Friday, September 30, 2005

Rural Broadband in Nebraska

Nebraska is a big state with over 75,000 sq. miles but a population of only 1.75 million. Half of the state lives in Omaha and Lincoln. There are 532 towns in the state, but 80% have a population of less than 1,000.

Football is big in the state. Virtually every one of the 200+ high schools have a team with four state classes of 11 man football, two of 8 man and even one of 6 man. Big Red Nebraska Football Saturdays could almost be classified as state holidays. Scores of fans make the weekly trek from Scottsbluff and the northwest to attend games in Lincoln, a 900 mile roundtrip.

The history of Nebraska has been shaped by access. It started with the wagon trains that trekked across the plains, replaced by the railroads. Eventually roads and then interstates took on added importance. Today its communications, specifically broadband access. I was interested in how “wired” the state was.

Roger Hahn of the Nebraska Information Network explained to me how connected the state was. Most of the 500+ towns in the state are connected and with multiple providers. The most wired is my top 100—Golden Eagle agurb® Kearney with 12 different providers, as many as there are in Omaha. The other agurbs® in the state Grand Island (10); Norfolk (10); and Sidney (5) also have multiple providers. The state capitol, Lincoln, only has 7 in comparison. The largest town without a broadband connection is Bee, NE (population 223) and there are only six other towns with a population of over 100 in the state without such a connection.

All but four of the 200+ school districts in the state are on broadband networks as are 130 hospitals, health centers and other public health facilities.

At the Nebraska Rural Institute, Kerri Kliewer of Henderson, NE (population 986) explained to me how she runs the US operations for an Austrian company that sells upper end jewelry clasps to companies like Nieman-Marcus, “People can’t believe that we can run a business like this out of rural Nebraska. But, we’ve got all of the technology we need right here in Henderson.”

In traveling around rural America, I’m impressed with by how wired the towns and even countryside are. Soon, I’m convinced that it will become second nature to think of all areas as being wired for broadband. We will look at broadband connectivity much like we do water, sewer or electricity service. It is expected as the norm and if you don’t have it, you will be completely out of the ED race.
With coverage like I found in Nebraska, why would you want to operate out of the rat race of a big city?

Thursday, September 29, 2005

I Love These Towns!

After I’d talked about the great towns in the USA that I’ve found in our research, Curt Alexander approached me to brag about a neighboring town, “Snyder, NE (population 318) is like some of those towns that you talked about where there are more people working in it than there are residents. And, about 1/3 of the population is little old ladies, who don’t work.”

He went onto to tell me about Smeal Manufacturing ( and various subsidiaries, one of which manufacturers fire trucks that are sold all over the world. I loved the story from their website.

“When Don Smeal opened his welding shop in 1955, his plan was to find a product that he could make and market from his hometown. In 1963 he was approached by the Rural Fire Board to repair a leak in the volunteer department’s fire truck. He told them to buy a new chassis and he would build a fire truck that would be like no other. He built an innovative fire truck like no one had ever seen. Soon other towns were calling Smeal to bid their fire trucks and thus began Smeal’s entry into the fire truck industry.”

Smeal and his family have grown their fire truck and water well service rig business all over the USA and to over 35 foreign countries. His Snyder, NE welding shop has grown to over 200,000 sf with hundreds of employees.

Another local manufacturer is Danko Emergency Equipment ( which was started in 1974. Daniel Kreikemeier and his 60 employees manufacturer a whole range of equipment. What a nice cluster in Snyder with Danko and Smeal!

And, not to stop yet….Omaha Steaks has their packaging operation in Snyder.

You can understand why I hope to visit Snyder the next time that I’m in NE.

Wednesday, September 28, 2005

LLC for Housing

“Our manufacturing council, a monthly meeting of plant managers, told us that we needed more houses in the town. Most of our housing stock was built in the 60s and we were only building four or five houses per year,” Norene Fitzgerald told me on my tour of York.

Norene convened the four banks in town, the lumber yards, concrete plant and builders to see what they could do to increase the housing stock. They collectively decided to try to build some upper end spec homes, setting up a LLC to invest in the project.

“Each bank contributed $25,000 and we got contractors and others who were interested in seeing growth in York to each contribute $10,000. We got seventeen people at that level, so we ended up with a total of $270,000 in capital. We hired the high school trades instructor to act as the construction manager and he has built 3 houses for us.”

