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Butch Donahue sells Delano Motor Sports
Oct. 7, 2013
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By Ryan Gueningsman
Managing Editor

DELANO, MN – Butch Donahue scraped up a $2,000 down payment to purchase the Delano Sports Center in 1973 and has never looked back.

Donahue bought what was then an Arctic Cat/Kawasaki dealership that had one employee.

“I’ve been here ever since,” Donahue said.

The southwest Minneapolis native grew up in a neighborhood called Morningside, which is now part of Edina.

“It was the Twin Cities’ first suburb,” he said, adding that it was right at the end of the street car line.

His mother and father bought a house in Morningside in 1940, which remains in the family as Donahue’s brother lives there.

Beginning to work at an East Saint Paul motorcycle shop at age 14, Donahue earned 40 cents an hour – and it took him more than two hours to get to the shop to work for four hours on Saturdays.

Donahue’s father, who was a heavy steel worker and a contractor with the US government during the war, died when Butch was 3 years old. Also at the age of 3, Donahue lost his right arm in an accident, suffering burns that caused the arm to be amputated.

As he got older, he worked paper routes, at a grocery store, and at a gas station to help out his family.

One spring day while walking to St. Thomas the Apostle Catholic School at about age 9, Donahue recalled seeing a guy start a 1930s motorcycle. This style of bike had a switchable throttle, which was used primarily by police to chalk tires in checking for parking violations, or during the war for shooting.

Donahue remembered he saw the man working the throttle with his left hand.

“I’d wake up and have breakfast, then I’d go down and wait for the guy to fire up the motorcycle,” he recalled, “just so I could hear him start it. I’d watch him take off and run down the road and go around the corner, then I’d walk to school.

“Then I’d get in trouble at school because I was late,” Donahue said with a laugh.

Since that time, he hasn’t had a day in his life where he hasn’t done something with a motorcycle. His first motorcycle came at age 11, which was a scooter-style. He has had a number of motorcycles since that time – almost 300 at one point.

When he landed in the hospital about 5 or 6 years ago following a quadruple bypass, he said, with a chuckle, he made the realization that if he hadn’t made it through the bypass, his two sons, Brett and Tony, probably would have had a big auction and a big party with the proceeds.

“If I hadn’t worked on it, ridden it, or played with it in one year, then it was no longer mine,” Donahue said. He’s gone on to sell about 30 or 40 motorcycles a year since. He primarily sells them at auction in Las Vegas.

Delano Sports Center

In 1973, Donahue purchased the Delano Sports Center from Dave Arneson of Hamel. Arneson had bought the business several years earlier from Ron Riebe of Delano.

At the time of the purchase, Donahue was running a nursing homes in Minneapolis; however, motorcycles were never far from his thoughts.

Donahue’s grandmother operated the nursing home and had wanted to retire, so Donahue spent about three years running it. He had left his job as a tire salesman to help out his grandmother.

“I got as old as the people I was taking care of,” Donahue quipped. “It was hard for me. People would drop their family off, then be gone forever. It was hard to see people not get visitors.”

Even with running the nursing home, Donahue still found time to hang out at a motorcycle shop in St. Louis Park. Because of his previous experience, which by then included a stint running a Yamaha dealership on Lake Street, he was asked to start a motorcycle sales department at the St. Louis Park store.

One of Donahue’s factory representatives for the line told Donahue that he should buy a store of his own. Donahue said he didn’t have the money, but the representative told him about the Delano store and that Arneson was looking to sell.

“Well, I had a few drinks one day – I quit 33 years ago. But I went out there and started talking to Dave and I bought it,” Donahue said. “We agreed to terms and I had to come up with $2,000 cash. Well, I didn’t have it.

“I begged, borrowed, and stole it,” he said with a laugh.

Aside from raising the cash, Donahue also had to tell his wife, Valerie – after he had already agreed to terms with Arneson.

“We had a nice home in southwest Minneapolis, but it was something I really thought I could do,” Donahue said.

And, he did. For the next 40 years, Donahue, along with his family and a dedicated staff, operated the Delano Sports Center.

“I had one employee who was with me off and on for 40-some years, Bob Cruse,” Donahue said. “He ended up being like a brother for me. He stuck with me through thick and thin.”

In those 40 years, Donahue saw changes to the industry and technology, experienced difficulties in a number of areas, but perseverved to keep the store open and strong. He also purchased and operated several other stores – including bringing a Harley-Davidson dealership to Delano.

In the mid-1970s, Donahue said there was a Harley-Davidson dealership in Buffalo. He had dinner and drinks one evening with the owner, and the man talked Donahue into buying the motorcycle business.

“Again, I didn’t have the money,” Donahue said. “I had to go to the bank. We mortgaged parts in the shop – that was the start of the Harley deal.”

In the mid-1980s, Donahue said things really began happening for Harley-Davidson. A new motor was introduced, and he said it was “just like they opened up the curtains.”

Also in the mid-1980s, things really began happening for Donahue as he purchased the building that presently houses Delano Sports Center. Prior to the move, he had been located where Lou Fegers Racing is along Highway 12. The store had also been located in downtown Delano on River Avenue before making the move to the highway.

