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The BIG News!!!

It's here! What we've been hinting about for weeks in The Agurban.....Boomtown Institute. The Institute is an answer to what I've been hearing for more than two years now. "What can we do to implement the 7 1/2 keys in our town?" "What suggestions do you have for our town?" "How can we become a Boomtown?" These are just a few of the questions that I've heard throughout my travels. I have established Boomtown Institute to be a mentor to America's hometowns. Our mission is to provoke innovative thinking, encourage leadership and foster investment throughout communities across the U.S.A. One of the new inititatives is Boomtown Boot Camp. We conducted our first Boot Camp in Tuscola, IL. Hear what they had to say. "Made the issues clear and helped us find solutions." "It became apparent that this had to happen." "Builds unity and provides encouragement." "Helps to channel energies from various units of community in a common goal." Intensive but well worth what you reap." "Finally, I feel good we're moving in the right direction." To learn more about Boot Camp for your community, call 217.342.3000. Go to our new website at www.boomtowninstitute.com and read all about us and our mentoring programs. My staff and I are excited about this opportunity to serve you and your communities.

Most Cajun Parrish Rebuilds

“Dubbed the most Cajun place on earth by the census bureau, this area is a wonderland of wetlands, wildlife, fishing and most definitely food.” Larry Lee, rural community development specialist in Opelika, AL, and Bill Davis, with USDA Rural Development in Bismarck, ND wrote in their white paper on Economic Revitalization for Vermilion Parish, LA (population 54,751), which sits on the Intercoastal waterway on the Gulf of Mexico and was devastated by both Katrina and Rita.

“At best, the parish economy was struggling before Hurricane Rita’s storm surge came racing across its marshes and rice fields, not only washing away homes, but a sizeable portion of its economic base as well. Now, Rita’s saltwater surge has left many fields unfit for cultivation for at least one crop. Many rice producers ‘double crop’ their land with crawfish. The best estimates are that nearly 25,000 acres of rice will not be able to be planted in 2006 because of salty soil conditions. This will mean a decrease of $10 million in income for local farmers. In all, it is estimated that the total loss from agriculture will be nearly $50 million.”

Lee and Davis identified the strengths of the region as: The Cajun culture; location on the Gulf of Mexico, rail lines and four-lane roads; strong agricultural work ethic; schools ranked 17th out of 66 school systems in the state; and its proximity to LaFayette.

The Challenges they found were: Disconnect between various entities within the parish; resignation that “this is the way things are done in Louisiana”; no core vision; proximity to LaFayette impedes development of Vermilion.

Lee and Davis proposed the creation of a public-private ED organization, partnering with a neighboring Iberia Industrial Development Foundation, leadership development, exploiting its unique Cajun tourism appeal and branding itself as the “Cajun Kitchen.” They have some great ideas for a region that has suffered greatly. I hope that Vermilion Parish follows their well thought out plan.

Water For the Future

“We are doing an $85 million pipeline and treatment plant to bring water from the Potomac River, which opens up a third watershed for us. It will take us from 7.5 million gallons/day up to 16 to 20 million gallons/day. This project will set us for at least 20 years.” It was the first thing that Richard Griffin, head of ED for the City of Frederick, MD, told me as I started my tour of the town.

My own town of Effingham just passed a similar pipeline project to bring water 20 miles from the Kaskaskia River, also a second watershed for the town. Fifty years ago Effingham built Lake Sara, which has become an abundant water source and recreational development area.

In my travels, I’m seeing water as becoming one of the critical issues in a number of communities. Those that are planning for their water needs 20 and 30 years into the future, like Frederick and Effingham, are the ones that will appear very visionary in the near future.

BoomtownUSA Featured in EDAmerica

BoomtownUSA is featured in a five page article in “Economic Development America”, a U. S. Department of Commerce publication. Louise Anderson, with the International Economic Development Council and editor of the publication did a great job on capturing my thoughts about the book. Check out the publication at www.eda.gov/ImageCache/EDAPublic/documents/pdfdocs/edawinter2006_2epdf/v1/edawinter2006.pdf. It starts on page 10.