They’ve sold one for $240,000 and the other for $197,000. The third one is listed for sale at $178,000. Plans are to build two more houses in 2006.

The goal of this Spec Home LLC is to run it for five years as a for profit organization, dispersing the capital and profits back to the investors. It is a great model that other towns might look at for projects that might change their community for the better.

Tuesday, September 27, 2005

Foresight & Can Do—Can’t Beat That Combination

York, NE sits about 50 miles west of Lincoln, three miles north of I-80. As I drove out there I noticed that few towns along the route had much development at their exits even though there are tens of thousands of vehicles/day passing by. York was a completely different story. There were motels, restaurants, gas stations, a new Wal-Mart Supercenter, and other retailers.

I asked Norene Fitzgerald, head of ED for the county, why York had so much activity compared to other towns along the interstate, “Jack Kitter, who was city administrator at the time, understood the importance of the interstate and got the water and sewer out there. And, he got the developers to help him pay for it.”

Today York generates $2 million/year in sales tax from this foresight on their 1.5% sales tax share. As a result they have one of the lowest property tax rates of a city their size in the state.

It probably would have been much easier for Jack Kitter to sit back and not do anything. Retailers in the downtown area weren’t in favor at the time and put some restrictions on what could be built out by the interstate (an antiquated, but still in existence restriction in York). But if it wasn’t for people like the Jack Kitters of the world, you wouldn’t have towns like York that are differentiating themselves from the also-rans.

Monday, September 26, 2005

Response on Question on Private Sector Help

Tim Burg from the Ponca City Development Authority gave me the best explanation on how the utility companies help each other in a time a need. Here is what he told me:

“What you are seeing with the electrical and phone companies responding in times of emergencies is part of a program called Mutual Aid Agreement. Independent electrical, phone companies, or electrical companies owned by companies or municipalities sign a Mutual Air Agreement.

This agreement says that if one of the signatory companies needs help due t a disaster, then they will receive help from the other signers. The help is not excess staff but rather staff that can be spared from any coop or city and it is supplied to the area with need for emergency services at whatever the going rate for such services would be. It is not free.

The coordination is handled through the various state wide electrical or phone coop organizations, or the respective major suppliers associations. They are all over the place.

There is no government direction, with the exception that FEMA says they may withhold services to a stricken area, if they have not signed such Mutual Air Agreements. Sounds like they strongly encourage communities and states to work to the benefit of each other.

Isn’t America great!!! Where neighbor helps neighbor without the government having to tell them to do so. Kind of like the parable of the Good Samaritan.”

Thanks for helping to explain it so well.

Giving York

I was in York, NE for the Nebraska Rural Institute, an annual event that brings together economic development enthusiasts from throughout the state. The theme for this year’s conference was “Entrepreneurial Engines & Economic Development Essentials.”

Stu Miller, Deputy Director for ED for the state, and Norene Fitzgerald, head of ED for the county gave me a great tour of York (population 8,081). Every town that I visit generally has something that impresses me about the town. Sometimes it is the downtown, industrial park, parks, or other attributes. In the case of York, it was the giving spirit that I saw exhibited in the many new projects in the town.

Norene told me, “Our community foundation has over $5 million in assets and it has only been in existence for fifteen or so years.” With the power of compound interest, I can’t wait to see what it will be in five or ten years! I also learned of Aurora, NE (population 4,225) which has approximately $28 million in their community foundation! I’ve got to check them out on a next trip!

The community hospital just completed a new $10 million clinic, helped by donations. The city just finished a $3 million new water park on a new 40 acre park partially paid thru donations. A new $10 million middle school is being built to replace the old one built in the 1800s. The town also has an outstanding library and senior center, also partially built with dollars from local benefactors.

Mayor Greg Adams talked about how a spirit of cooperation and can-do-it-ness permeates the town, “I think that it dates back to our forefathers. They came west in their covered wagons and knew that they had to cooperate with each other to make it across the Great Plains.”

One of the most impressive gifts by a local citizen was Wessels Living History Farm, a gift from David Wessels who wanted children to understand what it was like to grow up on a farm in the 1920s, when he was a child. Wessels bequeathed the family farm, which lies just south of I-80 along with several million dollars for its support.

