Friday, December 21, 2007

Last Blog of the Year

We’re off! Betinha, James, Joseph and I along with my mother-in-law Mary Lee Emmert are off for South Africa and Zimbabwe. We leave on Sunday for ten days of exploring, including several on safari. I’m sure that I’ll have some great tales to relate to you of the trip but probably won’t get them written until 2008.

I hope that each of you have a wonderful Christmas and New Years. I’ll talk with you next year.

Thursday, December 20, 2007

Hometown Filmmaker

Becky McCray writes a wonderful blog from rural Oklahoma. She sent me a wonderful story about an Enid, OK (population 47,475) native who is coming home from Hollywood to turn Enid into the “Family Film Capital of the World.”

Mark Marshall grew up in Enid, graduated from Enid High School in 1975 but moved to CA to work for Stephen Spielberg and George Lucas on such films as “Star Wars,” “Raiders of the Lost Ark,” “Indiana Jones and the Temple of Doom,” “Goonies,” “The Color Purple” and others.

Earlier this year he returned home and launched Nice Entertainment, along with a half dozen other partners. He told the Enid News, “We want films that have the family values but don’t look down to people. We should talk up to the audience, not down.” He told of working on “Free Willy”, the original version of which had several swear words in it. However, the test audiences objected and the studio wisely took them out and the film went on to great success.

Marshall hopes to build upon the incredible varied topography of the state, which I’ve seen as I travelled extensively throughout. There is desert in the northwest, bayous in the southeast, and mountains, rivers and plains throughout the state.

It’s great to see people with unique talents like Mark Marshall come back home.

Wednesday, December 19, 2007

Reinventing a Town

In my talks around the country, I often talk about Mooresville and Rockingham, NC. Both towns had about 10,000 residents when they decided to try to diversify away from their one-industry dependence upon textiles. Mooresville built an incredibly diverse economy around four strong pillars (manufacturing, race teams, a regional hospital and recruiting in the headquarters of Lowe’s) because of their wonderful quality of life. Rockingham went down a different path.

In 1965 a NASCAR track owner, a local landowner and a local trucking company executive built the North Carolina Speedway, nicknamed “The Rock”, in Rockingham, NC (population 9,672). Richard Petty won the first Carolina 500 there, which pushed him to the top of the NASCAR point standings for the first time in his long career. In 2003 and 2004 the two NASCAR races run on its 1.017 mile oval were transferred to California and Texas and the last race was run in February, 2004.

This fall the famous course was auctioned off for $4.4 million to a racing school which pledged to bring a race back in 2008.

Rockingham came to rely upon The Rock and those two races per year. Two-thirds of its retail sales occurred during the two weekends of those NASCAR races. It has been a painful couple of years since it lost those two races but I’m hopeful that they can rebound and reinvent themselves again.

Tuesday, December 18, 2007

72 Points in the First Quarter!

Late in the season Smith Center achieved national notoriety when it scored 72 points in the first quarter of their game against arch-rival Plainville, breaking a record that dates back to 1925. Even though Coach Barta took out his starting offense after its third touchdown, his freshmen took advantage of six Plainville turnovers, generally scoring one or two plays later. The coaching staff instructed those freshmen to run out of bounds or slow down so they could get tackled but kids being kids, who doesn’t want to romp for a touchdown? It’s the stuff that dreams are made of! What ninth grader is going to try to go slow? Herding cats would be easier.

By the second quarter, Barta got a running clock instituted and the team attempted their first field goals of the entire season (on first downs), making 2 out of 5. The final score was 83-0.

Smith Center totally dominated their opponents this year. The twelve seniors on the team haven’t lost a high school football game, won four straight state championships and achieved a record of 54-0 during their four year careers. The best example of this dominance was illustrated in a story from a game early in the year, when a member of the other team made a late hit on one of the Redmen of Smith Center. Another player from that team immediately grabbed the offending player by the face mask and screamed at the top of his lungs, “What are you doing! They are beating us 90 to nuthin’ and we don’t want to make ‘em mad too!”

Smith Center runs a wishbone offense, hard to master but run with such precision that there are only six plays in their playbook. They run three of those to the left and then three of them to right. They averaged 11.8 yards per play and needed to punt only once during the entire season. They averaged less than two passes per game.

Here are some other stats from their incredible season: They’ve averaged 419 yards rushing per game, outgaining opponents by more than 4,300 yards. The Redmen allowed 43 pass completions in 158 attempts (27% success ratio), had 20 interceptions and 21 fumble recoveries, giving them a staggering plus-38 turnover margin. They allowed an average of 87.6 yards/game with 50.9 yards rushing and 36.6 passing. The team’s defense allowed three touchdowns all year long but scored six themselves. They punted once the entire season but had to kick off 115 times, an average of 10 per game. They scored six touchdowns on punts and kickoffs but allowed only 8.7 yards per kickoff return for their opponents.

It’s an incredible story that will live in Kansas football lore for a long, long time.

Monday, December 17, 2007

A Most Incredible Sports Story

As I’m travelling around the USA, I’ve found that virtually every town is very proud of their local sports teams, as they should be. The lessons learned in these competitive arenas are some that will often become major “life lessons”. I’ve not written much about these local teams because they are so similar from town to town. But today I want to tell you about one that is totally incredible. It’s about a small town football team in Kansas that outscored their opponents 710-to-ZERO during the regular season and went on to win a fourth straight state championship, not losing one game during that four year span. But more on their exploits tomorrow, let me tell you about the town and their incredible coach first.

When you Google “Smith Center”, the first entries that come up are for the Dean Smith Center at the University of North Carolina, but if you continue to search, you’ll find Smith Center, KS (population 1,931). Smith Center is the county seat for Smith County, a very rural county in north-central KS with only 4,024 residents. During the 1990’s it lost 20% of its residents and is down almost 40% since 1970. The average age is 49.5 (22nd highest in the USA), 13 years higher than the country’s average. There are twice as many people over the age of 65 than there are of school age. It also has the highest percentage of residents over the age of 85 in the entire country. This is a county that has unfortunately gone over the “tipping point” of their population and is going to struggle mightily to just survive.

The one bright spot for Smith Center is its football team. For the past 30 years, Roger Barta has taught high school math and coached the local high school football team. With only 154 students, half of them girls, there aren’t a lot of athletes to pick from. But, Coach Barta has over 65% of the boys in the school on his football teams and during his 30 years has achieved a 276-58 record.

Every player on the Smith Center team must sign a pledge to stay alcohol, drug and tobacco free for as long as they are a member of the team. If he fails, he has to go to the elementary school and stand before the youngsters to tell them that he’s messed up. The grade school kids are instructed to take their football card of that player, which every student receives at the beginning of the year, and tear it up. That trip to the grade school hasn’t happened in over a decade.

Coach Barta’s most important message to his teams isn’t about winning or losing, it’s about the game of life. His senior quarterback, Joe Windscheffel told ABC News, “He tells us how to be a man, and then he shows us too.” Mark Simoneau, Smith Center’s only professional football player, an eight-year pro linebacker with the New Orleans Saints told the NY Times, “As good of a coach as Coach Barta is, he is a better person. He treats you like gold.”

Tomorrow, I’m going to blog on the incredible record of Smith Center. It baffles me how a team can run only 6 plays (3 left and 3 right) and pass less than twice per game but was able to accomplish what they did this past season.

