First District Association and Ideal Lumber recently reached agreement on a deal that will see the dairy processing cooperative purchase about half of the lumber company's property Litchfield.

"This is one of those things where the intent is to work together,” First District CEO Clint Fall said. “This gives First District and its members the opportunity to look long-term.”

Terms of the deal were not disclosed, but both Fall and Nelson expressed satisfaction over their agreement, which they said extends far beyond their individual businesses.

“This is good for Ideal Lumber, good for First District, good for Litchfield,” Nelson said. “It’s a win-win-win thing really.”
Nelson said he also hoped the announcement would quell rumors that have circulated for quite some time about the future of Ideal Lumber.

“Ideal Lumber isn’t going anywhere,” Nelson said. “Ideal Lumber is here to stay and we want to...we’re strengthening our business, making it better for the consumer.”

Selling the 1.7-acre piece of the business on the west side of Sibley Avenue will allow Ideal Lumber to consolidate its operations on the east side of the street. Ideal already has a large warehouse, design center and flooring showroom across the street.

Nelson said an office will be built on to the east end of the design center/showroom to form one large complex.

“I will have all my people in the same building, which will be a good thing for the business and the customer,” Nelson said.

Despite the positives, however, Nelson admitted that the decision to sell and relocate — even if just across the street — was not easily reached.

“It’s kind of like cutting some of the flesh off the bone,” he said. “For my dad, especially.”
Al Nelson, who has run Ideal Lumber since organizing investors and purchasing the former J.F. Anderson Lumber Co. in 1959, agreed. “I spent a lot of time there. It’s tough to see it go, but Ideal Lumber is still going to be around.”

The Nelsons and First District Association management have discussed property numerous times throughout the years. First District purchased about 6,700 square feet of the Ideal Lumber yard in late 1996 to accommodate expansion of its cheese cooler. But a deal with the magnitude of Friday’s purchase agreement never materialized.

“We’ve talked before; this didn’t come on just recently,” Brent Nelson said. “The shoe just didn’t fit the other times, really. It just wasn’t the right time or the right place for one of us. Now, it seems like it was the right time and the right place for both of us.”

Added First District’s Fall: “It’s been one of those things we have looked at as, ‘yeah, this would be nice.’ But being as conservative as we are, it had to play itself out over time. The board and management didn’t want to go beyond what was necessary to meet our needs. But to be sustainable long-term, you’ve got to plan — you’ve got to plan for growth or reorganizing or restructuring.”

That description of the planning process was aimed at both First District and Ideal Lumber.

For First District, the future seems in the direction of growth, and having the Ideal Lumber property adjacent to its facility will add flexibility to the cooperative’s growth strategy, according to Dean Grabow, human resource and purchasing manager at First District.

“It gives us the opportunity to have efficient growth,” Grabow said. “It’s right in line with our existing property; we have options.”

First District Association has no immediate plans for its newest piece of property, Fall said. But the wheels are in motion that make that property a valuable acquisition.

First District is working with the city of Litchfield in seeking state funding for an upgrade of the city’s wastewater facility, which is a necessity for First District to be able to process more milk. Currently, the cooperative is operating at capacity, unable to process any more milk or take on new members. First District’s management and its board of directors is exploring the possibilities for expansion, however.

Expansion would mean a need for increased storage space as well as additional processing capacity.

“If we don’t have the property, that almost limits the vision of what you can do,” Fall said. “It is one piece of a puzzle that has to fall into place.”

Ideal Lumber, meanwhile, is looking to reorganize and restructure in answer to current market forces.

“The building industry has been tough the last few years,” said Brent Nelson, who took over full-time management of the business in 2003. “We’re going to reorganize to our strengths. We’re changing our product line a little bit, restructuring the business to be more healthy in the environment that’s out there now.

“And we’re going to be able to do that at the same time that we’re letting First District do what they want to do,” Nelson said. “I think that’s great. This deal really is something that’s a win for everybody.”