Dale Clark the new activity director for the farm took time off from redoing the interior of the Wessels’ home when we visited, to show us around. “This is not going to be a museum, but it’s going to be an educational event center. We are going to use it to teach youngsters about their heritage and have it available for special weekends during the year.” He plans to plant two acre plots of corn, doing one with horses, one with a 1925 John Deere tractor and one with a new modern tractor to show how productivity has changed over time. Plans are to add a one room school house and summer kitchen to the old house and barns that are on the property. Their webcam of the farm ( is getting 90,000 hits/month.

Wessels Farm in York, NE Posted by Picasa

Wessels Windmill Posted by Picasa

Marilyn Sampson, Dale Clark and Norene Fitzgerald in Milking Parlor on Wessels Farm Posted by Picasa

Downtown York, NE Posted by Picasa

Downtown York, NE Posted by Picasa

Sunday, September 25, 2005

Private Sector Help

This weekend I drove to Indianapolis and Chicago, seeing hundreds of bucket trucks and crews on the road heading down to LA and TX. They were heading there to help fix the broken electrical and telephone lines that are down. I’ve seen these caravans before when we’ve had tornados, hurricanes and other natural disasters, but never to the magnitude that I saw this weekend.

I believe that this is an effort that is coordinated by the respective electrical and telephone industries, without any governmental interference. If anyone of you readers has knowledge of this, would you send me an email at I would like to better understand how the system works and report more on it.

Insurance Not Needed?

Ben Franklin started it all! Prior to his innovations of fire departments and fire insurance, calamitous fires were common in U. S. cities. Many burned to the ground. But when people started to protect themselves with Franklin’s two innovations, they began demanding better fire departments so that their insurance premiums weren’t so onerous. Building codes were strengthened to prevent fires and make them easier to fight.

But as we’ve seen in the last month in New Orleans, few people are as passionate about levees or protecting themselves from a flood that is sure to come. Why is that?

They have no vested interest in protecting their property because they know that the federal government will bail them out if something catastrophic happens. Only 40% of the homes in New Orleans had any type of flood insurance, even though the city was ten feet below sea level!

In the 1960’s the U. S. government took over the business of insuring against floods. As a result people built seaside homes and condos in areas that would never have been developed, knowing that if a hurricane hit they would get bailed out.

No one is taking responsibility, either personally or city-wide. The federal government should still help coordinate disaster relief but every town should take responsibility for fighting floods just like they do in fighting fires. Individuals should buy flood insurance or suffer the consequences when their homes are destroyed. We should get back to a fire insurance model for floods and hurricanes.

Saturday, September 24, 2005

New Homestead Act

270 million acres, or 10% of the area in the USA, was settled under the Homestead Act of 1862, one of the most important and revolutionary pieces of legislation in the history of the country. Now there is a bipartisan effort underway to develop a new Homestead Act for areas of the country that have been undergoing an out-migration of citizens. Nate Hill, ED Coordinator for Senator Byron Dorgan filled me in on the details when I was traveling in North Dakota last month. Senator Dorgan was the author of this bill.

President Lincoln signed the original Homestead Act as a way to have the vast areas of the burgeoning nation settled by families that had a vested financial interest in success for themselves and the nation. Up to that point in history, few people owned land. The Homestead Act empowered impoverished east-coast city dwellers and masses of the new European immigrants. Each homesteader had the right to claim 160 acres of land with the stipulation that they had to live on the land, build a home and farm the property for five years before they received title to it. Land settled in this manner was in the states of FL, AL, MS, OH, IN, IL, MI, WI and every state west of the Mississippi River (except TX).

The last person to claim land under the Homestead Act was Kenneth Deardorff, a young Vietnam veteran and native Californian, who filed a homestead claim on 80 acres of land on the Stony River in southwestern Alaska in 1974. He built all of the buildings on the property, fished for salmon and hunted moose for food. His transportation in and out was limited to a boat or a dog team in the winter.

The New Homestead Act would be open in non-metro counties that have experienced net out-migration of 10 percent or more over the past twenty years. A total of 698 counties in 38 states would qualify, representing 22 percent of the nation’s counties. The largest concentration would be in the Plains and upper Midwest.