Friday, December 14, 2007

Do You Have One?

My brother Jim is president of the Effingham County Community Foundation (ECCF), an organization that several of us set up in the late 90s under the motto of, “For Good. Forever.” Today, the foundation has grown to almost $2 million in assets in 36 different funds and has given out almost $500,000 in grants over the years. The ECCF is in the midst of leading a $3 million campaign to endow an operating fund for a new $13 million Sports Center. They are over 2/3 of the way toward their goal. This is a very giving community.

Jim also shared with me a new study from the Donors Forum and the Midwest Community Foundations’ Ventures, Wealth Transfer in Illinois. It details the transfer of wealth in each of the 102 counties in IL over the next 50 years, estimated to be $1.36 trillion.

In my county of Effingham (population 34,429) the ten year transfer of wealth is estimated at $490 million and the fifty year total is estimated at $3.52 billion. The study points out that if only 5% of that wealth is left for a community foundation it will amount to over $25 million over the next 10 years, which at a 5% payout rate would bring $1,230,000 in benefits to the county annually. And, imagine what it could do in 50!

Even for the smallest county in Illinois, Pope County (population 4,184) deep in southern IL, the 50 year transfer is $215 million, the 10 year is $34 million, five percent capture over ten years is $3 million and at a 5% payout is $160,000/year.

I’ve often said that if there is one thing that I could do in every town that I talk and tour, it would be to set up a community foundation. If you don’t have one in your town, you should!

Thursday, December 13, 2007

voting With Our Feet

Joel Kotkin, one of my favorite authors and demographers, has an interesting article on his website about the rise of family-friendly cities. My blog yesterday was on the census information on which states people are moving to. Today’s is Kotkin’s analysis of why this is happening. Here are some of the highlights from his article:

· The strongest job growth has consistently taken place in those regions with the largest net in-migration of young, educated families ranging from their mid-20s to mid-40s.

· Urban centers that have been traditional favorites for young singles, such as Chicago, Boston, New York, Los Angeles and San Francisco, have experienced below-average job and population growth since 2000. San Francisco and Chicago lost population.

· There is a basic truth about the geography of young, educated people. They may first migrate to cities like Ney York, Los Angeles, Boston or San Francisco. But they tend to flee when they enter their child-rearing years.

· Most Americans, notes the Pew Research Center, still regard marriage as the ideal state. Upwards of 80% still marry, and the vast majority end up having children.

· The “Millennial Mainstream” generation is twice as numerous as Generation X and far more family-oriented.

· It’s time to recognize that today, as has been the case for millennia, families provide the most reliable foundation for successful economies.

Wednesday, December 12, 2007

Population Movements

People are moving around the USA in the fastest rate since the early 1990s, according to recent data from the U. S. Census. This movement is being led by two very mobile segments of our population: Immigrants who are moving inland from traditional gateway cities to lower costs alternatives and Gen-Xers who are moving mostly in search of a higher quality of life.

In 2006, 2.7% of Americans or 8 million moved to another state to live. What I found most interesting is where these moves are being made to. For the most part they are occurring from “big city” states and moving to mostly rural ones.

The largest number of moves occurred to (in order): NV, AK, WY, ID and HI. The smallest number of moves in occurred in MI, NY, CA, OH and NJ.

Interesting trend, isn’t it?

Tuesday, December 11, 2007

Santa Claus Postmark

In my opinion, the absolute best name for a town is Santa Claus. There is only one in the entire USA or in the world, and it is located in southern Indiana. December is the month to be in a town like Santa Claus.

Santa Claus (population 2,041) has a special program that runs through December 20th. They will put a Santa Claus postmark on your letters or cards at the Santa Claus post office. The program started in 1983 and has grown each year. During the first 20 days of December over 500,000 pieces of mail will be postmarked from Santa Claus compared to the normal 13,000 per month during the rest of the year.

Each year’s unique postmark is designed by a local high school art student. This year’s winner is Marii Marley Jahn, a 2007 graduate of the local high school , and now a student at Purdue.

Monday, December 10, 2007

Tribute to a True American Hero

Sherman Jones grew up in Spade, TX (population 100), a very small and declining town 30 miles northwest of Lubbock. The closest town is Littlefield, TX (population 6,507), ten miles east of Spade.

He dropped out of high school in 1948, entering the army. Serving in the Korean War he became a prisoner of war and forced on the infamous Korean Death Watch in which he was only one of three survivors from the 300 who started. When released he returned home and never did graduate from high school.

That is, until the last class to ever graduate from Spade High School made up of only six students asked him to be an honorary graduate. The
nine minute video is a nice tribute to an American hero and a very caring group of young people from a small town in Texas.

Friday, December 07, 2007

Housing Downturn

Many people have moved to towns like Elk Grove, CA because of the extreme increase in housing and living costs in places like the San Francisco Bay Area. They were able to sell their modest houses there for hundreds of thousands if not millions, buy a new house in Elk Grove for a fraction of that and have a very nice nest-egg sitting in the bank.

Builders quickly threw up subdivisions, new schools were built, streets were laid and housing prices shot upward. The U. S. Census showed the median value for a house in Elk Grove of $151,400 in 2000 but $477,700 in 2006. Elk Grove charges an $80,000 entitlement and permitting fee to build a new house in order to pay for all of the infrastructure required for these new subdivisions.

Some people were buying houses, not intending to live in them, but because prices were increasing so rapidly. Others were buying more house than they could afford because they hoped to use their increase in home equity to cover any shortfall. They had never seen a time when housing prices didn’t move upwards.

But then the sub-prime crisis and overbuilding hit and prices started to fall and in some cases fell dramatically. The local newspaper, The Elk Grove Citizen, had four pages of foreclosure notices the day I was there.

There are all sorts of deals from new home builders. The local newspaper had these offers for new buyers: Freeze your interest rate at 5.99% for 30 years: No home payments for one full year; and discounts of $50,000 to $100,000 offered for ready to move in homes.

Centex Homes advertised their Plan 3555 (3,555 sf) home of 3 beds, 2.5 baths, 3-car tandem garage and private study for $585,000. It was previously priced at $902,778!

There is a great deal of pain going on right now in places like Elk Grove. However, the inventory of homes will eventually be sold off and the housing market will return to a more normal one. I hope that it happens quickly.

Thursday, December 06, 2007

More Growth than Whole States!

The city planner that was helping to give me a tour of the town was almost apologetic when she said, “We’re probably only going to have 600 building permits issued in 2007.” Her perspective was shaped by the 4,000 permits that were issued in 2004, when building hits its peak in Elk Grove, CA (population 59,984 in 2000; 146,793 in 2006).

I laughed at the time, telling her that there were some regions that would love to have 600 building permits. However, when I reflected upon it later, I realized that there are some whole states that would love to have that many building permits in a year.

In doing some 300 tours in 44 states over the past three years, I’ve yet to see a town that is growing more rapidly than Elk Grove. There are new roads being built in anticipation of future housing, a new civic center is in the works and three hospitals are collectively investing over $500 million into new medical facilities. And, the town was only incorporated in 2000!

