The Cure for High Prices...High Prices!

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

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

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

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

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

Under Siege for Pumpkins

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

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

- E.J. Radican, Rocklin”

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

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

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

Trust Funders Meddling

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

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

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

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

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

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

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

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

Above it All!

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

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

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

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

Request from Iraq

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

Lot's of meetings with Iraqis today. Drumming up support for the Economic & Agriculture "FarSa" (opportunity) conference, the constitution of two new Chambers of Commerce, and even the Education and Health Councils we are trying to build from scratch. I'm still looking for resources to use on these last two councils. I'm hoping the Iraqi-American Chamber of Commerce will come through for me on the first one. No use recreating the wheel if they already have charters and other documents in Arabic for the one started in Baghdad and a few other places.

Do we have any body out there with contacts in the newspaper world? I need to find out some information on newspaper industry, specifically, prices of equipment for printing local type newspapers. It seems to me that with today's technology you could crank out newspapers with much less equipment and associated space than in the past. The types of papers around here are 8 pages total, two of which are color. Circulation for each town is approximately 5,000 papers per week (one edition per week). The idea is to establish a regional network so a single hub could do the printing for multiple surrounding towns (Nahiya). Currently, they all travel to Baghdad for their out sourced printing. Amazingly, we are introducing the concept of paying operating costs by selling advertisements and charging for the papers. Remember, newspapers in this part of the world have been traditionally funded by the government, so there was no need to beat the street for advertising or charge for the paper. Of course, the news you got in return was also controlled by the government. If you have any leads or contacts that you might help let me know. I'm a small fish in a big ocean over here, but the Lord continues to connect me with people I need to meet to get my offense rolling and start making some first downs.

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

Retirement as Focus

I was the keynoter at the American Association of Retirement Communities (AARC) at their annual meeting in Las Vegas, NV. This group, formed in 1994, is composed of communities that are focused upon having the recruitment of retirees be a part of their economic development plan.

Linda Mayhood, Board Chairperson of AARC and also with the largest gated community in Hot Springs Village, AR, told me, “We’re seeing younger and younger people start to retire. When you look at the coming influx of the Baby Boomers, it is going to be an incredible opportunity for many communities.”

In last week’s Agurban we looked at the impact of these Baby Boomers upon our society. Starting on January 1st of this coming year there will be 10,000 Boomers per DAY who will become eligible for social security benefits!

There are many towns that have an opportunity to latch onto these retiring Baby Boomers. Have you given it some thought for yours?

http://www.the-aarc.org/

MOO-ville

“Their motto is From Cow to Cone,” was what Bonnie Hildreth told me as we drove into the Moo-ville Creamery for lunch on our tour of Barry County. Each of us got a tasting of homemade cheese whey and of course unlimited glasses of milk.

Louisa Westendorp and her husband Doug opened the creamery three years ago after milking cows on the farm on the hill for the past 15 years. Louisa told me, “We bought this farm and started milking 40 cows, three times each day even though we had six kids under the age of six. Now we are up to 80 cows and our 22 year old son Carlyle takes care of all of the milking. The twins are in college and the triplets are still in high school.”

She went on, “We never liked the idea of our milk being mixed with other farmers’ and wanted to produce something of a higher quality. We put together a business plan, got a $150,000 value-added grant from USDA and thought that it would take us six years to get to where we are today. For the last two months we’ve been bottling all of our own milk and aren’t selling any in bulk. We started making our own ice cream a year and a half ago and cheese curds within in the last two weeks. We hope to expand into yogurt and egg nog in the future.”

“Our kids didn’t take to the idea of opening the creamery. They were embarrassed by the MOO-ville name. But, now they’ve embraced it and we’re having a lot of fun.”

When I asked what they would do if they have too much demand for their product, Carlyle let me know that 80 cows were plenty to be milking. He didn’t want to add anymore. The Westendorp’s daughter Britney started a petting zoo next to the creamery/restaurant.

The Westendorp’s goal is to not only produce a super high quality product but to also educate consumers on the importance of milk and how their product is different. Louisa went on, “We pasteurize our milk but we don’t homogenize it. Homogenization takes the cream or fat content out of the milk. That cream is the cream-line that you’ll see in a glass of our milk and is why our milk has so much more flavor and also added health benefits.”

Customers of the MOO-ville Creamery drive from up to 50 miles away to buy their milk. Prairie Farm Dairy has begun selling their milk in Michigan stores. The Westendorps have developed a wonderful niche that is on the cutting wave of trends in both local and small batch production that I’m seeing as I travel around the USA.

I learned that there are five farmer-owned creameries in MI that are similar to MOO-ville. They are each great examples of “out of the box” thinking by farmers who have traditionally been more production orientated than marketing focused. I’m convinced that there is a wealth of entrepreneurial talent, vision and drive that is going to percolate up from young farmers like Louisa and Doug Westendorp. Talent like this is going to birth an incredible number of entrepreneurial, niche-focused agricultural businesses in the next several years.

Incredibly Giving!