The Act would:
1. Forgive 50% of college loans for recent graduates who live and work in these counties

2. Provide a tax credit of $5,000 for home purchases

3. Tax incentives for new buildings

4. A federally subsidized $3 billion venture capital fund

5. A tax credit for micro enterprise businesses

6. An Individual Homestead Account, similar to an IRA, to build savings and increase access to credit

All make sense to me, except I’d change the venture capital fund into a tax credit for setting up Angel Investor Networks, like I’m seeing in several states that I’ve traveled in.

Kenneth Deardorff, the last homesteader Posted by Picasa

Friday, September 23, 2005

Don’t Mess With Texas

I’m watching the TV coverage of Hurricane Rita. It appears to me that the storm is moving faster, winds are diminishing and it is moving more toward Louisiana all of the time.

The bumper sticker that Texas has made famous, “Don’t Mess with Texas” came to mind. Do you think that Rita has gotten the message? I sure hope so and that the damage when this hits tomorrow is less than projected.

Vermont Cheese Trail Map Posted by Picasa

Vermont Cheese Trail—The Next Napa Valley?

“Taking a trip along the Vermont Cheese trail is akin to taking time to smell the flowers,” is how the website starts your journey. I’ve been looking for this “Napa Valley of Cheese” since my March 30th blog when I was in Green County, WI.

Here’s some of what I said that day, “Today cheese is considered a commodity product, much like wine 20 or 30 years ago. Thirty years ago there were only a couple of dozen wineries in California’s Napa Valley, churning out unexceptional products for an American consumer who had little taste for wine. Thru astute marketing, branding, and differentiation wine has changed their image as it has grown into a $22 billion industry. And, it appears to me that in many ways, cheese is a very similar product. And, SW Wisconsin has all of the ingredients to be at the center of it…... If the “Napa Valley of Cheese” were centered in Green County other companies would set up shop just as they have in the Napa Valley because of the burgeoning wine industry. Tourism would soar, art galleries would flourish and jobs would be created…..As it stands now, the master cheese makers are being recruited by other states. One left last year for Indiana……California has seen first hand the impact of Napa Valley. I hope that Green County, WI can maintain their cluster and develop it into the “Napa Valley of Cheese.” They’ve got all of the tools to do so. Now they just need a plan and a brand.”

I found what SW WI needs to emulate in VT, where the Vermont Cheese Council was set up in 1997 to assist cheese makers market their products better. Today there are 31 cheese making members, the majority of which are only producing from 10,000 to 100,000 pounds/year out of the 70 million pounds produced in VT. They’ve set up a trail of their members shops at

Making cheese isn’t rocket science. Neither is wine making. Both are fairly simple processes. Cheese starts with good milk, a starter culture for fermentation, rennet to help coagulate into curds and salt. You add heat and you’ve got cheese. Anyone can do it, but a craftsman can develop their product into a niche that people will drive hours to buy.

I’m certain that we will one day have a “Napa Valley of Cheese” which will be recognized as THE place for boutique production. It might be in VT or perhaps in WI. Or it might be in one of your hometown because someone made it happen.

Thursday, September 22, 2005

Retail Drain

“Caledonia County retailers lose about $36 million a year in retail sales to businesses in neighboring New Hampshire,” a Northern Economic Consulting study showed for St. Johnsbury, VT (population 7,571). The town did the study to try to determine market opportunities that it might have and is a 180 degree change for a state that initially erected laws to keep big boxes out of the state. It is a strategy that backfired, one of those Law of Unintended Consequences that governments often pass with resulting horrible results.

Littleton, NH lives up to its name in size…it is almost has almost 2,000 less residents than St. Johnsbury, but it is a giant killer when it comes to retail sales. The big boxes located there when Vermont erected its Anti-Big Box Law and none have ever come back to St. Johnsbury. In the grocery category alone St. Johnsbury sells $2,025/resident compared to $3,500 in Littleton.

If you’re thinking of erecting barriers, I’d suggest a trip to VT to see the results.

Wednesday, September 21, 2005

Higher Education as ED Strategy

A town of 1,105 building a new college? And this is their second one in less than a decade? What is in the water there?

