Farm Bill Boondoggle

It baffles me that it appears the U. S. Congress is going to pass a subsidy laddaned new farm bill at a time when agriculture in general is the midst of an era of unprecedented prosperity. I’m going to do a series of blogs this week on my observations and research on the subject. In the spirit of full disclosure I receive crop subsidies and annual payments for walnut trees I planted in the 1980s and 1990s under the Conservation Reserve Program.

The graph at the right just amazes me. The Freedom to Farm Bill of 1996 was supposed to force American farmers to compete on the world stage, dramatically cutting subsidies. As you can see from the graphic, exactly the opposite has occurred. Government crop subsidies were two and a half time times as large in 2006 as they were in 1996.

The new farm bill currently being debated in Congress is projected to cost around $300 billion over the next five years. In my opinion it is obscene and creates non-economic distortions that are changing rural America for the worse in the long term.

More of my thoughts on this subject in the next couple of days.

Can Do, Wimbledon!

One of my favorite tours and talks over the past three years was in Wimbledon, ND (population 237). I played tennis in Wimbledon (the only place other than England that you can boost that) and still subscribe to their monthly newsletter. Mary Beth (Simenson) Olombel writes wonderfully newsy stories about the happenings in her small town.

Here is part of her editorial from this month’s edition.

There’s a spirit of optimism: The corps look good; prices are decent; gas prices at least haven’t shot up any higher. The local grocery store (a coop of
local members) is operating in the black; a new school year in the consolidated Barnes County North District is about to begin and new curricula emphasizing math and science skills will be in place. The prospect of new jobs in Valley City(manufacturing) and Spiritwood (ethanol plant) hints at survival and maybe even prosperity.

So Why have I climbed up on my soapbox again?

I want more.

We could be doing more to put Wimbledon on the map.

She went on

Towns the size of Wimbledon and smaller have created events that bring people (and money) to their communities:

Page—population 235: Over 100 participated in the annual 5K run in June.

Pekin—population 80: Their juried art show was established in 1994 and is the largest in ND.

Dazey—population 87: Dazey Days bring many to the town 14 miles east of Wimbledon for the buffalo barbeque, pie social, parade and races.

And while we’re planning a festival, let’s plant some more flowers.
Kensal—population 161—has 20 hanging flower baskets and new flower
gardens planted by volunteers this year.

I just love the spirit of places like Wimbledon, that refuse to give up and are looking for ways to make themselves better.

Sculptures on the Square

The Auburn Arts Commission aspires to showcase local artists of NE IN. Some of their activities include: Snowbound Writers’ Contest every January; the Auburn Jazz Fest; an outdoor jazz ensemble; children’s theater and other projects.

In 2007 the Arts Commission brought in a twenty piece exhibit of life-like bronze sculptures of J. Seward Johnson. The town was alive on a Tuesday afternoon with tourists walking from sculpture to sculpture and hopefully also shopping in the downtown stores.

The arts are becoming an increasingly important factor in branding a community. Auburn gets it!

The Internet of the 1920s

I didn’t realize how many companies were involved in the production of automobiles until I visited the Auburn Cord Duesenberg Museum in Auburn, IN (population 12,074) on my way to do some talks in Michigan. Auburn was a hotbed of luxury automobile manufacturing from 1900 until its closing in 1937.

Auburn was one of only 43 towns in Indiana that produced over 150 models of cars. In fact 12 different auto brands were made in Auburn in the early part of the 20th Century. Indianapolis has had 38 brands, including the American, Duesenberg, Hoosier Scout, Marmon, Stutz and others. South Bend made nine brands (Avanti, Erskine, Packard and Studebaker), Elkhart sixteen, Anderson nine and Richmond ten.

In those days, every young man with any mechanical aptitude dreamed of building a fast, cool car just as today many a young person dreams of developing the next Google.

One of those young men was E. L. Cord, a Missouri farm boy who worked as a car salesman in Chicago. The Auburn Automobile Company, which started out of a horse carriage business in 1900 had been bought by a group from Chicago that included William Wrigley. When the firm floundered the group approached Cord, who cut a sweet deal for himself….if he returned the money they had invested, the company would be his. Within a year, at the age of 31, E. L. Cord owned the Auburn Automobile Company outright and quickly turned it into a major auto phenomena with styling and marketing. His cars were sought by movie and sports stars and Cord’s photo graced the cover of Time magazine twice within a two year period.

Cord expanded his corporate reach into over sixty businesses including the production of airplanes, airlines and department stores. Overexpansion and the Great Depression eventually hobbled Cord and he was forced to sell out in 1937 to a group which quickly closed the company.

Today, luxury automobiles are still associated with Auburn, IN. Kruse International, started by Russell Kruse in 1952 and still run by his son and daughter-in-law annually sells over 13,000 classic cars each year during the Labor Day Weekend Festival held each year in Auburn.

Few of the early automobile manufacturers survived, but the clustering impact and its affect upon the economy in Indiana and other places still has an impact today.

Glass Half Empty? Or Half Full?

Twenty-five miles to the south of wonderful Frankenmuth, MI is Flint, MI. I drove through it because it has always intrigued me that the filmmaker Michael Moore grew up in Flint, sat on the city council and did his first movie, “Roger & Me” about his hometown. I thought that someone as passionate as Michael has surely returned, reinvested some of his multi-millions in the town and tried to make his hometown a better place in which to live.

In speaking with several people in Flint, I learned that once Moore hit the big-time, he never looked back and has not tried to help. In fact there is deep resentment that Moore’s first movie painted Flint in a horrible light, one that has been difficult for the town to overcome.

Today in Flint 20% of its houses sit vacant with 33% of the population living below the poverty level. The town could sure use some help, but appears to have been abandoned by former citizen Moore.

