Made My Day

“It was a pleasure to have you speak to our community leaders and since that time Grant County has continued to follow the guidelines you presented. Now we are being rewarded with extraordinary economic growth.” Terry Brewer, head of the Grant County, WA Economic Development Council wrote to me recently.

I was in Moses Lake, WA (population 14,593) in June, 2004 touring the town and doing a talk to their ED group. I was honored to receive to be named an honorary citizen and to receive a key to the city, the only town out of the several hundred I’ve visited to do so. During my talk I told them of the potential I saw for them to recruit companies from booming but congested Seattle because of a number of natural resources that they possessed including low power costs, ample land, lake and water, airfield, etc. Little did I know how quickly they would leverage those assets into billion dollar success.

Four Seattle based companies (Microsoft, Yahoo!, Intuit and Ask.com) have data centers under construction in Moses Lake, investing a collective $1.6 billion! At least 750 new direct jobs will be created and estimates are that an additional 2,000 jobs will be indirectly created from these new facilities.

What resources do you have that you could leverage as Moses Lake has?

Local Food Guide

One of the top ten trends of 2007 that I identified earlier this year is the idea of local food. I wrote, “The spinach scare followed by the green onion debacle at Taco Bell’s in 2006 is causing people to reevaluate their food sources. Local production is going to be increasingly prized.”

When I was in Brevard, NC I picked up Local Food Guide: Fresh Foods from the Farms of the Southern Appalachians. The publication is an 86 page description and listing of hundreds of different farms, wineries, farmers’ markets, roadside stands and local restaurants in western NC. It is published by the Appalachian Sustainable Agricultural Program, a 501(c) non-profit organization that supports farmers and local communities by helping to develop local food production, “Local Food: Thousands of miles fresher!”

This past Saturday the Artisan Bread Bakers’ Festival was held in Asheville, attended by over 1,000 bread lovers. Twenty different artisan bakers from across NC came to show off their bread making skills.

Both the local food guide and a product based festival are projects that other communities could copy from NC. They not only help local producers but also help bring in tourist dollars into the local economy.

Brevard's Downtown

When Mark Burrows moved to Brevard in the 90s about 1/3 of the storefronts in the downtown were empty. When I made my tour I didn’t see one that was empty. And, rather than seeing deteriorating buildings, saw many that had been redone and new ones being built. New condos were also recently built a block from the downtown. The downtown was hopping!

On my walk through the downtown I met some interesting, engaged retailers who were taking a local, focused approach to growing their businesses. We visited an art coop studio with two dozen local members, an old upstairs theater converted into movable offices and studios and a grown up kid who still plays with toys.

John Taylor greeted me in his propeller-hat. His O. P. Taylor’s toy store has grown into several neighboring storefronts. He bills his store as “the coolest toy store on the planet.” The store was teaming with both kids and adults playing with toys and perusing the merchandise.

I asked John about the internet’s impact upon his business. “We first got on the internet in 1990, when nobody knew what it was. At one time the internet accounted for 35% of our business, but it has backed off to 20% today just because of all the competition there.”

I love meeting people like John in my tours around the country. They make me feel like a kid again.

Tapping The Second Career Overachievers

Brevard, NC has a median age of 44.6 years compared to the national average of 35.3 years. That raised a red flag for me as I reviewed their data prior to my tour and talk. However, my initial concern quickly subsided when I saw that in the case of Brevard it was a major asset rather than a case of a town “aging in place.”

Mark Burrows quickly put my fears to rest, “We are blessed to have a number of very wealthy retirees choosing to move here. Some are very talented and wanting to give back. We’ve tried to tap into their talents.”

In 2004, Burrows set up the Retiree Resource Network to utilize a group of 60 or so retirees with existing and new businesses. One of the early volunteers, Bill Layton, who had worked for Holiday Inn, KFC and Proctor & Gamble, today coordinates the activities of the Network.

Layton told me, “We have 15 retired CEOs of Fortune 500 companies who have retired here. We’ve got a wonderful mix of business experience to call upon. My youngest volunteer is in his 40s and my oldest is an 84 year old former group president for Black & Decker. He has the energy of the 40 year old.”

Layton has been taking the example of the Retiree Resource Network to the National Active Retirement Association. With retirees retiring younger and often with more of their life in front of them than in the rear view mirror, programs like this make a lot of sense for other communities with a large retiree base. I hope that others copy.

