PIPESTONE Coordinating its community leadership, business interests and a vocational education program, the southern Minnesota city of Pipestone is fighting the menacing problem of blight with a hands-on effort to upgrade deteriorating commercial and residential structures. Kevin Paulsen, president of First Bank and Trust of Pipestone, has been a catalyst in the community-wide effort that is nearly a decade in the making.

As the Great Recession began in 2008, the city of 4,000 people “had a number of homes that were just abandoned, people just walked away from them,” Pipestone Mayor Myron Koets said. As a result, community blight became more of a problem. The city council started keeping a list of properties it felt were blighted but stopped when it hit 60.

During a Blandin Community Leadership Program retreat in 2014 where 22 community leaders gathered, a discussion emerged about how to deal with the run-down properties. As a start, members of the group decided to tackle an abandoned commercial building near downtown, Paulsen explained. “A group with ties to the Blandin cohort pushed the city to take action.” As a result, the council passed a city ordinance defining expectations for homeowners and landlords regarding property upkeep.

“Those efforts created a continued focus on blight, which is why the EDA kept looking for ways to help,” said Paulsen, who is also chair of the Pipestone Economic Development Authority.

For a while, the EDA focused on smaller projects and providing training, but it was little more than maintenance. A lack of funds stymied any significant progress. In 2017, however, those efforts got a significant shot in the arm.

Newsletter signup for email alerts

At one of the bank’s advisory committee meetings three years ago, Paulsen invited a city representative to give a high level description of what the city was trying to do about blight. One committee member — a local business owner — was particularly impressed by the information. It “kind of pulled on our heart a bit,” said Hannah Walkes, president of Pipestone Veterinary Services. As Pipestone Vet was then celebrating its 75th year in business, “the timing was great,” she said. “If we wanted to say thank you to the town, then there was no better way than to help beautify it.”

So Pipestone Vet put up a $75,000 gift to the city for a blight reduction fund to be matched by other donors. The first donor to step up was First Bank and Trust with a $25,000 donation. Other donors included First State Bank Southwest in Worthington with $11,000; First Farmers and Merchants Bank of Luverne with $4,000, and Peoples Bank of Jasper with $500. By the end of the year, the original $75,000 had been fully matched.

At the same time the funds were coming together, the Pipestone campus of Minnesota West Community and Technical College was reviving its carpentry program, which had been on hiatus for three years due to low enrollment. A new one-year certificate program was created after discussion and collaboration with the EDA, Pipestone School District, and Minnesota West. Instead of focusing on new construction, as the prior program had, the revived program would focus on rehabbing blighted homes in Pipestone. Not coincidentally, Paulsen also had connections at Minnesota West as its foundation board president.

That fall, even before all funds were raised, the carpentry course enrollees — traditional and non-traditional students, including Pipestone high schoolers taking college credits — were busy rehabbing the project’s first home on Fifth Avenue Southwest.

The program’s second and third projects, in 2018 and 2019, included three houses in a row. Two of the homes were rehabbed over two years while the third was razed. Just working on those three homes “really transformed the entire block,” said Jeff Jones, Pipestone city administrator. “Adjoining property owners did improvements on their property, impacting the block noticeably.”

“The neighborhoods we worked in were happy we were there,” said Solomon Derby, carpentry instructor at Minnesota West from 2017 through 2019. “Individuals in the neighborhood would honk and wave. Others would bring cookies for the boys. One neighbor would stop by each Friday” very interested in the project’s progress.

Rehabbing one house per year, the process may seem slow moving but, in fact, the EDA program is reaching many more people than solely the kids doing the work.

“Other businesses came forward and cleaned up other projects,” Walkes said. “People just seemed to move forward a little bit faster. I would say there was a tremendous amount of progress with beautification efforts.”

In addition, city staff has been nudging other property owners to clean up.

“In some cases when we contacted the owners, that seemed to be the initiative or the push or the nudge to have them say, ‘OK, you’re right. I’ve been meaning to get to it,’” Jones said. “My building and zoning official has been very conscientious and aggressive in pursuing this as it comes to our attention. We try to stay on that property or property owner until we see some action.”

After whittling the original 60 down to about 20, then updating the list with additional addresses, Pipestone is down to 37 properties on its blighted list, which means about 58 homes have been successfully removed from the list.

And the program isn’t just about beautifying Pipestone.

“In reality, what we’re doing is we’re teaching young people some great skills,” reintroducing properties to the tax rolls, and making some people homeowners, Paulsen said.

In its first two years, 21 students went through the carpentry program and in 2019, Minnesota West brought back the HVAC and plumbing program, so those students also worked on the homes. Derby said he still keeps in touch with many of those students, “and they’re still in the trades of residential work” with some in carpentry, HVAC, plumbing and electrical.

Once the homes are rehabbed, they are sold for cost to interested parties.

“We decided that all we wanted to do was get out of it what we put into it, just replace our money. Keep it evergreen as much as possible,” Paulsen explained. “The first two houses sold for what we put into it. … We were approached by purchasers before the project was even done so they could customize a little bit.” The third home just sold in December, and the Fall 2020 carpentry class at Minnesota West began on the EDA’s fourth home, which was a tax forfeited property purchased from the city for $1.

Those involved in the project give Paulsen a lot of credit.

“In order to get this to happen, there had to be a collaboration between the city, the donors, crews,” Walkes said. “Kevin really spearheaded that and without him, no way would we have made the progress that we made.”

Paulsen “has always been a leader as far as taking on projects that have an impact on the community — his involvement, his knowledge as a banker, his willingness to be involved in these kinds of projects and willingness to put the time in has been essential to making it work,” Jones said. And without Paulsen’s connections with Minnesota West and rapport with Pipestone Vet, “it wouldn’t have happened,” Koets said.

The program also has potential to be far-reaching.

“We’ve pitched this program to the state of Iowa, state of Nebraska, a couple communities in South Dakota, other communities in Minnesota” as a model Pipestone thinks can be replicated, Koets said.

Derby, who now lives in Kansas, is himself impressed with how the program developed and “how many areas it’s positively affected,” including revitalizing the trades in the area.

Overall, Paulsen ranks this project as one of his all-time favorites.

“I’m really excited about this. We’ve had open houses on every one of these [rehabbed homes] — and the students are standing there, and they’re as proud as they can be,” he said.

“They know they’ve accomplished something…[It’s just] a really good feeling.”

This piece originally appeared in the members magazine of the Independent Community Bankers of Minnesota. Liz Wheeler is a Fairmont-based freelance writer.