I love to find people like Wally Bronner who I blogged on yesterday, people who see the glass as half full and find ways to help their hometown with enthusiasm and love. I’m glad that I don’t have to deal much with the “half-empty” Michael Moores of this world.

World’s Largest Christmas Store

Wally Bronner was born and raised in Frankenmuth, MI. His father was a skilled mason and contractor who spoke German to his children at home. After high school Wally started a sign and display company that grew into doing outdoor Christmas decorations and eventually into a Christmas store on Main Street.

From that small store Bronner’s Christmas store has grown to over 300,000 square feet, the size of 5.5 football fields. In that building you will find over 50,000 trims and gifts and 250 full time employees. The business has grown into a wholesale operation to over 1,000 other Christmas shops, a catalog sent to over 5 million people and a rapidly growing internet operation.

It is a sight to see!

Branding at its Best!

“We have become one of the top three tourist attractions in the state. And, we are a great place to live, unless you are a chicken,” Gary Rupprecht, the Mayor of Frankenmuth, MI (population 4,838) told the Michigan Association of Mayors which was meeting in his hometown. I was there to speak to the group. Mayor Rupprecht was referring to the battle of the Bavarian Inn and Zehnder’s of Frankenmuth restaurants, which sit across the street from each other, both featuring chicken dinners.

Zehnder’s was ranked as the 43rd highest sales independent restaurant in the USA by Restaurants and Institutions in 2006 with $13 million in sales. But it serves the highest number of meals of any other restaurant with 948,675 meals served in 2006, quite a feat for a small town restaurant. People have got to really like your chicken!

The competition of those two restaurants and another local resident’s fascination with Christmas kept Frankenmuth “on the map” even when the town was by-passed by I-75. As Mayor Rupprecht said, “Wally Bronner became the king of billboards when the interstate put us 10 miles off the road.” I’ll have more on Wally in tomorrow’s blog.

Frankenmuth is one of those very, very unique towns that you’ll occasionally find as you travel around the country. It has leveraged what other towns would consider a rather ordinary German heritage into the recreation of a German village, enhancing the experience with numerous festivals, a river walk, 830 hotel rooms and wonderful shopping. As a result 2 million people visit the town on an annual basis.

And, unlike many other tourist towns, Frankenmuth also has a very strong commercial and industrial base. Frankenmuth Mutual Insurance with 600 employees, Star of the West Milling (17th largest miller in the USA), and other employers match 4,800 jobs with the population of 4,838, another very unique statistic! And, 8 of the top 10 employers are locally owned!

In 2004, the town did a $15 million renovation of its downtown, playing upon the German-Bavarian theme. Irrigated flower pots, fountains, complete sound system and other amenities resulted. The flowers are incredible and it didn’t surprise me when Sheila Stamiris, head of the downtown development authority told me, “We employ a full time horticulturist and a crew of five just to take care of our flowers.”

All of the stats on Frankenmuth impressed me, with the exception of their average age of 47.6 years compared to a national average of 35.3 years. Frankenmuth has to figure out a way to encourage young people to move there.

Great town…great brand….and a Must See town!

Christmas in Ida, MI

What began 25 years ago as a small town’s first attempt at doing something special at Christmas, has today grown into a mega production. The first Christmas in Ida Festival in 1982 had three floats, a small craft show and a children’s lunch with Santa. The agricultural community got involved, initiating a parade of lights with all sorts of farm tractors, combines, wagons and other farm implements decorated in lights for a nighttime parade.

Today Ida’s (population 4,949) has grown to include craft shows, ice and wood sculpturing, ethnic foods, international entertainment, Santa’s Zoo, ice skating, Christmas fireworks and of course, the Children’s Lunch with Santa. Even Disney has gotten involved sending in some of their recording artists and assisting in the parade.

Last year’s event attracted over 30,000 visitors and this year’s anniversary edition is expected to attract even more on the first weekend of December.

Sometimes all it takes is someone to try something different in a town. Then watch it grow!

Quaint Town on Great Lake…..River Running Through

Paul Livernois of Michigan Gas Utilities described his hometown of Monroe, MI (population 22,076) as, “A quaint town that sits on a Great Lake, not just a good lake. And, it has a beautiful river running right through the middle of it.” I couldn’t wait to visit and wasn’t disappointed when I did.

The town, which lies midway between Detroit and Toledo, OH, sits on the shores of Lake Erie. The town’s early economy was driven by paper mills, with five big ones dominating the industrial scene. Paul continued, “The last one closed in the early 1990s but Monroe has converted most of those old mills into new housing areas. We’ve had the largest number of successful brownfield sites in the state.”

Two farm boys, Edwin Shoemaker and Edward Knabusch, started La-Z-Boy in Monroe, where it is still headquartered. And, three McIntyre brothers started a tire pump manufacturer that evolved into Monroe Shock Absorbers, which is still headquartered in Monroe even after being sold to Tenneco.

Many automotive parts and related industries have located in Monroe with two Ford part’s plants being the largest. The establishing of the Monroe County Industrial Development Corporation, a private, non-profit in 1982 has continued the manufacturing tradition in Monroe. During those 25 years, Bill Morris and his team have helped to create over 11,000 jobs with nearly $3 billion of investment. The county ranks as the 85th best in the country (out of 3,141) with an average of $64,806 in average wage per manufacturing job, representing 18.95 of their workforce.

The power of local banks was reinforced to me with a program that Monroe Bank & Trust instituted over 20 years ago. ENLIST is a volunteer service organization that 82% of the bank’s 430 employees participate in. Over 200 organizations have benefited from the 120,000 man-hours contributed since inception. The bank really lives up to their motto of, “Community Service from Your Community Bank.”

….and, a river runs through it…..