Grundy, VA is the largest town in a county of only 25,200 in far western VA. It is less than 20 miles to either the KY or WV border from Grundy, but over an hour and a half to the nearest interstate.

And this is not a rich enclave in the mountains. This is a poor county! They’ve lost 20% of their population since the 1990 census, have 23% of their population living under the poverty level and have a median household income of only $23,682.

This past month seventy-seven students entered the new University of Appalachia College of Pharmacy’s ( pioneer class. The goal of the college is to turn out pharmacists who will serve rural and underserved areas.

The county plans to open a private forensic laboratory in partnership with the pharmacy school. Its focus would be on outsourcing work for state forensic labs and private organizations.

Grundy opened its first college, the Appalachian School of Law ( in 1997. Today it has 169 full-time students. It has spurred housing growth and allowed several small businesses to open. The pharmacy college is expected to have the same type of impact.

Bobby May, a local resident, said it best, “How many small towns can say they have a law school and a pharmacy school?”

Even more impressive…how many can boost of having started both in the past ten years? And in a town of 1,105!!!!!

Don’t you love small towns like this?

Tuesday, September 20, 2005

Ball’s Afire!

“We were just a small burg until the community did something that was totally out of character for a town that size,” Bruce Baldwin, Director of Community & Business Development for the Muncie/Delaware County ED was telling me about how Ball Manufacturing came to Muncie, IN (population 67,430) when it was only slightly larger than its trading post origins. “They gave them 30 acres of land and $25,000 in cash, which was a lot of money in 1887, for the five Ball brothers to move here from Buffalo.” But that investment changed Muncie forever when the Ball Jars and canning system became a revolutionary way to preserve vegetables, turning Muncie into an industrial center.

The five brothers and their offspring were very good to Muncie. Several family foundations are still located in the downtown and institutions like Ball State University and Ball Memorial Hospital owe their existence to the generosity of the Ball families. Unfortunately, in the early 2000s Ball Corp moved their corporate headquarters from Muncie to a suburb of Denver to be closer to the aerospace industry that is the company’s main business today.

Muncie has a real charm to it. Its downtown is being vibrantly recreated and has few vacancies. Ball State is a big asset to the town and region. Having talk show host David Letterman as an alumni, who often talks about his days at Ball State hasn’t hurt.

We ate at Vince’s at the Airport, an upscale restaurant located on the tarmac. It is partially owned by Jim Davis the creator of Garfield. He has a 30 + person operation out in the county that produces Garfield each day and licenses the Garfield image and name around the world.

I’m constantly amazed at what I find in virtually every town that I visit. You only have to look a tiny bit to find gems everywhere.

Monday, September 19, 2005

Doug Taylor of OK Mfg. Alliance; Jeromy Haines GM of Progressive Windows; Clay Buford of OK Alliance; and Larry Kliewer, owner of Progressive Windows Posted by Picasa

Good ‘ol Hard-Working Country Boys

Most people slow down when they reach retirement age, but Larry Kliewer isn’t like “most people.” Larry made his money in the rough and tumble oil patch, doing oil-field casing. Five years ago along with his two brothers he set up Progressive Windows, a manufacturer of high-end windows and doors.

Kliewer had seen two manufacturing companies which employed 300 people leave his Fairview, OK (population 2,733) hometown. His brother was talking with a foreign exchange student from Holland who was a window manufacturer. As Larry said, “His father was a real craftsman. The more we talked to him the more intrigued we became. Once you get hold of something, you can’t always turn it loose.” They started with one employee and have grown the business to 15.

The windows are European-style “tilt-and-turn” ones. You turn the latch up and the window turns in; turn the latch down and it opens horizontally. They sell their custom made products largely through word-of-mouth, still the best marketing method.
Clay Buford, Applications Engineer for the Oklahoma Alliance for Manufacturing Excellence said, “They were already quite successful and wanted to leave something for Fairview. They looked around and saw the area was in great need of manufacturing jobs—jobs that would pay a living wage.”

Doug Taylor, a manufacturing extension agent with the Alliance said, “They didn’t have to build this company. They could have retired or done whatever they wanted to do. They’re just good ‘ol hard-working country boys who wanted to make a difference.”

I run into a lot of these “good ‘ol hard-working country boys” in my travels. I’m glad that I do.