“We got started as a community foundation in July, 1995 with one fund and $350,000 in assets. Today, we’ve grown to over $17 million in 134 funds and have another $4 million estate about to come into the Barry Community Foundation,” Bonnie Hildreth, the dynamic president of the foundation, told me as she and several other community leaders took me for a tour of Barry County (population 59,899). At her annual meeting that night I told her 200+ members that I was in awe with what they had accomplished in only 12 years. Wayne County, MI (Detroit) with just under 2 million people would have had to raise almost $600 million to equal the per capita giving of Barry County.


Dr. Kim Norris, a local ophthalmologist and chair of the Barry Community Foundation, told me, “We’ve been very blessed with a great number of very caring and very giving individuals.” At her remarks at the annual meeting she quoted an African proverb, “If a person dreams alone, it remains nothing but a dream. But when a people dream together, that dream can become a reality.”



Barry Community Foundation’s Annual Report of 28 pages has hundreds of funds, donors, recipients and causes that were funded in the past year. Following are just a couple of stories that caught my fancy.


The Barry Community Foundation’s Youth Advisory Council (YAC) was started with an endowment from the W. K. Kellogg Foundation that continues to grow. The program is open to county youth between the ages of 13 and 21 which meets twice a month to focus upon grant making, leadership and community service. Twice a year these young people give out $300 to $5,000 grants to youth related projects in the county. In 2007 they funded 15 projects, totaling over $25,000.


Bonnie Hildreth told of a group of first graders from the Delton Kellogg Elementary School that applied for funding to replace dangerous and worn-out playground equipment, “They sat down with their teacher who turned their application to YAC into a math and communication lesson.”



Barry Community Foundation is also working with Gen X’ers. Bonnie told me, “We’ve got a special Next Generation Fund that is managed by a group of 20 to 40 year olds who collectively have set up their own fund within the foundation.”



An impressive Foundation funded project was the Orangeville Veterans Memorial which was dedicated May 27th. The dream for the memorial began with Alvin Warren, a lifelong resident who was a Vietnam veteran, member of the Army Engineering Corps and a quarter century member of the National Guard. In a six month period of time $30,000 was raised, gifts were made of building material, labor was donated and the construction was completed in time for Memorial Day, 2007.




When we were doing our tour we drove up to the memorial where we found a veteran who was lost in thought. He had decided to drive the 100 miles from his home on a beautiful fall day so that he could spend some time in homage.

I’ve often said at my talks that if there was one thing I could do in every town I talk in, it would be to start a community foundation. Examples like the Barry Community Foundation are multiplying and growing around the USA.

County of Lakes

I was excited to get a chance to tour Hastings (population 7,095) and Barry County, MI. Not only was Hastings one of my top 100 agurbs® but the county was also home to one of the three Schultz named towns in the country, just a couple of miles south and west of Hastings. Everything lived up to expectations except that Schultz, MI couldn’t even be called a “wide spot in the road” and since it is listed as the largest Schultz I’m not sure that I want to visit either Schultz, WV or WI. To add insult to injury the only sign around listed it as Shultz Road, obviously misspelling a grand name!

Hastings has a wonderful downtown with many local shops, a brew pub and other attractions. Other towns in the county include Middleville, Nashville, Woodbury, Freeport and others that I visited on my tour. All were equally quaint and with thriving downtowns.

Barry County is truly a county of lakes, with 367 named natural lakes that are attracting a lot of residents. Gun Lake, with 2,600 acres of water, is the largest lake in southern Michigan, followed by Gull Lake with 2,000 acres of water. On the tour I learned that Gun Lake was historically considered a blue-collar lake with over half of the homes strictly summer cabins. Gull Lake was an upper-end lake with some homes valued at $3 and $4 million. Property values on each lake are climbing with Gun at $3,000 to $4,000/linear foot of shoreline and Gull at $12,000 to $16,000/foot.

The lakes and over 20,000 acres of public lands in Barry County are attracting lots of residents. From 1990 to 2006 the county grew by 19.7%. One of the downsides of that growth was the fact that 59.2% of Barry County’s residents work out of the county, putting them at the 281st highest percentage county in the country out of 3,141. Almost 7,000 of them drive the 40 miles each way to Grand Rapids to work.

Barry County is working diligently to create more local jobs and needs to bring their number of commuters out of the county down for the long term benefit of everyone.

Just Wanna Work!

I was down in Atlanta for our annual meeting of NAIOP, National Association of Industrial and Office Properties which is the main trade organization that we belong to at Agracel. It is a wonderful group and I learn something at every meeting. My wife and I got down a couple of days early and wondered around eastern and northern GA, having a wonderful time.

We got a chance to spend some time with an illegal, I’ll call Jose. Jose first came to the USA in 1994 from Mexico and has been coming back every year. He speaks great English and his employer told me, “He is an excellent worker and also a leader of men.”

For several years he was able to obtain a H2-B visa which allowed him to work legally, but prior immigration arrests and stepped up vigilance on the part of Homeland Security, resulted in him not getting his visa in 2007. He came back anyway.

Jose is the foreman for a seasonal agricultural project that typically runs for about six months. He earns $1,000/week. His men, paid $9.30/hour, typically earn $600/week. The work is hot and dusty, but also mechanized.