Generation E

“We have a special curriculum in the high school on entrepreneurism. Right now we have about 150 students taking part,” Hillary Eley explained to me on my tour of Coldwater, MI. One of those students, Nate Johnson, was at my talk that night. Nate is entering college this fall, started his first business at the age of nine and projects a very entrepreneurial spirit.

Cheryl Peters and April Katz of the Generation E Institute which set up the entrepreneurship program were also at my talk. Cheryl explained to me, “We started this program three years ago, aiming it at high school students and those going for a GED. We’ve expanded it into the grade school and also begun a 7th grade camp this summer. Today, we are in 58 schools.”

Their program includes starting a business because as Cheryl said, “They’ve got to walk the walk. It can’t just be something learned in the classroom.” They’ve had businesses started selling art, jewelry, car care, wake boarding, a golf tournament and many other new endeavors.

They related the story of one of their summer campers this summer, “Jordan came to the camp as a very shy, quiet kid but by the end of it had blossomed into the leader of his team. He was the one who did their final presentation. When he got home he came up with an idea for a defensive mechanism for the police force. Today we are assisting him with a patent search and figuring out how to begin marketing his new invention.”

Not bad for a 12 year old. How many Jordan’s are their in your town?

Lakes Aplenty!

“We’ve got two chain-of-lakes in the county, with over 100 lakes in total,” Hillary Eley, the Branch County Chamber of Commerce President told me as she toured me through Coldwater, MI (population 12,697). Coldwater was one of the many agurbs® we found in our research for BoomtownUSA. And, lakes and recreational land are becoming key drivers in where people want to live and raise a family. Coldwater has both in excess….an undiscovered jewel that sits exactly halfway between Chicago and Detroit on the old Sauk Trail.

The town dates back to the 1830s and its early industries were cigars and cement. Today it still has a strong manufacturing base with 21% of its jobs in the sector.

The town has many historic districts of old Victorian homes and a very historical and picturesque downtown. Barbara Rosene who heads up the downtown association implemented a wireless downtown broadband capability in 2004 and is starting to bring back housing to the upper floors of the historic downtown buildings. The Tibbitts Opera House, built in 1882, is the second oldest, continuously running theatre in the state.

On the outskirts of town sits Capri Drive-In Theatre, still run by the same family that started it in the 50s. According to the website driveintheater.com, MI had 110 theaters in 1958 but only 10 today.

Last week’s blogs included a number of mentions of people who had come back to assist their hometowns. Coldwater has a number of examples including Ed Callahan, an ex-CEO who moved back home; Robert Brown who has donated over $7 million to local churches and a new city hall; and Max Larsen, who set up a trust fund which has funded a new school shown here, a gym, library and literacy program.

Coldwater is a gem with huge potential.

Invite Them Back Home to Nebraska

George Garlick grew up in Quick, NE which is today a ghost town. But the lessons of hard work, honesty and integrity stuck with him and he never forgot his hometown in SW NE. Garlick founded Advanced Imaging Technologies in Richland, WA, a company that has developed into a leader in dense breast imaging technology.

Last year he returned home to nearby Curtis, NE (population 832) where he attended high school to give the town $1 million for a new community center. Last month he returned to set up a subsidiary company, Frontier Technologies, in the town along with a technology initiative focused upon meat inspection technology in conjunction with the local Nebraska College of Technical Agriculture. Garlick’s father worked as a janitor at the college when he was growing up.

The dean of the college, Dr. Weldon Sleight said, “Rural Nebraska is dying. We’ve got to come up with methods to build and revitalize these communities. One way is to go to those who have made great contributions to science and other professions and invite them back home.”

Curtis is the largest town in Frontier County, NE (population 2,729). The 272 students at the Nebraska College of Technical Agriculture help to drop the medium age in the town to 32.1 compared to the county average of 43.4 and a national average of 36.2. The county has lost a quarter of its population in the past 30 years and with a density of only 2.8 people/square mile (think about that for a minute) it is one of the most rural counties in the country.

If you aren’t reaching out to your former residents, you might be missing an opportunity to transform your community just as Curtis is doing.

Come Back Home & Entrepreneurship

Two of my favorite subjects are “Come Back Home” or enticing former residents to return and the power of entrepreneurship. Putting those two concepts together can be very, very powerful.

In BoomtownUSA I wrote about Bart Holaday’s Dakota Foundation, a foundation that the retired venture capitalist, who was originally from North Dakota, set up in the late 90s. Recently, the Dakota Foundation funded the Dakota Venture Group, the first Venture Capital fund totally run by students at the University of North Dakota (UND). Bruce Gjovig is the enthusiastic head of the entrepreneurial UND Center for Innovation which oversees this endeavor.

Holaday related, “My wife Lynn and I want to give students the opportunity for hands-on learning from investing in startup ventures to train both aspiring venture capitalist and emerging entrepreneurs who need to know what it takes to attract equity investment.”

The fund is focused upon businesses in ND and MN, with a special interest in students and alumni of UND The five student managers have backgrounds in finance, accounting, consulting, risk management and marketing. Their first investment was in Grand Forks, ND based TheWineStandard.com.

What could you do to entice a former resident(s) back home?

Another Food Incubator

I have been intrigued with the idea of incubators and in particular food incubators for sometime. My travels around the country have let me visit ones in NY, OH and OK. It has always struck me at the incredible entrepreneurial spirit in our rural areas and leveraging the natural resources of our agricultural products has always seemed logical to me.

When researching yesterday’s blog on Thomas, OK I found an interesting food incubator in Taos, NM, one of my golden eagle Agurbs®. The National Rural Electric Cooperative Association put out an excellent book “The Power of Partnering”, which highlights successful stories of rural coops partnering with other local entities to affect positive change in their communities. You can order a copy by emailing Jessie.georgieva@nreca.coop.

