SMIF leaders see results of grant at BP Dairy Queen

When Jamie and Jay Klemmensen bought the Blooming Prairie Dairy Queen three years ago, things were going to change.

“We’d heard transferring a Dairy Queen franchise was challenging,” Jamie Klemmensen said, “and the (former) owner was just going to let the franchise go, so we were going to buy the building and turn it into a coffee shop,” something they knew the city’s residents wanted.

When they learned the transition wouldn’t be as difficult as predicted, “I didn’t want to be the ones to take Dairy Queen away – so now I have a Dairy Queen instead of a coffee shop.”

Neither she nor her husband had experience in the hospitality industry, Klemmensen told Benya Kraus, the new president and CEO of Southern Minnesota Initiative Foundation.

Kraus and Tim Penny, who recently retired as SMIF’s leader, were in Blooming Prairie on July 16, one of their stops on a tour of the region the foundation represents.

“None,” Klemmensen said of their restaurant background. Jay owns Eagle Prairie Insurance; Jamie is a graphic designer.

But they knew business and, in June 2022, found themselves at the beginning of a series of challenges.

“It was hard; it was really, really hard that first summer,” Jamie Klemmensen said. “I had a building that was falling apart; I had equipment that was failing; I had electrical that was failing; it was a tough, tough summer.”

Someone crashed into the building, though no one was hurt.

In March 2024, Cedar Crest Construction was destroyed by fire. Dairy Queen, located just yards away, also sustained smoke and water damage. Much of the equipment was no longer usable.

“When you think of everything that happened in just three years, it’s a lot,” Klemmensen said. “And now, here it is, after all of that.”

The business underwent a transformation, thanks in part to SMIF, a donor-supported foundation that invests in economic growth in 20 counties of south central and southeastern Minnesota, including Steele, Dodge and Mower.

“We can be the conduit, to help bring dollars in,” Penny said. “A lot of (small) towns, if they’ve got to figure out how to reach out for federal or state money, it can be a nightmare. If and when we can be helpful in dealing with that side of things, we’re happy to do so.”

To that end, the Dairy Queen was the recipient of a Main Street Grant through SMIF, which also helped the business out after the fire through a different fund.

The Main Street initiative comes through the Minnesota Department of Employment and Economic Development, using federal Promise Act dollars to support economic recovery.

The city of Blooming Prairie worked closely with SMIF to encourage businesses and nonprofits to apply; in addition to the DQ, 17 other local businesses and nonprofits shared in the $700,000 awarded.

Grants to businesses ranged from $10,000 to $50,000.

“We do lending, we do grants,” Penny said. “We know how to do this, so over about 18 months, we dispersed over 2,000 grants totaling over $20 million across our 20-county region.”

SMIF also created a business recovery fund on the heels of catastrophic flooding in southeast Minnesota in 2007.

“We found that early money made a huge difference,” Penny said of businesses hit by disasters. “It wasn’t all they needed to build back, but it allowed them to get something going again as a business, while they were waiting on insurance and other things.”

“We were planning to remodel anyway,” Jamie Klemmensen said. “With that grant, that extra money allowed us to do more here; we didn’t just do the exterior or just the interior – we did the whole remodel.”

The project, she said, brought the Blooming Prairie store “up to what you see with a new Dairy Queen being built. We put in a lot more investment – a significant portion of the money we spent was from that grant.”

It includes an addition to the back of the building and a redesigned drive-thru, as well as enough floor space to warrant two additional employees every shift to cover the extra square footage – not to mention the extra business.

“Year-to-year, we are up 22%,” Klemmensen said. “Most stores see an increase of about 8% with a remodel – and we’re sitting at 22%.”

She grows emotional when she talks about her staff.

“I treat all my employees with respect, and I don’t make a fuss over little things,” she said. “It’s a learning experience; it’s a first job for so many people … as their first boss, they’re going to remember me, so I want to leave a good impression on them. I treat them with respect, and in return, they treat our customers with respect.”

Even with the change of business plans, Penny said, “are you finding this space is serving some of that coffee shop role for the community?”

It is, Klemmensen agreed, saying people “hang out after they finish eating, sometimes for an hour or more” as others come in.

“It’s a big thing,” she said. “This business is just a reflection of who Jay and I are, and the fact that people can see it like that, and they feel that – it just means a lot.”