Work Here. Live Here.

Frederick, MD (population 52,767) is strategically located in western MD, equidistant from Baltimore and Washington, DC. Forty percent of the workforce drives each day the 50 miles to work in those two cities. When I left Frederick at 4:30 am to catch a plane home, I was amazed at the number of commuters already on the road to work. The Chamber’s motto of, “Work here, live here,” seems very appropriate.

Frederick County is a strong agricultural county with dairy farms predominating. The rolling hills of the county are the setting for Camp David, which has been a presidential retreat for over 60 years. The Fort Detrick complex in Frederick is a Bio Medical, National Cancer Institute, Department of Defense, Department of Homeland Security and numerous other governmental activities hubs, having over 7,000 employees. The Fort has spawned a number of businesses and economic diversity in the town. The establishment of a business incubator at Hood College two years ago, already has a number of biotech and IT start-ups.

Frederick’s downtown is also a masterpiece, with a historical tradition and bustling pace. It is the type of place that creates a certain “sense of place” that could become a huge asset as Frederick tries to recruit their commuters back home to the town.

The town is developing a $10 million project along their Carroll Creek area on the east side of the downtown. The project has charged the private sector to begin investing $150 million into 120 condos, 30,000 sf of retail and 100,000 sf of offices. A third parking deck, will raise to 2,100 the number of parking spaces in parking decks in the downtown. Having adequate parking in the downtown area is often the Achilles Heel of many towns.

Frederick was a very impressive community. The activity taking place convinced me that “Work here. Live here,” is a trend of the future.

Riverfront Development in Frederick, MD 

Frederick, MD Neighborhood 

Frederick, MD Main Street 

One Person’s Impact

“I lost one German company in Bay City, MI because the head guy stopped at the local gas station and asked the attendant what he thought of the town. He got an earful about what a lousy town it was, that there wasn’t anything to do in town and that everyone was looking at leaving.” Joy Gaasch, President of the Grand Haven, MI Chamber was telling me the story at dinner when I was there touring the town. “We met later and he explained that he was not going to spend anymore time looking at moving a plant to the community. That one person had so turned him off!”

I related an opposite story told to me by a banking consultant from GA several months ago. He related how Douglas, GA (population 10,639) won Wal-Mart’s first Georgia distribution center with over 1,000 employees. Sam Walton, who piloted his own plane, was flying from Bentonville down the GA coast to look for a site for his first GA DC. He stopped at the Douglas airport for fuel and breakfast. His waitress struck up a conversation with Sam. Learning of his travel plans, she convinced him that he needed to take a look at Douglas for his DC. Sam was so impressed with her enthusiasm for her hometown that he did a quick trip around the town and decided to build his first GA DC in Douglas.

What are your first-line-of-contact ambassadors saying about your town? Are you training them on the attributes of your community?

Reopening Grandpa’s Candy Kitchen

“My grandfather opened up his candy shop and soda fountain shop in 1901. My dad ran it through the mid-1970s. He raised three kids there, but we all moved away to the big cities.” Ann Beck was explaining to me a little of the history of Flesor’s Candy Kitchen (www.flesorscandy.com) in Tuscola, IL (population 4,488), one of my agurbs®. We were in Tuscola last week doing our first Boomtown Bootcamp. More on that on future blogs.

“The building sat empty for thirty years but came up for sale about three years ago. One of my sisters and I decided to buy it. We found the old store fixtures stored in a building in town. We got some TIF funding, a grant and took on a big loan. We opened 18 months ago and having been having good success.” Their candy shop has been featured in a number of publications including the Wall Street Journal.

Ann and her sister make some great candy. I’d gotten a box of it when I was in Tuscola last month giving a talk. I bought a box of it for my mom at the IL Products Expo. She loved it also.

Candy making, cheese, wineries and other products are all trends that I’m seeing in niche agricultural products being produced by entrepreneurs in rural America. What are you doing to encourage these producers in your area?