The Taos Business Incubator started in the shell of an abandoned supermarket but today occupies 24,000 sf in a modern adobe building. One of the early backers of the incubator was the Kit Carson Electric Coop which invested $40,000. Within the incubator is a 5,000 sf 24/7 commercial food center that is used by over 30 local entrepreneurs developing commercial food products. The incubator has spawned over 150 small businesses with over 500 jobs in its twenty year history.

The Thomas Gang

Thomas, OK (population 1,238), located in west-central OK, would be like a lot of towns that I’ve visited in the Great Plains. These towns are struggling with an out migration of residents and struggling to keep their schools, churches and downtown businesses viable primarily because they don’t have the job opportunities to keep people home.

Thomas instead has created almost 200 jobs since 2000 through the efforts of what Dennis Krueger, Manager of the Kiwash Electric Coop calls, “The Thomas Gang.” As he wrote in his coop newsletter, “Are you old enough to remember the ‘Thrilling Days of Yester’ Year? Those were the early days of TV when Marshall Dillon, The Long Ranger and Tonto, The Cisco Kid, Gene Autry, Roy Rogers and Dale Evans patrolled the silver screen cleaning up the Wild West. The good guys always wore white hats and rode off into the sunset after bringing law and order into each town they visited.”

This modern day gang, The Thomas Gang, is a group of volunteers who decided in the 80’s to not let their town suffer the fate of so many other towns that they saw slowly declining. For the first ten years, they met with no success but didn’t give up. Their hard work and continuing efforts to lay the groundwork for what “might be” has paid off in the past couple of years.

Since 2000 they’ve brought in a number of diversified firms such as J&C Aviation (refurbishes crop dusters); Hamm & Phillips (oil well servicing); Danlin Industries (chemical production); W&W Livestock Systems (manufacturing of livestock pens and corrals); and Ventura Refining (reopened shuttered oil refinery and adding bio-diesel production).

Dennis told me, “They are probably the leader in west-central Oklahoma in creating jobs on a per-capita basis but few recognize their accomplishments.”

Who says it can’t be done? Not the Thomas Gang!

UAW-GM Program

We recently ran a series of Agurbans on the issue of worker education and training, receiving a number of excellent responses. Here is one from Greg DuMars in southern Michigan where I am this week doing a series of talks.

Let me tell you about a program I used to be involved with when I was
working at the General Motors plant in Adrian, MI. The program was called
Partners in Education Program (PEP). This was a joint UAW-GM program
organized and supervised the the UAW-GM Center for Human Resources in
Flint, MI (Region 1-C).

Because of the distance from Adrian and Flint and the early successes in our program we had much autonomy in running our program. My UAW counterpart and myself promoted this program in all the school districts in our county (Lenawee, MI) and usually had 2 to 3 times the applicants as openings. We selected the educators (they ranged from teachers, guidance counselors and administrators) to work in our plant for an 8 week period. We selected non-traditional projects that did not take work away from anyone but provided a service to the plant.

My counterpart and myself worked daily with the educators to help them complete there projects. The program concluded with a presentation to management and union leadership to explain what they accomplished and how it would benefit the plant and then most importantly what they will do differently in the classroom (or school).

This was always an eye opener for these educators and they always went back to school with an entirely new outlook on the education process and what the students needed to learn to be successful when entering the "real world."

Unfortunately this program was discontinued due to lack of funding, but we had many success stories and a lot of good publicity about it when it was functioning.

We need more programs like this in today’s economy.

The Delta Blues & Ducks

If you say, “Dockery, Mississippi” to a blues fan, it’s likely that they will recognize the town as where the blues began. Dockery, the site of an old plantation, sits 3 miles west of Ruleville. Indianola, MS, the hometown of B. B. King is twenty miles to the south. A $10 million museum is going to be built on the gin site where B. B. King worked until as he said, “I got into trouble and had to leave town.”

There is a major effort underway to publicize sites like Dockery and Indianola with nine such sites located in Sunflower County. Fred Carl of Viking Grill fame in nearby Greenwood, MS has started efforts to develop a Blues Trail in the Delta to hopefully encourage more tourism.

Drew bills itself as the “Waterfowl Capital of Mississippi” with several million dollar hunting lodges in the nearby delta. Hunting enthusiasts fly in from all over the country every year.

It is those tourists and hunters that Ruleville and Drew have an opportunity to sell for new businesses, plants and residents. They’ve got some wonderful assets that I hope they can turn into more and better jobs.

Back Home From Hollywood

He was born in a shotgun house in the Mississippi Delta in 1937, was captain of the local football team in 1955, was offered a scholarship to a state college but instead followed a friend out to Hollywood where he got into costume design. A friendship with John Wayne that began on the set of True Grit ultimately resulted in his setting up his own costume company, American Costume Company. However, Luster Bayless, never forgot where he grew up, returning often from the glitz and glamour of Hollywood to visit his hometown of Ruleville, MS.

When the local clothing store was offered for sale, he bought it “lock, stock and barrel”, shipping the clothes in inventory out to his 40,000 sf facility in Hollywood. He turned the empty storefront into a café/Hollywood museum with a focus upon John Wayne. He also purchased an old plantation on the outskirts of town, turning it into The Old Place Bed and Breakfast. My wife and I stayed there on our trip to Ruleville.

Luster came back home to reinvest in his hometown. How many Luster’s does each of your towns have? How can you get them to also come back home?

Developing Drew

Just a few miles north of Ruleville, MS is the small town of Drew, MS (population 2,434) and it would be just like a lot of Delta towns but for a small group of eight people who decided to start turning their hometown around, starting in the old, historic downtown.