When I asked his employer why he couldn’t find local workers he responded, “The Department of Labor requires us to advertise for these positions. Every year we do so and the largest number of responses we’ve ever had has been four. When we’ve hired the locals, they never lasted for more than a week and usually it is only one day.”

A social worker who overheard the conversation piped in, “It is the difference between wanting to work and needing to work. Jose and his fellow Mexicans want to work. The locals need to work but don’t really want to work.”

When I quizzed her more she related that these same people who wouldn’t work for $600/week were renting government subsidized housing for $25/month that would normally rent for $600 to $700/month. She told me, “Last week I went to visit a 30 year old who was about to have their electricity cut off and didn’t know how they would survive without air conditioning. Thirty years ago no one out here had any air conditioning but today it is a ‘necessity’, we’ve lost touch with what is really necessary. This same person had a 50 or 60 inch HD TV, one of the biggest I’ve ever seen.”

In driving around the community it was obvious that this was a poor, rural community. My data search confirmed what we were seeing, unemployment is 8.5%; poverty is 24.6%; only 44.1% of those over 16 are in the work force (compared to a national average of 64%); 14.5% of those over 25 don’t have an 8th grade education; an additional 23.3% don’t have a high school diploma or GED. The situation is dire!

At the NAIOP Conference I was relating to a very good friend about the situation in this rural community. She told me, “It reminds me of the Canadian Geese who have now lived for generations on lakes here in the U. S. and couldn’t possibly find their way back home to Canada today.”

We have a woman on the lake that we live on in Illinois who is reputed to spend $700/month on bird feed for the ducks, geese and other waterfowl. Today, she’s got hundreds of birds that are captive to her generosity but also are trapped into a life on our small lake rather than taking wing and seeing the world.

In my opinion we’ve got to figure out a way to reverse what is a desperate situation in these communities. We won’t do it by throwing more funds but through education and job opportunities. We also won’t do it by refusing to allow Mexicans and others who want to work from coming here. Their work ethic and entrepreneurial spirit are what we need in places like this.

Entrepreneurs Impact

Philadelphia and Neshoba County have been blessed with the growth of a number of significant entrepreneurial companies that were started and grew up in rural MS. Another major economic force in the county has been the explosive growth of the Mississippi Band of Choctaw Indians (MBCI).

The Tribe is the only federally recognized Indian Tribe in the state of MS, having been recognized by the federal government in 1945. The tribe was impoverished with unemployment exceeding 80%, but started the long climb upward when they started their own small construction company to build houses. That project was followed by several industrial projects with wiring harnesses, greeting cards, automotive speakers and printing. Employment grew to over 2,000, quite an accomplishment for a tribe of only 9,600.

MBCI’s big break came when they opened the Silver Star Resort and Casino in 1994, at the time considered a huge bet for a largely rural area. That original casino has been expanded five times and a second was opened across the highway. A 36-hole championship golf course, a water park and other amenities have been added to the resort.

Miko Denson, Chief of MBCI, told me, “We are continuing to grow our employment base. Today, we are hiring twice as many people as we have working in the tribe.”

MBCI is one that I’ve been following for sometime. They are young (45% are under the age of 25) and are placing an increasingly important role upon education. They run the largest tribal school in the USA and offer a 100% scholarship for higher education to every member. At present over 400 students are enrolled in colleges and universities around the country.

Chuck Donald, Director of Operations for Taylor Machine Works, who sat across from me at lunch told of the 80 year history of Taylor, “We got started as a small machine shop, almost went under several times but survived and are still run by the third generation. We’ve got over 1,100 employees here and in Louisville, MS, our hometown.” Louisville (population 7,006) is 27 miles north of Philadelphia. They make the Big Red machines which are used in lifting intermodal containers and for other heavy uses.

Other entrepreneurial businesses located in Philadelphia are W. G. Yates Construction, one of the 200 largest privately owned firms in the USA, and Hardy Manufacturing, the second largest wood burning stove company in the country and the only one headquartered in the south.

Entrepreneurial Philadelphia

No, I’m not writing about that Philadelphia! This one is in Mississippi, the second largest Philadelphia in the USA, and was one of my top 100 agurbs®. Philadephia, MS (population 7,303) is the county seat for Neshoba County, a county which has grown 21.5% since 1990. Things are booming in Neshoba.

Philadelphia just opened a new 15,000 sf business incubator, the Neshoba Business Enterprise Center, to encourage the growth of new businesses. The $1.3 million price tag for the project was piecemealed together from about a dozen sources including EDA, USDA, MDA and other local and regional sources. In only 2 months, three companies have already located in the incubator, including a poultry support company (there are >80 million chickens in the county), an air purification start-up and an oil field support company.

It will be interesting to return in a couple of years to see what companies come out of this new incubator.

First Female CEO

One of my tour guides for my incredibly quick tour of Columbus, MS was Allegra Brigham, CEO of the 4-County Electric Power Association. Even though it’s called 4-County, the coop touches 7 counties and serves 43,700 members. With all of the things that I’ve written about Columbus in the past days, it wasn’t surprising to learn that they’ve added over 1,000 new members in the past year.

