Friday, December 31, 2004

Reflections on 2004

To say that this past year was probably one of my most memorable ones, is probably an understatement. It was memorable from a personal, professional and business standpoint. Milestones were set, not only by me, but also by a number of the key people that I’m with each day. It was an incredible year!

From a personal standpoint, everyone in my family is healthy. Our twin sons are both doing well as juniors in high school, even though girls are now a bigger part of the daily scene. My wife, Betinha, and I have transformed to living on Lake Sara for a full year. We love it, even if the winters get a bit long at times. I’m typing this as I watch dozens of geese and ducks in the midst of their annual migration, out on the water in front of my study. A fisherman just zoomed by. With temperatures in the 60s, it’s hard to believe that it is the end of December.

The publishing of Boomtown USA has exceeded my expectations. It is gratifying to see the stories and message of the book embraced by so many. When we were discussing doing this project at Agracel, I don’t think that any of us envisioned how well the book would be received. I’ve been overwhelmed with the reception that I’ve gotten as I’ve traveled around the country, touring towns, meeting economic development professionals, entrepreneurs and civic leaders and learning of the many wonderful steps that so many communities are making to create opportunities for their citizens.

Agracel has continued to grow and is setting new records in virtually every metric that we monitor. Team Agracel has stepped forward in their usual “Can Do” manner, not missing a beat with me being gone traveling around the country. They’ve continued to develop new building projects, creating job opportunities in the many agurbs® in which we work. I just hope that they have something for me to do when I get done with my travels, because it is very obvious that they are doing wonderful things without me. I hope that they are having as much fun as I am.

And, finally thanks to all of you who read this message. I’ve really enjoyed getting to know many of you during this past year. You’ve taught me a lot and I am very thankful.

It’s Better to Lose Your Job in America

Yesterday’s Wall Street Journal had an interesting editorial on the vibrancy of the U. S. economy compared to other 1st world ones. They gave interesting statistics on economic growth, unemployment rates, job growth and other key factors. The U. S. compared very well to the 27 other countries in the OECD, leading in most categories.

The statistic that really caught my eye was on long-term unemployment. If you lose your job in the U. S., 91.5% find a job within a year. In Britain only 76.9% do so; Japan 69.2%; France 66.2%; Germany 52.1% and Italy 40.8%. Huge differences!

So even though there are those who would have you believe that “the sky is falling” with our economy, as the WSJ said, “It’s nice to know that America’s “sluggish” economy remains a world-beater.”

Thursday, December 30, 2004

Offshoring Debate

I’ve gotten a couple of emails recently from people who question the political debate about offshoring. Here is my response to one of these who questioned my stand.

I initially was very concerned about the impact of offshoring upon our economy, particularly since my company is focused upon industrial development. With over 4 million sf under lease to manufacturers in the Midwest, South and Southeast I looked at the issue in great depth. I’ve read numerous studies on the subject and talked to researchers about their findings.

I’ve also traveled to over 100 small towns in 27 states over the past year. Some of these towns have gone thru dramatic changes, due to being dependent upon only one company or industry. Let me give you some examples of a few of the towns that I have visited in the last 3 months: Galesburg, IL (population 33,000) which is in the process of losing Maytag with 2,000 employees and Butler Manufacturing with 1,500; Ponca City, OK (25,000) which lost the headquarters of Conoco; Greenville, MI (7,800) which is losing Electrolux with 2,700 employees; and Mooresville, NC (population 11,000) which lost 5,600 textile mill jobs. I’ve also lived thru losing our major employer of 600 jobs (average wage of $40,000+) in my hometown of 12,000 about 4 months ago.

I’ve seen and felt the pain that these closings can cause in a town and my heart goes out to each of the people who have to find new jobs, often after working at the same company for many years. It is a difficult time for many of these people. Going back for retraining and looking for a new job is not easy.

But, with that said, it is a process that a capitalistic economy goes thru over and over. It occurred to us with shoes in the past 30 years, when there were over a dozen manufacturers within 50 miles of my hometown, employing thousands. All closed. But, today our economy is better than ever and virtually all of the former shoe makers found better jobs that paid more. Sure, it was tough to go thru at the time, but the end result was for the better.

All of the towns I mentioned above are going thru a great deal of pain or have already done so. I’m convinced that each will end up better and in some cases much better than when they were dependent upon only a single company or industry.

Let me tell you of the example of Mooresville, NC. They had virtually all of their jobs in textiles. The city fathers saw the risk of having “all of their eggs in one basket” and started a new industrial park. Today, they’ve replaced the 5,600 textile jobs with a new diversified industrial base of over 5,000 employees. They also have developed a medical base with over 200 doctors, from only 7 MDs twenty years ago. They’ve diversified with NASCAR race teams (49), which have encouraged 150 entrepreneurial companies to develop around this cluster. Last year Lowe’s moved their corporate HQ there because of the great quality of life they found in Mooresville.

Each of these communities recognized that changes are going to occur, you’d better plan on these changes occurring, and develop ways to prosper when those changes happen. Not every town will survive, but I’ve seen many that have made the changes that are needed, and are developing a more diversified economy. They are creating some wonderful opportunities for their citizens.

We can’t stop progress. Some jobs will move overseas. However, we are also seeing manufacturers expand in today’s economy. From what I’ve seen, I’m convinced that our best days lay ahead. And, I think that we will look back upon the offshoring debate a little like we look back upon the political debate of the 1960 presidential campaign, which was that robotics were going to destroy our manufacturing base in this country. It was a purely political and not economic concern. And, it didn't happen.

Wednesday, December 29, 2004

Giving Back to the Hometown

I had lunch yesterday with 40 year old dynamo Scott Molander, one of the many serial entrepreneurs that I am fortunate to have met during my travels this year around the country. Scott grew up on a wheat farm in Crosby, North Dakota, about 8 miles from the Canadian border. He graduated from Dickinson State University and got his first job with Footlocker. They put him in the inner city of Chicago. He vividly remembers the trip to Chicago, “I had never seen a toll booth before and didn’t know what to do.” As you’ll see, he quickly learned.

He worked for Footlocker for several years around the country, ended up in Indianapolis, when he and Glen Cambell (No not that one…this one is from Cape Girardeau, MO, one of my top 100 agurbs®) who was also with Footlocker, decided to start their own company. “We raised $110,000 from Angel investors back home in North Dakota. No one in Indianapolis would bite on our idea of selling sports hats.” George Berger, one of his Dickinson professors was the biggest investor and helped to bring in venture backing from Bluestem in Sioux Falls, SD, which turned a $7 million investment into $60 million.

They started on November 3, 1995 and had 5 stores by the end of 1996. They quickly grew their chain of Hat World stores to 110 stores by the end of 1999 and bought out their largest competitor, Lids, in 2001. Earlier this year they were looking to take the company public when a buyer matched their price of 7x EBITDA and they sold the company for $177 million.

Scott took six months off to be with his young family, but “six months was enough.” He is back on the entrepreneurial journey looking for great people with good ideas. He told me, “Number one is great people. If you have a great idea with average people you are in trouble.”
He is running with a new idea/company called Simple Furniture, which will sell a complete line of furniture which can be assembled without tools. He plans an upper end line for sale at Crate and Barrel, Pottery Barn and other high end retailers and also a lower end line for sale to students.

Scott is giving back to his hometown of Crosby, ND (population 1,312) in a number of ways. He is assisting a local company that exports peas and lentils; developing a Tech Center with some IBM retirees from the community and help from a Microsoft grant; and trying to figure out a way to fill a modern pasta plant coop that went broke. He also is helping Dickinson State University with a new entrepreneurial program they are initiating.

He’s on the move and I’m going to get to travel around North Dakota with him for a week in April, giving talks in various towns. With him as my tour guide I’m sure that I’ll have some wonderful stories to relay to you.

Tuesday, December 28, 2004

Ag Subsidies Retarding New Farmers

Here is a letter to the editor that I wrote today to the New York Times on a recent article they wrote about agricultural subsidies.

Dear Editor:

Your article “Big Farms Reap Two Harvests, With Subsidies a Bumper Crop” ignored four critical issues that are major impediments to the building of a healthy and innovative industry. These subsidies keep young people from becoming farmers, don’t allow them to achieve needed economies of scale and turn honest people into schemers.

1. Because so much of a farmer’s net income comes from government payments, they are often reluctant to retire and forgo a guaranteed check. Farmers have the second oldest average age of any profession in the country at 56 years of age. Young people aren’t able to begin farming as a result.

2. Government payments get translated into higher land prices, further erecting barriers for young people to enter the profession. Good land in my part of Illinois is selling for well over $4,000/acre. Without a government subsidy, it would probably be 20 to 40% less.

3. Because of payment limitations built into the government programs, farmers often have to enter into schemes involving family members and others to set up numerous “operating entities” to satisfy governmental regulations. I know of several good, young farmers who got out of farming rather than subject themselves to operating in this “grey area” of the law.

4. The current program helps farmers who have bumper crops more than farmers who might have a crop disaster. A farmer with 220 bushels/acre of corn typically got over $70/acre while one with only 60 bushels/acre because of weather problems received only $20/acre.

We need to return agriculture to a market based, subsidy free status. It would probably cause some short term pain, but would be better in the long term.

Monday, December 27, 2004

Space Needs Thru 2030

I just finished reading a new report from the Brookings Institute entitled Toward a New Metropolis: The Opportunity to Rebuild America, which looks at the demand for residential, commercial and industrial space over the next 25 years. They find that about half of the buildings in the country by 2030 will have been built after 2000.

I was particularly interested in their projections in the industrial arena where they see a need for 8.3 billion square feet of new space compared to the existing base of 12.3 billion sf. States with the highest percentage of new space built after 2000 are projected to be: Nevada, North Dakota, Utah, Wyoming and South Dakota. In raw square footage they are: California, Ohio, Michigan, Illinois and Indiana.