Steve Shurden), one of those eight and recently appointed to head up ED efforts for Sunflower County told me how it started, “About twelve years ago we had a crazy pyromaniac in the town who burned out many of the downtown buildings and 30 houses in Drew. We started out trying to save the facades of those buildings and turning the ones we couldn’t into parks rather than letting them sit in neglect. We set up a non-profit organization called Drew Enterprises.”

Southern Bancorp, a development bank holding company that is the largest Rural Development Bank in the USA, liked what they saw and funded Drew Enterprises with over $500,000 in grants to continue to renovate the historic Main Street. Those efforts have led to the formation of six new businesses which created over 100 jobs.

In addition, Mississippi Delta Community College agreed to set up a satellite facility in Drew’s downtown. Over 140 students are taking college and GED courses to improve their odds of exiting from a cycle of poverty.

I’ve often observed that real change happens when one or a handful of passionate people get involved. Chalk up another one!

The Little Hospital that Could!

Sometimes it only takes one person to turn a situation around. I met such a person in Ruleville, MS. I’m hopeful that his success with turning around North Sunflower Medical Center in Ruleville will serve as a model to help resurrect that town and hopefully spread to other parts of the Delta.

Billy Marlow was born at the North Sunflower Medical Center but worked as a catfish farmer and real estate developer before being asked to step forward in 2004 to run the rapidly failing hospital that was days away from closing. He had no experience in the medical field! But no one else would step into a failing situation.

In 2003 the hospital lost $1.7 million but by 2005 Billy had turned that loss into a profit and last year the hospital earned almost $1 million. As importantly, employment has grown from 180 to 266 and the payroll has more than doubled to $9 million. The hospital is a key driver of economic growth in a very poor community and employment growth at the hospital ripples through the community.

With 82% of the hospital’s business being Medicare funded, Billy’s only option was to diversify and grow into new areas. He has grown revenues from $6 million to over $20 million by growing a rural health clinic, open every night of the week until midnight, which also took people out of the high-priced emergency room and saved operating costs at the hospital. Patient visits have gone from 1,458 in 2004 to a projected 14,500 this year. In addition, he also grew the hospital’s nursing home and home health businesses.

It is an amazing turnaround and one of the beacons of prosperity and hope in the rural Delta.

Mississippi Delta

I was back in the Mississippi Delta last week touring Sunflower County (population 31,833) and doing a talk in Ruleville (population 3,234). When you look at the statistics, it is pretty bleak. The poverty rate is 34.3% (8th worst out of 3,141 counties in the USA), they’ve lost 9.4% of their population since 1990 (2,817th) and have only 59.3% of their adults over the age of 25 with a high school diploma (3,046th).

The first two indices are solvable but are directly related to the last one on educational attainment. Digging deeper into the educational shows even more concern. The county has 17% (one out of six) who have less than an eighth grade education (228th in the USA) and 23.7% with some high school but no diploma (42nd).

When I was asked at my talk what is the major obstacle to job creation in Sunflower County, I cited those educational rates telling them that those of us in the site selection business look at statistics like the ones I mentioned to determine whether to keep a community on the list. Unfortunately, Sunflower County’s statistics are so bad that they are rarely going to make it to the next level.

Several groups are working diligently in the Delta to address issues of education, unemployment and poverty. It will be a long, hard journey but there is progress being made. I’ll highlight a couple in the next couple of upcoming blogs.

More Lemonade Stands

Can the world have too many lemonade stands? My answer would be a resounding “NO!!!”

Umpqua Bank from Roseburg, OR has started a campaign to encourage young entrepreneurs to open more lemonade stands this summer. In fact they hope to see over 2,000 new lemonade stands started in the 96 towns where they have branches. Children up to 13 years of age need to fill out an application to receive a lemonade stand kit, which includes a booklet called “How to Become a Lemonaire: A Guide to Starting Your First Small Business,” that includes tips on cash flow, pricing, an advertising plan, general business tips and financial literacy lessons; a yellow, plastic tablecloth; a sign for ‘fill in the name’ lemonade stand; cups; napkins; and a $10 bill for start-up capital.

In addition a drawing will be held to select 105 “lemonaires” who will receive the use of one of the bank’s brightly colored, collapsible, stainless-steel lemonade stands for a week.

“Umpqua’s brand makes it possible for banking to be about more than just suits and handshakes. Unless those handshakes are small and sticky,” Jim Haven, creative director of the Lemonaire campaign said.

Umpqua is a very unique bank that started in rural Canyonville, OR (population 1,293) in 1953. In the past ten years it has grown from $150 million in assets to over $7 billion today as it has transformed itself into a different kind of community bank. It refers to itself as a retailer rather than a bank, offering free Wi-Fi access, its own branded coffee, sewing groups, yoga classes and even movie nights.

They also have figured out that entrepreneurism is the wave of the future and cultivating even young entrepreneurs in grade school makes a lot of sense. Other banks should follow their lead.

Who Knew?

When you travel around the country as much as I do, you see some incredible sights. Last week these water towers in Pratt, KS caught my eye.

Who knew that this was how they kept Hot and Cold water separate?

Progress and Frustrations

In the aftermath of a catastrophe like the EF5 Tornado that obliterated Greensburg, KS there is a great deal of aid that comes into the town from private and public sources. I was amazed by the progress that was able to be made within only two months for beginning the clean-up of the town and in constructing a temporary housing area for those displaced by the storm.

The day that we were there the first 28 residents had moved into a 350 unit temporary subdivision on the outskirts of town, complete with its own concrete storm cellar. The FEMA development was well landscaped and built with sidewalks. Benjamin Alexander of FEMA told me, “It is the nicest one that we have ever done so far.”

Think about the logistics required of laying out a subdivision, putting in all of the infrastructure, moving in housing and doing all of that while trying to move yourself into temporary quarters and dealing with typical government bureaucracy. I’m guessing that could only happen in the USA.