Beautiful Brevard

“We really took a couple of major body blows in 2002, when we lost 2,200 jobs and our unemployment rate shot up to 15%,” Mark Burrows, head of the Planning and Economic Development of the Transylvania County, NC, told me as we started our tour of Brevard, NC (population 6,789). Brevard is the county seat and largest town in the county of 29,626. Transylvania means “across the woods” in Latin.

They lost a X-ray film plant (600 employees) that DuPont had started in the 50s, a high-end paper mill (1,200 employees) and a textile mill (300 employees) during that time. All were the higher paying, but sometimes lower skilled or very specialized skill set that is not easily transferable to other industries. The old DuPont plant almost was put back into production but a political glitch killed it. Only the textile mill has been able to be converted into an alternative use, a packaging plant, which has invested $20 million into new equipment and is on track to hire over 100 people.

The workers who lost their jobs (most in their 50s and 60s) would obviously like to have jobs similar to their old ones and are pushing for large scale industrial projects, in a way, hoping to reinvent the past. It isn’t going to happen! Instead the county is doing the right things to reinvent themselves as a community and as a job generator.

I believe that it is futile for a place like Brevard, NC to even try to bring in large scale industrial projects simply because they aren’t out there. As I’ve mentioned in the past, there are only 200 projects done in the USA every year with over 200 employees. The rest are smaller, more focused factory projects and are the wave of the future. In addition Transylvania County doesn’t lend itself to large scale industrial plants because of its topography in the Smokey Mountains (the eastern continental divide is only 9 miles away) and as a result, it has a very high cost of developable land. They’ve only got one nine acre site shovel ready for an industrial project.

Mark told me, “Almost half, 46%, of the county is owned by the federal or state government.” While having such a high percentage of your county in government land can be negative because of the lost property tax revenue, having so much land in forests and parkland is growing in importance with a growing portion of our society who are making decisions on where they want to live because of these natural settings. More on that tomorrow.

The county is a jewel with its topography, moderate climate, downtown, Brevard College, local hospital, growing arts focus and world renowned Brevard Music Center. The county also boosts 250 different waterfalls, more than any other county and some states in the entire USA.

Burrows has had some success in bringing in smaller, more high tech companies to the community. They don’t require as large a footprint for their facilities and hire people with more skills (and at a higher pay). His approach is on the cutting edge of what I see in the area of industrial and economic development.

Brevard is a jewel, a jewel that is changing before you eyes, in a positive way.

Exports from ND

One of my favorite columnists is Rich Karlgaard, who is the publisher of Forbes. He wrote the great book, Life 2.0: How People Across America are Transforming Their Lives by Finding the Where of the Their Happiness. Rich used some of our research data from BoomtownUSA in his book.

He also does a great daily blog on his travels around the USA and world. Today he blogged on getting back to his hometown of Bismarck, ND to address the State Trade Office adding this footnote, “Little North Dakota, with 630,000 people, exported $3 billion of goods and services last year. Half of the exports were manufactured goods, up 30% from 2005. According to Lou Dobbs, success like this isn't supposed to be happening!”

Someone needs to tell Lou Dobbs! He is the worst demigod on trade that I’ve seen.

Shortage of Workers

A shortage of workers was one of the trends that we identified in our annual top 10 trends for the agurbs in 2007. In January I wrote, “Labor Shortage—Quickly developing into a major impediment in many rural towns. Some are starting to tap into their “brain banks” of former residents to solve.”

In the past week, I’ve had two different economic developers from two different parts of the country email me, looking for help on trying to find workers and residents for their booming agurbs®. A seminar I attended two weeks ago also stressed the future problem that much of the USA will face in the near future on this shortage of highly skilled workers.

Put it on your strategic planning agenda. This shortage of skilled workers is growing in importance and with the retiring baby boomers will only get worse.

Reuniting Citizens of the Year

I’ve spoken at a number of annual meetings where one citizen is honored as the Citizen of the Year. It is a great program to recognize those who are making a difference.

In Mooresville they recently brought together all of their past winners for a dinner, having each reminisce about the changes that they’ve seen take place in the community. They filmed the entire dinner, hoping to use it at a future Chamber event.

Wouldn’t this help you develop a wonderful archive for your community? Wouldn’t it also be a wonderful project for a local film class?

Local Entrepreneurial Publishers

When I’m in a town, I’ll sometimes find a very unique local publication other than the local newspaper. In Mooresville, IN I found three.