Devon Nau and Ann Beck, owners of Flesor's Candy Kitchen 

Downtown Tuscola, IL 

Niche Producers in IL

My wife, mother and I spent several hours at the IL Products Expo in Springfield, finding wonderful examples of entrepreneurs who are carving out niches for their products. There were companies as big as ADM at the Expo but most are more of the “Mom and Pop” type of company. There were producers of popcorn, barbecue sauces, salsa, nuts, honey, spices, pasta, cheese and wine.

I loved seeing the J. D. Mullen Company at the Expo. I’d loved their French dressing as a kid and didn’t know if was still being made in Palestine, IL. The company started 1948 when John Mullen opened a bottling plant with a recipe he discovered when he worked in a small French restaurant.

Eighteen of the sixty IL wineries were there with booths. The oldest IL winery, Baxter Vineyards in Nauvoo (one of my agurbs®) was displaying many of their 13 different products. Their winery offers tours and wine tasting as well as demonstrations from local artisans. I was particularly interested in their involvement in restarting Nauvoo Cheese, a 70 year old maker of Nauvoo Blue Cheese that was sold in 2003 and closed. Bob Hopp and five other local investors have restarted the company at the Baxter Vineyards where you will be able to watch them make their cheese by hand.

Several producers of cheese caught my attention as I toured the Expo. Prairie Pure Cheese (www.prairiepurecheese.com) in Belvidere was started two years ago when two dairy farmers and a vet hired a cheese maker to make their non-hormone cheeses. Lisa Fitzgerald told me, “We got tired of the low prices for our milk and decided to diversify into a more value-added product.”

I’ve said for sometime that some locale is going to set themselves up as the Napa Valley of Cheese. After tasting the production of Prairie Pure Cheese and several other niche producers, I don’t think that it will be long into the future. My only question is: Where will it be located?

Lisa Fitzgerald of Prairie Pure Cheese on right 

Bob Hopp of Nauvoo Cheese 

Mullen Salad Dressings Booth 

Recognizing Young Leaders

I’ve been very impressed with the idea of holding periodic community leadership breakfasts at three of the Lee Newspapers in Decatur, Carbondale and Mattoon/Charleston, IL. Last week I presented “Entrepreneurship as the Paradigm Shift in Economic Development” in Charleston to approximately 400.

Publisher Carl Walworth of the Journal Gazette and Times-Courier started a program to honor 20 under 40, a group that is often ignored in many towns. Of note was that in the first year of the program in 2004, there were 2 of the 20 who were entrepreneurs; in 2005 there were 4 and this year there were 8. I asked the attendees if anyone else noticed a trend taking place in Coles County? This entrepreneurial trend is a growing one in the USA.

What are you doing to encourage young people and entrepreneurs in your town? Do you have a program to honor them?

Firings Good for the Economy?

Have you been following the latest riots in France? Led by the Movement of Young Socialists, more than half a million young people have been protesting a new law which would give some flexibility to the hiring and firing of young people under the age of 26. The rigidity of France, Germany and other European countries labor markets is one of the reasons that their unemployment rates are twice what we have in the USA. The youth unemployment rate in France is 23%!

The Federal Reserve Bank of Dallas (www.dallasfed.org) recently released a report that looked at flexible labor markets and the impact of outsourcing upon international economies. It is one of the best ones I’ve seen.

The Dallas Fed estimates that over 150 million Americans lost their jobs from 1980 thru 2005, but the U. S. economy grew its employment base from 90,936,000 to 134,371,000 during that period of time. Unemployment fell from 7.2 percent to less than 5 percent today as productivity increased by 72%! This caused real per capita income to jump from $25,309 to $41,257 today and average household income more than doubled to $431,000. And, during that period of time we have had only 16 months of recession, less than any other major country.

One of the keys to our success is how flexible our economy has become. While other countries impede changes in companies, imposing draconian costs on lay offs, the U. S. has cut these costs dramatically over time. As a result companies are more willing to hire new employees, which encourages efficiency, productivity and economic growth—all contributors to higher incomes. The graphic shown on this blog from their study is very revealing.

