OWATONNA — Shortly before the normal lunch rush, Stacy and Mark Wilson looked at the dining room of their restaurant on Tuesday and saw nothing but empty seats.
Old Town Bagels in Owatonna has long been noted as one of the busiest places to eat in the downtown district. On a typical day, the Wilsons see a steady flow for breakfast the moment they open their doors at 6:30 a.m. and pack the building with hungry patrons over lunch, with a lingering crew up until their close time at 4 p.m. On Tuesday, however, the absence of customers couldn’t be ignored as the Wilsons began to prepare for what will now be their new normal.
Monday evening, Gov. Tim Walz announced an executive order that would close all restaurants, bars, and places that provide public accommodation and amusement effective at 5 p.m. on March 17 until Friday, March 27 due to the COVID-19 pandemic. Take-out and delivery options can still be available for businesses able to keep or implement those practices, but for many it will simply mean locking their doors.
“We kind of all saw it coming and we know it needs to be done,” Stacy Wilson said. “I do believe that we are positioned a little better with online ordering already being available, and I am sure we will see a drop in business, but it’s going to be a process as we learn how to mitigate this new normal we are in.”
In Owatonna, about 70 businesses are being directly impacted by the recent closures from the state. The ripple effect of the executive order reaches far beyond the businesses themselves, putting almost an entire industry of workers out of a job and without a paycheck.
“I think we all our concerned about how the economy is going to react to this,” said Brad Meier, president of the Owatonna Area Chamber of Commerce and Tourism. “People will be a little tighter to the vest with their money and that always impacts things. That’s a reality that we’re worried about.”
The economic concerns immediately brought opposition to Walz’s executive order from state legislators, including Sen. John Jasinski, R-Faribault, who only hours after the Monday press conference issued a plea for the governor to change his mind.
“I sincerely, sincerely hope the governor will reconsider his decision to close down most private businesses, including, but definitely not limited to bars and restaurants,” said Jasinski, whose district includes most of Steele County. “These small businesses are the backbone of our state’s economy. Many of them have high overhead and low margins. Order them to close, even for two weeks, will have a disastrous effect not just on our economy, but on thousands of hourly wage earners and small business owners.”
The Wilsons stated that out of their 12 staff members, only three of them have a second job outside of the bagel shop. While the store is planning on staying open to accommodate pick-up and delivery options, the hours of operation will be cut back as well as labor.
“Our staff is a great concern, we don’t want to put them out of work,” Stacy Wilson explained. “But the restaurant industry is a cash-flow business. If there is no cash coming in that is going to trickle down.”
“It’s really going to be an adjustment for everybody,” Mark Wilson added. “I know we have a couple of anxious staff.”
The Wilsons estimated that for now the staff will lost about 30% of their hours at work, and that they had offered everyone the option to be taken off the schedule for now if they did not feel comfortable coming in, knowing that filing for unemployment would then be an option. Unemployment, however, isn’t a perfect solution as it only covers about 50% of an employee’s wages.
“It is very overwhelming. A lot of people here this is their only job and their whole livelihood,” said Torey Statlander, owner of Torey’s Restaurant and Bar in downtown Owatonna. “With no income and no paychecks, people are going to be scraping by to pay some bills and just to put food on the table.”
Statlander said that his staff is his number one priority, but during the mandated closures the restaurant will be forced to significantly cut back on labor as they provide takeout orders for the next two weeks. For some other businesses, however — specifically bars that do not serve food — their only option is to lock up completely until the restriction is lifted.
“We have a lot of sympathy for what is going on and for the folks who don’t have a lot of options outside of just closing their doors,” Meier said. “We know that this going to be really difficult and we will do everything we can to support them though the period of time that they need to be closed, but we recognize that this is going to be very challenging times and that it’s possible that some of these businesses might not reopen. We just don’t know. It’s awful.”
Though the executive order is in effect until March 27, there appears to be a general expectation that it will be extended for an unknown amount of time. Walz stated at the end of his press conference on Monday that this is “only the beginning” and that he expects the closures to last longer than the current order states.
“We have to play it by ear for now,” Stacy Wilson said. “We just hope that people keep us in mind and know that we’re still here, we’re still open, and we still need their business.”