4-County is the fourth largest electrical coop in MS and one of the top 50 in the country. Allegra has been CEO for the past 4 ½ years. She was the first female CEO in MS and one of only 25 out of the 800 electrical coops in the country.

She told me of how she got elected CEO, “I started out as a school teacher after getting a master’s degree in history and journalism from the Mississippi University for Women here in Columbus. I went to work for 4-County but was passed over when our long-term CEO retired, but got the job when his replacement didn’t last long and the board did a nationwide search.”

Allegra impressed me with her grasp of economic development and the key role that the electric power provider plays in the ED game.

Not Just Industrial

From my posts of the past several days, you might have gotten the impression that Columbus, MS is just an old, dirty industrial town. Nothing could be further from that! Columbus is also a wonderfully picturesque southern town with old Antebellum homes and newer Victorians. In fact there are about 100 Antebellums and 200 Victorians. Five years ago, you could have bought them for a song, but with the growth going on prices have moved up to a more reasonable level. The Antebellum on the right can be yours for only $1.5 million.

Columbus was the main town where injured Confederate soldiers were cared for after the Battle of Shiloh. In that April 1862 battle in Shiloh, TN, on the banks of the Tennessee River just north of MS, 65,000 Union soldiers and 45,000 Confederate soldiers battled for three days, resulting in 23,746 casualties. Just think of transporting those soldiers 135 miles by wagon to Columbus! Because of the numerous hospitals that were set up in the churches and homes of Columbus, the town was spared when many other southern towns were torched in the last days of our Civil War, or as my southern mother-in-law calls it, “The War of Northern Aggression.”

The first Memorial Day, which later became a national holiday, originated in Columbus on April 25, 1866. Tennessee Williams was born in the town. His birthplace is now the town’s Visitor’s Center.

The town boasts a full time Arts Council. The downtown is thriving with over 100 new apartments and condos having been recently developed above the retail shops. “Noon Tunes” are a highlight on Thursday afternoons in the downtown when musical groups are hired to entertain.

The Mississippi University for Women, locally known as ‘W’, is now coed. Allegra Brigham, an alumni told me, “Today, it’s a university for women and smart men, too.” The Mississippi Math and Science School for 11th and 12th grade scholars is located adjacent to the W Campus.

Twenty five miles to the west of Columbus is Starkville, MS which is home to Mississippi State University. MSU’s Center for Advanced Vehicular Systems was a key reason that PACCAR decided to put their new engine plant in Columbus. The company donated $2 million to the center on the day of their groundbreaking.

With what I’ve written about Columbus the past few days, I hope that you can understand why I’m going back next month. It is an incredible town!

Aerospace Cluster and More!

I was worn out trying to keep up on the tour of Columbus, MS as Joe Max Higgins and Allegra Brigham showed me the SeverCorr and PACCAR sites, with a combined $2 billion in investments and thousands of newly created jobs. But, those two mega-projects weren’t the only things that were happening in Columbus.

Columbus, which is also the home to the Columbus Air Force Base, trains about 500 pilots per year. Those pilots and their support personnel have helped the community to recently develop into an aerospace cluster. American Eurocopter located here in 2003 to manufacture helicopters. The Lakota Helicopter, a replacement to the Huey, is being made in Columbus. Aurora Flight Sciences, which makes UAVs (unmanned aero vehicles—also called drones) and recently won a contract for a new composite cargo plane, has a plant at the local airport. In 2007 Stark Aerospace, a division of Israeli Aircraft, announced plans for a company campus to make drones and aero-optics. Collectively, these three firms employ about 300 but projections are to exceed 1,000 within a few years. A 15 acre Aerospace & Defense Incubator is planned at the airport.

A second port on the Tennessee-Tombigbee Waterway, which links the Gulf Coast with the Ohio River and other navigable rivers, is being built in Columbus. Other plants have expanded in the past few years. Columbus is on the move, at a scale that I’ve not seen in any other small town in my travels.

One final economic development note: Almost as a side note Joe Max and Allegra pointed out the site for a new 800,000 sf, $100 million shopping mall on the west side of town. While 2,000 jobs will be created and would be hailed with great glee in most towns, we all knew that real wealth is created with the other projects that are being created in Columbus. Retail will quickly follow. It doesn’t happen the other way around.

Flocking to Columbus

Joe Max Higgins is an example of where the combination of planning, persistence and risk taking combine to equal success. His first opportunity to distinguish and differentiate Columbus from the pack came less than a year after he started as head of the Columbus-Lowndes Development when the Tennessee Valley Authority (TVA) held a workshop in Nashville, TN, inviting hundreds of towns within the TVA area to look at developing new mega-sites for automotive, steel and other large projects.

Joe Max related that at the workshop they got up and said, “Ok, here is what you are going to need if you want to play. You’ve got to have a commercial airport within 50 miles. You’ve got to have one and hopefully two Class I railroads. You’ve got to put together at least 1,500 contiguous acres of land with at least 1,000 that are developable. And, you can’t have an existing automotive assembly plant within 50 miles.”

He went on, “We went check to that; check; check; check. But they only gave us six weeks to put everything together. That included controlling the site, getting engineering plans done and having cost estimates done for infrastructure.”