The Town Planner is a four color calendar for the community and chamber with ads and coupons for local businesses. The Morgan County Business Leader is a monthly business journal, highlighting local businesses. And, the Mooresville Magazine is a glossy four color quarterly magazine on the town.

Ryan Goodwin is the founder and publisher of Hometown Publishing which publishes the Mooresville Magazine. He started the business in 2005 and has similar publications in two other Indiana communities of Avon and Plainfield.

Ryan is only 23 years of age but this is not his first start-up. His first was a decorative metal panel business, Goodwin Industries, which he started at age 15. He is on the chamber board of directors, is a volunteer policeman and is running for the city council. He’s got a lot of energy!

Ryan is one of those young Millennium Generation entrepreneurs who are going to transform the USA into an even more entrepreneurial country. He is engaged, passionate, caring and VERY entrepreneurial.

The towns that can attract and nurture the Ryan Goodwin’s of their towns are going to better for it.

Change is Coming

“You are unlike most of the towns that I talk in. You are going to be going through a tremendous growth spurt and have to figure out for yourself what you want to be.” I was in Mooresville, IN (population 9,273) at their annual Chamber of Commerce Banquet doing my Boomtown talk.

The statistics on Mooresville and Morgan County (population 69,778) were outstanding. They had good growth in population, a population 10% below the national average, great educational levels, excellent income stats and poverty levels half of the national average. The only statistic that concerned me, as I studied them, was that 60% of their residents worked somewhere else.

During my tour of the town, I learned of several major projects that are going to transform Mooresville and the county. New I-69 from Detroit to Houston will cut diagonally across the SE portion of the county. A new outer interstate loop around Indianapolis would hook up with I-69 cutting drive time to Honda’s new Greensburg, IN plant from 1 ½ hours to about 30 minutes. A group out of Carmel, IN has purchased 2,000 acres of land for a 1,300 home high end ($400,000 to $6 million range) development and an Indianapolis industrial developer is planning a 480 acre industrial park NE of Mooresville.

Mooresville is midway between Indianapolis and Bloomington which results in a lot of life science couples working at companies like Eli Lilly or Cook Group or teaching at one of the many universities in central Indiana and explains why the community has such a large percentage of workers who are commuting out. The new developments that are planned will only increase that percentage, unless the community determines their own direction.

From what I saw, they’ve got some tremendous resources. With a bit of planning, strategic direction and cooperation they could establish themselves as a premier place to live and work, hopefully creating some very unique opportunities for their young people.

Local Ingenuity

“The coal mine was in operation for about 10 years but the company was sold and the new company shut the mine down within six months. This site sat completely empty for the next ten years until Roger and I decided to buy it,” Kenny Lasater was telling me about how he and fellow farmer Roger Swartz bought the 240 acre Consul Coal Mine site in McLeansboro, IL in 1999.

Since then they’ve converted the old coal bins into over 2 million bushels of grain storage, turned the offices and maintenance facility into a coop farm center, built a 125 ton dry fertilizer building, rebuilt 3 miles of rail and turned an unproductive asset into a bustling agri-business hub. Future plans are to entice in an ethanol and biodiesel facility.

Local entrepreneurs, reinvesting in their hometown and turning a decaying asset back into a productive one….It’s happening all over the USA.

Worldwide Retailer from Rural North Dakota

One of my favorite examples of the changes taking place in business, driven by the internet, is Dakota Cabin Quilts. DCQ is located in Hettinger, ND (population 1,307), the largest town for 40 miles. It is remote!

Dakota Cabin Quilts was started by a local physician, Dr. Laura Walker, and her husband Wesley, because Dr. Laura couldn’t find quilting supplies near Hettinger. She built her business with an internet model and sells all over the USA and world. When I was last in Hettinger, they had eight employees.

She and her husband write a wonderful weekly e-zine newsletter about DCQ and their family. Even if you aren’t a quilter, and I’m not, you should subscribe to this newsletter. Here is today’s newsletter from Dr. Laura about starting the business.

After Wesley's funny & honest newsletter last weekend, I feel the need to confess. He's absolutely right. I sheepishly read "Help, I Married a Quilter", and recognized myself, my quilting friends, and many of our quilting customers in the book.

