“Economic Gardening” – Business Friendliness Redux

gardening hands.jpgThe City of Littleton, CO has pioneered a different sort of economic development strategy for the past decade. Known as “economic gardening”, this strategy shifts the emphasis from “economic hunting”, i.e. recruiting companies to relocate, to helping a community’s existing businesses and entrepreneurs grow into healthy, vibrant companies with a strong employment base.

Historically, small businesses have accounted for about 75% of all job growth, plus half to two-thirds of the nation’s innovations and inventions. According to the NY Times, small businesses accounted for more than half of all private-sector jobs created last month. And of 150,000 new jobs, 91,000 of them were in businesses with fewer than 50 employees. (Large businesses, however, cut 4000 jobs in June.) And the SBA (U.S. Small Business Administration) has determined that companies with fewer than 20 employees created 85 percent of the new new jobs over the most recent 14 years of available census data (up to 2003).

Given facts like these, it simply makes sense to cultivate and nurture entrepreneurial activity and our existing businesses, rather than putting all our economic eggs into the recruitment basket. However, as Ross pointed out in an earlier post Northfield does not have a reputation for being “business-friendly”.

But why not? And what does that mean, anyway? (The most vocal sector of the “be more business-friendly” contingent usually uses the term as code for “developer-friendly”, which isn’t the same thing at all.)

According to consultant Edward Lowe, the three basic components of economic gardening are:

  1. Providing critical information needed by businesses to survive and thrive.
  2. Developing and cultivating an infrastructure that goes beyond basic physical infrastructure and includes quality of life, a culture that embraces growth and change, and access to intellectual resources, including qualified and talented employees
  3. Developing connections between businesses and the people and organizations that can help take them to the next level – business associations, universities, roundtable groups, service providers and more.

The City’s Economic Development Authority has defined its mission very narrowly, whereby its effectiveness and success is measured simply in terms of job creation and tax base. Admittedly these two things are crucial, and of course they’re the easiest to quantify. However, I believe that if Northfield wants to keep its existence as a cohesive and free-standing community, we need to look beyond that definition and think more broadly. It will help if we can shift our understanding to a more organic model, which acknowledges and appreciates the way each part (colleges, businesses, entrepreneurs) contributes to the whole (making Northfield a safe and satisfying place to live, work, and play).

Different business types obviously have different needs. For example, our “Mom and Pops” (our independent retailers and restauranteurs and service businesses, particularly the ones downtown) are usually underappreciated, and often struggling. No, they don’t contribute much in terms of job growth or commercial tax base. However, these businesses are hugely significant in providing a distinctive flavor and “sense of place” to our community. Their very existence contributes directly to our quality of life and our community identity. We can’t justify expenditures of City resources to a particular downtown business, but perhaps there’s a way to implement programs that will benefit them collectively. The least we can do is try to smooth their regulatory path a bit and make the process of expansion and renovation easier.

There’s also sort of an entrepreneurial corollary to these Mom and Pops – what I’ve heard termed the “lone eagle” businesses, generally an individual providing expertise to other businesses by consulting services. These are often extremely well-respected experts in their various fields. I don’t see a clear way to directly support businesses like these, but perhaps they could also benefit from being recognized as a vital part of Northfield’s community identity. Any organization that took on the task of interviewing these eagles, and helping to publicize their skills and accomplishments, would benefit both the businesses and the reputation of Northfield vis-a-vis creativity and a business-friendly place to live.

Another of our varieties is the entrepreneurial operation, usually 5-20 employees, which are often second-stage businesses. Most of them are too busy doing their core business and morphing through various growth stages to notice or care that Northfield isn’t as supportive as it could be. This segment provides the greatest opportunity to benefit from the economic gardening approach (for both themselves and the community); we have to remember that these second-stage businesses were once entrepreneurial startups, so we need to feed those as well.

The larger businesses in Northfield could benefit from any program that focuses on their workforce, whether it’s workforce housing, additional opportunities for education, etc.

Besides the City, there are three other major players tasked with supporting the business community: The Northfield Enterprise Center, the Northfield Area Chamber of Commerce, and the Northfield Downtown Development Corporation. Referring back to Lowe’s components of economic gardening, it’s clear to me that all these organizations have consistently missed #3, so there’s definitely an opportunity there.

Barbara Gentling, the owner of Care Tenders, shared her less than stellar experience in building her new facility in comment #38 of Ross’s post, which provides some excellent information about what not to do, and ways the City might improve its processes to facilitate growing more businesses like Care-Tenders.