Allegra Brigham added, “It really separated the men from the boys. No one thought we could pull it off. They thought we would give up midway through. But, Joe task mastered everyone and we pulled it off. When we were done we had a six inch binder to submit with all of the details they were looking for.”

The new mega-site involved getting seven different land owners to agree, something that I can’t imagine being able to do in such a short period of time.

The site became the first TVA certified site in their seven state area in August, 2004 and SeverCorr, a new generation steel producer, walked in the door in October. The $880 million project was announced in January, 2005 and formally broke ground in September, 2005. The ribbon cutting for the plant is later this month. Two other companies (Heidtman Steel and New Process Steel) are also building plants adjacent to SeverCorr to utilize the mill’s production.

Allegra talked about the community’s reaction, “We had a lot of doubters in town. Some of the people started to finally believe when we got the mega-site certified but there were few doubters when SeverCorr landed.”

Joe Max added, “The knife was hot and we cut through the butter with SeverCorr. But one winning season does not a dynasty make. So, we had to do it all over again. We signed options with another seven different land owners for our second mega site in November, 2005. We got that site certified in the spring of 2006 and it became TVA’s fifth mega site. We were the only town that has ever done two. Suddenly, we were a player!”

Columbus quickly became a finalist for National Railcar that ended up in Mussel Shoals, AL; a GE plant that went to Batesville, MS; and a new PACCAR Engine plant that is now being built in Columbus.

Joe Max said of PACCAR, “We were simultaneously working all three of these projects in a six month period of time when PACCAR called and said, ‘We want to come to Columbus but you’ve got to end discussions with the other two projects you are working.’ We rocked the ED world when we took ourselves out of the running for GE and National Railcar.”

He laughed as he told me that he had lost over $1 billion in projects in the past year, even as he was landing the $1.1 billion PACCAR plant with almost 1,000 jobs.

The SeverCorr jobs will pay an average of $75,000/year. PACCAR’s will be $50,000/year jobs. Of the 3,500 jobs that have been created, only 200 could be classified as lower paying ones. Quite an accomplishment for Columbus and its citizens.

Can you believe I’m not done with this story? Monday: Other, smaller companies landed that would be front page news in most towns!

More than Entire States!

Todd Thoman, our resident economic development expert at Agracel, kept telling me about Columbus, MS (population 25,944) from his travels around the country. Todd is on the road almost as much as I am and was the person who taught me the ED field many years ago. As we were expanding, he was the first person who I thought of bringing on when we were of a size to do so. Fortunately, he accepted and is a key part of Team Agracel.

I finally got to Columbus on my way to a Mississippi Power talk in Meridian. Almost 100% of Mississippi Power customers lost power from Hurricane Katrina, but valiantly the company had everyone back online within 12 days. They are a world-class organization.

Joe Max Higgins, CEO of Columbus-Lowndes Development, and Allegra Brigham, CEO of 4-County Electric Power Association, were my tour guides for a very quick two hour tour of Columbus. In fact, as you’ll see in my report, it was too quick and I’m going back next month for another visit.

Joe Max explained a bit of the history of Columbus, “Forty years ago we were bigger than Tupelo, but George McLean and Harry Martin started the Tupelo Miracle and within ten years we were the same size. Today Tupelo is about 40% bigger. We developed a great deal of complacency and had a loser attitude. We were constantly coming in second on many projects.”

I’ve often said I’d much rather come in tenth or twentieth rather than second on an industrial project. You lose either way, but coming in second is especially disheartening.

Joe Max went on, “I was working in economic development in Paragould, AR and a recruiter called me about the job in Columbus. I hung up on him but then started looking at them compared to other locations. I thought that they should be hitting home runs, but it appeared that they didn’t have a team in place and they weren’t working any deals.”

Allegra added, “Joe came in to the interview and knew more about our town than we did. We knew we had to do something different and talked him into leading us. One of the questions he asked us that day was, ‘Do you value the past more than the future?’ I responded that day, ‘We appreciate the past but are looking to the future.’ Joe is definitely one who is looking to the future.”

That was June, 2003. Since then Columbus has landed two mega-projects and numerous other new businesses that have collectively invested over $3 billion into the community. Those companies will hire approximately 3,500 people, virtually all at over $16/hour. Their goal is to continue to grow 1,000+ jobs/year, a very aggressive plan for a town of 25,000.

Three billion in projects is more than some states that we work in have accomplished in the entire state! Tomorrow’s blog relates how they landed those companies.

Earthbound Farm

One of the more incredible stories that we found in researching BoomtownUSA was that of Drew and Myra Goodman, city kids from Manhattan who took some time off from school to start growing 2.5 acres of raspberries in the Carmel Valley in 1984. Myra’s idea of bagging up lettuce so that she could make a quick salad when they came in from the field, grew into a huge idea. Today Earthbound Farm is the largest grower of organic produce and their pre-packaged products are found throughout the entire country.

We visited their original farm stand and enjoyed walking through their fields and flower beds. The place was hopping!