I paused, and looked back upon my personal quilt making history, and the history of our business. I clearly remember the time when I was inspired to start a little home-based business (in our basement), selling fabric & quilting supplies. My motivation: I wanted to buy my stash "for wholesale cost". Of course, I didn't tell my husband that, but he soon figured it out.

I told him that I might need a little help with my little business venture. He cautiously asked, "How much help? How many hours a week do you think I would have to help?" I looked him straight in the eye, answering, "Oh, probably no more than 3 hours a week."

Well, let's just say that it was never "just three hours". From the beginning, he worked side by side with me, and when we moved out of the basement, and bought our building, he became the store manager. He works many more hours at the store than I do, usually 6 long days every week.

It hasn't been easy. We've fired each other a number of times. But, since we're in this together, we forgive & forget, and smooth out the rough spots. In the beginning, Phyllis honestly commented, "I like working with Laura. I like working with Wesley. But, I don't like working with Laura & Wesley". She was right... sometimes we work great together. Sometimes, we don't. (She says we're better than we used to be, but I know we have "our days".)

Along the way, Wesley has learned a lot about the art of quilting, and about the retail side of things. He's a tough negotiator with the fabric companies, and has friends in customer service at every office. He has a reputation with the quilters in the area, "If you really need something, and all the shops say they can't get it, call Wes. He might be able to find it." Sometimes, this backfires, as quilters call looking for the impossible.

I had a moment of pride when we were unpacking at a quilt retreat about a year ago. A couple of older quilters, with years of experience dealing with female clerks in fabric stores, were watching us unpack our merchandise. I happened to overhear their conversation.

"A man? In a quilt shop?"
Her friend replied, "Yes, and he's very good. THEY SAY, he's much better with color than SHE is!"
"Really!", the first exclaimed.

Although hesitant at first, the quilter asked Wesley for help, and he rose to the occasion: knowledgeable, friendly, and helpful. By the end of the day, they were fast friends.

Come Back Home

Jerry Sloan, head coach of the Utah Jazz, was a basketball star at McLeansboro High School, Evansville, IN University and was the first draft choice ever of the Chicago Bulls. Even though he achieved great success at numerous levels in basketball, he and his wife Bobbye, also a McLeansboro native, never forgot their hometown of 2,945 in southern Illinois.

I was in McLeansboro doing a tour and talk. One project, Kids Kingdom Playground, really caught my eye during my tour. Chris Howton who was one of my tour guides told me, “That project happened because of the Jerry & Bobbye Sloan Foundation. They provided the funds for the equipment and 8,600 people worked over a three day period to build it last year
Isn’t it nice to see what people working together are able to accomplish?

Reaching Across State Lines

Tom Christoffel does a wonderful compilation of weekly articles and news about regional initiatives around the USA. If you aren’t receiving it, you should. Email him at tom.christoffel@gmail.com.

This week one article about the new Toyota plant in Tupelo, MS from the Christian Science Monitor really struck me as what other states should be doing. Here is the article on what is possible when working together regionally.

Alabama Gov. Bob Riley and Mississippi Gov. Haley Barbour both understand how the game has been played. In the past, they've battled each other tooth and nail, using Fort Knox-size economic incentives to attract truck manufacturing and Internet server farms in a bid to help their own states climb out of America's economic basement.

Today, former rivals Riley and Barbour, both Republicans, as well as Florida Gov. Charlie Crist (R), are working together.

Their coalition, cobbled together by Governor Riley, hopes to lure a $2.9 billion German steel mill to Mobile, Ala. The plant, shopped around by German company ThyssenKrupp, would employ 2, 700 people. Mississippi and Florida are helping Alabama because 30 percent of the jobs would go to Mississippians and Floridians.

Although the alliance serves a self-interest for the states involved, some experts predict it is part of a gradual tilt toward broader economic regionalism, especially in the South. Such partnerships could relax states' competition for corporate business, increase cooperation, and ease what some critics see as a lack of confidence that causes Southern states to overcompensate to win industry favor.

[Southern states] "have built incentive packages out the wazoo ... but they're insufficient, " says Pete Whalley, an economic development expert at the University Research Center in Jackson, Miss. "Market forces don't care about state lines, so we don't need to think about boundaries anymore."

Economic regionalism was first touted in 1988 by then-Arkansas Gov. Bill Clinton and the governors of Louisiana and Mississippi, who shook hands on a barge in the middle of the Mississippi River to start the Delta Regional Authority. This multistate approach has slowly been taking hold in other parts of Dixie.