Frontier Communications, my host for the tour, moved their western headquarters to the town three years ago. Denise Baumbach, Sr. VP and General Manager, told me, “Our goal is to make Elk Grove our model telecom town and we’re rolling out all of our new technology here first.” Frontier is underlying the entire town with fiber and recently rolled out a massive Wi-Fi broadband network in the town.

Everything is there in Elk Grove, everything that is, except jobs. Of the 74,914 workers in the labor force (71.6% of the population compared to a 65.0% national average), it is estimated that 60,000 are driving out of town each day to work. Most are driving north to Sacramento but about 10% (6,000) are driving west to the Bay Area. San Francisco is only 100 miles away but depending upon time of day and the traffic pattern, that trip can take several hours.

And just think of the time and energy that would be saved if the jobs were located in Elk Grove. A rough calc of both is about 750 million miles, 40 million gallons of fuel and $130 million in miles/fuel and 30,000,000 hours in time wasted in commuting for its workers.

In addition to be terribly wasteful, Elk Grove is hurt by those commuters not spending time and money in the community. Those commuters aren’t as likely to volunteer, sit on school boards, coach a little league team, be a scout leader, etc. They are exhausted from their commute and hibernating for their return trip the next day.

In my talk, I applauded the efforts of Elk Grove and its citizens in setting up a new Economic Development Corporation, raising over $1.5 million in pledges to get started. To really build a community you’ve got to have people living, shopping and also working in the town. Elk Grove is on the right track.

Wednesday, December 05, 2007

Regionalism, Cooperation

One of biggest fans of BoomtownUSA is Robert Baker. He continues to buy books, distributing them to politicians and influential people in small towns. Several months ago he suggested to me that I write a Boomtown book for each state, with examples of towns that are “gettin’ it done” around the country. At the time I thought that it would be difficult to do and put it on the back burner.

I’m now giving his idea more thought after spending some time researching and putting together a presentation for the North Mississippi Industrial Development Authority, an organization comprised of electrical power distributors serving counties in northeast MS. The group is closely tied in with TVA, which I talked about on Friday. It covers 33 counties or about 1/3 of the land area in the state.

In my research, I found some wonderful examples of some very rural, small counties that were beginning to work together, resulting in some great new projects and jobs. Itawamba County (population 23,532) went from having only 27 acres of industrial land to putting together a 140 industrial park and landing Toyota Boshoku (500 jobs—a 33% increase in manufacturing jobs) within the past six months. Neshoba County (population 30,125) has developed a new $1 million + entrepreneurship incubator. And, Calhoun County (population 14,657) got the four small towns in its county to band together to start their first ever ED effort in the past three months.

The Golden Triangle (Columbus, Starkville and West Point) is another cooperative effort that built a wonderful regional airport, started an industrial park and is cooperating on a number of other new projects. My blog the last two months has been filled with examples of the $3 billion + in investments in that area.

The PUL Alliance (Pontotoc, Union and Lee Counties) with a combined population of 140,000 in the three counties got together to develop a mega-site composed of 22 different parcels of land (and owners) that landed the Toyota assembly plant that is being built.

A spirit of cooperation started in north MS when the newly formed Community Development Foundation (CDF) lured Morris Futorian to town to begin manufacturing furniture in northern MS. When a suitable location couldn’t be found in Tupelo, the local CDF agreed to help them do the project in the neighboring county of Lee, in the town of New Albany. From that single factory somewhere from 25 to 40 (I heard both numbers) furniture companies evolved, turning Tupelo into the Furniture Capital of the South. One of those companies, Furniture Brands International, the largest in the world, was started and still run by Mickey Holliman who worked as a laborer and foreman in Futorian’s first factory.

Another favorite town, Oxford, MS, was my example of branding in my talk. From having one of the nicest downtowns I’ve seen to establishing themselves as a retirement destination Oxford is one of the best examples of a unique “sense of place” that I’ve found.

On second thought I think that there is enough material to do a whole book on Northern MS. Imagine what I could do if I included the entire state and great stories like the reinvention of the Gulf Coast (post Katrina), Greenwood, Ruleville, Drew, Vicksburg, Laurel and others!

Tuesday, December 04, 2007

Retention Story

In spending much of the last three years on the road, visiting 300+ towns in 44 states, I’ve seen some incredible successes. From a pure investment and job creation standpoint, Columbus, MS has stood out and I’ve written about them several times. Creating 3,000+ jobs (paying $50,000 to $75,000 each) in rural MS with over $3 billion in new investment within the past three years is truly incredible! But, I learned as much about how they retained an older company in their community which was instructive in how they have been so successful in also bringing in new business.

I made sure that I wasn’t late to hear the story of Baldor from Joe Max Higgins, CEO of the local ED, Allegra Brigham, CEO of the local utility, and Tim Weston, manager of ED for TVA.

If Joe Max weren’t in ED he could probably make a good living in comedy and story-telling. He has a very unique and colorful way of relating important information in an interesting way. He told about Baldor Electric, “They are NYSE Company that is 87 years old, with over $800 million in sales. We celebrated their 40th year in Columbus in 2005. They had gone through seven different expansions during that time and grown into 160,000 sf with 250 employees.”

“They came to us wanting to build a new 300,000 sf plant that was expandable up to 600,000 sf. This would have been a $21 million investment in phase 1 and created 150 to 175 new jobs. The major complication was that they didn’t want to write off their old building because of the impact they felt it would have upon their stock price, so we had to put together a $1.2 million package which equaled the value that they had the old building on their books.”

“We were about to close when we announced that we had been chosen as TVA’s first mega-site location. Baldor was not pleased to be across the street from what could be a huge new manufacturer. They let us know that they were going to look elsewhere.”

Allegra piped in, “We went from being ecstatic at being named as a mega-site to one of despair at losing one of our major employers and not knowing if we would ever land something at the mega-site.”

Joe Max and his team didn’t despair but developed a plan to build the new Baldor plant in another location, giving the company the option of opting out if they didn’t like who might occupy the mega-site.

Tim Weston made some very interesting observations from seeing Columbus’ change in the past five years, “Columbus was always viewed as the town with lots of potential. But it never lived up to that potential. Joe Max shook things up and today they’ve got five certified economic developers, more than some states!”

Tim also pointed out the beauty of competition, something we see every day, “When Joe Max shook up Columbus, Tupelo which had always been top dog, got concerned and stepped up their economic development efforts. If it wasn’t for him, Toyota would have never landed in Tupelo.”

Competition, Retention, Recruitment….it’s a wonderful game we’re in!

Monday, December 03, 2007

Best Utility ED Organization

In the 20+ years that I’ve been involved in economic development, I’ve seen an incredible change in how the business is conducted, the speed with which it moves, and the size of projects decrease dramatically. As with any endeavor, it is a constantly evolving process.

When I first entered the field in the late 80s, I found that the electric utilities dominated the business. It was obviously in their best interests to find new, heavy electric-load customers for their business. And, they could wrap their economic development activities into their utility rate. In fact, if it wasn’t for the ED efforts of Central Illinois Public Service (CIPS), which took me under its wing, I’m not sure that I would have ever made it in industrial development. But, when they were sold and started to downsize their ED efforts, I hired their best Todd Thoman, and we’ve never looked back.