I’m sure that some of the states above shocked some people in Washington, DC but there are some compelling reasons why more rural states will thrive over the next several decades. The study acknowledges that modern industrial processes are best done in more rural surroundings stating, “It is conceivable that much of the 7 billion square feet in industrial space that will need to be replaced and the 1 billion in new square feet needed to meet growth will occur away from where they presently exist. The impact on communities beyond the suburban fringe may be significant especially considering spin-off development.

Agurbs® that have developed a plan for job growth, have spruced themselves up and offer a high quality of life are poised for great opportunities in this new century.

Wednesday, December 22, 2004

Branson’s Promise

I was reading the Branson Daily News last night, one of many small town newspapers that we subscribe to as part of our ongoing research, when a message from Ross Summers, President and CEO of the Branson Lakes Area Chamber caught my attention. He very well articulated a vision for Branson, which I feel is why a small town of 6,000 people can become the Live Music Capital of the USA.

The Branson Promise

We believe that a vacation is not an escape from reality but a connection to what is real. You. Your family. Laughter. Music. Pure fun. Doing the things you really want to do…together.

We believe you don’t have to go far from home to feel far from home. We believe you deserve to take a break from your regular life while preserving the security and comfort that comes from feeling right at home.

We believe that the best experiences are live and personal. They affect you – and you affect them. The most memorable experiences are always personal and unique. Spontaneous and unexpected.

We believe in families, and that vacations can belong to everyone in the family. While on vacation everyone can and should have a child’s sense of energy and enthusiasm – especially adults.

We believe in our American values and celebrate them every day. Respect for the individual, patriotism, faith, hope, optimism, family, courage, generosity and opportunity for all. We believe in the home. Homemade. Homegrown. Homespun. We believe that new people aren’t strangers, just friends who haven’t visited. We believe that every guest can be a part of our Branson family. From headline performers to the folks who sell the tickets, we invite you to become part of the fun we create every day as the families who built this community.

We believe that world-class entertainment doesn’t need to cost a world-class fortune!

We believe that money is hard-earned and respect the work that sits behind every dollar spent by our guests. We still think it’s possible to be surprised by how much money can buy, especially in Branson.

We believe in Branson, Missouri, nestled in the lakeside beauty of the Ozark Mountains. We’re proud of who we are and where we are going. We’d love to show you around because we love the ways in which we will surprise you. We’ve found what we want in Branson, and we know you’ll find what you want here too. Our doors are open – come on in.

Monday, December 20, 2004

Extreme Makeover—Town Sized

ABC’s “Extreme Makeover: Home Edition” has one town thinking of doing it for their entire downtown. Big Sandy, Montana (population 800) has decided that they need to remake themselves into Wild West theme. And they’ve taken steps to do just that.

Even though the show generally works on individual houses for struggling, deserving families, Marlys Bitz head of Big Sandy’s Chamber of Commerce and Agriculture is giving it a shot. Big Sandy like lots of small rural towns, is fighting for survival. There are empty buildings in the downtown area and three other businesses are for sale. Bitz said, “I was worried about the domino effect,” as she explained how towns lose their grocery store, then their doctor and finally, very slowly simply disappear. With a CAN DO attitude she said, “What is the worst thing that could happen? They don’t come.”

They’ve held art auctions, raised funds from the local Rotary Club, and tried other ways to put Big Sandy “back on the map.” Hopefully, Extreme Makeover will give them another boost.

Bitz and the citizens of Big Sandy again showed to me the determination, drive and pulling together of so many small towns.

Sunday, December 19, 2004

Place & Water—Keys for the Future

This week I talked with my favorite state head of economic development, Leland Speed of Mississippi. He is not a “typical” economic developer. He has started a couple of public REITs and comes to the job of economic development from a real estate angle. He has talked to me in the past about “curb appeal”, first impressions, and other terms common to that industry. He is working as head of Economic Development for Mississippi for $1 per year. He loves what he is doing!

“The sense of place is becoming more important. Look at Oxford, MS where single family housing within 3 blocks of the square sells for $300/sf compared to ½ that price on the outskirts of town,” he told me. “Or, Biloxi where high rise condos are selling for $350/sf, if they have a view of the gulf.”

He told me of how the importance of water and place could be more important for the future as people look at where they want to live. “Take the example of our state. The state is named for the Mississippi River which flows along the entire western edge of the state. Yet, there are only five spots where you can even see the river from shore. The rest of the great spots are blocked by levies. It is something that we’ve got to correct.”

And, knowing Leland, he’ll figure out someway to fully utilize this great resource that is underutilized today.

Saturday, December 18, 2004

Leveraging Their Natural Resources--Farmland

One of the speakers at last week’s Missouri Governor’s “Survive and Thrive in 2005 Conference” was Rand Fisher, President of The Iowa Area Development Group. This organization was set up in the mid 80s by the 85 coop and municipal utilities in Iowa to encourage economic development. The mid 80s were when 38 community banks in the state closed, there was a farm auction on almost a daily basis and one Iowa mayor told people to “turn off the lights” when the last person left Iowa. I was working in Iowa at that time and I can tell you that it was bleak.

And, there are still challenges. The farming population is aging quickly, partially due to the current farm programs and the huge subsidies being given to existing farmers. “The average farmer in Iowa is 59; 70% work off of the farm for part time income; 48% of the land is owned by someone over the age of 65 and 24% is owned by someone over the age of 75,” according to Fisher. He went on, “At one time we were concerned with corporate and foreign land ownership, but today the biggest issue is that over 20% of the land in Iowa is owned by an heir who lives outside of the state.”

With ag being such an important asset in Iowa, “if we don’t use it as a plus in our rural development strategies, it is like a baseball team not using their best player.” Fisher related two examples (egg production and dairy) of successfully revitalizing agricultural businesses in the state as an example of what can happen when you “connect people and resources to grow businesses and communities in Iowa.”

Egg production was always an important product on most Iowa farms, with the state the number 1 egg producer in the country. It was considered the grocery money for a farm family. But the industry changed and Iowa didn’t. By 1980 Iowa wasn’t even in the top 10 states in egg production. But The Iowa Development Group and others started promoting Iowa as a location for egg production because it is much cheaper to ship eggs than feed. The average laying hen consumes 1 bushel of corn and ½ bushel of soybeans/year and Iowa produces lots of each. Today, Iowa is #1 again creating 2,640 jobs. The other key numbers: $61 million in payrolls; $750 million in industrial sales; $160 million in personal income; $225 million in value-added and $10 million in state taxes.

Iowa has had the same problem with the diary industry, resulting in fluid milk and cheese plants closings. The economic impact of one cow is $13,737. But big dairy herds are returning to Iowa, with 13 having been set up with over 1,000+ head each in the past 10 years. Other ag industries with huge potential in Iowa are: ethanol (15 new plants built in the past 5 years); renewable energy (wind power); and specialty crops. Iowa is learning to utilize their major resource, land, creating jobs in the process.

Thursday, December 16, 2004

104th Talk of the Year—Bitten, Fogged In and Out of Gas

On Monday I gave my last talk of 2004 and 104th since my first one on February 1st in Washington DC. During the past 10 months I have traveled 86,500 miles to 27 states, getting a chance to tour some wonderful agurbs® and meet some incredible people. It has been one of the best experiences of my life and I have had a wonderful time. Thanks to all of you who have made this such a memorable experience.

Some of my memorable moments during that time included being on the program with three Governors (MS, NM & MO); running out of gas in OH; a speeding ticket (my only one of the year) in IN; getting bitten by a dog in KS; and getting fogged in at Sam Walton’s first store location in Newport, AR.

Most are surprised to learn that Sam Walton started in Newport, AR, not Bentonville, but the businessman who leased him space wouldn’t renew his lease at the end of the five year term. He wanted his son to take over the business, essentially kicking out Sam. The town hasn’t changed much since then, while Bentonville where Sam landed has been transformed.

I got the dog bite when I was given a tour of a honky tonk performing arts barn out on a farm. The barn was called the “Fun Barn”. Evidently they don’t get many tourists out there in suits. I told my wife back at the hotel, “I thought that the owner had trained his dog to attack anyone who might look like an IRS agent.” She responded back, “No, they’re just great judges of character.” I’m not sure that I’ll ever win that one.

I’m going to take some time off for the next several weeks and won’t be posting every day. I’ve got some stories that I’ve accumulated in my travels that I’ll want to share with you, but I won’t be doing them on any regular pattern. I plan to again post on a regular basis when I’m back on the road again in January.

Wednesday, December 15, 2004

Columbus, IN—Why a Japanese Manufacturing Hotbed?

Yesterday I wrote about the large concentration of foreign manufacturers in Indiana. Japan with 188 companies in Indiana leads the pack, with almost 10% of those in the town of Columbus. How did this top 100 agurb® achieve this percentage when they have less than 1% of the population in the state?

Larry Ingraham, who runs an economic development company focused upon Japan told me, “One of the reasons there are 15 Japanese companies located today in Columbus is that the former mayor, Bob Stewart, made 17 trips to Japan during his 12 years in office. During the 8 years Governor Evan Bayh was in office in Indiana he never went overseas and he did his best to avoid being seen with Japanese or other foreign investment. However, during this period of the Governor's "absence", Bob Stewart of Columbus was the most well known Indiana politician in Japan, and it was his personal leadership and direct appeals to Japanese executives that contributed to all of those Japanese firms selecting Columbus as their U.S. location.”

He also related to me the story of how DIAMET, a Japanese Company that manufacturers automotive parts from powdered metal, had an announcement ceremony in Columbus in the late 80s. One of those present was the president of Mitsubishi Materials USA. He developed an eye problem during the ceremonies and was diagnosed with a detached retina. J. Irwin Miller, who I wrote of in my book, arranged for his jet to take him to the best eye doctor at the Mayo Clinic that afternoon.