I know we have a lot of readers with first-hand knowledge of a local business. What do you see as the greatest need? Or more specifically, what programs or services would most significantly or most immediately benefit your business? Getting that information out there will help the City and the other business-support organizations further clarify their respective missions, and prioritize their work plans. Both the Chamber and the EDA do on-site visits to local area businesses, but there’s no way they can cover all of them, and in my experience some of the best and brightest, or most interesting, are almost invisible because they’re not focused on the local market. I’d like to solicit some input from business owners and entrepreneurs (beyond “the usual suspects”), and it would be even more valuable if the comments were both specific, and first-hand.

Who wants to go next? I’m willing to share my own experiences in this arena, but I doubt Northfield can do much about the decline of the dollar against the Indian rupee, which is the biggest obstacle my business is facing right now. Other people could probably be much more helpful.

25 thoughts on ““Economic Gardening” – Business Friendliness Redux”

  1. Tracy!

    Great post. This is exactly the sort of thinking we need if we are to correct the “grow at any cost” behavior of most Economic Development Authorities (EDAs) (I mean, look at their name, for crying out loud). What I think you are calling for is an “Economic Sustainability Authority” that would look at how to build a sustainable community rather than a growth-oriented community. Mighty revolutionary concept, but very much in line with ideas like computing the Costs Of Community Services (COCS) before you decide that an expansion, an annexation or a platting is a good thing. I’ll bet that the limit to growth represented by our shared sewer plant is going to make both communities reconsider their land-grab tactics. In Dundas we are already well on the way to using planning rather than reacting as our modus operandi.

  2. The Edward Lowe website is wonderful! I am starting a small business myself, and there are MANY helpful links on his site. There is so much good information that I bookmarked it on my computer as a reference.

    A first step for Northfield might be to create a website simular to his with links for information. Established Northfield business resources could even be plugged. These resources would include anything of use to businesses. For instance:
    – shipping services
    – internet services
    – banking services
    – advertising services
    – architechtural services
    – accounting services
    – etc.

    This is only to name a few!

  3. Brilliant post, Tracy!

    I appreciate the metaphor/paradigm shift from hunting to gardening. It is generally a steadier and more reliable approach to survival and, as Bruce suggests, more sustainable too.

    I’ve read about existing businesses providing most of the job creation, tax base growth, and entrepreneurial innovation in many sources over the years. Perhaps our leaders will take advantage of your “Cliff Notes” on success in economic development.

    I would suggest that downtown contributes more to the job and tax base than you’re giving it credit. Your point on making investments downtown that benefit the many instead of individuals is worth considering. My experience has been that although existing businesses believe that should have access to the same resources as potential recruitment targets, they are more interested in the removal of obstacles.

  4. To help Northfield find the allusive answer to our “business friendliness” question, one only needs to talk to the owners of the following businesses to ask why they decided to leave Northfield; College City Beverge, Marathon Multimedia, Ryt Way Packaging, College City Homes and Radio Shack Electronics. Maybe even speak to the guy trying to open a pizza shop in the old Ideal Cafe about his experience in finding Northfield “business friendly”. We should find some “lessons learned” here without creating a new wheel.

  5. Tracy, I think the #1 thing Northfield needs to focus on is taking care of the businesses we already have here. Over the past 35 years I’ve seen dozens of businesses leave the community. While I know we probably couldn’t keep all of them, keeping the biggest share of them would have kept hundreds of jobs here….and tax base.

    When businesses like Pumper Plumbing, College City Beverage, Lonsdale Painting and so many others have to leave town we lose our tax base opportunities. When they move to Dundas we most likely keep a good share of the jobs, but the new tax base loss hurts.

    Northfield has had an Economic Development office for some time. Have we ever given them solid goals to meet? Have we ever had a true economic development report showing how our tax dollar investment in the office have been used?

    I remember some years ago (1995) I saw a report by the Economic Development office. My new construction facility (built in 1994) was listed as ‘jobs created’ etc. That is false thinking. When an existing business expands it is because the business is operating successfully and in a manner that necessitates an expansion. I managed to expand in spite of sigificant restrictions placed the design—such as ‘must be constructed of masonry or brick veneer’.

    There is a huge difference between an Economic Development office bringing a new, vibrant business to Northfield and having the office simply watch existing businesses expand.

  6. Tracy, I would be interested in your thoughts about whether we have a better “economic garden” in the Comp Plan because of the Chamber’s involvement, and why you think so.