Several of the residents expressed concern about the pace of rebuilding, wanting to get started with putting their lives back together. I cautioned them on rushing too quickly and losing sight of the fact that they have an opportunity to rebuild the town with a vision and wisdom to last for generations into the future. Most towns don’t get an opportunity like this, to rebuild exactly as they want themselves to be.

It is a tough and delicate balance going on in Greensburg. I hope that they are able to balance short term desires with a long term vision of the future.

Not a Typical Storm

The last EF5 storm, the weather service’s maximum level, to hit the USA was in 1997. The EF5 that hit Greensburg, KS on May 5, 2007 was on the ground for 30 minutes as it left a path of destruction for 22 miles throughout SW Kansas. Wind speeds exceeded 200 mph!

Ten people were killed by this storm, the first storm related fatality in Kansas since 1967.

There are several websites that have some incredible pictures of the aftermath of the Greensburg storm. I hope to never go through such a storm myself.

http://www.kansas.com/static/slides/050507tornadoaerials/
http://www.ultimatechase.com/chase_accounts/Greensburg_Tornado_Damage_Survey.htm

Recovery and Rebuilding

The devastation and aftermath of the tornado that hit Greensburg, KS (population 1,574) on May 4, 2007 was difficult for my wife and I to comprehend and process. We were there earlier this week to do a talk to the survivors who are slowly rebuilding their lives. It was a very emotional tour, especially in talking with many who hunkered down in their basements as winds of over 200 mph whirled above.

Several told of how their ears popped that night with the pressure from the storm and how their hearing had still not returned to normal. The devastation and complete loss of everything that they and their neighbors owned, including baby pictures and other momentos, was obviously painful for several to retell.

It was, by far, the most difficult talk that I’ve had to give in the 300 or so that I’ve given in the past three years. I wanted to share with them the experiences of other towns that have been devastated by fire, floods, hurricanes, tornados and other natural disasters, hoping that the successes that those towns were able to achieve might console and inspire the citizens of Greensburg to envision how they want to rebuild their community. Their response to what I had to say was overwhelming.

Mayor John Janssen, FEMA Coordinator Benjamin Alexander and local banker Steve Kirk, who invited me to Greensburg, spent several hours with us showing us the remnants of the town. They and others in the town are deep into the plans of how to rebuild the community for the future. A land use plan, rerouted roads and a new industrial park are among the items being discussed.

Freedom

“Few of their children in the country learn English. The signs in our streets have inscriptions in both languages. Unless the stream of their importation could be turned, they will soon so outnumber us that all of the advantages we have will not be able to preserve our language and even our government will become precarious.” Those were not the words of someone in 2007, but rather, those of Benjamin Franklin who found the waves of my ancestors pouring into Philadelphia from Germany “the most stupid of their nation.”

I was reflecting on the Fourth upon the yearning for freedom and opportunity that drove those ancestors to journey half-way across the world in rickety ships. They came with an ideal in their heart, a willingness to work hard and their children and grandchildren quickly assimilated into the “American Way.” Yet, they and every other major immigrant group had to overcome the sentiment of not being welcomed from those firmly planted on American soil.

They say that history repeats itself. Are we witnessing such a repeat today?

New Ten Commandments

“The Ten Commandments of Community Leadership” is Maury Forman’s newest book, which he co-authored with Michelle Harvey of the Association of Washington Cities. Maury is a good friend who is an icon in economic development in the northwest. This is his ninth book on economic development and one that I thoroughly enjoyed.

Each of his new ten commandments has a number of sub-headings with ideas and tools that relate to that commandment:

Thou shalt create a vision for the future

Thou shalt develop a strategic plan

Thou shalt build a sustainable economy for the next generation

Thou shalt seek public/private partnerships

Thou shalt invest in education and training

Thou shalt promote respect

Thou shalt demonstrate a high standard of ethical behavior

Thou shalt value history, art and culture

Thou shalt prepare for a global environment

Thou shalt develop future leaders

Maury and Michelle’s book is one that many ED professionals are going to want to buy for their boards and allies. To order contact Linda Alongi at LindaA@cted.wa.gov or 360-725-4031. Cost is $10

Unexpected. Unforgettable.

Columbus, IN (population 39,059) was ranked as one of my top 100 agurbs® in our original research for BoomtownUSA. I use Columbus in most talks I do, citing how the community is ranked as the sixth most architecturally significant city in the USA by the Architectural Institute of America.

Recently Columbus unveiled a new brand for the community…Columbus, Indiana. Unexpected. Unforgettable.

Mayor Fred Armstrong said of the new brand, “We will be able to promote our community more effectively, with a single, well-researched message that is true to both our community’s assets and aspirations.”

What is your brand?

Developing Tech Jobs in Rural Communities

One of my favorite email news lists is Russ Fletcher’s MATR Newsletter. It is a twice weekly compilation of several dozen interesting articles on items of interest in the area of economic development, primarily in rural areas. If you aren’t a subscriber, you should be. Sign up here.

An interesting section of his website is where he archives articles within a specific area of interest. One of those areas is Developing Tech Jobs in Rural Communities. Two articles on that site that were particularly interesting were: Microsoft expanding operations in North Dakota and Average Seattle worker can’t afford to live here.

In the first article, Microsoft announced plans to increase their 1,200 employee campus in Fargo, ND from two to three buildings because of the lower costs of operation. The second article bemoaned the fact that the typical school teacher in Seattle can only afford to buy about half of a typical house or face a commute of over one hour.

Making a Difference

I thought that this true story of how one person can change attitudes was excellent. Please take three minutes to view it.

If a simple bagger can change an entire store, imagine what you could do!

A Fifty Story Farm?