Deregulation of utility rates changed the utility industry model and most utilities started downsizing and downplaying their ED departments. Many have been gutted. But, the TVA, which covers all of TN and parts of six other states (80,000 square miles), has continued to emphasize the importance of economic development and developed into the premier ED group in the nation in the opinion of Team Agracel.

I was at their 2007 Customer Service and Communications Conference to learn more about some of their many successes.

Amy Bunton, GM for ED at TVA, spoke on the changing nature of business and why retention is growing in importance, “In 1982, 11 of the top 25 companies in the Fortune 500 were manufacturing based. Today it is only 5! We have 11,325 manufacturing companies in the TVA territory that account for 666,000 jobs. Of the total jobs in rural areas, 32.7% are in manufacturing in the TVA, compared to only 16.9% in our urban areas.”

In addition to the direct manufacturing jobs, Bunton estimated that there were another 815,000 jobs within TVA that supported those manufacturing jobs and that it was a lot less expensive to spend time and money on retaining those jobs rather than recruiting in a new company. She explained, “We estimate that it costs $1,000 to $50,000/job to recruit in a new business but only $200 to $4,000/job to retain one.”

You do the math!

Friday, November 30, 2007

Wonderful Berkeley Springs

Berkeley Springs, WV (population 663) started turning things around as a town in the late 70s when a small group of artists banded together to set up the Morgan Arts Council. Jeanne Mozier, who I met at the Create WV Conference, led those efforts in trying to bring together the handful of artists who didn’t have any direct connection with each other but knew that they could accomplish more by working together rather than each on their own.

Along the way, an old industrial building was turned into the an arts development center, an old theater was revived and artists started to pour into the small town. Today there are over 150 working artists with about 5 per year moving to the town. Those artists keep the 7 galleries in town filled with product and have helped the small downtown to become a diversified destination. Their efforts have resulted in a $35 million tourism industry.

The town has been mentioned numerous times as one of the best small art towns in the USA by various publications, was voted #2 Art Destination in America in 2005 and has more art density some weekends than Manhattan.

Thursday, November 29, 2007

Creative and Energetic in WV

I knew that I was going up before an energetic group when I started talking to the Create WV steering committee prior to my talk. This message from their website captured what I sensed in our conversations:

Here a diverse community of West Virginians comes together to create a West Virginia that thrives on innovation, artistic vision, connectivity, diversity, entrepreneurship, technology and growth. In short – a West Virginia for the New Economy. But it's more than that. Our vision is not to try and replicate what others have done. It's to forge a dynamic new West Virginia that is rooted in what has always made West Virginia great. It's the combination of the simple beauty of our surroundings and the soulful strength of our unique history with 21st century tools to share our strengths with the world, and to invite them to share with us. It's about welcoming the new in the context of what's already great about West Virginia. Join the discussion. Share your ideas. Create West Virginia!

My talk in Roanoke, WV for the Create West Virginia Conference was the 44rd state that I’ve talked in. If only NH, CN, RI, DE, LA and HI would call. My wife Betinha would really like for HI to call in February!

The group that organized Create WV did so in record time. They pulled together 56 different speakers, organized seven different tracks (Arts, Entrepreneurship, Diversity, etc.) with seven sessions in each track in less than 4 months.

In my almost 300 talks around the country I’ve yet to see a more enthusiastic and engaged group than what I saw in Roanoke. I hope that they keep the ideas and enthusiasm going. They have a wonderfully beautiful state that could and should become much more creative.

Wednesday, November 28, 2007

Princely Property...For a Song!

We had helped a manufacturer (260 employees) locate in Princeton, KY (population 6,536) and have our newest investment there so I was happy to get a chance to tour the community and the two adjacent counties of Caldwell and Lyon. Jim Moore runs the Caldwell-Lyon ED organization and was my tour guide. I was there to speak at their fifth annual meeting.

One of the building blocks for Jim is the fact that KY’s largest experimental agricultural station is located in Princeton. Jim related to me how it landed in the town, “In the early 20’s Princeton was vying for the next state college but lost out to Murray which won Murray State University. We were awarded the experiment station.”

“With 40 PhDs working here, we have the highest per capita number in the entire state. They really help to improve the quality of our education and are very engaged.”

One of Jim’s more interesting accomplishments was the formation of a five county consortium (Caldwell, Lyon, Crittenden, Livingston and Trigg) which put together a 500 acre parcel of an old state pen farm for the purpose of having a mega site for a larger project. These type of land holdings are getting more difficult to put together and I applaud the vision that these five counties showed in putting together the Pennyrile Westpark, one of only five such mega sites in the state of KY.

At the annual meeting John Carner, a long time banker in the community was honored for the 30+ years of being a linchpin in the ED efforts of the area, having been directly involved in more than $70 million in investments that resulted in 2,000+ jobs. I’ve found that it is people like Mr. Carner that really make a difference in a community and I was privileged to get to highlight his many accomplishments at the end of my talk. I called him “Mr. Can-Do!”

Princeton has a series of wonderful murals in their downtown. They’ve been expanding them, featuring some of the rich history of the area.

Caldwell and Lyon counties both have great potential in promoting their access to the 1,800 miles of shoreline on Kentucky Lake (built in the 50s) and Lake Barkley (60s). When I learned that you could still buy a buildable lot of around a half acre for $25,000 to $75,000 I urged my audience to invest in one.

The Baby Boomers, the first of which just turned 60, are drawn to water and lake front property is soaring in value in the places that I’m visiting around the country. Luring in and channeling the energy of these Baby Boomers will become increasingly important for those rural areas with the right natural resources.

Tuesday, November 27, 2007

Blue Collared, But Skilled and Educated

Each year John McGrath and Ronald Vickroy, professors at the University of Pittsburgh at Johnstown, do a survey of the business prospects of Cambria (Johnstown) and neighboring Somerset County, PA. They’ve been doing the survey for 14 years and developed a good gage of the business sentiment of the region. They presented their findings at the Chamber’s 2007 Economic Summit that I was keynoting.

One of the major changes that McGrath highlighted in his presentation was the 30%+ growth in jobs in blue collar skilled and blue collar support positions compared to 28% in white collar skilled and 9% white collar support positions.

These new jobs are becoming increasingly more specialized with 46% requiring a certificate beyond high school, 15% an associate’s degree, 35% a BS and 4% a graduate degree. The days of a “strong back” and a good work ethic are rapidly declining and the need for more education of the workforce continues to grow in importance.

When McGrath and Vickroy surveyed employers on skills most lacking, communication skills (or lack thereof) were cited by 32% and work ethic by 22%. These were not a surprise to me as I’ve heard it before in my travels around the country.

The study showed the growth and good prospects for the manufacturing and high tech industries in western PA. I’m seeing it happen around the country and think we are in an increasingly important time for growth in the manufacturing sector. The survey in PA only solidified my conviction and observations.

Monday, November 26, 2007

Lots of Pluses

Anytime that a town shrinks from over 60,000 to only 24,000 there are going to be lots of underutilized buildings, inexpensive real estate and some incredible opportunities for those who are there to take advantage of it. Johnstown was such a town. In addition it sits in the incredibly beautiful Alleghany Mountains.

Those mountains and the recreational hobbies that can be pursued in such an environment are numerous: white water rafting, mountain biking, hiking, hunting, fishing, bird watching and dozens of other outdoor activities are major attractions for the area.