“This is going to affect every business as people are afraid to go out of their homes,” Statlander added. “We need to support any local business that we can, we’re all just trying to make a living.”
“I think this community has weathered a lot of storms over the years and has been able to really come out stronger in the end,” said Meier. “I am very confident that we will be able to do that again. The message is that people need to support each other and do the best we can. Stay positive. Things will get better.”
As of press time on Tuesday, the Owatonna City Council was scheduled to declare a State of Emergency during the regular meeting at 7 p.m. The Steele County Board of Commissioners are also scheduled to declare a State of Emergency during an emergency meeting on Wednesday at 3 p.m.
Companies across southern Minnesota have placed severe restrictions on business-related travel, applied the social distancing principle to the factory floor and are having employees work from home whenever possible in light of the the spread of COVID-19 into the region.
At Daikin Applied, which operates two factories in Faribault and one in Owatonna, all employees were continuing to work onsite as of Tuesday afternoon, according to senior human resources director Matt Alexejun. He estimated that the southern Minnesota locations employ roughly 1,000 direct laborers and another 175 salaried employees supporting factory operations.
“We’ve canceled all in-person trainings and all factory visits of more than five people,” he noted. “We’ve also banned all international business travel and we’ve restricted domestic travel greatly, including incoming international visitors to our facilities.”
Alexejun added that the company has also moved almost all meetings online and is limiting in-person gatherings to less than five people.
With offices in Owatonna and Mankato, Owatonna-based Federated Insurance is taking similar measures according to Julie Rethemeier, vice president and director of public affairs.
She noted that all non-essential business air travel has been postponed, with the majority of meetings also being put off or conducted virtually. Earlier this week, employees were offered the opportunity to work remotely if their position allowed them to do so.
“If it did not, social distancing measures are being taken internally,” Chairman and CEO Jeff Fetters said in an email. “Employees are asked to stay in their workstations and to avoid in–person interactions with co-workers and instead utilize Skype, WebEx, phone [and other measures].”
The company added that all employees are being asked to refrain from mingling during breaks and lunches, and all fitness centers and cafes were closed March 17. Rethemeier noted that the 2020 Annual Meeting of the Policyholders will still be held on April 21, but will likely be conducted in large part virtually in the interest of limiting person-to-person contact.
As of Tuesday morning, the Minnesota Department of Health had confirmed 60 cases of COVID-19 statewide. According to the Centers for Disease Control and Prevention, the respiratory illness is spread primarily via person-to-person interactions through respiratory droplets expelled when coughing or sneezing.
“We anticipate that only a few board members and other necessary people will actually be physically present in the meeting room. Most will likely utilize telephonic participation,” added Fetters, of the yearly gathering. “The agenda will be condensed to only necessary action items. No community guests will be invited this year. The pre-meeting social gathering has also been canceled.”
In implementing many of the new social distancing policies in Federated offices, Rethemeier noted that one of the main impetuses was Gov. Tim Walz’s executive order issued Sunday to close all K-12 public schools to students from March 18 to 27 — with the idea that staff will use this time to prepare for potential prolonged distance learning in the future.
In terms of manufacturing for both Daikin Applied and SageGlass in Faribault, Alexejun and Ryan Park — vice president of marketing and product management for the latter — say they haven’t seen any real impact yet on either the supply or demand side, although Park added that it’s still too early to tell what effects the virus may have in the future.
“I would suspect that demand probably is going to slow down in the next few weeks just because a lot of our business in the field happens via face-to-face interaction,” said Park. “A lot of the time, what we’ll do is visit clients on job sites to learn more about their projects. Part of our process, as well, is to bring people to our facilities to show them how we do things.”
Park added that the plant halted any visits from external suppliers or visitors about a week and a half ago, with guidance from Paris-based parent company Saint-Gobain.
“We had guidance from them, as well as our headquarters in Malvern, Pennsylvania. They were both in the mix very quickly,” said Park.
On the office side, he noted that most southern Minnesota employees are working from home, with a rotation in place for those who do need to come in and used specialized equipment as part of their job function. The company has also banned all business travel on public transportation, but Park added that some local car trips are still being approved at the discretion of the employee.
He added that the factory is running as usual, and that many social distancing recommendations have already been met by default given the nature of the process.