Ingraham told me, “The Japanese President (and his company!) was extremely grateful to Mr. Miller and to Columbus for this special arrangement that had been made for him in his time of need. This story was then told by the Mitsubishi Materials officials to other Japanese companies and helped to paint a most favorable image of the Columbus community which resulted in more Japanese companies visiting there to see for themselves what was so special about the city. I was there that day at the Mitsubishi Materials announcement for Diamet and I will always remember what Mr. Miller did for that man.”

Little acts of kindness and respect can have huge long term benefits for the agurbs® that have figured out what it takes to succeed.

Tuesday, December 14, 2004

Inshoring in Indiana!

Last week when I was touring NE Indiana, Gary Nielander, head of economic development in Steuben County, showed me a study and map that the utility company Cinergy had prepared on foreign investment in Indiana. The rather impressive map of these companies throughout Indiana is shown at

Indiana ranks as the 14th state in the USA with number of foreign companies with operations in the state. There are over 600 foreign companies, employing almost 200,000 people. The greatest number are Japan (188 companies); Britain (140); Germany (96); and France (47). But there were also companies from such countries as Brazil; Chile, Chine, Greece, India, Israel, Liechtenstein, Luxembourg, Malaysia, Mexico, South Korea, Taiwan and Yugoslavia. Indiana has the 3rd highest concentration of Japanese companies in the country.

Free trade has encouraged these investments. Free trade will continue to grow jobs in the US and around the world.

Monday, December 13, 2004

What If?

Have you ever thought about what might have happened if something had occurred or if you had done something differently? It is no different for a town.

In 1934, in the midst of the Great Depression, the 50 year old barber Hendrik Meijer decided to start a grocery store in the rental property that he owned next to his barbershop because he couldn’t find anyone to rent the property. Shaves and haircuts were considered luxuries during the depression and he was often paid with farm produce in the small farming community of Greenville, Michigan. He bought $338.76 worth of grocery items and started North Side Grocery. His 15 year old son Fred was the first employee.

That humble beginning has grown into the Meijer supercenters, which first introduced hypermarkets to the USA in 1974. Sam Walton often studied Meijer and was said to consider it to be one of the best retailers in the country. It wasn’t until Sam passed away that Wal-Mart started to compete head to head with Meijer, because of Sam’s tremendous respect for Fred Meijer.

In the late 60s Meijer moved their growing headquarters to Grand Rapids, 30 miles to the south. Today their 160+ stores, still privately owned by the Meijer family, are run from there rather than Greenville.

Fred Meijer, who celebrated his 85th birthday last week, has donated millions to his hometown. His store no. 1, which has been replaced with a new store on the outskirts of Greenville sits empty. Meijer has offered to sell the 140,000 sf centrally located store to the city for $1, hoping that it can be reused by the city or non-profits in the town.

Let me finish with some of the “what ifs” that went thru my mind as I toured Greenville last week. What if Hendrik Meijer had rented that empty space out to someone rather than starting a grocery store? What if he had decided to start a furniture store instead of a grocery store? What if Fred Meijer hadn’t moved the company headquarters to Grand Rapids? What if Sam Walton had moved out of Bentonville, Arkansas with his headquarters when he went public?

Sunday, December 12, 2004

Ice Boxes to Boxed Out—Picking up the Pieces

Not many of you probably remember “ice boxes”, where you put a block of ice into an insulated box to keep food chilled. Gibson Ice Boxes started in Greenville, MI because of the great oak lumber found in the area. It evolved into refrigerators and continued growing, but was sold several times: to White, then to Frigidaire and eventually to Electrolux, a Swedish conglomerate. The 1.5 million square foot plant located in Greenville is the largest single refrigerator plant in the world, turning out 1.6 million refrigerators/year. At one time 6,000 people were employed in the plant, but thru productivity enhancements today 2,700 are employed there. At least they will be until November, 2005.

On October 21, 2003 Electrolux informed the city of Greenville that they could build a new plant in Mexico and save $80 million per year. They gave the city until January 1st to see if they could match the savings to keep the plant in the town of 7,800.

The city went to work. They met with the local union, governor, federal contacts and even the CEO of Electrolux. George Bosanic, city manager of Greenville said, “We refused to give up. We put this together over this 70 day period which involved four holidays.” George pointed out to me that “deer season” is considered an unpublished holiday here, as it is in many rural areas.

They got $36 million/year in concessions from the UAW; $8 million in state and city incentives; 200 acres of land for a new plant; and a new efficient 800,000 sf plant that would be leased to the company. The new plant would allow Electrolux to reduce their workforce by 650, while keeping production at 1.6 million units/year. In all the incentives and cost savings amounted to $76 million/year.

But to Electrolux it wasn’t enough and they announced on January 10, 2004 that the plant would close in November, 2005. It was a blow to the town and national and international media picked up the story of how a small town tried to save their plant to no avail.

And, are they now giving up? Nope! The publicity has generated a lot of interest in the town. Bosanic told me, “I’m now working with 24 companies that are looking at us. My goal is to replace ALL of those 2,700 jobs by the time that they close down. We should be making an announcement in the next two months on two new companies that will hire a total of 800 jobs. More announcements will follow.”

With what I saw in Greenville last week, I’m convinced that the closing of Electrolux will be a rough patch in the road, but that they will look back on it as a turning point in the town. And a turning point for the better.

Saturday, December 11, 2004

More Jobs than Citizens

Two of the small towns in Steuben County, IN that I visited this week have more jobs than they have citizens. You don’t find one of these type of towns very often and it is the first time that I’ve found two in one county.

Ashley, IN is a town of 1,010 with 1,560 people working in the community. They have 8 manufacturing companies, each with from 10 to 500 employees. In 2000 they ONLY had about 1,000 people working there. They lost two manufacturers in the early 2000s, but both buildings are now occupied with internal expansions.

Fremont, IN is a town of 1,600 with 2,000 working in the town. They also lost a couple of manufacturers in the early 2000s, but have continued to grow their industrial base as the economy has grown in the past several years. One of their companies is doing a $30 million expansion that will add 50 new jobs to their base of 250.

The town also has a brand new $2 million library that is very impressive. You can tell that it is a community on the move.

I love these small towns that are showing all of the nay sayers wrong.

Friday, December 10, 2004

Manufacturing Growing?

I was in Steuben County, IN this week doing the keynote talk for their first annual economic development meeting. This is a new organization that is focused upon creating new opportunities in this most northeast county in the state. It’s led by Gary Nielander, an ED veteran who is enthused with the potential. His organization is supported by the 7 towns in the county, the county government, various chambers, and six local companies.

The county of 34,000 is blessed with over 100 lakes, one of which is the third largest natural lake in the state. There are nine golf courses in the county along with a gorgeous state park that I stayed at. Several of the golf courses are brand new championship caliber ones. The county “has been discovered” by city dwellers within 3 hours of this crossroads community like Detroit, Chicago, Toledo, Ft. Wayne and Indianapolis. Having interstates 80, 90 and 69 all crossing within the county is a huge advantage.

The county has a very strong manufacturing base with 91 different companies, one of the most diversified bases that I’ve seen in a county this size. These manufacturers account for 37% of the jobs in the county and have an average pay of $34,400. The county’s unemployment rate soared to 9.2% in the recession of 2001, but is now down to 5.8% as local companies have expanded.

One local company that announced an expansion at the annual meeting was Vestil Manufacturing Company which moved here in the mid 80s. Entrepreneur and CEO Ralph Trine is starting a $4 million expansion that will add 75 jobs to his base of 200 employees. He is a globally orientated executive with a manufacturing operation in China. But, he is expanding operations in Angola, fully knowing that not all manufacturing is going to move to China. I’m sure that this will come as a surprise to Lou Dobbs and several others in the media who prefer to only look at gloom and doom and not at what a resilient manufacturing base we have in this country.

Thursday, December 09, 2004

Fed up in the Holland Tunnel

He was a national marketing manager for Sony. She was advertising copy chief for Macy’s. They lived in New Jersey but worked in Manhattan. “After getting stuck for the 15th time in Holland Tunnel, I decided that enough was enough and we moved to Sandpoint, Idaho,” said he.

And so began a new business, one that no one noticed or probably even gave much chance of survival when it started from scratch in 1984 in the town of 5,000 in northern Idaho. Their first catalog had 18 items in it. By 1991 they were doing $11 million in sales. Today they do $500 million as a public company, but one that is still headquartered in Sandpoint. The company is Coldwater Creek and the founders, Dennis and Ann Pence, still run the company from the charming town on the banks of Lake Pend Oreille.
My wife and I visited their main store this weekend, which is built over the actual Coldwater Creek on an old bridge which used to link the town to the train station. The bridge/store is often featured in their catalog. When we were there, a group of Tibetan monks were doing sand art in the store, raising funds to help Tibet.

Having one nationally know company in a town this size is quite impressive. How about two? Also located in Sandpoint is Lighthouse Dressings, which started out of a local restaurant.

Schweitzer Ski Resort is a destination ski area that is located just outside of town. The town offers numerous music and arts festivals, the largest of which is in August when the football field is covered with a tent and musical groups from all over the country are brought in to perform. The average house in Sandpoint is under $150,000. The town has a small town, artsy charm.

You’d hardly know that the entire economy was at one time totally dependent upon timber milling. The timber mills all moved out by the mid 90s, but the new economy of entrepreneurs and artisans is going to be a much better one for great places like Sandpoint.

Many think that Sandpoint is the next Jackson Hole, Wyoming and that it has many of the same characteristics of that town in 1970.

Wednesday, December 08, 2004

The Dream of a Local Entrepreneur

Who would think of making a $60 million investment in a small town that “was out in the boondocks and had a reputation for being the center of Aryan Nation, a group of dangerous, vociferous right wing extremists?”