Interesting Encounters

My three talks to the Capitol Bancorp directors in Northern CA, Southern CA and AZ put me in touch with some very interesting people with a great passion for what they are doing. They are all actively engaged in bettering their communities and making them better places in which to live. I’ve told you about several of them in the past week, but this blog is the additional ones who didn’t make prior ones.

Nancy Stetler came up to me after my talk in Napa, telling me, “I’m originally from the small town of Ripon, California which is the ‘ammend’ capital.”

I didn’t understand what an ammend was, so she told me, “Everywhere else they call them almonds, but we’ve always called them ammends.”

I met Craig Makela at my Southern CA talk, learning that he was in the olive business. He told me, “My great-great grandfather was on his way from France to San Francisco during the California Gold Rush. The ship he was on stopped in Santa Barbara where he fell in love and decided not to get back on the ship, instead marrying and settling down. He brought the first grape vines and olive trees to California with him. We still have some of that original stock.”

He told me that while his Santa Barbara Olive Company is the second largest in the USA, there are over 300 olive companies in the country, up from only about 20 a couple of decades ago when he first stated production.

Andy Clark, President of the Bank of Santa Barbara, related to me his experiences of working in Seattle before moving back home to Santa Barbara to start-up his own bank. I had used the story of Microsoft’s starting in Albuquerque, NM in the mid 70s but moving to Seattle when they couldn’t get a $35,000 loan.

Clark told me, “Bill Gate’s mother Mary was on the board of Pacific National Bank of Washington. She called me up one day and told me that her son had moved his business to Seattle and that we might be able to provide him some services. I went to visit Bill Gates and his company was just like the photo you showed. No one had offices and they were crammed into their space. I asked him what they did and he told me, ‘We write software for mini-computers. One day I think that every business in America is going to have one.’”

Clark went on, “I’m not sure that I believed him at the time and he didn’t need anything so we didn’t do any business with him, but that meeting has stuck in my mind since then.”

Clark also related the story of getting a call to go visit a coffee shop that was needing funding, “We went down to their store and I thought that the coffee tasted burnt and I didn’t see anyway that they were going to be able to get people to pay the $3/cup that they were charging. As you’ve probably guessed, I turned down Howard Schultz of Starbucks Coffee for a loan.”

There are some wonderful stories that I find all over this great country of ours. I’m glad that I am so privileged to be able to hear them from some wonderful people. Ain’t life grand?

Midwest Wake-up Call

One of the best list serve emails is one put out by Chris Gibbons of Littleton, CO. Chris was the originator and implementer of the idea of Economic Gardening, developing local entrepreneurs. He has great success in Littleton, I’ve attended one of his annual gatherings and followed the success of others in the field.

Chris was recently in Illinois and wrote the following profound piece about his observations. In particular, his advice on the “creation of the pie” vs. “how to divide the pie” is a wake-up call.

I had the opportunity to meet with folks at the Illinois Rural Economic Development conference last week. There were 300 some people from small communities all over the state. Like much of the Midwest, Illinois has been losing manufacturing jobs to overseas countries for a number of years and the pool of new plant expansions to chase is drying up

It’s just an offhand observation of mine, but it seems to me that the entrepreneurial spirit through the Manufacturing Belt has withered. Every time I am in the Midwest, I am always struck by the lack of conversation and even more important, the lack of infrastructure for entrepreneurial activity. My own home state of Colorado is relatively small in population (25th in the nation) and Denver has often been called the Capital of the Empty Quarter…..but we consistently rank high in entrepreneurial activity, venture capital, tech jobs and similar categories. I just never get that feel of energy and ideas and possibilities when I am in the Midwest.

In some respects, I think our friends may be suffering from their own success. Many of the great 19th and 20th century companies like John Deere, Kellogg and General Mills, Ford and GM, Quaker Oats, McCormick Harvester and Caterpillar (which has its corporate headquarters in Peoria where we met) were founded in the Midwest. All that burst of entrepreneurial activity created hundreds of thousands of jobs… but somewhere along the line the focus shifted from “creation of the pie” to fighting over “how the pie is going to be divided.”

It seems to me that a great proportion of the population quit worrying about wealth creation and instead engaged in management/union disputes over how the wealth was going to be distributed. The idea that wealth creation should be broadly distributed through the population seems to have dwindled away… and so as manufacturing plants relocate to other parts of the world, the local communities feel lost and betrayed and hopeless.

