Editor's note: This story is part of a series by our sister publication, the Grand Forks Herald. Click here for an introduction to the "On the Border" project, which includes multiple stories and a three-part video documentary.
In the months before Gov. Tim Walz restricted indoor dining in Minnesota's bars and restaurants for the second time, Roxy Kulyk didn't need to worry much about social distancing customers at her diner in Lancaster, Minn.
On one chilly October weekday, Foxy Roxy's Diner was nearly empty — except for a small group of local customers — despite a lunch special of fried chicken with all of the fixings.
Foxy Roxy's was hurting, a casualty of the COVID-19 pandemic and the closure of the U.S.-Canada border. The diner, which usually relies heavily on truckers driving through Lancaster, population 331, on their way to and from Canada, saw a dramatic drop in business since the pandemic prompted the border closure in late March, Kulyk said.
“This is what’s killing us,” Kulyk said.
Kulyk is one of many business owners in northern Minnesota who have struggled from a one-two punch delivered by the closure of the international border and the coronavirus pandemic.
Some businesses in the northwest region have struggled, or had to adjust and adapt, due to the border closure. Others, however —including Polaris in Roseau and Marvin in Warroad, as well as resorts along the south shore of the lake and even some realtors — were seeing upticks in business as summer turned to autumn.
The pandemic has been especially unkind to Foxy Roxy's Diner. Besides a drop in the number of customers who used to frequent the diner each day, the pandemic and border closure has crimped Kulyk's ability to host the events, such as parties, she previously did to supplement her income.
Even if the indoor dining order expires or is rescinded, it's likely Kulyk's troubles will remain until the border closure is lifted. That is, if it is lifted anytime in the near future, Kulyk said.
Since the border closure, even the morning coffee crowd has been a casualty of the pandemic. For years, tables of six to 14 customers sat at three tables shaking dice to see who paid for coffee. Now, because the dice would have to be sanitized after every shake, those coffee drinkers stopped coming.
Adding to the frustration, Kulyk has to buy disposable dinnerware and condiments, which must be thrown away whether used by a customer or not. Ordering food is a problem, too. Kulyk said she is limited in the kinds of meals she can prepare because some of the usual food she orders just isn’t available.
A few blocks from the diner, Bergstrom Oil also has seen a drop in traffic. Pre-pandemic, the service station’s convenience store derived half of its business from Canadian customers, said Charlie Bergstrom, who has worked in the family business since 1990.
Besides the reduction in convenience store customers, the family-owned company, which has been in business in Lancaster since 1936, also has lost sales of gasoline, mechanical work on Motor Coach Industries buses and no longer can deliver parcels to Canada.
The work of mounting and balancing tires for the bus company in Winnipeg has been cut by about 50%, Bergstrom said. The border closure also stymied Bergstrom Oil’s work on Canadian farmers’ tractor tires this past summer.
The combination of revenue losses adds up, Bergstrom said.
“It pretty much stinks,” he said “Everything is up in the air. I don't know when everything will end.”
In October, Bergstrom said he had reduced hours to offset the service station’s drop in business and used a $39,000 PPP — Payroll Protection Program — loan he received for payroll. Keeping the nine full-time employees working at Bergstrom Oil was a priority, according to Bergstrom.
“I don’t like to lay off; everyone we have here is valuable,” he said.
Back on Lancaster’s main street, Carol Johnson, Lancaster city clerk-treasurer, said limitations put on events in public places have put a dent in the town’s revenue reserves.
The city, which rents its large meeting room to wedding receptions and other celebrations as a source of income, had to stop doing that in February. Since then, groups of only 45 people or fewer have been allowed to gather in the city meeting room.
The city also has seen a drop at its city-owned liquor store as a result of the coronavirus pandemic and border closure. The city campground, where usually a dozen Canadian recreational vehicles park during the summer, also lost business as a result of the border closure, Johnson said.
The lack of Canadian customers resulted in reduced revenue for the city, and also for some of its businesses.
“It’s been tough on a lot of businesses,” said Lancaster Lumber owner Luke Nordin, adding that the challenge is getting the products he needs to get construction projects completed on time. The lead time for ordering supplies has increased from two weeks to eight to 12, Nordin said.
Shingles, siding, windows and particleboard are among the products he sees being delayed. A major siding provider is backed up for months, he said.
“Some of the stuff we ordered in August, they said they wouldn’t produce until January,” Nordin said.
The prices of building supplies also have risen during the pandemic. Nordin was fortunate that he ordered a lot of supplies in June. Still, finishing his projects on time is challenging, and Nordin said he is grateful that most customers have been understanding about delays.
“So far, we’ve had a lot of projects going on, and only a few have decided to wait it out until spring,” Nordin said.
Boom times at Polaris
Business remains strong for the region’s largest manufacturers, such as Polaris Industries in Roseau, Minn. The factory weathered the storm of the pandemic and a three-week shutdown in mid-March and continues to seek new workers to meet demand for its products, said Nathan Hanson, operations manager for the Polaris factory in Roseau.
The Medina, Minn.-based company's earnings of $166.8 million were up 90% over the third quarter of 2019, and sales for the quarter ending Sept. 30 increased 10% to $2 billion, according to a report in the Minneapolis Star Tribune.
Demand for Polaris products has been “extremely strong” since the shutdown, Hanson said, driven by an appetite to recreate outside.
“As we started back up, we saw just incredible demand for our product,” Hanson said.
Speaking for Roseau specifically, Hanson said he didn’t necessarily expect that demand, when Polaris reopened in April; recession certainly was on people's minds.