Earthbound Farms has special events at their farm stand EVERY weekend from May 1st through the end of October. Such events include: Bug Walk; Garlic Braiding; Corn Husk Dolls; Flower Walk; All About Herbs; Chef Walk; Raspberry Revelry; Corn Crazy and many others.

The Goodmans learned long ago that it is not just about how you produce but also how you market that is the difference between failure and success.

Farmers in San Francisco? And, NYC?

As I mentioned in my blog yesterday, one of the great advantages that I see in CA agriculture is its wonderful diversity of crops that are grown on its farms. Driving down the road for an hour you can see dozens of different crops, both annuals and perennials. This diversity has helped to elevate CA into the top spot in American agriculture.

Another advantage that CA has, in my opinion, is that it also receives one of the lowest amounts of subsidies as a percentage of its production when compared to the other 49 states in the USA. CA farmers are producing for the market, not because of what Washington incentivates with its Farm Bill. I’ve seen how eliminating subsidies can stimulate an agricultural economy in New Zealand and wish that we would give it a try in the USA.

The maps of SF and NYC that are on this page show the number of “farmers” that received agricultural subsidies from 2003 to 2005. The larger dots received hundreds of thousands of dollars in taxpayer money for the farming that they were doing.

I guess that I’ve just not gotten to the right spots in either city to see the farms that are located there!

End Subsidies?

Dean Kleckner, Illinois farmer and former head of the American Farm Bureau from 1986 to 2000 had a wonderful op-ed piece in the NY Times this morning entitled “Today’s Harvest of Shame.” In it he attacks our current system of subsidies and calls for a more open agricultural trade policy. Here are two of the more powerful paragraphs from his op-ed.

In the 1990s, however, a trip to New Zealand made me realize that eliminating subsidies was not just a free-market fantasy, but rather a policy that could work in an advanced industrial nation. New Zealanders had stopped subsidizing their farmers, cold turkey, in 1984. The transition was controversial and not without its rough spots, yet it succeeded. On that visit and several later ones, I never met a farmer who wanted to go back to subsidies.

Today, it’s obvious that we need to transform our public support for farmers. Many of our current subsidies inhibit trade because of their link to commodity prices. By promising to cover losses, the government insulates farmers from market signals that normally would encourage sensible, long-term decisions about what to grow and where to grow it. There’s something fundamentally perverse about a system that has farmers hoping for low prices at harvest time — it’s like praying for bad weather. But that’s precisely what happens, because those low prices mean bigger checks from Washington.

http://www.nytimes.com/2007/10/15/opinion/15kleckner.html?_r=1&th&emc=th&oref=slogin

October 15, 2007—Wonderfully Diverse Agriculture

My wife and I were out in CA for a wedding and took a day trip up the Salinas Valley near the coast. We love driving through wonderfully diverse areas like this where one field is cabbage, the next is lettuce, grapes, artichokes, etc., etc., etc. I’m a firm believer that much of the reason for the incredible strength of the California agricultural economy is the great diversity of crops that it raises as compared to a more limited number of crops in much of the rest of the USA.

This diversity has served it well. Today CA produces almost twice as much in dollar terms than the second highest state, TX. The ag and food processing sector is the second largest industry in the state, following only computers and electronics. As the largest U. S. agricultural exporter, if CA were a country it would be the 6th largest ag exporter in the world!

One of our more interesting stops on the road that day was Pezzini Farms, which has developed a niche in artichokes. They’ve been producing them for over fifty years near Castroville, CA, a community that boasts it is The Artichoke Capitol of the World. At the Pezzini Farms shop, surrounded by artichoke fields, we saw and learned more about artichokes than I’ll ever be able to use. From their packing plant in the back the Pezzinis’ ship artichokes across the country and around the world.

Further up the valley we spent some time in King City, CA (population 11,094), a farming community in a uniquely California sense. Most of the shops in their beautiful downtown were in Spanish (lots of entrepreneurs!) and later I learned that 80.4% of its population is Hispanic, with 73.9% speaking a language other than English as home. Their average age of only 25.3 years compared to a national average of 35.3 is one of the youngest that I’ve encountered in my journeys around the country.

One final observation is that it appeared to me that grapes and wineries are beginning to take over some areas in CA, including in the Salinas Valley. As I observed and reflected upon it, and I don’t profess to be an expert, it appears to me that grapes could be much easier to grow. They only have to be planted once. Wine is the new sexy product. I hope that other crops aren’t abandoned as a result.

Marvelous Marvin

One of the better regional business magazines that I subscribe to is Prairie Business out of Fargo, ND, which covers the two Dakotas and Minnesota. Rick Killion, its editor, is a very engaging person with a real passion for the development of local businesses and communities.

Last month’s issue had a wonderful story on Marvin Lumber & Cedar Company, known around the country for their Marvin Windows and Doors. Privately owned, the company was started by George Marvin and is still run by third and fourth generations of the family from Warroad, MN (population 1,722), a town just six miles south of the Canadian border. Grandson Bob Marvin runs Marvin’s truck fleet in addition to serving as mayor of Warroad since 1994.