Maintain Local Control is one of the 7 ½ keys in my book. I found that it is often the local people who are willing to take risks for the betterment of their community that someone from the outside might not be willing to make. I found such a local person in Coeur d’Alene, a small town that once had the Aryan Nation reputation. But, largely because of the efforts of Duane Hagadone and his partner Jerry Jaeger, today Coeur d’Alene is developing a cosmopolitan reputation.

Duane Hagadone was born and raised in Coeur d’Alene which had a population of around 10,000 when he was growing up, the son of the publisher of the local newspaper owned by Scripps. Duane started working at the paper when he was 20 in advertising sales and Scripps named him publisher when his father passed away at the age of 49. He later bought out the Scripps and started buying other small town newspapers when he was still in his 20s, amassing a collection of newspapers in the northwest and Hawaii along with other businesses. But he had a dream…a dream to have a world class resort in his hometown, even though he had never owned a hotel.

The North Shore Motor Hotel, an old, two building, multi-storied hotel sat on the site that he coveted for this dream. Most of the rooms faced the parking lot, not the picturesque Lake Coeur d’Alene, but Hagadone who was in his late 40s got a right of first refusal if the North Shore was ever sold. The buyers decided to sell and he formed a partnership with Jerry Jaeger, 15 years his junior, an experienced hotel operator and also from Coeur d’Alene. He was born in Ritzville, WA (see my post of December 5th) that is known for being the birthplace of a number of Fortune 500 CEOs. Has anyone tested the water in Ritzville? He moved to Coeur d’Alene when he was in high school.

Hagadone’s dream was big, really big! He and Jaeger decided to build a showplace, destination resort with 338 rooms that resembles a Swiss Chalet or Bavarian Castle. The Coeur d’Alene, A Resort on the Lake opened on May 9, 1986. Idaho’s governor called it, “the biggest happening in Idaho since Averill Harriman built Sun Valley.” The “experts” predicted that it was in the wrong town, the hotel too big and that it would bring Hagadone/Jaeger to their knees. They were wrong.

The resort was an immediate success. Its location close to nature, next to a quaint downtown and only 40 minutes from an international airport (Spokane) quickly turned Coeur d’Alene into a destination location. Conde Nast’s readers voted it The Top Mainland Resort, one of many awards for the resort.

The Hagadone/Jaeger partnership has expanded into other resort and recreational locations, but they’ve continued to invest in Coeur d’Alene. One of their other notable projects in the town is the construction of The Coeur d’Alene, a world class golf course that features the first and only floating golf green. This green of 15,000 square feet, is 10 feet deep (5 below water), features 2 sand traps and 5 big trees, and weighs 5 million pounds.

A local entrepreneur…a dream….a transformation for a small town!

Tuesday, December 07, 2004

Agurbs® in “America’s Switzerland”

After doing my talk in Spokane WA on Friday, my wife and I were planning on going to Coeur d’Alene and Sandpoint, Idaho, two of my golden eagles or top 100 agurbs® in the country. But, the weather forecast was for a snowstorm of 12 to 14 inches of snow. We almost cut our trip short and headed home early. I’m glad we didn’t. The weather man was wrong and we had a great time.

Both agurbs® were unique in their own way, offered some fantastic natural beauty, and showed me some additional, wonderful examples of how local or transplanted entrepreneurs can transform a community for the better. One of these entrepreneurs you’ve probably never heard of. The other’s catalog is probably sitting on your coffee table.

The two towns, located in the northern panhandle of Idaho, are about an hour apart. This area of the country has often been called “America’s Switzerland” with beautiful natural lakes that sit at the foot of soaring mountains. It offers four seasons, but with a winter season that isn’t as brutal as you would imagine at its latitude.

Monday, December 06, 2004

Bed Burning

I’ve been preaching for sometime that a town can’t be just a bedroom community. It is a loser’s game. It’s impossible to win.

The reason? Research that I found when I wrote Boomtown USA done by the American Farmland Trust, on over 100 towns scattered all over the country, showed that residents in a town get $1.17 back in city services like fire, police, water, sewer, schools, etc. for every $1 they pay in property taxes. Commercial and Industrial firms get $0.27 back for every $1 they pay. One city manager in Arizona told me that they calculated it at $1.75 for every dollar that the residents paid.

Post Falls, ID is a town of 17,000 midway between Spokane, WA and Coeur d’Alene, ID. Some called it a bedroom community for these two booming communities. But Post Falls understood the ramifications of taking that path. They wanted to stress this to their residents. They held a bed burning party, actually burning a bed.

Burn your beds! Make sure that you have a diversified economy and don’t just depend upon people choosing your town because it is a nice place to raise a family.

Bring Back the Kids

John Larson is one of those serial entrepreneurs that are going to be cultivated by more communities in the future. He started out in the Lake Tahoe/Reno area, sold his business for millions and moved to the small town of Winthrop, Washington (population 350).

His new entrepreneurial endeavor is, a company that will take your home movies, digitize them and put them on the web so that you can share them with family and friends. The company has been written up in the New York Times, Washington Post, Newsweek, Parade and other publications. It is cutting edge!

Larson’s growing company is becoming a key employer in Winthrop and Larson is investing in fixing up the historic downtown area. Already he has spent over $1 million into this effort.

But, he needs more workers and he wants to encourage other entrepreneurs to start businesses in Winthrop. He has a new website that is focused upon doing just that. I love the first page of the website:

You know who they are…..
They used to live here, too

Now they only visit on holidays

Wouldn’t it be nice to have them home again?

Sunday, December 05, 2004

Tapping into Alumni’s Fond Remembrances

I found it! I finally found it! For years I have been preaching to economic development groups that they had a HUGE untapped resource that no one was tapping into. But various groups, all protecting their turf (I call it “silo mentality”), prevented towns from exploiting it. I hoped to find an example of someone who was mining this fantastic database, but searched in vain. Until today!

I was in Spokane, WA for the Inland Northwest Partners, a regional ED group in NE WA and Northern ID. Maury Forman, renowned author of numerous economic development books, coordinates the group. The theme of the conference was “Cultivating the Entrepreneurial Spirit & Reaping the Benefits”. One of the great benefits of traveling all over the country giving talks on my book, is being able to attend conferences like this and meeting some very passionate, dedicated economic development pros.

Spokane has figured it out and worked thru various egos to market their city to alumni of area universities. They are doing funky post cards that various ED groups in the city can use in this campaign ( They also are attending alumni events, profiling recent returnees in alumni magazines and promoting the city at sporting events around the country.

They sent a “With over one billion dollars invested in the Spokane region you may not recognize it…Relax, Dick’s Drive-In is still here” large post card to 300 local alumni in Washington, DC. They had 50 attend a reception, have already had one move back to Spokane and two others contemplating a move back.

A “Sure, 76 surrounding lakes may be a bit excessive, but you’ll have to take that one up with mother nature” post card aimed at Southern California had a firm with 4 partners in the financial services industry move to Seattle.

Their most popular post card is one that says, “I love traffic” on the front and points out that the average commute time in most major cities is about 45 minutes compared to 20 minutes in Spokane.

Ritzville, WA, a small town of 2,000 that is 60 miles west of Spokane, is doing a similar campaign with their high school grads. They have 3 former grads that are today Fortune 500 CEOs and hope to tap into them and other former grads fond memories of their hometown.

Why doesn’t every ED group in America do this?

A Rich Heritage from Architecture and Arts to Entrepreneurism

I almost bought a Frank Lloyd Wright house for $30,000 in 1988. As you could imagine, there was a catch. The house had to be moved because a local church in Mason City, IA had bought the property and unless someone moved it, they were going to tear it down. After I found out how much it weighed, I quickly lost interest. But a group of local preservationists bought the house, moved it a couple of blocks and restored it back to its old majesty. I’m glad they did.

Mason City is blessed to have numerous Wright creations including several houses, a hotel modeled after the Imperial Hotel that he designed in Tokyo, and a waterfall. Walter Burley Griffin, another Prairie School architect designed a very unique house that is built into the side of a hill. It looks like a rock jutting out of the cliff.

Today several banks and commercial buildings in Mason City are designed in the Prairie style. It offers a unique charm to this great agurb®.

Meredith Willson, who wrote The Music Man, was born and raised in Mason City and River City was modeled after his hometown. A few years ago a local foundation built the Music Man Square, a meeting center with an authentic indoor re-creation of River City from the movie. There also is a Meredith Willson Footbridge over the river.

However, a lesser known local might have an even greater influence on Mason City and the entire state of Iowa with his philanthropy. John Pappajohn, 78 years old, was born and raised in Mason City. He made his first fortune in insurance and his second in Venture Capital. Today he is funding Pappajohn Entrepreneurial Centers throughout Iowa, including Mason City. These centers, aimed at improving the entrepreneurial skills of Iowans could be a major springboard for the entire state in this new century.

Saturday, December 04, 2004

An Agurb® Moving from Bricks to Clicks

\ Mason City, Iowa is an old industrial city of 29,000 in north central Iowa. I first visited it in the early 80s and often stayed overnight in the town in the late 80s and early 90s. It always impressed me as being a very nice town. The people were friendly. The yards were well kept. It radiated a certain charm. But, I hadn’t been back since 1992.

I was surprised when I first drove back into town after 12 years by the expansion of retail in the town, which was incredible. There were half dozen new big box retailers, numerous smaller stores and a handful of new auto dealers at the main entrance to the city. Mason City’s unique downtown also seemed to be doing well.

I’d picked it as an agurb® for my book and I knew I’d made a good pick when I saw how Mason City has expanded and diversified their job base. Several of the old line industries that helped make the city the largest in the northern 1/3 of Iowa are long gone like the Armour packing plant and the brick plants, but their two cement plants are still going strong. They’ve added to that base with food plants like Kraft (Jell-O pudding cups); ConAgra (hot dogs, bacon and ham production); and Cargill (liquid eggs primarily for McDonalds). They’ve got some local entrepreneurial manufacturers, a new $400 million power plant, and a new $56 million ethanol plant that will use 15 million bushel of corn per year. There is a good diversity in their industrial base.

