Friday, August 29, 2008
Thursday, August 28, 2008
The Gulf Coast Business Council Research Foundation released a report on the recovery from Katrina last week. You can read it here.
After being virtually wiped clean, with hundreds of thousands of people homeless, the MS Gulf Coast has done a wonderful job of rebuilding itself. I’ve been there a half dozen times through the process and been very impressed with both their “can do” attitude and willingness to not make excuses. Now they are almost back to normal after a lot of hard work.
Wednesday, August 27, 2008
As I was driving from Fargo to Bismarck the chorus to the Green Acres theme song kept rolling around in my head. Do you remember that show?
Green Acres is the place to be
Farm Livin’ is the life for me
Land spreadin’ out so far and wide
Keep Manhattan…just give me that countryside
So, which would you take, ND or Manhattan? Since we’re in the midst of the Democratic Convention, I decided to compare it to Speaker Nancy Pelosi’s San Francisco. SF has been cited by numerous pundits and writers (Richard Florida probably being the most vocal) as the ideal city of the future.
The populations of ND and SF are somewhat similar. SF has 764,976 residents. ND 639,715. SF has a much higher household income at $57,476 compared to ND’s $40,818, but beyond that one stat, virtually every other stat that I looked at showed ND similar to or superior to SF.
Both SF & ND lost population from 2000 to 2007. SF 1.5%. ND 0.4%.
Both have had a negative outward domestic migration in the past year. SF -1,112. ND -1,136.
The medium age in SF is 39.6 years compared to 37.2 years in ND. USA average is 36.4.
When it comes to families, only 44% of households in SF are married with children compared to 64.6% in ND. USA average is 68.1%. SF has one of the lowest school age populations in the country with only 9.4% in the 5 to 17 age group. ND is at 16.6%. USA is 17.8%.
In 2000, SF had 611,674 jobs. By 2007 the city lost 16% of its jobs, taking it down to 556,621. ND during the same period grew their jobs by 11% from 309,127 to 341,704.
Home ownership is really lopsided! Only 33.3% in SF own their own house vs. 59.1% in ND. USA average is 60.2%. In the past twelve months there were 799 single family housing permits issued in SF compared to 1,919 in the three MSAs in ND (Bismarck, Fargo and Grand Forks). With a medium housing cost of $799,000 in SF, the average job holder will spend 94% of their income on housing! In ND, it will cost you 24 to 28% for that $135,000 medium priced home.
And, how about the much higher household income in SF? They’ll need it! A $100,000 income in SF will buy you what $53,991 will in Fargo, ND. Groceries are 27% less expensive in Fargo, as is housing at 71%, utilities at 18%, transportation at 17% and healthcare at 18%. All are less expensive in Fargo!
Where would you rather raise a young family?
Just give me that countryside!
Tuesday, August 26, 2008
I was back in Arcola to help them celebrate their community foundation which was started in 1976 and has grown to $5.5 million in assets. Think about that! In a town of 2,652!
They give away tens of thousands of dollars in scholarships, helped to restart the local grocery store, gave $1 million to the new school building and $400,000 for their new library. In other words, they are making a difference in making Arcola a better place in which to live!
Have you started your Community Foundation yet?
Monday, August 25, 2008
Just want to update you…..Daktronics started here in January 2007 with 110 employees, we are currently at 280 and plan to go up to 300 by the end of the year….and 500 by the end of 2009!!! They are doing a community open house this Saturday – production is over expectations here – life is good!
Lamberton – ethanol groundbreaking yesterday – 35 new jobs in Spring 2009
City of Redwood Falls approved a $3.8M family aquatic center. It is have a rock climbing wall, zero entry wading pool, lap pool, two slides, two diving boards, umbrellas and several other water amenities!
We are partnering with Minnesota West Community and Technical College for an extended education center here – partnership with Redwood County, City of Redwood Falls, and business partners – Lower Sioux Indian Community, and two additional funding sponsors to be named shortly.
Lots of things are happening in Redwood Falls! It was a very impressive town when I visited in April, 2007 (see blogs in archives) and continues their very positive momentum. In addition to the aquatic center, Redwood Falls also has a community ice skating rink, civic center, conference center that can seat 500, field house and fitness center. And, in a town of 5,459!
Sunday, August 24, 2008
Calling himself the Republican Reporter, his tagline is, “Most reporters are politically biased, I'm one of the few willing to admit to it.”
He got credentials through a local newspaper and will be writing irreverently and with a decided bias. I just hope that I don’t have to send him bail money.