Tourism also has great potential with the town hosting the Johnstown Flood Museum in Andrew Carnegie’s first publically funded library, the steepest vehicular inclined plane in the world and the Flight 93 Memorial being built in Shankstown, just south of Johnstown.

Johnstown also hosts its own symphony orchestra in addition to offering an October to May Concert Series and outreach to young people in the community.

Housing prices are very low, with a median home value of only $36,200.

The town has it all to become a Mecca for young people who want to start a new business. And with an average age of 41.5 years (vs. USA average 35.3 years) they need to be focusing upon how they develop more opportunities so that the young people of Johnstown don’t continue to leave town for better opportunities elsewhere.

Thursday, November 22, 2007

Grateful Thanksgiving!

We had finished eating our Thanksgiving dinner and I was checking emails, one of which was from Jeff Madison from Iraq. I’d written about him in the past and his work in doing economic development in that country, something that I greatly applaud and appreciate. In Jeff’s email today he told of the Thanksgiving message from a group called The Yellow Ribbon Girls. Here is their message today to our troops.

The Yellow Ribbon Girls and our ever faithful circle of supporters would like to say:


We are GRATEFUL for you, your unit and those serving around and we know you are doing your best to project us and our freedoms.

We not NOT HAPPY that you are away from your loved ones but we know all around the United States families will come together today and continue to pray for your safety in your job and you safe return to us.

We are GRATEFUL to be born in the Land of the FREE and the Home of the BRAVE. There are so many with so little. We are blessed to be Americans!

We are NOT HAPPY that due the the strength and power of our nation we are often called on to project smaller weaker nations around the globe.

We are GRATEFUL for the Internet and the access to email by so many of you so that we can learn more about your needs and do all we can to help you through this deployment.

We are NOT HAPPY with the press and how they portray the troops and your actions. They never seem to be able to broadcast the good things you are doing and the progress that is being made.

We are GRATEFUL that every day you are there brings you one day closer to being back with your loved ones here in the states.

We are NOT HAPPY with the long deployments which are so hard on you and your families.

We are GRATEFUL for our military PAST and PRESENT. Without you we would be nothing. AGAIN we thank you for your service to our GREAT country and and we are HAPPY to support you with all that we can.

We have been blessed, with a lot of help, to be able to ship over 11,000 care packages to deployed around the world. You and your needs are always in the minds of many in our little part of the world.

We are THANKFUL for you!
We are GRATEFUL to you!
Bonnie ,Vicki and Patti
724-752-3314 or 724-971-1236
Stay Safe! Stay Strong!
I believe! Support our troops

I hope that all of your are having a Grateful Thanksgiving.

Wednesday, November 21, 2007

Earmarks--The Con

Someone who was at my talk in Johnstown, PA emailed me with the other side of earmarks in Johnstown,

Thanks to Congressman Murtha, millions of dollars have been falling out of the sky and into the laps to the wealthy business leaders in our small community. The amount of money has dramatically increased over the 20+ years Congressman Murtha has been in office, especially since last year, when the democrats won control of the House and Jack Murtha became Chairman of the House Appropriations Committee. Most people would be envious to have between $100M and $200M injected into a small area of a couple hundred thousand people. But the reality turns out to be vastly different.

Over the past 20 years, the business leaders have all hired their relatives and buddies to run these increasingly profitable and fast growing companies. So instead of cultivating a climate of innovation and entrepreneurialism that rewards success, the congressional largess has created an arrogant, oppressive and incredibly wealthy regime of “curmudgeons” and “cavemen” that are actively stifling entrepreneurial ideas and initiatives by the young people on their staffs and around the community.

Almost everyone in the town knows that the claims of the companies and the politicians amount to little more than an elaborate charade, but they are afraid to say something about it, for fear that there will be a reprisal against one of the friends or family members. So just below the surface of this town is the gnawing fear that the Congressman will be thrown-out of office, resign, or retire and all the money will suddenly disappear, leaving nothing but for sale signs for as far as the eye can see. And everyone with brains or talent will make a beeline to the nearest big city, leaving the elderly and poorest of the poor to fend for themselves.

I hope that Johnstown is able to leverage some wonderful attributes (more on them Monday), their defense cluster, health care technology expertise and their young people to develop into a more entrepreneurial community.

Tuesday, November 20, 2007

Earmarks--The Pro

Dave Fyock, CEO of MountainTop Technologies, Inc. sponsored my talk and was one of my tour guides of Johnstown, PA. He is very personable, knowledgeable and has a strong interest in the betterment of his hometown.

He established MountainTop in 1993. His son, who is now the company’s chief technology officer, came up with the name MountainTop because, “everyone goes to the mountaintop to seek guidance from the Oracle.” The company has grown to over 100 employees with a focus in learning, transportation and communications. He started the company after a career in environmental and governmental affairs for the power company, cutting his teeth in the aftermath of Three Mile Island.

We talked about earmarks during my tour. Fyock’s take on them was, “We’ve had earmarks since the days of George Washington. They are an independent branch of the government and are a way for a local congressman to see what is needed most by his constituents. We’ve used earmarks to be able to start many programs, some of which are today helping to save lives on the ground in Iraq and Afghanistan.”

He went on, “While earmarks helped us to get these programs started, today over 50% of our business is built upon continuous contracts that we win on our own merit. But without earmarks we wouldn’t have ever gotten a chance to show what we can do.”

MountainTop is a very impressive company that is working in some very cutting edge technologies.

Monday, November 19, 2007

Comeback Town

I’ve seen several towns that have been able to come back from one or two knockout blows, but none that have come back from as many as Johnstown, PA (population 23,906). I remembered the infamous 1889 Johnstown Flood from my history books but wasn’t aware of the one in 1936 and only vaguely remembered the one in 1977.

The town sits in between steep hills and at the confluence of the Stony Creek and Little Conemaugh River. The first flood was caused by a recreational dam that held back 500 million gallons of water breaking and sending a sixty foot wall of water down through the valley, killing 2,200 people and leveling most of the rapidly growing town that was already one of the largest steel producers in the world. The house at the right is one of the most photographed ones from that flood, of a tree that impaled itself into the John Schultz house (surely a distant relative!).

The town rebuilt.

A large winter snowfall, early spring thaw and 36 straight hours of rain resulted in another major flood in March, 1936 that killed twelve and did over $40 million in property damage.

The town rebuilt.

A freak nine hour thunderstorm that stalled over Johnstown in July, 1977, dumped 11.87 inches of rain. Seven dams above town overflowed, twelve people died and over $300 million in property damage resulted.

Again the town rebuilt.

But even worse than the flood of 1977 was the world economy of the late 70s when cheap imports of steel were devastating the U. S. Steel industry. Johnstown’s two major steel plants, Bethlehem and U. S. Steel, gradually began downsizing throwing over 20,000 people out of work by the mid 80s. Unemployment hit 24%, the highest in the country. The population of the town fell by over 50%, but again Johnstown began to pull itself up from the ashes.

Congressman John Murtha began to try to reposition the community and area as a defense industry cluster. “The Congressman”, as virtually everyone in town called him, went from running a car wash in Johnstown to Congress in 1974 and no one has come close to unseating him ever since.