And Mason City is moving from their old bricks industries into a “clicks society” where knowledge trumps brawn. They are leveraging their strengths as regional financial, insurance and medical centers to create more white collar and high tech jobs. Their location along the interstates I35 and Avenue of the Saints (St. Louis to St. Paul) also offers them some opportunities in the growing distribution industry.

Friday, December 03, 2004

Iowa Tax Credits for Communities

Two new initiatives discussed at the Community Collaboration in Spencer, Iowa this week have the possibility to help transform small towns and counties throughout Iowa. And, they will be jump started with state tax credits, allowing local people to take some of their taxes to directly help their region.

The Regional Angel Investor Network ( will help regions in Iowa to fund entrepreneurs in their areas. As I’ve written before, I believe that the start-up and recruiting in of entrepreneurs will be the paradigm shift of economic development in the 21st Century. Iowa gets it and is doing something about trying to help fund entrepreneurs.

Another new program in the state is Endow Iowa ( which also uses state tax credits to help start Community Foundations like the one I was at in Winfield, Kansas a few weeks ago. We are going to witness the largest transfer of wealth in the history of the USA and communities that have the vehicle of a Community Foundation to recirculate these funds will be able to do good things forever for their local citizens.

Iowa understands the importance of “place” and is looking at ways to keep their small towns functioning and flourishing for decades into the future.

Regionalism on the Rise

Wednesday, I was the keynote speaker at Community Collaboration, a regional initiative for economic development in Spencer, Iowa. This northwest area of Iowa started to do economic development marketing on a regional basis in 1992. Today they are looking to expand their work geographically and the conference included several counties from SW Minnesota.

Why more regionalism? Entrepreneurs and companies looking to move to an area don’t care about boundaries, whether they are city, county or even state borders. They are looking for quality of life for themselves and their employees and cooperation and collaboration from the various entities in an area.

Regions that can come together to help develop their competitive advantage and use that advantage to create some critical mass and clusters will be the winners in the long run. There were several great examples of cooperation cited at the conference taking place in NW Iowa and SW Minnesota. With the enthusiasm and interest displayed by this group I’m guessing that it will grow and prosper in the future.

Thursday, December 02, 2004

A Revitalized Downtown….Priceless!

South Bound Brook, NJ changed the look and image of their small town by redeveloping the ancient GAF factory site, an old asbestos shingle manufacturing site. Having 20,000 cars/day driving by this dilapidated site created a horrible image for the entire town. Mayor Schubert and the city council worked diligently to get this eyesore turned into something they could be proud of.

It took a lot of work, but the hard work is paying off today. In the works on the site are 152 townhouses, a 25,000 sf retail shopping area and upscale apartments above the shopping area. Restoration of 1500 feet of the historical Delaware and Raritan Canal is also underway with a footpath along the canal connecting this project to the adjacent downtown area.

Today South Bound Brook is branding themselves with a canal barge and the mules that pulled the barges on it.

As Mayor Schubert said, “New Residential Townhouses $50 million; New Retail and Apartment Development $6 million; A Revitalized Downtown…..Priceless!”

Wednesday, December 01, 2004

True Leaders Come for Everywhere

At a NAIOP Conference in Edison, NJ this week one of the speakers was Jo-Anne Schubert, mayor of South Bound Brook, NJ. She wasn’t born in the town of 5,000 and in 1996 when she first ran against the two term mayor who had been born in the town--as she says, “I was still considered an outsider even after living there for 18 years.”

As she related, “The old mayor was comfortable with us being a bedroom town and we needed a vision and balance for the town. We had lost a major plant in the late 80s that took up 12 acres right in our downtown area and it was the death of the community. We had to do something to turn the town around. So I ran. My husband told me: “if you win, that’s great. If you lose we are moving.” She won big.

The factory site that needed to be cleaned up wasn’t any site. It was where asbestos shingles had been invented and had been an industrial site for over 100 years. It was the pits!

The process of changing the image of their town from “the town that no one wanted to admit they lived in, into a charming little town on the banks of the Raritan River” wasn’t easy, had major bumps in the road and didn’t happen overnight. A 100 year flood caused by Hurricane Floyd in 2000 almost derailed everything. As you could imagine, working through the environmental issues with the site were complicated. Mayor Schubert said, “I’d failed science in high school, but now I’m an expert on environmental issues.”

How did she accomplish such a turnaround? She met constantly with her council, sometimes every night of the week. She went to state and federal sources for funds. She got the citizens involved. The group chosen to do the redevelopment was vetted before 200 local residents in a public hearing where everyone had a vote. She was a dynamo!

Every town would do so well to have a mayor like Mayor Schubert who was told in high school that she wasn’t “college material.” Tomorrow: Redevelopment and Branding in South Bound Brook.

Tuesday, November 30, 2004

Entrepreneurial Locations

The Milken Institute’s annual best performing cities report released this month ranks all of the MSAs in the country based upon long and short term job growth, salary growth, GDP growth and number of high tech companies. The top five cities in the country were in order were: Fort Myers, FL; Las Vegas, NM; Phoenix, AZ; West Palm Beach, FL; and Daytona Beach, FL.

An interesting part of the study was an analysis of what makes great performing cities in the future. One of the keys to the future is entrepreneurial activity as explained by Milken, “Regional economic dynamism is epitomized by fast-growing, entrepreneurial companies. For a metro area to be successful over the long haul, it has to have capable entrepreneurs. The very foundation of the theory of clustered economics rests upon the dynamic rejuvenation capability of the cluster. Over the long-term, cities with strength in entrepreneurship will be among the Best Performing Cities—large and small.”

What is interesting in their study is that ALL of the top 25 metros in their study stretch from the southeast, across the south and up the west coast. There are none in the NE or Midwest. Florida has 6; Texas 5; and California 5 cities.

What is it going to take to convince politicians in the NE and Midwest to make their economies more entrepreneurial friendly?

Monday, November 29, 2004

The Next Great Bubble Boom

Over the Thanksgiving holiday I read Harry S. Dent, Jr.’s new book, The Next Great Bubble Boom, which carries on from his previous themes in prior books like The Roaring 2000s. Dent utilizes demographics and lagging birthrates to show how they change our economy over time

Some of his observations about what I call the agurbs® and he calls the exurbs:

“This new economy will continue to enable a growing shift toward ‘exurban living’ in high-quality smaller towns.”

“Continuing Megatrend: Consumers will continue to flee to the Exurbs. Lower-priced homes, less congestion, and more recreation are the drawing cards.”

“This trend is a broad trend like the shift from cities to suburbs, starting in the early 1900s, but accelerating for many decades into the 1970s.”

“Now the Information Revolution—being accelerated by the Internet, home PCs and entertainment devices, cellular smart phones, and broadband (wired and wireless)—will allow more people to live, do business, and communicate from exurban areas.”

Dent’s research shows the exurbs growing to 50% of the US population by 2025. While, I find this figure a bit optimistic, I think that several of the points he makes in his book about why the exurbs will grow compelling.

Stillwater’s booming downtown

One of the very positive things that struck me about Stillwater, Oklahoma was their vibrant downtown. They have obviously spent a great deal of time and effort making sure that their downtown continues as a livable draw. They have over 50 independent entrepreneurs with stores in the downtown area.

Having a strong downtown as a gathering place, like in Stillwater, is becoming more important as people search for a sense of place in where they live. It is not something that you can get at a Wal-Mart or strip mall. It is often a unique place like a downtown. Stillwater is such a place, where a unique sense of place exists.

Sunday, November 28, 2004

Company Town on CNN

Last night I watched a one hour special on CNN about a “company town.” They featured Canton and North Canton, Ohio long time homes to Hoover (vacuums) and Timken (ball bearings). Both started in the early 1990s and closed their manufacturing operations there in early 2000s.

They showed the anguish of long term veterans of the company losing their jobs and their turmoil of deciding what new jobs and careers to pursue. They also featured a professor from Harvard who talked about the plight of these people. She thought that it was very unfair that these workers had a pact, or deal with the company and then one day it suddenly ended. She thought that there wasn’t any hope for the ex-workers nor their children, unless they left home for greener pastures.

The show’s only positive voice was the mayor of Canton, who was made to look like an out of touch cheerleader. CNN’s portrayal was that she was enthusiastic, but didn’t have a clue.

Losing a long time pillar of the community like Hoover or Timken is devastating. The hardship of losing long term jobs is overwhelming. But communities like Canton, North Canton, and others generally pick up the pieces and move on. I’ve seen it in many company towns like N. Adams, MA; Mooresville, NC; and recently in Ponca City, OK. At the end of the day they moved onto new businesses and endeavors, becoming better agurbs® as a result.

It is a shame that a news organization like CNN would have you believe that these towns are doomed and feature analysts who bemoan changes, have an entitlement mentality and don’t see the can-do spirit of these communities. They see recent downturns as trends that can’t be turned around. They miss completely the true spirit of small town America.

Forward Stillwater!

I was briefly in Stillwater, Oklahoma last week giving a talk to their new economic development organization Forward Stillwater. This very forward looking economic development organization raised $2.5 million this year to increase the economic opportunities not only in Stillwater, but on a regional basis out 50 miles. They are on the cutting edge of economic development.

Stillwater is a thriving community of 40,000 that is blessed to be home to Oklahoma State University. OSU accounts for about 25% of the economic activity in the city and is churning out graduates that many companies are yearning for. Combining a focused economic development effort with the power of OSU is a strong mix that should continue the growth that I saw taking place in this booming agurb®.

Saturday, November 27, 2004

Big Fish. Great Pond.