“If [employees] do unfortunately get COVID-19, they would have paid leave. If they have family members who have it, they would get paid leave. This is all through March and we’re playing it by ear as we go along,” added Park.
He estimated that the business employs roughly 250 people in its Faribault location.
He noted the business has no plans to lay off or furlough employees at this time, adding, “we’ll do what we can to ensure we have continuity with all of our team members.”
Like Alexejun, Park noted that SageGlass is trying to be flexible with scheduling in order to accommodate employees with children who are no longer in school due to the temporary closure. For many on the line, he said this may mean switching around shifts to allow them to be home during the day.
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In one of its final acts before taking a month-long pause in response to the COVID-19 pandemic, the Minnesota Senate approved legislation late Monday night that woill pave the way for the state to complete the Highway 14 expansion from Nicollet to New Ulm, the final phase of a long-awaited project.
On Tuesday, Gov. Tim Walz followed suit and signed the legislative measure that will clear the path for the final expansion of Highway 14, the road he considers “the deadliest highway in the state.”
This comes less than three weeks after Walz, joined by a number of local legislators, mayors, commissioners, and advocates, announced during a press conference at the Nicollet Fire Department hall a plan to fund the four-lane expansion. At that time, the Minnesota Department of Transportation intended to use a federal loan for $39 million as the foundation in paying for the estimated $92.7 million project that would expand the 12-mile stretch of highway between New Ulm and Nicollet. Nicollet County also committed to a $3.5 million contribution to the project at that time, and MnDOT committed to using transportation funds to pay for the remainder of the cost.
The bill that was signed allows MnDOT to secure a Transportation Infrastructure Finance and Innovation Act loan through the federal Department of Transportation for the final portion of the project. The loan will be administered by the Rural Project Initiative and the Build America Bureau. The loan will be repaid using overweight vehicle fees, which are currently places in the state treasury and then credited to the Trunk Highway Fund. This loan will only be accessible to fund the Highway 14 expansion project.
“I am happy that the full Senate made this dangerous and deadly highway as high a priority as I have, especially when there are so many other issues that are getting put on the backburner for a little while,” said Sen. John Jasinski, R-Faribault, who has been credited by many as the leading force behind finishing the expansion of Highway 14.
“I came to the Legislature determined to secure funding for the east end of Highway 14 between Owatonna and Dodge Center. We delivered that funding two years ago, and now we have a strong bipartisan agreement to leverage funds in order to accomplish the west end expansion. It is an exciting day for southern Minnesota.”
Jasinski’s district includes most of Steele County.
State legislators first secured funding for the 13-mile expansion of Highway 14 between Owatonna and Dodge Center in May 2018. After an additional year of preparations and finalizing of bids and contracts, a groundbreaking of the much anticipated project was held in Claremont in November 2019. The project comes with a price tag of nearly $108 million.
The time frame for the final leg of the project on the west end of the highway is dependent on the state’s deliverance of proof and source of payment to the federal government. Once Minnesota’s credit is approved, the U.S. Department of Transportation will invite MnDOT to formally submit applications for review. MnDOT expects that construction could begin as early as fall of 2021 with an expected completion date of late 2023.
“This legislation represents the final major piece in an effort that has lasted more than 60 years,” said Karen Foreman, the president of the U.S. Highway 14 Partnership and a member of the Mankato City Council. “Expanding Highway 14 to four lanes all the way from New Ulm to Rochester will undoubtedly save lives and stimulate our regional economy. Every time we have expanded a segment of Highway 14, economic growth along the corridor has followed. This stretch will be no different.”
Since the announcement of the Highway 14 east end expansion, millions of dollars’ worth of capital investment projects have been approved in Owatonna. Some of the projects will bring big production companies to the city, including Costco, Minimizer, and Rise Modular.
“There are many people have worked tirelessly in support of these efforts,” Foreman said. “I want to express my sincere gratitude to Gov. Walz, MnDOT Commissioner Margaret Anderson Kelliher, and MnDOT staff for seeking out solutions to finally complete Highway 14. And thank you to our area legislators both past and present who fought long and hard for Highway 14 expansion.”
“I also want to thank the countless local residents and elected officials who for decades have continued to voice your support for Highway 14,” she continued. “We couldn’t have done this without your unwavering support and dedication.”