SCHMID: TOP NORTH DAKOTA STORIES OF 2019
WEATHER SWAMPS FARM ECONOMY
Weather and farm income are inseparable. The state has a radical weather history and this year weather devastated most major crops. The growing season started in an ominous way — late and wet. By August there was cautious optimism, yields and prices looked good, and there was hope the state was breaking out of five years of poor farm incomes. Those hopes were dashed when record rainfalls in both September and October were followed by snow and freezing temperatures. Crop quality and quantity was down — comments were heard like “most difficult harvest in 40 years” and “once-in-a-generation.” At a large sugar beet processor, returns to growers were down 60% and the Grand Forks area lost 100,000 acres of beets and potatoes. Crop losses trickled into the broader economy. It will be well into 2020 before the total damage is known.
IF IT WERE NOT FOR OIL?
Agriculture and lignite coal were the mainstays of North Dakota’s economy until this century. Ag is in a multi-year slump (see above) and the importance of coal is rapidly declining. Yet, the state’s economy is strong — the 2017-19 budget cycle ended in a surplus and there is a cheerful outlook for 2019-2021. North Dakota has the highest GDP per capita in its region and the fourth highest GDP per capita in the nation. From 2010 to 2018 the state was the nation’s fastest growing economy. What’s the explanation? Oil has become pivotal in the economy.
TALE OF TWO CITIES
Of North Dakota’s four largest cities, Fargo and Bismarck are on I-94 (southern route) and Grand Forks and Minot are on U.S. Highway 2 (northern route). The two southern cities have fully participated in the state’s growth, while the two northern cities are lagging. Minot prospered in the early days of the oil boom, but saw a reversal of that growth. The Grand Forks labor force has been flat for 30 years. Both cities claim to suffer from not having two interstate highways, still feel the results of major floods and are hurt by the impact on retailing of a soft Canadian dollar. Minot is supported by a large Air Force base; Grand Forks was hurt by a large reduction of its base. In 2019, both cities saw an erosion of retailing and their sales tax base and Grand Forks has yet undefined damage from the fall crop disaster.
SAGA OF ROOSEVELT LIBRARY
The T. Roosevelt Presidential Library in Medora moved haltingly forward during the year. In May, the Legislature authorized a $50 million endowment with the condition it must be matched by $100 million of privately raised funds. At yearend the library foundation appointed a Director of Design and Construction and began the selection of a site (in or near Medora) and an architectural firm. Former Gov. Ed Schafer urged support of the library saying it would be a “world-class destination.” Detractors remain, they favor a Dickinson site because of its visitor infrastructure, by contrast, Medora virtually closes during winter.
LEGACY FUND
Nine years after its founding, the North Dakota Legacy Fund topped $6 billion, yet lacks a road map for spending. A Legislative committee heard a fountain of ideas ranging from school lunches to university research. Gov. Burgum is adamant — the fund principal should remain untouched and the earnings should go into investments with broad, lasting impact.
TALLEST AND MOST EXPENSIVE
In November, the Block 9 high-rise on Broadway in Fargo topped out and became the state’s tallest private structure — the state capitol is slightly taller. The $117 million, mixed-use building was developed by the Kilbourne Group and completion is expected next fall. Block 9 will receive $10 million of Renaissance Zone tax credits over 20 years. Kilbourne contends Block 9 would have never happened without the credits.
KENNEDY ROLLER COASTER
Last year at this time, UND President Mark Kennedy was rebounding from missteps — he had alienated a major donor and applied for the presidency of a Florida university. Favorable momentum carried into 2019 as he addressed Legislative committees about the need for research funds. Then he tripped again — favoritism to his chief of staff brought critics in droves and a major donor, Kris Engelstad McGarry, said no more gifts until Kennedy was gone. The mob had their torches and tar ready, but Kennedy sprang out of the trap! He was selected president of the U. of Colorado, a larger and more prestigious job. Nodaks were left with a split view: Kennedy was an excellent strategist and decision maker who put UND on the right track, but unnecessarily alienated many UND stakeholders in the process.
NEW UND PRESIDENT
The State Board of Higher Education felt burned, or at least singed, by their experience with Kennedy. So they let everyone have a hand in choosing the next president. Listening sessions were held throughout the state and a broad field of candidates was narrowed down to three who were interviewed by faculty, students and staff at UND. The Board chose Andrew Armacost (52), an Air Force Brigadier General and PhD, who recently retired as dean of faculty at the Air Force Academy. There was enthusiasm at UND — the faculty got an academic with a prestigious PhD (MIT), while the aviation school was thrilled at the prospect of a strong relationship with the GFAFB and related UAS facilities.
FOOTBALL DYNASTY
The North Dakota State Bison football team rolled through another undefeated season piling up records as they went. They play for the national Football Championship Subdivision football title at Frisco, Texas on January 11. Their 36 consecutive wins is a FCS record as is their participation in 8 of the last 9 championships. This may seem routine, but it is one of the more astonishing records in college football.
BUY HIGH, SELL LOW
This was the year of big tri-state ag frauds: an elevator manager in Minnesota, a feed lot operator in South Dakota and Hunter Hanson, a 21-year-old grain trader in North Dakota. Hanson pleaded guilty to $11 million of frauds involving 60 farmers, elevators and grain traders and faces up to eight years in prison. He was classified as a “roving grain buyer” and is believed to have been a novice who bought high and sold low. Hanson said he was just a New Rockford High School grad who had never been in trouble and “got overwhelmed.” As a result of the fiasco, the Public Service Commission was stripped of grain trading regulation.
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