It might seem counterintuitive, but the ability to hire and fire quickly is a major advantage for our economy because it gives us the flexibility to move quickly, taking advantage of ever-changing opportunities and is one of the reasons why we are the envy of the rest of the world.

Job Security & Income per Capita 

Mississippi Revival

“Our people are tough. They were back to work on the first day after Katrina. That’s why you don’t see them much on TV. They are the type of people who you would want working for you.” Governor Haley Barbour of MS was talking with a dozen site selection consultants at the Governor’s Roundtable last week. I was there to continue my study of the revitalization taking place in the state and to consider making an investment there. I’ve been very impressed with the direction of the state, taking on very tough issues like tort reform and setting themselves up to be one of the major growth states of the 21st Century.

The new Gulf Opportunity Zone (GO Zone) Act of 2005 was recently set up to assist 49 southern MS counties. Incentives include tax credits, special financing, housing incentives, and most importantly to real estate development, a 50% bonus depreciation in the first year.

Some of the suggestions from us at the table were: build upon existing clusters like composites, polymers and others; leverage existing infrastructure like four rail lines crossing at Hattiesburg; expand the ports for containers; and find the often hidden benefits of military bases. One consultant indicated that call centers are moving back to the USA after some very bad experiences overseas. Also unanimously agreed upon by the group was to get Governor Barbour out on the road selling the state to CEOs. His fame, charisma and strong grasp of details make him a perfect spokesman for the state.

Despite the impact of Katrina, Mississippi’s industrial expansion can be seen in the level of its exports. In the past two years exports from the state have skyrocketed from $2.55 billion in 2003 to $4.0 billion last year. Leading export products are vehicles at $738 million; chemicals $397; electrical machinery $385; machinery $358; and wood pulp $283. The MS Nissan auto plant, which I’ve blogged on numerous times due to the impact it has had with over 20 supplier plants in small towns, is exporting cars to Mexico, Canada, United Arab Emirates, Saudi Arabia, Oman and even China.

There are lessons to be learned from the visionary approach of Mississippi.

Governor Haley Barbour and I at ED Roundtable 

Biloxi Missiles

I was flabbergasted when I saw how a casino larger than a football field was moved over 1,000 feet by the fury of Katrina. I tried to explain it in some previous posts from my visits to MS shortly after the hurricane.

At Governor Haley Barbour’s Roundtable last week, they showed how the floating casinos turned into floating missiles. The satellite photo shows a before and after photo of the location of the three Biloxi casinos.

Biloxi, MS before and after Katrina--note locations of casinos 

Grand Island Casino on land 

Katrina Intensity--equivalent from Washington DC to NYC 

Greenville Coming Back

Greenville, MI was down in the dumps when I visited there last year right after it was announced that its largest employer, Electrolux, would be closing its doors. I was very impressed with what I saw in the town and counseled them that they needed to keep their head up and to continue to put their best foot forward as they recruited in new industry. Today, I was pleased to receive the following article from Greenville.

Officials say it was a collaborative effort between the City of Greenville and the governor's office to lure a new manufacturing plant to Greenville, bringing more than 500 jobs with it.

City officials say it took three months to close the deal with United Solar Ovonic. United Solar is a subsidiary of Detroit based Energy Conversion Devices Incorporated. Officials say United Solar is one of the leaders in developing alternative fuels, an important component in President Bush's initiative to curb what he says is the United States' "addiction" to foreign oil.

"It's amazing. It's just simply amazing what this is, and I couldn't be happier," said Greenville City Manager George Bosanic.

Officials completed the deal under the pressure of what was looking like a disastrous future job outlook.

Earlier this month the Electrolux refrigerator plant closed its doors for good, leaving 2,500 workers without jobs. Detroit based Federal Mogal announced it too could cut jobs, possibly affecting its Greenville plant ,and Tower Automotive announced it will shut down its Greenville plant by years end.

Probably Won’t Make Hillary’s Website

“You probably saw this sign during the 1992 presidential campaign,” Teresa Powers explained as we toured Newberry, SC. My guess is that the picture I took of it won’t make Hillary Clinton’s website.