“Things were going really good,” Donahue said. “But Harley was giving me a tough time because I was handling multiple lines. I’ve never seen a motorcycle I never loved. I don’t care what it is. If it’s a motorcycle, I like it.

“They don’t talk back most of the time. They might break down once in a while, but they don’t talk back.”

Perhaps like dogs are known as man’s best friend, it would be fair to say motorcycles are known as Donahue’s.

A second building was built at the present Donahue Sports Center location, and the building that presently houses Crow River Harley-Davidson became strictly a Harley business.

“Things were going good,” Donahue said. “Harley had really exploded.”

So good, in fact, that he purchased a second Harley-Davidson business in St. Cloud. Brett Donahue ran that business for 22 years. The store was sold several years ago and has since become Viking Land Harley-Davidson.

Every day is a winding road

Times were good, the economy was good, and things were moving right along for Donahue until some personal and business setbacks hit hard in the mid-2000s.

His business fell victim to embezzlement in 2005, he said.

“It kind of took the wind out of my sails,” Donahue admitted.

At the time, Donahue said his businesses were doing about $25 million in sales in a year and there were about 150 employees. There were more than 50 employees at the Delano locations.

“I couldn’t stay abreast of it,” Donahue said. “I hired an expert, but I hired the wrong expert.”

A forensic bookkeeping firm estimated Donahue lost more than $1 million from the incident. He said he got back about $400,000 through court proceedings, but never was able to recoup about $600,000.

“What people don’t understand, when that happens, it destroys you,” Donahue said. “It destroys your faith in the company. I had a great group (of employees). We had a great customer base, and it just kind of destroyed it.”

Like several times before he considered purchasing businesses, Donahue said he was forced to borrow money to put the company back on its feet, knowing it would take five or six years to get out of it.

“I refused to let it go down,” Donahue said. “I know there’s a lot of people that would have walked away.”

He sat in his upstairs office at the Delano Sports Center one morning at about 2 a.m., staring out at Highway 12, trying to “figure out what the hell to do.”

“I was not going to let it down,” Donahue said of the business. “It’s been good to me. I’ve been good to it. It’s got a good aura, aside from one person, and it’s been a wonderful run. I decided to save it.”

That employee base proved to be the primary reason for Donahue to rejuvenate the center.

“The main reason I decided to save it is I wasn’t going to fail my employees,” Donahue said. “That’s why. These people have been with me, I’ve watched their kids grow up, I’ve hired their kids, grandkids. They all made a good living and didn’t have to drive into the Cities to make a living. We had a good time.”

Donahue admits that, financially, he would have been smarter to close the business.

“I was starting to see a little light at the end of the tunnel, then they tore the bridge up,” he said, referring to 2008 construction in Delano. “But, we got through that.”

Also ongoing for Donahue was a legal battle with Harley-Davidson.

“I destroyed my relationship with Harley,” Donahue admitted. “And, rightfully so. They were wrong.”

Donahue said pressure was also applied by Harley-Davidson for Donahue to construct a new building. He didn’t see the point of doing that unless the dealer was going to provide more product. In October 2008, he sold Donahue Harley-Davidson to Virgil and Rodney Scherping, who own and operate the business today.

Donahue shifted his focus once again to the Delano Sports Center. In the past few years, despite the down economy, he said he’s been able to make the business a success again.

“It’s not what it was, but it’s a success,” he said.

A little more than a year ago, Donahue said representatives from Twin Cities Automotive (TCA) began speaking with him about a possible buy-out. The company had also purchased Star West Chevrolet-Honda Sports from John Tackaberry.

Donahue said he initially didn’t pay much attention to the TCA discussions, but said eventually be began going down the path of selling to the company.

Product lines found at Delano Sports Center will move to Star West Motorsports, under ownership of Twin Cities Automotive, upon completion of the transaction, according to Star West Motorsports General Manager Tom Stifter.

“They want to place motorsports right next to a successful auto dealership,” Donahue said of TCA’s plans to move the Donahue Sports Center lines to the Chevrolet of Delano/Star West Motorsports complex along Highway 12.

“I wish them the best,” Donahue said. “That’s one of the reasons I sold it to them is because they have enough money to stick it out. They have plans for an expansion of the show floor and service area. They’re going to do it right.”

Donahue said his remaining employees have been offered positions with TCA.

Riding off into the sunset

The man who loves motorcycles and anything to do with them plans on spending more time on a motorcycle following the completion of the sale of the business.

He has a couple “old bikes” he presently rides, and said he prefers to just ride “something that runs.”

“I have a ‘99 Kawasaki,” he said. “It doesn’t do anything exceptionally well, but it doesn’t do anything bad either.”

He’s driven across Mexico and the United States, but said he now plans to “ride around the country and see all the people I’ve threatened to go visit all these years.”

One bucket list item for Donahue is to ride the circumference of Australia, while another is to ride from Alaska to Panama, fly his bike to Chile, going over the Andes and ending up in Argentina.

Plenty of time will also be spent with his wife, sons, and his two granddaughters, a grandson, and a great-granddaughter.

He said, while he will miss the employees and the customers, he will not miss doing business with the manufacturers.

“It got to be very tough to do business with them on a day-to-day basis,” he said.

So, he is going to sell the business and ride off into the sunset.

Donahue considers himself lucky for “borrowing $2,000 and making a pretty good living.”

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