The good news is that University of Illinois Extension and Western Illinois University have taken the lead to rekindle the entrepreneurial spirit. This is not an easy road to travel however. The hardest part is changing mind-set on how a community is going to save itself. I’ve often thought that the analogy for these communities is the Alamo. That is, we have to come to terms with the cold fact that no one is coming to save us. If we are going to survive, we are going to have to save ourselves.

“Ourselves alone,” as the Irish say.

It is a scary proposition to think that it will be “ourselves alone” after a century of depending upon a large corporation. Not only does the basic mind-set have to change but a whole new set of tools and concepts have to be learned before they can even be put to use. If the budget is allocated to brochure development and cold-calling travel and subsidies, it takes great faith to let loose of a known and leap toward an unknown.

But in Illinois and Iowa and Michigan and Indiana and Wisconsin and Minnesota I see the first shoots of a new spring coming back. At the state level, at the university level, at the local level there are a number of efforts under way to encourage entrepreneurial activity. We will know it has changed when the billboards coming into town change from “Please relocate your business here” to “Our hometown…full of vibrant, growing businesses.”

Economics of Wine Making

I was surprised to learn that prime vineyards sell for $300,000 to $500,000/acre in the Napa Valley. Those kind of numbers make our recent Midwest land prices of $5,000 and $6,000/acre sound like chump-change.

How could they possibly pay that amount for their land? I decided to try to figure it out. Here is my “back-of-the-envelop” calculation.

A typically vineyard will hold 450 grape vines and will yield 18 pounds of grapes/vine, or 8,000 pounds of grapes. When those 8,000 pounds are crushed, fermented and bottled it will yield about 2,700 bottles of wine. If you sell your wine for $10/bottle, you would gross $27,000/acre without taking out ANY expenses, not much of a return/acre on a $300,000 to $500,000/acre investment.

I’m not smart enough to figure out how to make money with those land costs, but I’m certain that there are much smarter people than I out there.

I Understand Lemonade Out of Lemons, But Mustard?

Driving through the Napa Valley during the winter, you quickly notice a yellow haze hanging just above the ground in between the ruler-straight grape vines. A closer examination revealed that it was mustard, used as a cover crop for the bare ground during the non-growing season. But why mustard?

I soon learned that Napa Valley has a two month long celebration of this mustard from January 27th to March 31st, called appropriately the Napa Valley Mustard Festival. It now is in its fourteenth year.

The idea for it originated with the Yountville Chamber of Commerce, a small town six miles north of Napa, in 1993. Yountville was trying to find something to help promote business during the slow winter months. The Chamber President George Rothwell had originated Yountville’s Festival of Lights and understood how a good promotion could enliven a town. He focused upon the yellow flowered mustard that was used on some of the farms in the valley for a cover crop, turning a waste crop into a major promotion.

What started as a simple promotion has grown into a series of events that stretch throughout the valley including: Fine Art, Dinners, Wine Tastings, Mustard Music, Photography Contest and of course Mustard Tastings from Around the World. The local farmers trim their mustard so that it is blooming during the entire festival.

The mustard in the fields is never harvested but that doesn’t hinder using an optical delight into a positive draw. What do you have in your town or region that you could leverage to your benefit?
www.mustardfestival.org

Different Communities Even in Large Cities

When I first interviewed Joe Reid last year one of the surprises he related to me is, “We have two banks within a mile and half of each other in Phoenix. They are that close together but in completely different markets.” It seemed incredible to me at the time but I decided to see for myself when I was in Phoenix delivering my regional talk on entrepreneurism to several hundred bank employees, directors and their customers.

Capitol has nine banks in Arizona with six in the Phoenix area. It also has one in Yuma on the CA border and two in Tucson. Sunrise Bank of Arizona is located at 4350 E. Camelback and Camelback Community Bank at 2777 E. Camelback. As I was driving from Sunrise Bank to the airport on 44th Street I was shocked to find a third Capitol Bank only four miles south.

Asian Bank of Arizona was started in June of last year, catering specifically to the booming Asian community in the Phoenix area. The bank is set in an Asian themed shopping center, sitting prominently on the main corner. I turned my car around and went back to investigate.

The bank’s tagline is “We speak your language!” The brochures in their lobby were in English and several other Asian languages. I picked up an Arizona Asian-Pacific Yellow Pages and several Asian language newspapers to study on the plane back home.

