORT 9

 610 Fillmore St. Suite 1 – Alexandria, MN 56308
Phone: (320) 763-4545 – Toll Free: (866) 296-4545 – Fax: (320) 763-4457
E-mail: aaedc@rea-alp.com – Web: www.alexmn.org