By adroitly using earmarks, Murtha has helped to get over 2 dozen defense companies to either start up in the town or to move operations to the region. Those companies are today involved in everything from drug intelligence to composite materials to robotics. The 2008 defense-spending bill now before Congress includes 45 earmarks worth $166 million in Murtha’s Congressional district with over ½ of that going to firms in Johnstown.

Murtha’s relentless pursuit of defense earmarks has resulted in the development of a massive defense and health care cluster surrounding Johnstown. Over 4,000 of the 9,700 jobs in the town are in these clusters.

My hope is that Johnstown can develop new uses for the technology that has been developed in the town because of these earmarks. I’m hopeful that new entrepreneurial companies can come out of these 20 some defense companies.

My concern is that the next disaster for the town won’t be a flood but will be when Congressman Murtha, age 73, steps down and the new Congressman doesn’t have the clout of The Congressman

Friday, November 16, 2007

Quality of Life & Entrepreneurs--Critical for Future

This week, I’ve focused upon a number of people and projects in my home county of Effingham County, IL, where I was born and raised and lived most of my adult life with the exception of college and seven years in Brazil. I hope that you will excuse my boasting this once about this great community. I’ll go back to reporting on other towns/regions around the USA next week.

One of the comments that I often hear as I travel around southern/central IL is, “What is in the water in Effingham County? There are so many entrepreneurs there, especially when you compare them to our county.” I believe that the entrepreneurial spirit of Effingham goes back to our German ancestors who left everything and moved to a strange, wild land. Their ancestors have been encouraged by family and friends to start new businesses and to help other entrepreneurs to take the new business plunge.

Those many entrepreneurs have put together loosely tied groups that have been willing to back new entrepreneurs like the Campbells and Martin Hubbard. They’ve understood how important growing your own entrepreneurs is to the future of a community and have been willing to risk some of their own hard-earned funds to help others.

That same openness/giving attitude is what helped to fund the starting of the Effingham County Foundation and funding for the new Sports Center. Many of the entrepreneurs who donated to that project will never use its facilities but each understands why projects like it are critical to the future of Effingham County.

There will be few direct jobs created by any of these projects like the Rosebud Theater, Firefly Grill, Sports Center and the Biking Trail, but these types of projects are going to be increasingly critical to the future of Effingham and its region. The importance is going to be noted most by the next two generations, Gen Xers and Gen Yers (also known as the Millennial Generation).

These two younger generations have an approach that is much different from my Baby Boomer Generation or my parents’ Greatest Generation. Mine and my parents’ generations approach when exiting from school was to find a job and then to move to wherever that job might be. These next two generations are going to figure out where they want to live and then find a job when they get to their ideal location. And, unless you have exceptional quality of life attributes like the bike trails, entertainment, recreational amenities, etc. you are going to be overlooked for those areas that do offer those amenities.

The entrepreneurs of Effingham County understand the importance of improving the quality of life for the future of the community. Do your entrepreneurs Get It?

Thursday, November 15, 2007

Braggin' on my Hometown/County!

This week I’ve been highlighting some of the wonderful attributes of where I was born in Teutopolis, IL (population 1,559) and now live in Effingham, IL (population 12,384), both in Effingham County (population 34,264). Today I’m going to brag a bit on some of the great things going on in our rural county.

This past weekend I attended the grand opening for the Rosebud Theater, a brand new 1,600 seat performing arts center that was built completely with private funds. Local entrepreneur Martin Hubbard started working on a vision he had for this center almost four years ago. At the time he was the restaurant manager at a local Petro Truckstop but continued to pound home the point of, “I can’t tell you how many times I have truck drivers who ask me what there is to do in Effingham.”

Martin put together a business plan and raised almost $2 million in equity from 40 other local entrepreneurs, $4 million from local banks and a promise of $1.2 million in marketing funds from the city’s hotel/motel funds. He also pre-sold over $1 million in season tickets and ticket commitments from mostly local companies and individuals. The community really pulled together on this project.

Over the next nine months we are going to have approximately 60 acts like the Oak Ridge Boys, Bill Cosby, Green Day, Marie Osmond, B. B. King, and many other well known names.

Before the grand opening we ate dinner at The Firefly Grill, an upscale restaurant that you won’t find in most towns the size of Effingham. This two year old restaurant began as the dream of Kristie and Niall Campbell, a young couple with ties to the area but who were living in San Francisco where Niall was a chef at some well-known restaurants. They also developed a business plan, sold it to 20 local entrepreneurs who agreed to fund the Campbell’s dream. Today the restaurant is packed most weekends with customers driving from as far as 100 miles to eat in a gourmet place. Firefly has been featured in several food magazines and has been interviewed for a feature in Gourmet Magazine in February.

The City of Effingham recently announced plans to proceed with a $10 million+ Sports Center that they have been working on for the past five years. The facility will include a hockey rink, competitive 8-lane swimming pool, running track, recreational pool and about a dozen basketball/volleyball courts. Funded wholly from hotel/motel funds and TIF, the project is projected to bring in competitive teams from around the Midwest for competitive sports competitions.

Because of the concerns that the Sports Center might operate at a deficit for a couple of years, the local Effingham County Foundation (set up in 1999) is in the process of funding a $3+ million endowment fund, earnings from which will fund any shortfall. Approximately $2 million of the $3 million is already committed, again mostly from local entrepreneurs.

My final brag is being driven by my neighbor Frank Brummer, who recently sold Farmweld, a hog equipment manufacturer. Frank is an avid biker and last year took on the challenge of developing a county wide bike/hiking trail throughout the county. He is in securing grants and donations and is about to build the first leg of the multi-mile system.

Quite a bit to be proud of? You betcha! Tomorrow, I’ll talk about the commonalities of all of these projects and why your town should be doing something similar.

Wednesday, November 14, 2007

Millenial Entrepreneurs--Gotta Have 'em!

The focus of my talk in T-Town was how to grow more entrepreneurs in our small towns, seeing it as a paradigm shift in economic development. The more that I’ve researched it and seen examples from around the country, the more excited I get about the future of the USA. Our brightest days lay in the future.

I’ve found about a dozen examples of young people, under the age of 22, who have started significant new businesses in small towns. There are going to be many more examples and if you have any in your town please send them to me.

This next generation, called Gen-Y or the Millennial Generation, is going to be the most entrepreneurial in the history of the USA. They are already being compared to the generation of the 1880s which transformed our country into an economic world power.

One of my favorite examples is David Orr, a young man in my hometown, who has started a deal-a-day website called Each day David offers his fruper-duper-deal-of-the-day! On the day of my talk he was offering a T-Phone for $150 that is very similar to the I-Phone but at $500.

In less than a year fruper has become one of the top three deal of the day websites. David just launched world-wide shipping and is in negotiations with Dell to sell some of their products because of the web hits he is generating.

I first met David about six months ago when he was shipping product into our public warehousing operation because he had outgrown his parent’s garage and basement. His biggest problem at the time was not being old enough to drive.

Two weeks ago I met with him on a new idea he has for a second website and learned that he turned 16 on September 15th. After meeting with him I went down to see the Range Rover he had bought with his own money generated from fruper, which he bought online!

On Monday I saw him at the best restaurant in town. His mother told me proudly, “David is treating me to lunch and took me for a drive in his new car.” David let me know that he had already traded in his Range Rover for a BMW. Also bought online! I’ll have to get a new picture.