The phone book’s information section had important phone numbers in English, Cambodian, Chinese, Filipino, Hindi Indian, Japanese, Korean, Laotian, Pakistani, Thai and Vietnamese. Only the Asian Bank of Arizona and Wells Fargo (but with an 800 number) had display ads in the phone book. Other banks like Bank of America advertised with an 800 number, not exactly a real local and friendly approach.

Only the Asian Bank of Arizona advertised in any of the Asian newspapers. They obviously are closely tied into the Asian market and view it as their unique niche.

The U. S. Census showed an estimate of 97,661 Asians in Maricopa County (Phoenix), the 25th highest concentrations in the USA.

It is a different niche, in a different neighborhood. And, I’m guessing that it will be one of Joe Reid’s most successful bank start-ups. The guy has this idea of community banking figured out.

Importance of Community Banks

Joe Reid is a different kind of banker. In fact I’ve never met another like him. I profiled him in my September 18, 2006 blog (available in our archives) when I first started studying Capitol Bancorp in detail. Capitol just opened their 51st stand-alone community bank last week in Palm Desert, CA. Each bank is locally run with a local governance board, management and shareholders.

Reid sees the need for community banks as critical to a community as he explained, “Access to capital is the key to U. S. growth but the power of credit is becoming more concentrated into fewer and fewer hands. The best example of this is Bank of America which has 9% of the country’s deposit base. A month ago they unleashed their lobbying efforts to strike down the federal decree that you can’t buy banks to go over a 10% level, although you can grow above the 10% level with organic growth.”

Reid went on to explain to the assembled directors of several of the banks, “This concentration of power has been bad for the development of small and new businesses. When the decision making is taken from the community small business suffers, according to an SBA study. The advantage that each of our banks has is that you are making the lending decisions locally and each of you have a stake in your town.”

Key Six in BoomtownUSA is To Maintain Local Control with the importance of local financial institutions being a critical part of that local control. Bankers talk about the 5 Cs of Lending of: cash flow, collateral, capital, conditions and character. The first four of those are fairly easy to measure and a banker in an ivory tower can quantify those items fairly easy.

But how do you quantify character? Character is often the critical element in the success or failure of a new business. And is why local community banks are so important.

I Love These Immigrants!

“I came here in 1970 from Mexico as a laborer. I only had a second grade education but I was willing to work hard. I made $1.50/hour pruning trees and doing landscape work. The big change here is how we’ve moved from prunes and walnuts to wine making. The work was much more seasonal then with those two crops than what it is today.” said Salvador Ramos, as he was telling me about how he got started in Napa, CA.

Today Salvador manages 400 acres of vines and is a director of Napa Community Bank. My guess is that his hard work and astute investing has made him far more wealthy than he ever dreamed of when he immigrated to the USA.

I asked him how he bought his first house which brought a smile to his face. “I was working on a farm and didn’t have enough money for a down payment. I convinced a neighboring farmer to let me prune his trees for a set contract amount, asking him not to pay me until I was done with the job. I worked weekends and nights to get that job done and was paid $5,200. We bought our first house for $43,000. Today I live on 15 acres up in the hills.”

Ramos’ daughter is an attorney and his son works in the real estate business, both successful in their own right.

When I asked him his opinion of globalization, he responded, “Competition worldwide has been good for us. We took the market away from Europe. This valley is small but we have built a huge industry.”

Immigrants like Salvador Ramos are one of the reasons why the USA has developed well beyond whatever Europe ever imagined. Keeping people like him immigrating into this country is critical to our future success.

When I say Napa Valley, What do you think of?

I was thrilled to be back in Napa, CA (population 73,085), which is located about an hour north of San Francisco. My wife and I had visited it several years ago and were enchanted by Napa and the surrounding area. I was there for another of my Capitol Bancorp talks. I’ll have more on this most innovative of community banks later this week.

Chuck Dickenson, a local attorney and director of Napa Community Bank, one of the Capitol Banks, was born and raised in Napa. He told me, “In the 1970s this community and entire valley made a huge leap when we went from prunes to vines. Robert Mondovi was the visionary who started the modern wine industry. What really started it going was when he went to Paris in 1976 and won the French Paris Tasting. My mother was on that trip and carried some of his wine over for him.”