Progressive Windows Posted by Picasa

Progressive Windows Posted by Picasa

Sunday, September 18, 2005

Kia Follows Trend

Recently Kia Motors announced that they had put Mississippi at the top of their list for a new plant, with Kentucky in second position. A key factor for Kia was that it was close to Hyundai, their parent company’s Alabama plant, which opened this year.

We’ve spent quite a bit of time tracking the movement of auto plants and their resulting suppliers. Our research shows a tidal wave of movement from the Indianapolis to Detroit corridor to a new one centered in the northern third of Alabama and Mississippi.

I’ve suggested that while these large assembly plants can put a huge strain on a small town, being within an hour or so of one can be a huge benefit for a community. The multitude of parts manufacturers that revolve around an assembly plant want to be in close proximity. Nissan’s new Canton, Mississippi plant has already resulted in new parts plants in over 20 towns in Mississippi.

Hyundai has already recruited in several suppliers to follow it to Alabama. My guess is that Kia’s decision to focus upon Mississippi is driven by a desire to be close to those same suppliers, generating cost savings and accessibility.

These recent auto moves are a lesson in the importance of industrial clusters for regions. They can have a very positive and dramatic impact.

Saturday, September 17, 2005

Rural Sourcing

Can the Indian outsourcing model work in rural America? Dr. Kathy Brittain White, founder and president of Rural Sourcing, Inc., has developed a model to do just that. From Jonesboro, AR, a second location in Greenville, NC and three rural satellite offices in AR and NM, she is determined to prove the effectiveness of rural locations.

She explained the idea for RSI, “I set up a foundation for technology in Arkansas and committed $2 million to economic development and technology outreach. I was searching for something that I could do to integrate my passion and technology skills. Rural Sourcing is it.”

Her success is predicated upon lower costs and higher quality of life, “We locate in areas that have 35 to 50 percent lower cost of living than major metro areas. We like to choose locations that have a nice quality of life that would attract people back to the area or entice experienced professionals to move to the region.”

She has carved out a niche for shorter term projects of two to three months and smaller projects. Even though her blended rate is $38 to $48/hour compared to $20 to $40/hour in India, her flexibility and ability to move much faster has proven successful.

She has encouraging words for the agurbs®, “I think that we can be a catalyst for rural America to think about other knowledge work. Many other services can be done remotely.” And, I’m convinced that other entrepreneurs, like Dr. White, will develop similar models that will capitalize upon the advantages of the rural USA.

Friday, September 16, 2005

Issues for Grants Pass

My Golden Eagle Grants Pass didn’t disappoint during my tour. I was impressed with how they’ve overcome adversity, taken a new path, redone their downtown, embraced new artists, enticed entrepreneurs to town and worked together to accomplish better things for their citizens. Grants Pass exemplifies many of the qualities that I highlight in my talks about what differentiates the boomtowns from the also-rans.

But, all is not perfect in Grants Pass. The rapid influx of people from CA and Oregon’s development restrictions have exploded the price of housing in Grants Pass. Realtor Nancy Venutti told me, “The median house price was $318,000 last month. This would buy you a 1,800 to 2,000 sf three-bedroom home.” For the retirees flocking to the town from CA (over 20% of the town is over 65 years of age) it looks like a bargain, but its way too high for the average worker. Even higher than average annual wages of over $30,000 in the manufacturing and health care areas (27.5% of the workforce) are being priced out of this escalating housing market, which Nancy told me, “is going up by about $500/week.”

Charlie Mitchell, head of ED for the City is fully aware of the problem. He asked me, “How are we going to be able to attract workers in the future, if they can’t afford to live here?” He also made another great observation about the impact of the surging retirees, “Our school enrollment is growing much slower than the general population. School enrollment is the canary in the coal mine for a town like ours.”

Grants Pass’ downtown impressed me. It is better than what I typically see. But, it has even more potential. There are too many vacancies and the empty upstairs lofts need to be converted into residential housing. Getting more people in the downtown area at all hours is a sure sign of the type of booming downtown I love to see.

From the people I talked to in Grants Pass, I’d guess that they’re all over these issues. I plan to return in the future to see how the town develops. I’m certain that I will be impressed with what I see.