David Myers, head of economic development in Ponca City for the past two years, talked to me about his goals for development. “It is the people’s money and we need to use it wisely. The vast majority of our job growth is going to come from within our existing businesses. When a company looks at moving here they are going to want to talk to their peers and we want that to be a good conversation.”

“Our new campaign is: Big Fish. Great Pond. Let me give you an example of the type of person we are bringing into Ponca City. Shane Herman is a blue collar kind of guy who makes oil field spill prevention devices. He got the idea from working on the north slope of Alaska. He moved here from Yuma, Arizona last year because he wanted to work with Conoco-Phillips and be closer to the oil companies. We helped him get a purchase order from Conoco-Phillips that will allow him to grow his company from 5 to 10 employees. We are going to help him continue to grow. I call it growing your own.”

Myers also related this approach to economic gardening as opposed to “buffalo hunting”, or going after the huge projects. My own experience is that too many communities spend WAY too much time “buffalo hunting” for projects rather than growing their own small companies. Ponca City is on the right track and I love their slogan, “Big Fish. Great Pond.”

Friday, November 26, 2004

Mourning to Turning—Turning Losses into a New Future

When Conoco merged with Phillips in 2002, over 250 officers and executives from Conoco moved to Houston, the new companies headquarters. The town of 25,000 also lost 600 or 700 indirect jobs as a result, both as a result of the multiplier impact in reverse and Conoco-Phillips moving to one source contractors. In all 1200 people let town, creating a huge, negative impact on a town this size.

Stan Kisler said, “We were in a mourning stage for about a year. But a couple of events helped to pull the town together. One was a mission/soup kitchen in the bad part of town that was burnt down by an arsonist. In 90 days we rebuilt it with everyone working together. The second was when we did a $1.2 million campaign to rebuild the Northern Oklahoma Youth Shelter. Dave May, who weighed about 270 or 280 pounds decided to do a fundraiser with people donating $1 to $2/pound for him to lose weight. We challenged each other. Dave was all over town, riding a bike, doing other things to lose weight. Everyone took ownership in this new shelter as a result. When you start to help other people, you start to feel better about yourself.”

Today, Ponca City is putting those lost jobs, a lost shelter and lost pounds behind it. They are working together and preparing for a better future…a future built upon a more diversified job base, building upon existing clusters in tool bits and machining, growing their existing local companies, even as they recruit in new businesses.

Thursday, November 25, 2004

Lessons from a Legend

E. W. Marland failed eight times before he finally discovered oil near Ponca City, Oklahoma in the 20s, eventually controlling 10% of all of the world’s oil. He founded Conoco Oil, which was headquartered in Ponca City and was a “kept town” by Conoco, which totally dominated the town of 25,000.

Twenty years ago 5,000 people in the town worked for Conoco, but today it is down to only 1,600. More importantly, as Stan Kisler, an ex Conoco VP, today a city commissioner and head of their economic development efforts said, “Conoco provided the genetic material for the town.” Having a one-horse town is a big plus as long as the horse is healthy.

Today Ponca City has an impressive revitalization of their economy taking place. They’ve passed a ½ cent sales tax for economic development, put together an entrepreneurial board (no bankers or Conoco-Phillips execs), and did a nationwide search for their ED Director. As Stan told me about their ED group, “We work like a skunk works rather than a bureaucracy. We’re having the most fun that you will ever have with your clothes on.”

Just as Conoco’s founder failed many times, picking himself off the ground, before moving onto to greatness, Ponca City is rebounding from the shrinking of Conoco. They’ve got a great plan, motivated locals and a lesson of what is possible if you don’t give up.

Tuesday, November 23, 2004

Leveraging Your Resources—Even If It’s A Sand Trap

The Eyre Highway is an 868 mile road thru the Outback’s Nullarbor Plain. It is generally considered one of the most desolate areas in Australia. They’ve got sand, lots of sand! What could you do with all of that sand?

In a classic case of turning lemons into lemonade, the 18 towns and gas stations along the road are going to build a golf course out of all of that sand. And not just a normal golf course, but one that will be 868 miles long!

Each town has agreed to use their road grading equipment to create sand fairways and “greens” made of oiled sand—real grass is impossible to maintain in such an arid climate. Golfers will play one hole per gas station and then drive on to the next hole, as much as 62 miles down the road.

The locals hope to get people to stop at their towns, showcasing some local attraction, after they’ve played a hole of golf. One town features whale watching, another ancient fossil beds.

“It’s never going to be St. Andrews, but it’s an awesome idea for promoting our area and should be a lot of fun,” said Alf Caputo head of the local tourism association. It’s another example of towns working together to try to better their lot. I wonder how many Fosters were consumed coming up with this “out of the box” idea?

Monday, November 22, 2004

Hasta la Vista, Baby!

I was in Ponca City, Oklahoma last week touring the town. I’ll have several reports on them this week. They do a very interesting weekly economic development newsletter. This week’s edition had an article entitled: Tell Arnold, They Won’t Be Back.

They cited my work on Americans looking for quality of life places to live and raise a family. They reviewed an AP article that one in four Californians were considering moving from the state. The culprit? Only 19% can afford the $465,000 median home price.

A demographer at a conference I was keynoting several months ago mentioned that California runs the risk of becoming the America’s Appalachia in the 21st Century. The reason? Today they have the lowest high school graduation rate in the entire country. High costs and a weak educational system could be a deadly combination that even Arnold can’ fix

Sunday, November 21, 2004

Cultivating Serial Entrepreneurs

Agurbs® that learn how to cultivate entrepreneurs and especially serial entrepreneurs who continually are starting companies are going to take their communities to a completely higher level in this new century. I met one of these captivating serial entrepreneurs in Winfield, Kansas.

Todd Gentry graduated in Electrical Engineering from Kansas State in 1992 and wanted to work in the aircraft industry in Wichita. He moved to Winfield because his grandparents lived there and it was close enough to Wichita to be able to drive to job interviews. He ended up getting a job as an engineer with a local firm and stayed in Winfield. In 1995 he and a friend started a part time business with their meager savings and a $20,000 loan from his grandfather to provide internet service to the town. They sold it for several million dollars in the late 90s.

In 2001 he started Inno-Labs, a product development firm to take new ideas to market. He’s designed heated and cooled sports seats that he is selling to Wal-Mart, Cabelas, Costco, Bass Pro, Budweiser, and others. He’s also producing a product to keep animals out of rooftop plumbing vents that are sold thru Menards, Home Depot, and other home improvement stores.

Todd is a young man on the move, one that many towns would love to have starting new businesses. Today, Winfield is home and as he told me, “I have had the opportunity to work in or at least visit nearly every major MSA in the US. I love to travel, I love the social, cultural, and culinary and entertainment opportunities of the larger cities. I also dearly love coming home.”

Saturday, November 20, 2004

Brain Drain Cost or Brain Bank Return

At the Connecting the Dots Conference at Southwestern College in Winfield, KS we discussed growing your own businesses with local entrepreneurs as an explicit strategy. A group from Wichita showed the cost of losing our young people in rural America to large cities. Their figure was that it cost $300,000 to raise a child into an adult. They showed Wichita losing about 20% of its young people or 1,700 people each year. That is a net loss of $510 million!

What is the lifetime value of keeping those young people in your community? In Winfield, Kansas the average wage is $26,631. For a 40 year career that is over $1 million for each young person.

Think of all of the young people who leave rural towns like Winfield! Just think of the Brain Bank of talent that grew up in your town and isn’t living there today. Look at the return on investment that could be earned by recruiting them back home.

Community Foundations—Legacies Forever

I gave a talk at the Legacy of Thanksgiving dinner for Legacy, A Regional Community Foundation, established in 1996 in Crowley County, KS. This fourth annual event recognizes the many people who have contributed over $1 million to the foundation for the benefit of generations of citizens.

Legacy has some innovative programs to assist those less fortunate like providing dental care for young children, special programs for young people decided upon by a panel of high schoolers, and other donor specified projects. This is a great example of how people in rural areas are showing their generous nature and positively altering their towns forever.

The motto of Legacy is an old Chinese proverb, “A wise man plants trees under which he will never sit.” Another saying that I like is: “If it is to be, it is up to me.”

Clusters—Can be a Springboard

I got a great tour of Cowley County, KS (Winfield and Ark City) this week. This is a county that has had a strong industrial base but has had to rebound from losses of over 2,000 jobs with plant closings of Crayola, a refinery and a packing plant. However, I was impressed with how this rural county has picked itself up and increased their economic development efforts in a countywide effort.

A local company, Gott, developed a thriving business in plastic products which they sold to Rubbermaid. Rubbermaid still produces products like coolers, trash cans, etc. in Winfield, with a workforce of over 750 employees. Other companies, Winfield Consumer Products, K Square and Galaxy Tool, are also producing plastic goods. They’ve have sprung up from ex-Gott employees, hiring another 400 people.

Clusters like this one in the plastics industry can be the springboard for increased economic activity in many towns. If you haven’t done a survey of potential clusters in your region, you should do so.

Friday, November 19, 2004

A Picturesque Steamboat Town

I toured Warsaw, MO yesterday with Randy Pogue, Warsaw’s city planner. Sitting on the banks of the Osage River, it was the final stop for steamboats from St. Louis. When the steamboat era passed, Warsaw slowly slid backwards.

Today, Warsaw is a bustling community of 2,000 with one of the nicest downtowns I have seen. In the past five years they have redone it into the steamboat era of the past. Already, 50 small retail stores have sprouted up and there is a wonderful vitality in the downtown area.

Warsaw sits at the site of the Truman Dam and is at the headwaters of The Lake of the Ozarks, 90 miles north of the dam at Osage Beach. It has the best of both worlds, the natural beauty of a Corps of Engineers lake (Truman) and the commercial potential of The Lake of the Ozarks.