Friday, August 22, 2008
In 2002 a group of milk producers there got together to try to figure out how to turn their money losing operations around. One of the ideas thrown around was to add more value to their product by producing such products as cheese, yogurt and ice cream. A lab was set up at Reaseheath College in Nantwich but the distance to the college was a major inhibitor to innovation.
Thursday, August 21, 2008
One of the major attributes of rail is the relatively low amount of fuel that it takes to move a ton of freight. I’ve always thought that this one factor would become more important, especially in a high fuel environment like today. And, we’ve seen potential clients come “out of the woodwork” as the price of diesel has continued to climb.
One of the rail companies has boasted that they can move a ton of freight 436 miles on one gallon of diesel. It sounded WAY too high to me, so I decided to check it out. The Association of American Railroads (AAR) actually keeps track of data like that! In 2007, the seven class one railroads (all of the big ones) used 4.1 billion gallons of fuel to move 1,770 billion ton-miles of freight, which works out to 435.9 ton-miles per gallon. That is over 100 times more per gallon than a truck!
My guess is that we’ll see a lot more freight moving by rail in the future.
Wednesday, August 20, 2008
I planted a stand of switchgrass in 1988 on a CRP farm that I still own. We’ve got a wonderful picture of one of my sons, James, sitting on my shoulders in that field with the heads of the switchgrass up to my shoulders. That stand of switchgrass is still going strong, constantly reseeding itself without any involvement on my part.
Tuesday, August 19, 2008
An early study by Handmade showed that over 4,000 artisans made their living in the region, globally contributing $122 million to the regional economy. With an average income of $32,000 per year, their earnings were slightly higher than that of a factory worker at $29,800. The study also showed that about 67% of all craft sales were made to tourists.
The Handmade organization wrote the book, promoted the region and today all of Western NC is better because of their efforts. Today that region generates more than $500 million from their efforts, new entrepreneurial enterprises have been started and numerous jobs have resulted.
The mission of Handmade continues, with an emphasis upon:
Place-based—assets tied to the region so that they can’t be moved;
Diversified—expanding many sectors rather than only one;
Regional—small towns are better working together rather than fighting each other;
Entrepreneurial—virtually all of the businesses impacted are owned by entrepreneurs;
Collaborative—over 45 partnerships with other organizations have resulted;
Inclusive—over 3,000 citizens have been involved in planning an execution.
My wife and I had a wonderful time touring the Handmade in America region with their book as a guide. We had a great time. I hope that you get a chance to visit the region yourself.
Monday, August 18, 2008
I just wish that I could understand even one word in it!
Friday, August 15, 2008
I spoke with Don Macke and Craig Schroeder about the program this past week. Don told me, “Our focus is on how to get the youth in a town engaged and attracted. We’re focusing upon leadership, mentoring and also entrepreneurism. We’ve seen some towns that are doing pieces of this but none that has pulled all of them together. We hope that communities will look upon their youth as a backbone strategy for their town’s future.”
Thursday, August 14, 2008
Crabtree, who grew up on his family’s ranch in Kingston, first started his business in borrowed kitchens in the area until he had accumulated $10,000 to buy his own utensils. Those funds came from showing registered black angus cows because, as he said, “I never got an allowance. Any money I wanted I had to work for.”
He recently introduced a Brew and Wine Series of chocolates (I’m not sure how he does this at this age?) and has several patents pending on new products he intends to introduce. One of those patents is for a chocolate melting machine that he designed with his brother, a West Point engineering graduate.
This fall Peter is headed to Seattle University, not intending to take on any student debt. Care to guess what he is studying? Don’t you just love these Millennial Entrepreneur stories that I’m collecting? What are you doing to encourage entrepreneurs in your hometown? Get on the bandwagon, now!
Wednesday, August 13, 2008
Tuesday, August 12, 2008
Monday, August 11, 2008
Friday, August 08, 2008
Two years ago Mississippi State University (MSU) set up a Community Action Team, headed by Virgil Culver, to utilize the expertise and resources of MSU’s faculty and students in concert with local citizens to address the needs of the many MS communities. One of their main programs is First Impressions, a program designed to provide communities with an unbiased summary of its strengths and weaknesses from the perspective of a first-time visitor.
Virgil told me, “It is a program that ties together our roots in extension with MSU. Andy Lewis from Wisconsin first developed the idea and it is now being done in states like OH, KS, WV and others.”
First Impressions descends upon a town unannounced with six or eight people. After doing a thorough study, Virgil told me, “We give them a full report and do a community wide presentation. We hope to get some issues on the table and start to work cooperatively on some of them.
The Community Action Team has completed over 50 studies in the past two years and has another ten in the pipeline to do.
Do you know what the first impression is of new people to your town?