“He owned the Charles Krug Winery with his brother but split with him and set up the Robert Mondovi Winery,” Dickenson went on. “He was in his 50s when he started this revolution. Today 40,000 out of 67,000 jobs in the county are related to that wine industry that he revolutionized.”

Anywhere that you go in the developed world, if you say Napa Valley, virtually everyone will associate it with premier wine production even though it wasn’t the first to produce wine nor is it the largest. But, they’ve done a tremendous job of developing a brand and promoting it around the world.

What is your brand? What are you doing to develop it?

Signs From the Road

In traveling around the world there are always signs that catch your fancy. Most are pretty easy to understand. Others require some explanation. Here are the ones that we found to be the best.

Both Betinha and my favorite was in a restroom in Cambodia. Neither of us could ever remember having tried this particular maneuver but can understand why it might be frowned upon.

We also had never seen a road sign quite like this one, also in Cambodia.

Perhaps the Arab world’s distaste for American culture is from Hollywood. This was the only TV show we saw promoted there.

Neighboring Qatar seemed to have a more serious problem, a shortage of sand. Who knew? Do you think we could get them to take sand for oil?

We were enchanted by New Zealand; from the time we exited the airport and saw this welcoming sign to their country.

But we didn’t spend much time in Kawakawa, which touted their world famous toilets as a main attraction.

I was glad that we took a back road that had about one car every half hour when we stumbled upon the world’s longest named town. Sorry but it takes three photos to properly capture this one.





We got to Taupo too late to partake in their version of golf at the local shrimp farm.

And, we found that there are always crabby folks everywhere.

Help from City Folk

Milparinka is over 600 miles as the crow flies NW of Sydney, Australia, in the Australian outback. Ruth Sandow moved there 27 years ago with her husband Jon. She was struck by the beauty of the old courthouse which had fallen into a state of disrepair with missing doors and windows and as Ruth said, “Every man and his dog had carved a message into the plaster walls; the Baltic pine floors were imprinted with hundreds of tiny nail-holes from the pegging of fox skins; and long-cold charcoals spewed from broken fireplaces.”

Twenty years ago Sandow formed a small community action group to restore the building. They since have restored another couple of buildings in the historical downtown and turned Milparinka into a bit of a tourist town. That long abandoned courthouse is now the Local History and Family History Centre with hopes of developing it into a mining heritage interpretive center.

The group has built a park of native trees and shrubs, a heritage walking trail and a memorial wall. They’ve won numerous awards for their work.

They also have used volunteers from Sydney and other Australian cities to help them in their efforts. Last year 15 volunteers traveled out to Milparinka to assist in the restoration efforts. Sandow says of their efforts, “They bring knowledge and experience that enables us to look at our operation from another perspective. In the past they’ve handled their situation with humor and the same fine-in-the-belly passion that drives those us who have been intimately involved with Milparinka’s restoration.”

Why couldn’t we do the same thing here in the USA? Imagine the impact they could have in each of our small towns. Just think of the number of aging baby boomers who are going to be retiring soon, looking for something meaningful to do with the rest of their lives. What if we tapped into them, just like Ruth Sandow did in Milparinka, Australia?

Rural Economic Growth Leaves the Cities Behind

Becky McCray who does a wonderful blog on rural issues posted yesterday on an article in the New Zealand Herald about rural economic growth outstripping urban growth.

Could that happen in the USA? What if we followed New Zealand’s lead in doing away with all subsidies? And, we ended up with a wonderfully more diversified agricultural and rural economy.

Trade Aid

I’ve often wondered if a better way to solve the problems of poverty in so many countries around the world is to turn more of them into entrepreneurs rather than giving them direct aid. Are they better off being given a fish each day or being taught how to fish?

One of the problems in many of these countries is that there is not a big enough market for many of the products that could be produced. I’ve often thought that we could bring the benefits of burgeoning world trade to more if we could help to develop more markets in the USA and other developed countries. We tried it at Agracel with some products from a women’s group in Bolivia over our eBay auction site, but without success.

We made a stop at a shop in Taupo, New Zealand called Trade Aid. They were selling various products, all from less developed countries. You could buy Hmong embroidery from Vietnam, small wooden chests inlaid with silver from India, sequined notebooks from Nepal and many other products from dozens of countries.

I learned that Trade Aid is a New Zealand organization that started 15 years ago, having grown to 35 stores scattered throughout the country. Sales last year were NZ$8.5 million (US$6 million). That is quite an impact for many villages in this world.