With 5,400 employees in five states the company is by far the largest employer in the far northern MN and has positively impacted the towns in which it operates. I hope that I can get to Warroad to study them more.

http://www.prairiebizmag.com/
http://www.marvin.com/

E-Community Kansas

“The best way to improve economic and community development in rural communities is to foster entrepreneurship. After conducting 32 town hall meetings and awarding more than $240,000 in loans and grants to small businesses across the state during the past 15 months, we have learned that the best way to achieve success is by empowering local leaders to engage rural entrepreneurs,” said NetWork Kansas Director, Steve Radley. I couldn’t have said it better myself.

The initiative was started in 2004 as a way to revitalize and encourage more economic development activities in the state. This latest effort will provide $1 million in tax credits to four towns or rural counties chosen to use as grants or loans for start-up businesses.

The Kansas program provides each donor to the program to a 75 cent income tax deduction for each dollar that they contribute to this program. Other states have taken similar approaches with angel investor networks in rural areas. I wish that more would follow.

Waterfowl Capital

Having won the designation as the “Waterfowl Capital of Mississippi” in 2006, Drew (population 2,434) is holding their first annual “Delta Wings Festival” on November 3, 2007.

I was in Drew in July and wrote several blogs in late July and early August about how Drew and neighboring Ruleville were making valiant efforts to reinvent themselves from that of the typical Delta town. I was particularly impressed with the effort being made in Drew to redevelop their historic downtown.

This first festival will include a youth and adult duck calling contest; a duck gumbo competition; music; food and other activities. Prizes include a celebrity hunt with Archie Manning at the Fighting Bayou Hunting Club. The event will wrap up with a Delta Waterfowl Banquet at the Drew Country Club.

Drew is not giving up. I’m impressed with their approach and tenacity.

Resume Bank

Nebraska Rural Living is a non-profit e-magazine that will now allow visitors to the site to upload a resume and cover letter to their newly-created resume bank. What a great idea!

Betty Sayers, co-founder of the web site in 2003, commented, “We can’t promise anyone a job, but we will make the resume bank available to employers and propose resumes for specific opportunities we become aware of.”

Nebraska Rural Living features articles on small town and rural entrepreneurs, events, activities and people. The site also profiles “Livable Small Towns” and offers a database of houses, businesses and commercial property for sale, as well as a database of rural jobs.

“Small town have many wonderful benefits to offer,” Sayers said. “Housing is affordable, crime is low, and pollution and congestion are almost unheard of. There are also many employers here who are eager to hire skilled workers and paying competitive wages. We’re hoping the resume bank can be a win-win proposition for everyone.”

What a great way to match people with jobs – and help your community’s greatest asset, your residents!

Raising Shrimp in the Cornbelt?

My wife and I made our annual trek to the Stan and Kay Zumbahlen Dairy Farm in rural Newton, IL for their shrimp harvest this past weekend. The Zumbahlen’s have been raising shrimp for the past half dozen years with nieces, nephews and grandkids all helping with the draining of the ponds and sorting of the shrimp.

The young shrimp come from the Gulf Coast where they are acclimated from salt water to freshwater. Around June 1st of each year the Zumbahlen’s put about 1,100 of these baby shrimp into their larger pond, which I estimated was about 2 acres in size. For the next 4 months they feed and aerate the pond, draining it each fall. They sell the shrimp for $8/pound, selling all they produce by the end of the day and without a great deal of advertising.

This is one of the many different types of unique “crops” that can be harvested in our rural areas. It continues to puzzle me of why more farmers don’t look at some of these alternatives to help diversify their revenue away from what is becoming too much of a monoculture or duopoly of crops.

Another observation from visiting Shrimp Day on the Zumbahlen’s Dairy Farm is that farmers need to learn to become not just good at production but also good at marketing. Revenue could be significantly enhanced by turning a production day of draining the pond into a festival with such things as a shrimp boil, shrimp races, etc.

These niche ag products are rapidly developing around the country. I just wish that they would happen more quickly.

Forbes 400

The Forbes 400 hit my mailbox today. It now takes $1.3 billion to make the list, which puts me multiple zeros away from ever making it.

But, there on page 31 is Forbes’ publishers list of the best books to get rich by. And guess which book is one of the 53 that they chose? Pretty cool, huh!

Here’s what they said,

Let’s suppose your goal is to raise a child who will grow up and make The Forbes 400 list someday. How do you feed her brain and nourish her spirit? What secrets of wealth-building do you pour into his pulsing veins?

And they went on,

Here are 53 books that I and some of my self-made, rich friends recommend. These books range from the theoretical to the practical, the instructional to the inspiration. It’s an eclectic list—highbrow to hokey, it runs the gamut. No one will like the entire lot. But I hope you find a few gems that might help your children achieve outsize success.

I’d never ever considered BoomtownUSA a “Get Rich” book, but who am I to know? At least we didn’t make the “Don’t bother ever reading this book” list.

Take a look at the list of books for yourself here.

Traffic Congestion

When I was asked to address the Illinois Association of Highway Engineers’ annual meeting which was being held in my hometown, I did some research on what I perceive as an increasingly more congested road system. The following graphs show that while our lane miles of traffic are up marginally since 1980, the number of miles traveled on those roads is up over 250%. No wonder it seems to always take me longer to get around!