Thursday, August 07, 2008
Wednesday, August 06, 2008
Tuesday, August 05, 2008
But, there are compelling reasons why it sometimes makes sense to build a spec building, especially when the economy is expanding and there is a shortage of existing buildings. We’ve found that about 80% of companies looking to expand would prefer an existing building that they can move into quickly and several towns have used spec buildings as a lure to bring in a new manufacturing plant. That’s our goal with our newest spec building that I’ll tell you about tomorrow.
Today, I want to tell you about our first five spec buildings, all done in the 90s and all in the state of IL. Each was the same design (40,000 sf) and done in conjunction with the local community having buy-in on the building and its promotion. We wanted them with “skin in the game” if we were going to risk our capital or as I told them, “If I’ve got a prospect in town on a Saturday afternoon, I don’t want the mayor to say ‘Jack who?’”
Of the five, four have been virtually continuously occupied since they were completed. The exception was one that we completed at a small airport shortly before 9/11. Talk about bad timing!
The Greenville, IL spec building was occupied by a local manufacturer for a number of years until they added onto their existing plant, while we were continuously promoting it to new manufacturers. On Thursday we closed with El Milagro, which will expand the building into their main corn receiving and processing facility for their Chicago tortilla plant.
El Milagro was started by Raul Lopez in 1950 after he immigrated to the USA from his native Mexico in 1942. Orphaned at eleven, he lived with his uncle in Mexico City but dreamed of being a bullfighter, which forever earned him the nickname of “El Torero”. He began work as a laborer on the Illinois Central RR, starting El Milagro as a part time endeavor. Only when the business achieved a size that could support his growing family of 12 did he quit the railroad to run the business full-time. Today, seven of his children are involved in day to day operations of the rapidly expanding business.
And, we’re thrilled that they bought our spec building, creating dozens of jobs and offering an alternative, premium market for area corn farmers in the Greenville market. That’s why we built it in the first place.
You never know where these job creators are going to come from. Or what they are going to produce!
Monday, August 04, 2008
Frank recently sent me a study that American Trails Training Partnership did in MN on the impact that nice trails can have upon a community. The study looks at the impact of the Root River Trail in SE MN upon the town of Lanesboro (population 788) stating “Post-trail Lanesboro boasts 12 B&Bs (with year-long waiting lists), 8 restaurants, an art gallery, a museum and a thriving community theater.”
The study cited the example of the small “mom and pop” bike shop in Lanesboro which sold 60 tandem bicycles in a single year, more than Minneapolis’ largest multi-store chain sold in the same year. It’s an example of people out having a good time on the trail, making an impulse purchase in a small town.
MN boasts over 1.5 million cyclists, inline skaters and walkers that use its many trails. These people spend money and even fall in love with a region, sometimes moving because of quality of life attributes like trails and other amenities. In the case of Lanesboro that means more than $5,000,000 in added economic benefit. Not bad for a town of 788!
Friday, August 01, 2008
Today’s high gas prices have turned that equation on its ear and the worst collapses in housing prices are occurring in the further out suburbs of major cities, especially in CA, AZ, NV and FL. Those towns were dependent upon developing as a bedroom community, a long term recipe for disaster in all of our research. That’s why our research for BoomtownUSA was not centered on the suburbs but rather upon stand-alone communities that were creating new jobs and opportunities for their citizens. And, it is why we continue to see job creation and economic development activities as so critical for long term success in any town.
John Burns puts out a great weekly ezine on housing markets around the country. He tracks job growth, housing starts, housing affordability and other key statistics from around the country. This past week’s ezine showed that the concerns about job creation are largely confined to the states that had the greatest run-up in housing prices and ultimately also the biggest collapse. The states of CA, AZ, NV and FL have collectively lost almost 200,000 jobs in the past year. Other states like DE, MI, MO (St. Louis only), NJ, OH, RI, and WI have also seen a loss in jobs.
But surprise! If you total up those states, you’ll only get to eleven, which means that there are 39 other states that have grown their jobs in the past year.
All of the data shows that the housing crisis that has gripped the country for past year is beginning to bottom. It will be a couple of years before things return to normal, but the continuing massive declines in both sales and prices has slowed and is stabilizing. Granted, it will still take a couple of years to work off the huge inventory of unsold homes, but that is the normal consequence of an asset based bubble popping. From there is will probably take five to nine years for prices to return to levels seen in 2007, but they will also eventually come back as inventory is reduced and memories of the collapse fade.
Bottom line for me is long commutes are going to die, towns that create their own jobs are the long term winners, job growth isn’t as bad as the media would have us believe and the housing crisis will eventually turn around. Have a great weekend!