I’m a sucker for new ideas, but I’m not buying what Dr. Dickson Despommier of Columbia University is trying to sell to people in New York City. Dr. Despommier is getting serious consideration and a number of articles written on his concept of implementing Food Production Skyscrapers in NYC and other urban centers. He thinks that “it would only take roughly 150 such buildings to feed the entire city of New York for a year.”

Dr. Despommier and others in urban centers really need to get out and see the vastness of the U. S. and other countries. They need to fly over the country, not at 30,000 feet but a few thousand feet to get a feel for the amount of land that is available in places other than New York City.

They also need to realize that world agriculture is evolving, very productive and innovative. Comments they make, such as, “__________xxx acres of new land will be needed to grow enough food to feed them, if traditional farming practices continue as they are practiced today,” don’t take into account progress being made in crop production around the world.

As an example, when I was growing up 100 bushel/acre corn was considered a good yield. Today, on those same fields, 200 bushel/acre is the norm and scientists are getting over 400 bushel/acre with new experimental hybrids and production techniques. In addition, new technology will allow corn and other crops to be raised on much less water than is normal today, opening up vast amounts of new land all over the world.

But, take a look for yourself. It is fun to see some of these futuristic ideas, even if they probably don’t make any sense.

Family Business Moves

I mentioned the impact that Bob Potter, an 80+ year old former VP of sales for AT&T, was having on recruiting in new businesses to Coeur d’Alene, ID in BoomtownUSA. Potter continues his tireless efforts, concentrating mostly upon family run businesses.

In the past fifteen years, he has brought in 70 new businesses into the Inland Northwest area of WA and ID. Of those 66 were family run businesses that relocated for lower operating costs and a better quality of life.

He talked about this importance of quality of life for family businesses, “family members of succeeding generations have different lifestyle interests and seek a quality of life different than that of their parents and grandparents. They not only seek bottom line dividends through relocating their business, but lifestyle dividends as well.”

If you’ve got tremendous quality of life attributes like the Inland NW, you might want to think of targeting second and third generation family businesses.

More Corporate Headquarters?

Michigan has been in a funk for the past six years, with growth at half of the U. S. average. That lagging was the focus of the Detroit Chamber’s annual Mackinac Policy Conference last week. Edsel Ford II and others urged business and political leaders to collaborate in order to diversify the region’s economy away from its reliance upon the industry that his great-grandfather launched into overdrive a century ago, pushing for a regional effort under the banner of One D (for Detroit).

Most of the sessions centered upon the changes in the automotive industry and its deterioration impacting so much of the Michigan economy. Several suggested that Michigan needed to focus upon bringing in more corporate headquarters. The loss of headquarter companies like Kmart, Crowley, Gantos, Old Kent, Michigan National, Standard Federal and others has very adversely affected the state’s ability to withstand this recent automotive downturn.

HUH!!! Recruiting in HQs is old thinking, of people wishing that they could turn back the clock. Instead, the focus should be upon the development of entrepreneurs from the core of talented people who have been building products like automobiles for their entire life. Unfortunately, many of them learned their craft in a tightly controlled, non-entrepreneurial environment. They’ve got the skills, but need encouragement to make the entrepreneurial leap. Until Michigan figures out how to move from a corporate, bureaucratic, headquarters mentality into an entrepreneurial model, I’m concerned that they will continue in their economic stagnation. I hope that they embrace entrepreneurism quickly.

Magnet for CEOs

“I moved back here in 2003 to start this business with my brother, who was living in Los Angeles but he and his wife didn’t want to raise their young daughter there.” Quay Chilcott was explaining to me how he started By the Bay Shuttle in Traverse City, MI as he drove me up to Petoskey, MI. Both Traverse City and Petoskey were rated as Golden Eagles or top 100 agurbs® in BoomtownUSA.

Chilcott explained to me his newest venture, “We found that we were increasingly transporting CEOs and their families around the area. One of them suggested starting a specialized service for them, using late model SUVs. We started that last year and I’ve been amazed at the way it has taken off. We’ve already signed up 83 CEOs at $3,000/year.”

Chilcott didn’t have any idea that there were that many presidents, CEOs and business owners in the area until he started the business. He’s finding that more are moving in, choosing to raise their families in a more tranquil, rural setting even as they are jetting off each Monday to their offices.

The development of broadband, video conferencing and other distance-reducing technologies have spurred this search for better quality of life alternatives for these CEOs. The advent of the new Very Light Jets (VLJs) with their dramatically lower costs will allow for VPs and others down the corporate ladder to also make such choices.

Chilcott is already looking at how he might be able to incorporate the VLJs into his burgeoning shuttle business. Areas like Traverse City/Petoskey and others that offer a higher quality of life will be the big beneficiaries of these new technologies.

Entrepreneurs from Corporate Bureaucracy

“We’ve had our wheels on Orange County Choppers and other shows,” Rob Rodems explained to me as he gave me a tour of his manufacturing operations in Jacksonville, IL (population 18,940). “I started this with my brother and sister in 2000.”

The company has over 50 different wheel designs, selling mostly to Harley Davidson riders through a series of over 3,000 dealers in its database. Increasingly the internet is becoming an important marketing tool for them, with over 500,000 hits per month on its website.
The company is an offshoot of JMI (Jacksonville Machinery Incorporated), a custom machining company that does specialty parts for companies like Caterpillar, Owens-Illinois and others. However, its main customer for many years was Pactiv, which has a major presence in Jacksonville.

Another entrepreneurial company in the town that Terry Denison, head of Jacksonville ED, took me to visit was CCK Automations. The company was started by J. J. Richardson and his wife Sherry when J. J. became disillusioned with his engineering job at Pactiv in 1994 and took the entrepreneurial plunge.