Thursday, September 15, 2005

Grants Pass Entrepreneurs

“Spaulding Commerce Park is the property that was where the last sawmill closed in 1999. We decided to convert it into an industrial park. It was a public-private partnership. We got grants for infrastructure and have had private industry step forward with new buildings.” Charlie Mitchell was taking me thru Grants Pass’ new 140 acre industrial park, which had almost a dozen new buildings. In less than 5 years time, there are already more people employed in this park than there ever were at the sawmill.

Encore Ceramics moved here in 2001 from Santa Rosa, CA in the Sonoma Valley wine country. Debbie and Barry Russell had started their production of decorative tiles in their two car garage and as Barry told me, “We had to get our baby of a manufacturing business out of the garage. At that time they called the Sonoma Valley Telecom Valley and no one wanted to talk with us about our hand produced tile business.”

They had friends in southern Oregon who suggested they might find a more receptive welcome in Grants Pass. They have and grown the business to 50 employees in only four years. The company has made the top 100 list of fastest growing companies in Oregon for the past two years. They sell thru 90 high end decorative design firms throughout the USA.

They’ve already talked another CA company, Marzi Sinks, which makes hand crafted ceramic sinks, to town. Another CA transplant is Oregon Swiss Precision, a high tech machining shop.

Three San Francisco glass blowers, Lee Sassink, Nathan Sheafor and Butch Kreuzer moved to Grants Pass and started The Glass Forge Gallery and Studio in the downtown historical area.

It seemed that everywhere I looked someone was from CA. In fact during my talk I took an informal poll and found that about ½ of the audience was originally from the state to the south.

Barry & Debbie Russell, owners of Encore Ceramics; Grants Pass, OR Posted by Picasa

Charlie Mitchell at Encore Ceramics in Grants Pass, OR Posted by Picasa

Glass Forge; Grants Pass, OR Posted by Picasa

Charlie Mitchell & I in Glass Forge Gallery; Grants Pass, OR Posted by Picasa

Wednesday, September 14, 2005

Wring Your Hands—Or Move On?

“The town moved on, unlike a lot of other timber dependent towns that are still wringing their hands waiting for it to come back.” Charlie Mitchell was talking about how draconian changes in federal policy in the early 1990s killed their main industry of timber. “In the 60s, 40 to 50% of the employment base was in wood products. There were a couple of dozen plywood and sawmills. Today we only have one plywood mill left with about 180 employees.”

Changes like that are “gut-check times” for towns. It is when they come to a life changing time that they have to make a decision of which path they are going to go down as a town. Too many, sit back hoping that the glory years of yesterday will return. Bruce Springsteen’s Glory Days song says it best:

I had a friend was a big baseball player
Back in high school
He could throw that speedball by you
Make you look like a fool boy
Saw him the other night at this roadside bar
I was walking in, he was walking out
We went back inside sat down had a few drinks
But all he kept talking about was

Glory days well they’ll pass you by
Glory days in the wink of a young girl’s eye
Glory days, glory days

Well there’s a girl that lives up the block
Back in school she could turn all the boy’s heads
Sometimes on a friday I’ll stop by
And have a few drinks after she put her kids to bed
Her and her husband bobby well they split up
I guess it’s two years gone by now
We just sit around talking about the old times,
She says when she feels like crying
She starts laughing thinking about


My old man worked 20 years on the line
And they let him go
Now everywhere he goes out looking for work
They just tell him that he’s too old
I was 9 nine years old and he was working at the
Metuchen ford plant assembly line
Now he just sits on a stool down at the legion hall
But I can tell what’s on his mind

Glory days yeah goin back
Glory days aw he ain’t never had
Glory days, glory days

Now I think I’m going down to the well tonight
And I’m going to drink till I get my fill
And I hope when I get old I don’t sit around thinking about it
But I probably will
Yeah, just sitting back trying to recapture
A little of the glory of, well time slips away
And leaves you with nothing mister but
Boring stories of glory days

Chorus (repeat twice)

The turning point for Grants Pass came in 1996 when Master Brand Cabinets, owned by White-Electrolux was down to 130 employees and was planning to close. “We got wind of their potential closing and put together a package to keep them here. We put an Enterprise Zone in place to give them some tax abatements on new additions.” Today they have 700 employees as a division of Fortune Brands, selling custom wood kitchen and bath cabinets under the Thomasville line at Home Depot and other home improvement locations.