“I think your mind went back to 2008-2009, so we didn't know, and we were preparing for, kind of bracing for, what might be the worst and had that plan in place,” Hanson said. “Ironically, we came out and saw the opposite. And really, we’ve been chasing that potential upside ever since that point.”
Throughout the pandemic, Hanson said people in Roseau have “banded together” to help each other, whether it be ordering takeout food to keep the restaurants going or encouraging residents to patronize small businesses.
Polaris, for example, has given “Roseau Dough” promotional dollars to employees as a reward for quality work or safety records, Hanson said.
“We don’t want to lose any of our businesses in town,” he said. “I think as you drive through Roseau today, you see the Tractor Supply in the old Shopko building, you see the new Cenex and Burger King, which is just beautiful.
“So, there is a lot of positive growth in Roseau.”
Still, there is a lingering concern that the pandemic has permanently changed shopping habits in favor of online retailers such as Amazon, according to Mary Hoffer, promotions director for the city of Roseau.
That was apparent in mid-May, when Walz lifted the order that had required all but essential businesses to close during the first two months of the pandemic.
“When the stores were able to open back up in May, they expected people to be at their doors waiting to come in and shop, but that didn’t happen,” Hoffer said. “I think people have gotten in the habit of ordering online — I hate to say it.”
No doubt that’s hurt, Hoffer says, but it’s not all doom and gloom.
“I think the businesses in town have really done a good job of flexing and flowing after the initial shock of being shut down,” Hoffer said. “I think the majority of the businesses are like, ‘OK, we’re going to have to be creative here and think of ways.’”
Positive signs in Warroad
In Warroad, Minn., 20 miles to the east on state Highway 11, Drew Parsley is seeing delays getting supplies for the 67-room Hampton Inn he is building with his partner, Jon Waibel, a Lake of the Woods County commissioner who lives near Baudette, Minn., and their project developer, JLJ Management.
The developers broke ground on the $9 million Warroad hotel in October 2019, seeing a need for lodging to host the snowmobilers, hunters, anglers and hockey players and families who travel to Warroad, Roseau and Baudette for recreation.
The project hasn’t had to shut down because of delays in getting supplies, but the targeted date for completion was delayed from October to December, Parsley said.
“We’ve had a very rough, rocky start to this,” according to Parsley, who said he has no intention of not completing the project.
“We’re going to plow through this thing and make it happen, no matter what,” Parsley said
Across state Highway 11, on a busy corner, Lake of the Woods Coffee owner Aimee Roberts is confident her new business, which opened its drive-thru in July, will be successful, despite the pandemic. The drive-thru allowed the business to work out the kinks and, at the same time, keep employees and customers safe, Roberts said.
Daisy Gardens cafe owner Khahn Duong credits Warroad community members and the town’s Community Development organization with helping his business survive the pandemic. Duong moved his restaurant, which serves American and Asian food, from a building along Highway 11 to its current location downtown during the pandemic.
“When I reopened, the community helped,” Duong said.
Funding from Warroad Community Development LLC helped him pay for remodeling the downtown building, he said.
The support from Warroad Community Development LLC and Warroad Community Development Hub gives entrepreneurs the confidence to open their businesses in Warroad, said Cyndy Renfrow, Warroad Community Development’s executive director.
“I think they believe in the vision, that they really want to be part of it,” Renfrow said.
Meanwhile, established Warroad businesses, such as Marvin Windows Co. and Doug’s Supermarket, have maintained their strong presence in the community during the pandemic.
Marvin employs slightly more than 1,800 people in Warroad, about 1,500 of whom work at the factory in Warroad and the remaining 300 in offices in town. Though the company closed early in the pandemic, and April and May were rough months, the company weathered the storm, said Rick Trontvet, Marvin Windows Co. senior vice president, human resources.
Now, demand for Marvin products not only has recovered, but has improved, Trontvet said. The summer and fall construction seasons were busier this year than normal because “do-it-yourselfers” did projects during the pandemic.
It’s just another example of the strong manufacturing base that has helped northwest Minnesota withstand the pandemic as well as it has. Marvin has 6,180 employees in 12 factories in cities across the United States, including Grafton, N.D., Fargo and Northwood, Iowa.
The company has offered a variety of incentives to encourage people to work at Marvin.
“We have to think outside the box: plant pay increases, commuter bonuses, relocation bonuses at all levels,” Trontvet said.
At Doug’s Supermarket, owner Chuck Lindner also has taken creative steps to maintain and grow his business during the pandemic. Lindner also owns a Doug’s Supermarket in Baudette and will open one in Pine River, Minn., in August 2021. He also owns a liquor store 2 miles west of Warroad.
“The way we did business had to change,” Lindner said, noting that the grocery store reduced hours and increased its sanitizing measures. It also started curbside pickup and, with the help of the local ministerial association, twice-weekly delivery to older customers who live outside of town.
Meanwhile, the grocery store sells specialty smoked meats, has a Caribou coffee franchise and sells Kreative Kernel popcorn, made fresh in the store.
Lindner, who has owned the Warroad grocery store with his sister since 2004 and the Baudette store since 2015, is always searching for ideas to increase market share. For example, the grocery store sells organic produce and natural foods.
“You kind of learn what works and what doesn’t,” he said. “When you’re the only store in town, you have to be something for everyone.”
As a way to reach out to customers who don’t feel comfortable coming into his store to shop, Lindner is developing an app through which customers can order their groceries, he said as he sat at a desk under a plaque that reads: “Tough times don't last. Tough people do."