Newberry, SC sign 

Blogging Software Glitch

The blogging site that we have used since I started blogging in 2004 mysteriously developed some strange glitches late last week. I have not been able to post on the site since last Thursday. I apologize for any inconvenience that this might have caused you and hope that it won’t be a recurring problem. Thank you for your patience.

Newberry industrial diversity

Agracel did a 20+ state site selection project for Komatsu in 2001, helping them to select Newberry, SC for their new Utility product line manufacturing plant. I returned to visit the plant, taking a tour with Gary Crain who explained to me, “Over 50% of the worldwide utility equipment market is in the USA and having this plant puts us in a great position to both import and export product.”

The plant has grown from an initial 65 employees to over 200, with plans to increase production greatly. The plant makes excavators, skid steer loaders, backhoe loaders and other ancillary products.

The Newberry Industrial Park has an international feel to it with companies from Japan, Korea, Ireland and Italy located in it. A new 465 acre site was purchased this month for a new industrial park. Based upon what I saw in Newberry, it will be filling up soon.

Komatsu's Largest Utility Machines 

Komatsu's Smallest Utility Machine 

One Man’s Dream Transforms a Downtown

“It was one person’s dream to recreate our 1880s opera house to its past glory. The place had been city hall and the town jail and was in disrepair when Dr. Jim Wiseman, a local dentist, decided to make it his mission in life.” Teresa Powers, head of ED for Newberry County (population 36,108) was explaining to me how one person with a vision can transform a town. Newberry, SC (population 10,580) was one of my top 100 agurbs® and I was not disappointed with having chosen them as a “golden eagle.”

“He even ran for the city council to get this project done,” Teresa explained to me. It’s not often that I see someone running for office with an “agenda”, have such a positive impact upon a community.” But, Dr. Wiseman is one of those visionaries who knows what he’s going to do and doesn’t let anything stand in his path.

His efforts culminated in an $8 million renovation of the 420 seat historic building in 1998. Dr. Wiseman also went after one of the top 25 theater managers in the country, recruiting in Debra Smith from CN who loved the quality of life in the SC town. Over 200 groups perform per year, many with multiple productions. The Shanghai Quartet was performing the night I was there and groups on the program for the first five months of the year included: The Lettermen, The von Trapp Children, The Oak Ridge Boys, Swan Lake with the Russian National Ballet, Gentlemen Prefer Blondes, and many others.

Teresa added, “As a result of the opera house we bring over 100,000 people into our downtown area every year. We had a local investor build a brand new Hampton Inn next to the opera house and are in the process of converting an old firehouse into a conference center for groups of up to 150. We’ve also now got 2 of the top 10 restaurants in central SC and a new coffee shop just opened. The old downtown hotel has just been sold to an investor who intends to turn it into a 15 room bed and breakfast.”

We drove by a construction site for 24 new townhouses adjacent to the downtown. There is a real vibrancy going on in downtown Newberry. And it all started with one person with a special vision for their hometown.

Newberry, SC Opera House 

Old hotel recently purchased in Newberry, SC for B&B 

The Chinese are Coming!

“The GE of China was looking at us. We couldn’t believe that we were competing with a place in Connecticut and Orlando, Florida.” Nelson Lindsay, head of ED for Camden, SC was explaining to me about how they landed Haier into one of their three industrial parks. The company bought 110 acres, built one large warehouse and has plans to eventually develop a campus like environment for their other industrial companies. They also plan to begin doing much of their R&D in Camden.

The first Haier project in the USA is the production of household appliances. The company imports components from China, doing final assembly in Camden in addition to manufacturing appliances in the town.

Haier is another important trend that you’ll want to follow in the future. There will be more foreign companies like them from China, India and other countries that will want to establish more of a presence in the USA. Being close to a port for “Strip and Ship” and component assembly operations could be keys to recruiting these companies to your community. What are you doing to begin marketing to these companies…to let them know where you are on the map?

Steeplechase Capital of the World

The Steeplechase Capital of the World sign caught my eye as I drove into Camden, SC (population 6,682). When I drove by their horse facilities, I could understand how they could hold such an event but why did steeplechasing happen to land in this town, was my question.

