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.

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.

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.

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.

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.

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!

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.

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?

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.

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.

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.

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.

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!

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!

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!