Wood products still account for about 1/3 of the 12.5% of the jobs in the manufacturing sector but most of these new jobs are in industries like doors, cabinets and other value added products. Grants Pass has moved beyond the commodity cyclicality of sawmills and plywood plants.

In the last ten years the number of jobs in the county has increased by over 20% as it has gone down the path of a more diversified economy.

Tuesday, September 13, 2005

Working Together—See the Results

“The new Performing Arts Theater was done jointly between the high school and a non-profit arts group working together,” Charlie Mitchell head of the Grants Pass EDC told me. He went on, “It seats 800 and is even used by other area high schools.”

It was one of many examples of the power of working together in a community. The theater was part of a $40 million school bond referendum that Grants Pass used to build a new high school that looks more like a college campus on the grounds of their early 1900s era high school. The non-profit outfitted the theater with state of the art equipment and furnishings.

Grants Pass also raised funds for a new 90 bed, $52 million hospital on the outskirts of town, efficiently consolidating two separate campuses. The city provided infrastructure to and around the site, resulting in tremendous growth in the area. Charlie’s tour took us by dozens of new medical related offices around the new hospital, hosting many of the 138 doctors that call Grants Pass home.

Grants Pass, OR High School Posted by Picasa

Grants Pass, OR Hospital Posted by Picasa

Grants Pass, OR Hospital Posted by Picasa

Monday, September 12, 2005

Charlie Mitchell with Bear Fest in Grants Pass, OR Posted by Picasa

A Golden Eagle Passes—With Flying Colors

I’m always a little apprehensive whenever I first visit one of the Golden Eagles, agurbs® that our research showed were the top 100 small towns in the USA. And with only one exception I’ve always been extremely impressed with what I see on the ground. Grants Pass, OR (population 23,003) didn’t disappoint on my first visit there last week for a talk. I was most impressed with their physical assets (downtown, industrial park, parks, schools, natural setting, etc.) and also with a strong spirit of cooperation taking place in the town. But, most impressive was the number of new entrepreneurs that the town has attracted in the past five years. I’ll write about some of those entrepreneurs in a day or two.

Charlie Mitchell, the head of economic development for the city was my tour guide, with the most comprehensive and best documented tour of a town that I’ve ever had. He packed a lot of information and sites into two hours.

We started in the downtown area, which Charlie overseas in addition to his ED duties. Grants Pass has a two block historical district that dates back to the town’s incorporation in 1887 when it was a mining boomtown. The first downtown, constructed of wood, burned down. The locals rebuilt at the turn of the century out of brick. There has been a lot of restoration taking place and Grants Pass has an eclectic range of shops. They haven’t jumped on the vertical housing program of the state to develop housing in the old lofts above the retail stores, but I’m guessing that will happen in the near future.

I really loved the Evergreen Federal Bank’s Bear Fest which started out with 18 decorated bears three years ago and has grown to 62 today. They are auctioned off and raised several hundred thousand dollars for local charities. Brady Adams, president of the bank has been a strong supporter of the arts, particularly in the downtown area. During the Christmas season they do fiber optic murals and last year did an “Imagination Village” which had local home builders team up with local artists to design and build small houses like “Knight’s Castle and Tulip House” which were also auctioned off.

I noticed a number of galleries and studios which Charlie told me, “The arts here are new. It all started about 4 years ago and wasn’t on our ED radar screen at the time. The Bear Fest really got the ball rolling. Today it’s become an ED focus. The local community college has a program dedicated to teaching business skills to emerging artists, called Art Works.”

My wife would have loved their flower basket program which was championed by Chet’s, a local garden shop. “The proprietor, Cliff Benett, has single handedly taken this project on when on one thought that he could keep the flowers alive because of how much water they use.”

Tomorrow, I’ll talk about how the town has pulled together to work on projects in a cooperative manner.

Bear Fest Posted by Picasa

Bear Fest Posted by Picasa

Bear Fest Posted by Picasa

Bear Fest  Posted by Picasa

Rogue Theater Posted by Picasa

Downtown Mural Posted by Picasa

Grants Pass Hanging Baskets Posted by Picasa