Nelson Lindsay, who is head of ED for the county and a lifelong resident of the town explained to me, “In the early 1900s, this was a winter haven for many wealthy northerners. They came down with their horses and used to have horse races, fox hunts, polo matches and steeplechases. We had three resorts in town back then.”

Harry Woodward, who made his fortune with Jello, started the steeplechase facility. One of the DuPont heirs who bought it from Woodward, left the vast facility in trust to the state of SC for use in horse related activities. Today they host the Carolina Cup, which dates back to the 1930s, and the Colonial Cup. Lindsay told me, “The Carolina Cup is called the largest outdoor cocktail party in the world, with over 80,000 people attending.”

Camden impressed me with its historical background, having hosted two Revolutionary War Battles, quaint downtown and large historical district of 60 houses. It also has a very vibrant industrial base that is diversifying from textile dependency to a more expanded one (Target built a 1.4 million sf DC with 800 employees in 2002). They are developing their third industrial park, after virtually filling their first two in the past decade. It is the in the 7th fastest growing county in the state.

One of many historic houses in Camden, SC 

Downtown Camden, SC 

Maceo Nance and the Community & Rural Development Team at SC Rural Summit 

Autos Impact on SC

“We didn’t produce our first car until 1994, but we’ve now got 44,000 jobs in the auto industry,” Tim Dangerfield, Chief of Staff for the SC Department of Commerce, was telling me at dinner at the SC Rural Summit. “We just produced our 1 millionth auto earlier this month.”

When BMW decided to build their U. S. plant and headquarters in Spartanburg, SC there were some who were skeptical of the incentive package that lured them to a state without much of an auto culture. It was a long way from Detroit.
Maceo Nance, who heads up Community & Rural Development for SC Commerce added, “Originally, BMW planned to invest $300 million in the plant and have 2,000 employees. Since then they’ve invested $2.37 billion and grown it to 4,500 employees!”

Most important for the agurbs, is the number of auto suppliers that have been lured to the state by BMW. Tim told me, “The latest count is 44 companies and growing.” Most of those are in smaller communities and having a wonderful impact upon the economies of those towns.

One Millionth BMW Produced in SC 

Ag Barbell in the Future? Wineries as an Example.

Would a barbell make more sense for how we view our agricultural economy in the future? I’ve been contemplating this for sometime as I traveled around the country for the past several years, observing the changes that are occurring in the agricultural arena. My observation is that we really have two areas of growth for our agricultural producers.

The most obvious area of growth is in the production of commodity products such as corn, soybeans, wheat, cattle, hogs, etc. The keys to success to compete in an increasingly global economy are: economies of scale and becoming the low cost producer. Our current agricultural policies do not encourage either key and hopefully will be changed in future bills to allow us to compete better.

The area of most excitement to me is on the other end of the barbell, in niche markets where producers carve out an area of expertise, allowing them to become dominate within their geographic or product area. New technologies (i.e. GPS), media (i.e. email, Internet, etc.) and changing demographics (i.e. baby boomers reaching retirement age) are all factors that should allow for the rapid growth of new entrepreneurs in agriculture. I’m seeing examples of it with every trip that I take out around the country. If we could channel some of the subsidies going to commodity products into these niche products and convince the medium commodity producers to develop niche products, I’m convinced that we would make both ends of the barbell much more substantial.

An example of an agricultural niche area that is growing very rapidly is in the growth of wineries throughout every state in the USA. A recent trip to OK showed over 30 wineries in that state (www.oklahomawines.org) and 60 that I learned of at an IL Products Expo that I attended last weekend (www.IllinoisWine.com). IL only had a dozen wineries ten years ago, quite an increase in the last decade.

IL was the fourth largest wine producing state in the country until the Prohibition Act of 1920 caused the closing of all wineries. In 1936 the Baxter family in Nauvoo, IL reopened their winery, which remains open today as a fifth generation operation. More on them later in the week.

OK Wine Map 

Wineries of IL