Even more alarming was the area in red on the following two maps from 1998 and projected to 2020. The red area is highways that are operating at over 115% of their rated capacity.

Several months ago I spoke with Peter Kinder, the lieutenant governor for Missouri, who explained a plan to try to develop I-70 and I-44 the length of the state into 8 lane highways, with 4 of those for the exclusive use of cars. After studying the last two maps I could understand why they are looking at such a plan.

While much of rural America has not been bothered by serious highway congestion, other than our ‘rush-minute’ at the start and stop of the day, it is going to become more of an issue as the population of the country continues to grow and more people flee the ‘rat-race’ of the bigger cities for the tranquility of the countryside.

1998 Data

2020 Projection

They Still Call Him Johnny

John Wooden’s record of winning 10 national championships during a 12 year period at UCLA is one that will probably never be broken. However, his leading the local high school to a state championship (in the days of a one-class system) and three straight state finals as the team’s point guard, is what he is remembered best in Martinsville, IN.

Johnny Wooden, as he is known locally, was born on a farm without electricity or running water, moving to town when he was in high school. From Martinsville he went on to star at Purdue where he was a three time All-American and College Player of the Year.

A series of coaching assignments in high schools, enlistment in the Navy during WWII and coaching at State Teacher’s College in Terra Haute preceded his accepting the head coaching spot at UCLA.

Wooden’s late wife Nellie, who was his high school sweetheart, was also a Martinsville native. The town named the Martinsville High School gymnasium in his honor in 1989.

How come so many of the great ones come from small towns like Martinsville?

From Mineral Water to Destination

“Our motto was the City of Mineral Water and we had a dozen sanitariums in the town,” Jamie Thompson, Executive Director of the Greater Martinsville Chamber of Commerce, told me as we started our tour. The sanitariums are long gone but the Morgan Hospital and Medical Center with its cutting-edge technology investments and 550 employees is bringing in patients from all over the USA and some foreign countries.

I often talk about crossroads for communities and decisions that have to be made when towns come to those crossroads. Martinsville, IN (population 11,698) is at one of those crossroads. The population of the county has grown by over 50% in the past 30 years, primarily due to its strategic location midway between Bloomington and Indianapolis. Many working couples moved to Martinsville as the drive to each town was only 30 to 40 minutes. A new 2,100 acre housing development of 1,300 homes ($400,000+) with riding stables and a Pete Dye Golf Course on the outskirts of town will only accelerate this growth. Or you can buy a Frank Lloyd Wright designed home for about $250,000.

An even greater impetus for growth will be the new I-69 interstate that is in the planning stages, linking Detroit to South Texas/Mexico and linking up Indianapolis to Bloomington and on to Evansville. That project which will take at least a decade to complete will physically split Martinsville but allow the town to rethink what they want to be in the long term.

I told my audience that they needed to rethink the approach of some, that Martinsville’s best strategy lay in continuing to be a bedroom community. The financial ramifications of going down that path are dire. The longer term ones of building a community when the best in your town are worn out from a long commute are even more devastating.

The Morgan County Economic Development Corporation, under the able leadership of John Taylor who I’ve known for over a decade, is pushing to leverage Martinsville’s location between Eli Lilly in Indianapolis and Cook Group, a biomedical powerhouse, in Bloomington to develop a life sciences cluster. Another possibility is auto racing technologies building upon a local company’s success with making racing car windows and visors that are 460 times stronger than normal auto glass.

Martinsville has a very bright future. Decisions that are made in the next couple of years will determine how brightly that future glows in the next decades.

Downtown Franklin

Franklin, PA (population 7,200) is the county seat of Venango County. Venango is an Indian word for ‘Beautiful River Runs Through It’ and the Allegheny River which runs from Oil City to Franklin and then on down to Pittsburg, is certainly a beauty.

Franklin, also called the Victorian City, was an important French fort. A young British officer named George Washington was sent to the town in 1753 to warn the French that they were trespassing on land claimed by Great Britain.

Their downtown is one of the loveliest I’ve seen in my travels with all of its old two and three story brick buildings still intact and largely occupied on the main floor. Efforts are under way to redevelop the upper floors with apartments and condos, something that I view as critical to long term success in any downtown.

The community did a downtown study and blueprint on its future in 2004, revamping parking and beginning the redevelopment of upper floors. A 498 seat, early-1900s theater has been redone and the town puts on 7 festivals each year. The largest is the annual Applefest held the first weekend of October each year, with over 100,000 annual visitors to the town. Other festivals are Franklin on Ice (ice sculptures); May Garden Mart; 4th of July; Music Festival and Taste of Franklin; DeBence Antique Music World; Rock in River and Light-up Night. That first festival, Applefest, started 25 years ago as a pie baking contest and has grown ever since. The Rock in River Festival includes the PA Stone Skipping Competition. Last year’s winner, Russ Byers, set a Guinness Book of World’s Records last year with 51 skips!

The town also features noon concerts in the summer and a patio series of musical groups on Friday evenings.

Franklin is a wonderfully charming town with a bright future.