CCK has developed into a leader in the engineering, design and manufacturing of circuit boards and control panels. Its boards cover a wide range of uses as evidenced by a price range from $2.16 to $3500.00 per board.

Both companies are competing in a global marketplace but both came out of corporate bureaucracy of a big company like Pactiv. I’ve seen a number of entrepreneurial firms spawned in such a manner. They often result in other start-ups, the clustering of similar new companies and can help to shape job growth and economic prosperity in a region.

Manufacturing Exports

“We are losing all of our manufacturers and manufacturing jobs!” You can’t imagine the number of times that I hear that every month. It grates on me to hear such statements. I blame their misinformation upon our news media and a few pundits who prefer to prey upon fears rather than look at facts.

I patiently, and sometimes not so patiently, respond that we are today producing more manufactured goods than at any time in the history of the USA. I also add that we have more people working in the manufacturing of automobiles than at any time in history. I hope that I’m having a small impact, but based upon the sometimes dumbfounded look on their faces, I’m not so sure. Here’s some new ammunition that I’ll be able to use.

Data from the Federal Reserve Bank of Minneapolis shows how exports of manufacturing goods are soaring in the USA. Look at the graphic which shows the percentage increase in manufactured goods exported on a state by state basis.

The largest states for manufactured exports are (in order): TX, CA, NY, WA, IL, MI, OH, FL, PA and NJ. All showed gains in 2005, 2006 and in the first quarter of 2007. The states that showed a decrease in 2006 with state rank in parenthesis were: GA (15); SC (24); VT (39); WV (43); AK (52) AND HI (54).

U. S. exports grew from $805 billion in 2005 to $923 billion in 2006, a gain of 14.5%. In the first quarter of 2007 they were up another 9.6% when compared to the first quarter of 2006.

I love manufacturers and the jobs that they create. There are many that are growing and prospering in today’s economy.

Entrepreneurial America

Each year the Kauffman Foundation ranks states on their entrepreneurial activity. This past year MT was ranked as the most entrepreneurial with 600 entrepreneurs for every 100,000 residents (0.60 percent). The others in the top five were MS (0.52%), GA (0.44%), OK (0.43%) and ME (0.42%). The lowest levels of entrepreneurism were in MI (0.16%), PA (0.17%), SC (0.18%), IL (0.18%) and DE (0.19%).

The states that have experienced the largest percentage increase in entrepreneurism over the past decade we MS, HI, RI and AR. Those with the largest decrease were AK, ND, NM, TN and KS.

Entrepreneurism is the key driver of future economic development in rural America. Those communities, regions and states that have it is a priority are the ones that will thrive.

Wall Street West

Leveraging their proximity to New York City (less than a two hour drive), the nine counties in northeastern PA have banded together as Wall Street West to market their rural location as a second home for Wall Street. Being on a separate electric grid, reasonable proximity to NY and NJ and lower operating costs are all keys to developing this regional designation into a key economic cluster.

The Pocono region was known for years as the “honeymoon capital of the world.” My parents drove from IL out there in 1951 for their honeymoon and proudly showed us their home movies of being stranded by a huge snowstorm, something they didn’t seem to mind at all. It is a beautiful, rolling country with a great deal of history. Hopefully, this new regional initiative will breath economic life and good paying jobs into the rural communities in these nine counties.

Government Payments, Good or Bad?

For some time it has concerned me how government payments have translated directly into the price of land, driving up the key cost component of farming and making it increasingly difficult for new farmers to enter the profession. The dark green areas of the map show where this impact has been the greatest, where over 45% of gross cash farm income is coming from the government. In my opinion this is far too much dependence upon government payments, creates a false sense of economic well being and ultimately leads to painful crashes at some future point in time.

Wouldn’t we better off in the long run by having the government less involved in the economics of agriculture? Wouldn’t we better to have a more diversified agricultural economy in our rural communities? Wouldn’t we be much better off if we helped, rather than hindered new, younger faces in our farming communities?

What do you think?

105 Year Old Beauty Open After 75 Years!

Earlier this month I wrote about a trip my wife and I made to the newly reopened French Lick Resort in rural French Lick, IN. Bill Cook, a self-made billionaire from nearby Bloomington, IN invested $382 million into the renovation of the French Lick Resort and nearby West Baden Springs Hotel. He reopened the West Baden Springs Hotel last week after being closed to guests since 1932.

When West Baden was built in 1902 it was called the “eighth wonder of the world” for its 110-foot free-span dome, the largest of its kind until the opening of the Houston Astrodome in the 1960s. The hotel’s original 508 guest rooms were restored and reconfigured into 246 modern rooms and suites.

“You only read things like this in fairy tales,” local State Representative Jerry Denbo said at the ribbon cutting. He added, “We have two grand hotels out here in the sticks of Indiana and we’re truly blessed.”

Bill Cook said, “We’ve come a long ways. This building could have been history. Now, it’s here for history, and it’s here for people to enjoy.”

Only a local person, with ties to the area would invest almost $400 million into a dream of past grandeur in an out-of-the-way place like French Lick.

Record Rebuilding

Normally it would take at least four years to rebuild a bridge like the Bay of St. Louis Bridge which was destroyed by Hurricane Katrina in 2005. It takes at least a year to design and then three years to rebuild. To the people of the Gulf Coast having that key link out for so long was unacceptable. Instead the State of Mississippi and Federal Highway Administration embarked on the largest, fastest and first design-build bridge project in the state.

The original bridge was beyond repair so a new site was selected and this past week the first two lanes were opened to the public. The project required installing 1,160 new concrete piles, hundreds of concrete girders and over 500,000 sf of concrete bridge deck. All four lanes of the bridge will be completed in November, just over 2 years after Katrina’s devastating impact.

Bay St. Louis is a wonderful artist town and having this bridge back in operation is a big help on their road to recovery.