I’m convinced that you are going to be reading about David in Business Week, Forbes or Fortune in the near future. He is a comer and has an incredibly bright future.

Tuesday, November 13, 2007

125 Years of Excellence!

The major business in town when I was growing up was the Siemer Milling Company. At the time it was run by the first cousin of my Dad and today his son Rick, my second cousin, is doing a wonderful job of growing the company into new directions. And, it is still one of the major businesses in T-Town.

Rick’s great-grandfather was one of the originators of the Hope Roller Mills in November, 1882. He and his son bought out the other family members in 1906, renaming it Siemer Milling Company.

Rick related to me that in 1906 the milling industry was the largest industrial business by dollar value of sales in the USA with over 12,000 mills dotting the USA countryside. Virtually every town had a flour mill and the business was mostly local and regional, at best. Today it is global and Siemer Milling is one of the handful of survivors left, having grown into a second and third mill in Hopkinsville, KY, producing over 450,000 tons of product annually, with annual sales exceeding $100 million.

The company employs 75 people in Teutopolis and is always one of the main contributors in the community. I was privileged to attend their 125th Birthday celebration last week and wished Rick and his team another 125 years of prosperity.

Rick gave a wonderful brief history of the mill during that celebration which was attended by many customers, suppliers and past and present employees. I sat at the table with Allie and Bernie Ruholl and their wives. Each had worked over 40 years for Siemers and each spoke very highly of the company and the family atmosphere of it. Rick referred several times to the unique culture of Siemer Milling which has been evident in the many contacts I’ve had over the years with Rick and his many employees.

That first mill cost $40,000 to build and could produce 30 tons/day. Over the past 125 years the company has had to innovate numerous times, essentially reinventing the business and also streamlining ownership. Or, as Rick referred to it in his talk, “Pruning the family tree.”

The major innovations for them occurred in the 1920s when they replaced all of their worn out equipment with state-of-the-art milling machines, in the 1960s when they again replaced everything with the latest Swiss technology, a major rebuilding in 1979 and again in 2003 when Siemer built the first heat treated flour process in the western hemisphere.

The “pruning of the family tree” started in 1906 when Rick’s great grandfather bought out his other family interests. His grandfather bought out his four sisters in the 1910s and 1920s, one of which was my Grandmother Schultz. Several years ago Rick gave me the loan passbook which showed when his grandfather made his yearly principle and interest payments to my grandmother. It is one of my prized possessions, showing $500 to $1,000 payments from 1916 to the final $2,000 paid on July 4, 1927, totaling all of $5,000! Seeing how well Rick has developed Siemer Milling, I wish she had kept the stock!

Rick divided the wholesale end of the business off to his uncle, bought out his siblings and some cousins and set up an ESOP in 2000 to ensure that the business continues on for many years into the future.

If you use Duncan Hines Cake Mix, eat a Rolls Gold Pretzel or buy Girl Scout Cookies, there is good chance that you are consuming some Siemer flour. They are one of the many companies that make things for us and do so in a competitive and ethical manner. They also have been providing employment opportunities for hundreds for over 100 years. I’m hopeful that they make it for another 100+.

Monday, November 12, 2007

My Hometown!

I was thrilled and also a bit intimidated to get a chance to talk to about 400 people at the Vision 2020 Celebration of Excellence in Teutopolis, IL (population 1,559) where I was born and raised. Once you get over 25 miles away from home, some people will consider you an expert but those who remember what you were like as a kid often have a different opinion. Thankfully, no one mentioned the time that I climbed out onto the roof of the high school library and was caught by the principal.

When I drove into T-Town (as we knew it as kids), shortening the name from the phonetic Too-Top-Less, I started counting the number of businesses on Main Street. I lost count at 42 but John Wessel, a third generation grocer, told me that there were over 100 businesses in the town, or about one for every 16 residents!

I related to the group in my talk that T-Town is a very unique town, because there are more people who work there each day (1,800) than sleep there at night (1,559). In my travels around the USA over the past three years I’ve only found about a half dozen such towns. Some that come quickly to mind are Nappanee, IN (population 6,710) and Sidney, NE (population 6,282). Nappanee was also the only town I’ve been in that had an entire industrial park without any electricity. The Amish plant owners run all of their operations off of individual generators, much to the dismay of the local utility company. And, Sidney is home to Cabella’s, the outdoor mega retailer.

I always remembered T-Town as being a very entrepreneurial town and virtually every one of those 100+ local businesses that John Wessel told me about were started and expanded locally. Not one was recruited in.

If you get a chance, stop by to visit T-Town. I’ll be happy to show you where I lived on Pearl Street.

Friday, November 09, 2007

The Cure for High Prices...High Prices!

“In nearly 25 years of building homes, I have not asked a homeowner to pay more for a house when the value increased,” Anderson Homes owner Larry Anderson wrote in a letter to homeowners who recently asked for a rebate because of falling home values in Manteca, CA (population 49,258). Anderson recently auctioned off 34 finished homes in the Paseo West subdivision in Manteca.

Homeowner Dave Cantrell who led a homeowner revolt against Anderson differed in his sentiments, “I lost a quarter million dollars in value. I’m screwed.” He had paid $670,000 for a 2,700 sf home a year ago. An identical one five doors down the street sold last month for $391,000 at the auction.

Virtually all of the buyers at the auction were renters who felt they could finally afford to take the plunge into home ownership. Many are moving out to Manteca from the Bay Area, even though it will be a 90 minute commute for them to Silicon Valley. But, they are realistically looking at this being their only opportunity to buy at what they consider a reasonable value.

A study of housing values in Yuba County, CA (population 70,396) showed the median value of a home in 1997 at $83,000. That value would double to $163,000 by 2003 and double again in the next two years to $341,000. But, from 2005 to 2007 the value fell by $64,000 to $277,000, not what I would consider a bargain basement price but definitely more affordable than at its peak.

The current crisis in some parts of the country in housing values plunging will pass with time. It always does. When prices get too high, the market corrects itself for the cure for high prices, is those high prices.

Thursday, November 08, 2007

Under Siege for Pumpkins

This letter writer’s sarcastic thoughts matched mine, “There must be something crooked going on at this family-owned business ... after allowing children and their parents to visit and enjoy this beautiful farm for better than 25 years. Maybe you should check the pumpkin patch for some kind of mystery green weed growing there, or better yet seize the old steam train for going too slow.

Rest peacefully, all residents of Yolo County: Your elected officials are really watching out for crime in your area! One could only wonder: Don't you have anything better to do?"

- E.J. Radican, Rocklin”

Mr. Radican was referring to the raid that Yolo County, CA officials made on the 1,000 acre farm of fifth generation farmer Bob Kirtlan recently. Kirtlan has run a pumpkin patch and train collection on his farm for the past 25 years. His
Silver Bend Farm is the autumn field trip destination for families and school children, attracting over 20,000 visitors each year. He tries to teach children where food comes from (to the surprise of some it is not the grocery store) and teach them old-style rural values.

But, Kirtlan didn’t know that he had to have a special operating permit and had been operating without one for a quarter century. But armed officials informed him otherwise and temporarily shut down his farm, charging him with a misdemeanor. Kirtlan hired an attorney who happened to be on the farm with her 4-year-old twin daughters at the time of the raid and got an injunction to allow him to operate through Halloween.