The town is one of the fastest growing in Missouri, attracting both retirees and entrepreneurs who are looking for special quality of life features in a town. Warsaw is working on building a resort on the peninsula overlooking the dam, a golf course expansion, rebuilding of a 100 year old suspension bridge, an outdoor amphitheater, and a walking trail to link it all together.

Keep your eye on Warsaw. It’s a small town on the move.

Thursday, November 18, 2004

What’s Luck got to do with it?

Thomas Edison once said, “Success is 1% inspiration and 99% perspiration.” Another famous quote is, “The harder I work, the luckier I get.” But, sometimes it is just luck. Blind luck!

Yesterday, I viewed (stayed in actually) where blind luck helped a town. After 9/11 the Hilton Corporation decided that they wanted to reach out to country as a whole, following upon President Bush’s model of “Acts of Service.”

They appeared on the Rosie O’Donnell Show, having Rosie throw a dart at a map of the U. S. It landed upon Clinton, MO. Last night I stayed in a brand new Hampton Inn that resulted from that dart toss.

While a single motel won’t completely alter a community, this new motel is a big step up from the handful of other motels in Clinton. Hopefully, it will lead to other great developments for a wonderful town.

Wednesday, November 17, 2004

Getting Out of Their Silos

I had a great tour and gave a talk in Clinton, MO yesterday. Clinton is a town of 9,000 in west central Missouri on the shores of Lake Truman. Clinton’s mayor for 10 years, Gus Wetzel, and their head of economic development, Christy Maggi, spent several hours showing me their community. Mayor Wetzel, also an engaging surgeon, proves that mayors can come from any profession. His father, also a surgeon, was a past mayor of Clinton.

Clinton’s downtown, an original Main Street Town from the mid 80s, is quite impressive for a town its size. Clinton was also an All American City in 2000. The city has built a great new industrial park and is in the process of expanding their airport to help take them into the new century.

I was very impressed with the Benson Convention Center and adjacent City Community Center. This joint project was done with the city and county working together. An aquatic center is in the works on site. I’ve found that too often cities and counties remain in their “silos”, not working together to accomplish projects and help to take their communities to a higher level if they cooperated more. Clinton is a great example of what can happen.

The one downside I saw in the town was when we drove by their schools. I counted 13 trailers that are being used for classrooms. You have to question the long term commitment of citizens that aren’t willing to invest in their kids. Clinton is trying to pass a referendum to solve this overcrowding. I’ll be watching to see how they do.

Saturday, November 13, 2004

Seeding Small Towns

Thanks to all of you who are sending me emails. I’m really enjoying communicating with so many people who are passionate about small towns in general, and their town in particular. I’m learning a lot.

This week I got an interesting email from Debora Dragseth, a professor at Dickinson State University in ND. She’s got a very interesting idea about how to repopulate dwindling towns, “There is another community that I read about that brings in little kids via an aggressive program of adoption. I think it was a town in Texas as well……that's a concept that I would like to explore the economic impact of in small communities. There are 1/2 million foster kids in the U.S. right now and 1/3 of them will never go home and they will never be adopted. Imagine the impact on a town of, say 5,000, if 5-10 new little kids were brought in and the community helped pay the costs ($3-5,000 in many cases--lawyers, agency fees, etc.) The diversity impact would be stunning as well.”

Very interesting idea! What do you think?

Friday, November 12, 2004

Can Do Blue Earth

Yesterday afternoon I flew into Blue Earth, MN for a tour, dinner and talk. This is a town that has very aggressively and successfully recruited a number of late 20s and early 30s aged young people back to this town of 3500. Blue Earth is a town that is confidently preparing for the future. It is a town on the move.

There are a number of locally owned businesses in the banking, telecom, manufacturing and retailing sector that are investing in the community and it shows. Their downtown is the best that I’ve seen in a community of this size. It would be the envy of many towns three times its size.

High paying jobs are still of concern, as they are in many towns, but with the spirit that I saw displayed by the 200 people at my talk last night I think that you will be hearing more about Blue Earth. The name of the town, by the way, comes from blue clay that the Indians found on this spot many, many years ago.

Galesburg Repositioning

I was in Galesburg, IL yesterday talking to about 180 people as part of their Leadership Greater Galesburg. Galesburg has been in the news recently with plant closings at Maytag and Butler. At one time these manufacturing operations hired over 3,000 people in a town of 33,000. In talking with local citizens and leaders it is obvious that the town feels a great deal of hurt and betrayal. Some even want to sue Maytag for repayment of past incentives given to the appliance manufacturer.

In a way Galesburg is going thru a grieving time for their loss, but already the seeds of a resurgence are being planted in this agurb®. A new 350 acre logistics park is being developed, workers are being retrained, and the empty buildings are being aggressively marketed.

Keep your eye on Galesburg. With what I saw yesterday I’m convinced that they will turn the lemons of their job losses into lemonade.

Thursday, November 11, 2004

Red vs. Blue Agurbs®

Analyzing the data on this past election from our 397 agurbs® showed some significant differences from the national data. President Bush won 338 agurbs®, John Kerry 58 and Waldo County, Maine had a tie. In these agurbs 6,858,488 votes were cast with President Bush winning 61% of the vote compared to 51% on a national basis.

The largest differences in votes were in Madison, ID where President Bush won 92% of the vote and Taos, NM where John Kerry won 74% of the vote. Colorado and New Mexico each had 7 agurbs that voted for Kerry, the most of any state.

If the agurbs® determined the electoral vote Bush would have won in a landslide with 40 states, Kerry 5 (ME, NH, VT, NM and CA), and 5 states which didn’t have any agurbs®.

During the campaign one of the candidates consistently talked of two Americas. Perhaps there are two Americas: The Agurbs® and the big cities.

Wednesday, November 10, 2004

Maryland Small Town Interest

Yesterday I gave a talk at the Maryland/DC NAIOP Chapter. It was a great group with lots of interest in the area. Several of the members talked of their work with small towns, relating both the joys and challenges of their efforts.

I had one member who conveyed to me his strong interest to go out to a very small town in Virginia and use some of the information in my book to help with development efforts in that community. I’m gratified when I see this type of interest sparked in small towns.

David Brooks, columnist for the New York Times, wrote a column in yesterday’s paper about the decentralization of America. Here is what he is observing of these locations, “I didn’t adequately describe the oxymoronic attraction these places have for millions of people. On the other hand, people move to exurbs because they want some order in their lives. They leave places with arduous commutes, backbreaking mortgages, broken families and stressed social structures and they head for towns with ample living space, intact families, child-friendly public culture and intensely enforced social equality. That’s bourgeois….They are Mayberrys with BlackBerrys.”

I continue to be intrigued by the interest in small towns, even when I’m in large areas like Washington, DC, Philadelphia, Boston, etc. There really is a growing interest in the agurbs®.

Tuesday, November 09, 2004

Retaining our Risk-Takers

I’ve had some great email conversations with Debora Dranseth of Dickinson State University in North Dakota where I will be doing a series of talks in several agurbs® next April.

She recently wrote an editorial for a western North Dakota magazine about the young people who are leaving the state, comparing them to their ancestors who settled the state in the 1800s. She relates how our country was built by people who took risks and were willing to give up everything they had to move across the country in their covered wagons.

Today studies in ND show that ½ of the young people graduating from high school or college plan to leave the state. Dranseth says, “I believe that the graduates who exit the state are not necessarily the “best and the brightest” but the risk takers; those who are willing to take on the uncertainties of leaving the state where their families have lived, perhaps for generations, and venture out into the unfamiliar.”

“Successful entrepreneurs are creative, resourceful risk-takers. Thus, it is critical for the future of North Dakota that our communities, our law makers, and our educational institutions work together to find ways to retain these young risk-takers and foster in them the entrepreneurial spirit and vision that will help our state thrive.”

Monday, November 08, 2004

A Rather Unique Incubator

While I was in Conroe, TX at Entergy’s Team City Conference I toured the area. One of the facilities that caught my eye was a company called Conroe Trading. This Italian owned company is developing a business incubator focused upon Italian companies looking to develop business relationships in the U. S.

Already they have a dozen Italian companies that make things like ball valves, sealings, powder handling systems, grinding machines, water purification, etc. This effort, begun in 1997, hopes to foster more international trade.

While I’ve seen many incubators in my travels and research this is one of the most unique. Could this be a concept that other agurbs® could develop with other countries?

Sunday, November 07, 2004

Family Doctor of Small Business

Last week I was at Entergy’s Team City Conference in Conroe, TX. Over 60 cities and towns from SE Texas were represented with almost 500 in attendance. There was a great deal of passion shown for economic development by the participants. Unfortunately, I left my notes at the office and won’t get a full report on the various speakers until probably Tuesday.

On the plane to the conference I read Ernesto Sirolli’s book “Ripples from the Zambezi”, one of the speakers at the conference. His approach of a “Family Doctor for Entrepreneurial Businesses” makes a lot of sense and is spreading in use. Here are some of my favorite quotes from his book:

“The last 15 years have confirmed that governments and corporations do not create jobs. Jobs are created by small individual enterprises….Individual entrepreneurs are the powerhouse of the economy.”

“Passion is what propels us during our solitary journey….For fear of living is similar to death.”

“There are about ten million companies in Japan employing fewer than 30 workers each. Of these, nearly seven million are manufacturing companies.”

“No matter how rich Russia is in terms of natural resources…in the final analysis what makes a society proper or not is the collective quality of its citizens.”

There are other great stories in the book and it is a must read for anyone thinking of using local entrepreneurs as part of their economic development strategy.

Thursday, November 04, 2004

Texas Towns Booming

Yesterday afternoon I toured The Woodlands and Conroe, TX, both located in Montgomery County. These communities are about 30 miles north of Houston and are growing at rapid rates.

Conroe is an old sawmilling and transportation hub with a wonderful downtown area that is being redone with brick sidewalks, building facelifts and other improvements. Lake Conroe, built in the early 70s, is a 22,000 acre recreational mecca that enhances the town’s ability to recruit in new professionals and industries.

Greater Conroe’s Economic Development Council purchased and developed a 470 acre industrial park just outside of town 5 years ago. It is already teaming with many new companies, both domestic and international.

The Woodlands was started about 30 years ago as a planned development on 16,000 acres by the oil mogul George Mitchell. They’ve developed about 70% of the land and already have a population of over 70,000.

Tuesday, November 02, 2004

There Can Be Life After Textiles

Today’s New York Times has a touching article about the end of textile quotas and the impact that it is going to have on towns like Kannapolis, NC. The town grew up in the early 1900s around the textile mills built by James William Cannon. Today they are facing economic calamity as textile mill jobs move overseas.

Losing one’s job is never fun. I’ve seen it happen too often. But there can be a life afterwards.

It’s interesting that Kannapolis has built the Dale Earnhardt Plaza to celebrate its native son. I’m sure that it brings in some tourists. Meanwhile, Mooresville, 20 miles away and also an old textile town has completely diversified themselves away from textiles. And, they’ve got Dale Earnhardt’s headquarters with 250 employees.

It takes vision and determination to change yourself like Mooresville as compared to so many towns that wring their hands and have a “woe is me” attitude.

Monday, November 01, 2004

Regional Economic Development—Wave of the Future

I was the afternoon speaker for the first annual meeting of the Southeast Missouri Economic Development Alliance (SMEDA) on Friday. This six county region which comprises the boot heel of MO is just forming a regional initiate, seeing the wisdom of pooling their resources to market their region. It will be totally funded from the private sector and has some very strong leadership and vision.

At the conference they had a very interesting panel of regional economic development directors from MO, TN and AR.

Mark Young from the Delta Center (AR) said, “Just because we play football against each other on Friday night doesn’t mean that we can’t trust each other and help each other.”

Mike Philpot of WTIA (TN) talked about “coopetition”, a new word for “we are going to have to cooperate with each other before we start to compete against each other. If an industry lands next door to us, we all win.”

I’m seeing more and more regional initiatives. Towns are quickly realizing that they get lost in the clutter of 15,000 other towns around the country and that a way to effectively leverage their recourses is to work together with their neighbors.

Sunday, October 31, 2004

The Next Paradigm Shift in Economic Development

I was in Branson to give the keynote talk to the Fifth Annual Fall Partnership Meeting of the Ozarks Regional Economic Partnership, a ten county region that is centered in Springfield, MO. This group was set up by the Springfield Chamber five years ago together with 68 member cities, counties and other partners in the region to promote sustainable development opportunities. Allen Kunkel, their executive director says, “All economies are regional.”

One of the speakers at the conference was Dennis Robinson, of the University of MO-Columbia in the Community Policy Analysis Center who talked about entrepreneurship in rural counties. Some stats that he shared:
*Small, high growth companies account for 70% of US Economic Growth

*Fortune 500 companies have lost 5 million jobs since 1980, but 34 million jobs have been added in the US, primarily from small and entrepreneurial companies

*As many as 8 out of 100 Americans are attempting to start their own business, the highest rate in the world.

Keep your eyes on the growth of entrepreneurism. It has the potential to become the next paradigm shift in economic development.

Saturday, October 30, 2004

You Can’t Ride One Horse Forever

What would you do if you were the mayor of Branson, a town of 6,000 that has developed into the “Live Music Capital of the U. S.”? This $1.4 billion revenue generating cluster brings in over 7 million tourists/year to Branson. Those tourists stay an average of 3.9 nights, spend $710/trip, have an average income of $50,487 and are 56.4 years old. Little Branson ranks as the 16th top location in the country for overnight leisure stays.

Branson recently passed a $300 million TIF district along Lake Taneycomo adjacent to their historic old downtown area, which was hopping with shoppers when I toured it at 3 pm. This new project is projected to bring in an additional 1 million visitors into Branson annually.

Most towns would be willing to sit back and “let the good times roll”. But, not Branson! Their mayor, Louis Schaefer, told me “We’ve seen here in Branson that shows don’t last forever and that you can’t ride one horse forever. Two years ago we decided that we needed to diversify our base, so we started an office of economic development to help us do that.”

This is one neat town that isn’t sitting on its laurels and understands that if they stand still, you will slowly start to die. Branson is taking the positive steps of diversifying their economy when the times are good. Smart people, very smart people!

Friday, October 29, 2004

Branson--An Incredible Story

I was in Branson on Wednesday, Tulsa on Thursday and Caruthersville, MO today. I’ve been on the run and had some computer problems but hope to catch up this weekend with details of what I found on the trip.

Branson was incredible. While I’d been there before, this was the first time that I got a “behind the scenes” tour. I also spoke to an eleven county economic development group. Each of those counties, some over 50 miles away have been positively impacted by the live music cluster of Branson.

Branson has 49 theaters with 56,000 seats (more than are on Broadway). It has 17,000 hotel rooms (more than in Kansas City). It brings in 7 million tourists per year. They are doing a $300 million TIF district that will include a 220,000 sf convention center, a 260 room upscale hotel, and a Bass Pro store. This booming agurb® of 6,000 has 1,000 members in their chamber. There is a real entrepreneurial spirit in the town.

More tomorrow on Branson.

Tuesday, October 26, 2004

Tired of Mudslinging

I’m sure that many of you are as tired of this election season as I, especially those of you in “swing states”. I’ve been avidly following the various races, especially those in my home area. But, today I was sickened with how ugly campaigns can become.

In my hometown we have two very prosperous business people running for the job of state rep. Each of the state organizations has poured over $500,000 into each campaign, a huge amount for a seat like this!

Today I listened to one of the candidates berate the other for being “greedy”. Amount his numerous offenses, cited by his opponent, was his being awarded $7 million in state contracts to the construction company he is a part owner of. He neglected to mention that these contracts were won via bid and that they provided tens of thousands of days of work

That a supposed “business friendly” candidate would make this type of charge is very disappointing. There is enough suspicion of business from the uneducated who don’t understand economics and often want to believe the worst, without it being flamed by a supposedly “pro business” candidate. Shame on him!

I’m off to Branson, MO tomorrow to give the keynote talk at the Ozarks Regional Economic Development Conference, a regional economic development event. I should be in a much better mood after I get a tour of that great agurb®.

Monday, October 25, 2004

A 10 mile long downtown

I was in Belleville, IL today doing a talk to their Chamber leaders along with some Chamber execs from nearby Swansea and O’Fallon. We had some great conversation about taking a more regional approach, which all of the professionals seemed to be in favor of. I wish that it was that easy, but there are too many people wanting to stay in their “silos”, resulting in less progress and wasted opportunities for many areas.

Belleville has a 10 ½ mile downtown that stretches from the east to west side of town. That has to present unique problems of promotion and logistics. First one that I’ve seen that long!

Sunday, October 24, 2004

A Photography Cluster? In High Point, NC?

High Point, NC’s photography cluster wasn’t the first thing that came to mind when I visited there recently. Furniture for sure! And, fabrics made sense also. But photography? In High Point? How could a furniture cluster lead to a photography cluster?

I found out and boy was I shocked! I learned that High Point, with a population of less than 100,000, has more square feet devoted to photography than any other city in the entire country. More than even New York or Los Angeles!

The furniture cluster started it, but the tremendous cost advantages of a location like High Point have allowed this cluster of businesses to expand tremendously. High Point counts 11 studios with over 100,000 sf and several with over a quarter of a million sf. Employment in this high paying industry is over 600 and growing.

Saturday, October 23, 2004

Manufacturing—Hope Even in Apparel

A recent BLS study highlighted at NAIOP forecasts that 54 of the 87 manufacturing industries that it tracks will lose jobs from 2002 to 2012. Manufacturing industries projected to grow in that period are: Plastics; Animal Slaughtering; Pharmaceuticals; Special Wood Products; Furniture; General Purpose Machinery; Concrete Products; and Metalworking Machinery. These ten industries are forecast to add 683,000 jobs during the next ten years.

The worst industries in their forecast are: Apparel; Textiles; Tobacco; Leather; Computers; and Pulp & Paper. Apparel is projected to lose 69% and Textiles 47% of their workforces.

Even commodity type products like apparel can survive, but require more speed and resourcefulness. One Los Angeles manufacturer of casual wear can fill orders of up to 160,000 units in less than 24 hours. It has become a “build-to-order” producer and uses its flexibility and speed to compete with China’s five-month lead times.

Friday, October 22, 2004

Off-shoring Concerns are Bogus

Both of the first two speakers at the NAIOP Meeting in San Diego on Thursday talked about off-shoring of US jobs. Susan Hudson Wilson called it “a bogus political issue, which is not even a factor when you look at the raw numbers.”

David Pearce Snyder cited a recent Bureau of Labor Statistics report which showed that approximately 20,000 jobs would be off-shored in 2004 compared to a normal 15 million jobs per year that are eliminated thru automation, info-mation, mergers, domestic outsourcing and business failures.

Putting these numbers into days, A Off-shoring Worry Free Day would end at about noon on January 1st. It continues to amaze me how many politicians play upon voter’s fears with this issue.

Thursday, October 21, 2004

Typical October Pre-Election Swoon

I’ve noticed that our inquiries for new plants, site selection work and even decisions on moving ahead on projects seemed slow down in the past month. We had seen a marked increase in these inquiries over the past year and were hopeful that this up tick in activity would continue.

This same type of slowdown started in October, 2000 just prior to that election. Remembering back those four years makes me less concerned. I believe that there is a natural tendency caused by uncertainty for companies to delay and slowdown major projects until after a close, major election.

But, everything that we see in the expansion market indicates that 2005 should be a very active year for plant expansions and new construction.