Do you ever think that we are over regulating ourselves to death when you have to get attorneys to operate a pumpkin patch?

Wednesday, November 07, 2007

Trust Funders Meddling

My trip to Northern CA was a quick one but thanks to a dedicated group of passionate locals who picked me up at 6:30 in the morning to tour both Mt. Shasta (population 3,621) and Weed (population 2,978), neighboring towns within view of the gorgeous 14,162 ft. Mt. Shasta.

Both were lumber milling towns but most of the mills have closed due to environmental and economic reasons. The towns are trying to reinvent themselves with a mix of economic development and tourism and have had some success in turning things around.

One of the challenges for both towns is the rapid increase in housing costs due to the influx of new residents from the San Francisco Bay Area, rapidly making most housing unaffordable for many workers. As an example, we went by an older 3 bedroom/2 bath house that sold for $150,000 seven years ago but surged to almost $500,000 two years ago and is today still over $400,000, even with the sub-prime meltdown.

“Trust-funders” was a new term that I’d not heard before in small towns. These are mostly young and middle aged people who have a trust fund that provides them with enough of a monthly check that they don’t have to ever work again. While it sounds like a neat idea if you are on the receiving end of these checks, it also has its downside as was explained to me by one of my tour guides, “They make up 10 to 15% of the population in Mt. Shasta but they don’t have to work and seem to want to erect barriers to keep anyone else out of the town. They also don’t seem to care what happens to our young people.”

Both Mt. Shasta and Weed each have water bottling plants in their towns, each employing several hundred people. Both Dannon and Coke Cola have been there for a number of years, providing some of the best paying jobs in the communities.

Nearby McCloud (population 1,343) located 12 miles outside of Mt. Shasta had reached an agreement to build a similar plant with Nestle. The plant would have been located on a 250 acre former lumber mill plant that was the major employer until it closed in 2003. The demographics on the town aren’t very good with an average age of 44.2 compared to a national average of 35.3; per capita income 30% below the national average and only 4 students in their local high school. The deal would have taken 1,600 acre-feet of spring water per year and bottled it, which is the equivalent to what 3,000 families consume on an annual basis.

To someone without any agricultural background, 1,600 acre-feet of spring water might seem like an awful lot, especially when you convert into gallons: 1,600 acre-feet is 520 million gallons. According to a good friend of mine who also farms in the Sacramento Valley, it takes about 6.5 acre-feet of water for cotton and 4 to 5 acre-feet for row crops. If you use an average of 5 acre-feet, this plant would use the equivalent of about 300 acres of cropland, not very significant when compared to the 28,000,000 acres of farmland in the state. That same 300 acres of farmland might employ one or two people, especially if raising cotton. Compare that to the 240 jobs projected to be created by the bottling plant. Or, that the old saw mill used as much water prior to being closed as the new bottling plant will ever use.

It is not a huge amount of water when compared to the population and water needs of CA, but it has outraged the trust-funders. They have marshaled the forces of other outside groups and McCloud’s water plant is now in doubt. Why can’t they let the locals make their own decisions? Do you think that if they had to work for a living, they might have a different perspective?

Tuesday, November 06, 2007

Above it All!

I was in northern CA doing a talk at the Northern Rural Training and Economic Consortium (NORTEC), a 12 county workforce training group of some of the most rural counties in the state. Kathy Garcia from Tehama County told me, “We encompass 1/3 of the state geographically but only 5% of the population. We also are the source of most of the water that is used in the state.”

The geography in this region includes the northern end of the rich, fertile, flat Sacramento Valley; mountainous areas and numerous national forests including Mt. Shasta, at 14,162 ft., the highest point in the state, and the Redwood National Park; and a gorgeous Pacific coastline. However, the area is also fairly remote, requiring a three hour drive from the Sacramento airport to my talk in Mt. Shasta. I was told that you could drive through seven states on the east coast in less time than what you could drive the length of CA. A Map Quest search showed that it was shorter from Boston to Raleigh than from the OR border to San Diego.

The demographic/social profile of the area was more similar to the Midwest or Great Plains than it was to the much more populous areas of CA with the exception that most of the northern CA counties have grown by over 20% since 1990. Most of this growth has occurred as a result of people moving from the Bay Area to the region. It has caused a few conflicts as I’ll tell you tomorrow.

Northern CA is trying to brand themselves as “Upstate California: Above it All.” It is a great brand and one that they can leverage well. I have hopes that I will be back for a long tour of the land above it all very soon.

Monday, November 05, 2007

Request from Iraq

I’ve been trying to help provide some ideas on the redevelopment of Iraq to Jeff Madison, an Army Lieutenant Colonel who is working to help the country rebuild its economy. He has kept me informed of the work and progress that he and others are making there through some lengthy, very interesting emails. Here are some excerpts, including his request for help in the newspaper world. If you can help him please email him directly at

Lot's of meetings with Iraqis today. Drumming up support for the Economic & Agriculture "FarSa" (opportunity) conference, the constitution of two new Chambers of Commerce, and even the Education and Health Councils we are trying to build from scratch. I'm still looking for resources to use on these last two councils. I'm hoping the Iraqi-American Chamber of Commerce will come through for me on the first one. No use recreating the wheel if they already have charters and other documents in Arabic for the one started in Baghdad and a few other places.
Do we have any body out there with contacts in the newspaper world? I need to find out some information on newspaper industry, specifically, prices of equipment for printing local type newspapers. It seems to me that with today's technology you could crank out newspapers with much less equipment and associated space than in the past. The types of papers around here are 8 pages total, two of which are color. Circulation for each town is approximately 5,000 papers per week (one edition per week). The idea is to establish a regional network so a single hub could do the printing for multiple surrounding towns (Nahiya). Currently, they all travel to Baghdad for their out sourced printing. Amazingly, we are introducing the concept of paying operating costs by selling advertisements and charging for the papers. Remember, newspapers in this part of the world have been traditionally funded by the government, so there was no need to beat the street for advertising or charge for the paper. Of course, the news you got in return was also controlled by the government. If you have any leads or contacts that you might help let me know. I'm a small fish in a big ocean over here, but the Lord continues to connect me with people I need to meet to get my offense rolling and start making some first downs.

To catch you up I am assigned to a Provincial Reconstruction Team in Southern Salah ad Din (SaD) province. I am an active duty Army Lieutenant Colonel on loan to the Department of State for this mission. I arrived in the combat zone on 28 JUL 07. I talked to most of you in JUN just after I moved to OK. My primary role is governance, but I am involved in economics, agriculture, health, education, and just about everything else. My partner in crime is 1LT Carl Kusbit, a 58-year old reservist from Pittsburgh, PA. He's an ER Trauma Nurse. Southern SaD is bordered on two sides by the Tigris River, is heavy in Agriculture, very little manufacturing or Agri-Value Chain processing at this time. Population between the two qada'as (districts) is just over 300,000. The largest city, Balad, is close to 100,000 by some estimates. It is a Shia island in a Sunni sea. There are five major Nahiyas (towns/sub-districts): Isahki, al Dulu'iyah, Yethrib, Balad, and ad Dujayl. I live on FOB Paliwoda, sometimes LSA Anaconda, and occasionally journey to COB Speicher (Tikrit).