    In my opinion, and I told you during the Comp Plan process, the Northfield attitude focuses TOO much attention on subjective concepts, like “sense of place”, “quality of living”, and “historical preservation”. Agencies like the Historical Preservation Committee and the Design Advisory Board are more like garden parasites than cultivators when it comes to thinking about the impact of their decisions on businesses. Look at Barbara’s experience.

    True, we need to take care of our businesses here before going after other businesses. But, as Ray pointed out, we are not doing a very good job of taking care of our existing businesses. Remember Norman Butler’s earlier post about his windows? Is the HPC really helping businesses or does it exist to satisfy players who don’t have a dime invested in the result? The HPC should at least consider how much historic preservation costs the individual owners.

  7. If HPC shows up with a check to help preserve the historical facades of buildings, then it is the pollinating honey bee in the garden of our community. If they just stand in the way and expect the building owners to pay the extra costs, then they are the parasitic slugs and cut worms gnawing at our vegetables.

  8. Bruce,
    Who should in charge of removing or stoping invasive weeds in the “commmunity” garden?

    That fact Northfield has an Historic District, suggest some form of oversight. Should we perhaps set up a scare crow to watch over the crops?

  9. David,
    I would disagree that “sense of place”, “quality of living”, and “historical preservation” are subjective. All these have measurable qualities. For example, quality of living standards are posted by many authorities to measure the success of regional and state economies. On a personal, I tend to use the price of gas and a can of coke.

  10. In the misery loves company department, some people in Minneapolis have the same complaints about the HPC there. A major ($100 million plus) project in the Warehouse District was held up over whether they should have five or six trees along the sidewalk in planters or grates. This happened even though the HPC readily admits that in historic downtown the only trees that existed were ‘volunteers’ in empty lots, which were cut down as soon as land was developed.
    One landscaping plan for the front entry was turned down because commissioners had a feeling it looked too formal; a second one was turned down because it looked to suburban…again there were no historic examples to use. So are we honoring history or creating them parks of what we wish places looked like if we had been there to save them from themselves.

    As for planning principles, search other cities’ plans and you see clear, demonstrable ideas specific to their communities. The Northfield principles seem rather vague and open to interpretation. Your sense of place may be far different than mine. Is it a sense of the manufacturing history of Malt-O-Meal, the sense of place of a farm town or that of a college town or that of a wild river corridor?

  11. Anne – Principles are different to objectives. Principles are interpreted in the context of the overall plan. The draft principles allow some flexiblity within the northfield context which is a mixed of places…being industrial, college, environmental. The draft principles in the Comp plan reflect these different places.

  12. Steve, I appreciate your clarification, but I wish I had a dollar for every visioning meeting I’ve attended and every comp plan I’ve read over the last 20-some years.
    I just feel, IMHO, that Northfield’s principles are too vague. Who doesn’t want their city, whatever city that may be, to have a sense of place, respect its history or provide a good quality of life? But what does that mean? (See the post above about historic Minneapolis).
    The key to communications is having a common understanding of common terms.
    Quick example: much of the infamous heroin numbers dispute was fueled by the lack of a common definition of such simple terms as young people, users, and an increase in criminal behavior. (Does young mean everyone 15-24, teen-agers, enrolled high school students, etc. Are all users addicts? Is a crime increase a few more burglarized cars or a rash of armed robberies?) The numbers wouldn’t have varied so much if everyone had been using the same definitions.
    There already have been disagreements about the wording of the principles…I’m just trying to be optimistic that the community conversation continues in a spirit of finding common definitions, and that the final document fleshes those details out just very nicely.

  13. There is at least one economic garden in Northfield to which we tend quite well – education. For example, the rental code is going to make an exception for college-owned housing? Without college students, we wouldn’t have the problem. So why should the business that indirectly created the problem be exempted?

    Tracy, you noted that the single most important factor in your business is the value of the Indian rupee. For local businesses, property taxes, health insurance, cheap housing, and other economic issues tend to be the most important determinates of success. How can we “garden” locally so that these determinates of success become important factors in the planning process?

    While I like the concept of putting more focus on growing the businesses that we already have, my personal opinion, combined with my Chamber experience, tells me that Northfield has two major attitudinal obstacles:
    First, business success ranks very low on the priority list. For example, non-motorized transportation received multiple mentions on the Development principles; yet, the first draft of the Comp Plan did NOT have one identifiable reference to business success.
    Second, when business success is mentioned, it is usually restricted to a particular business without regard to the ecomonics. In the original Comp Plan, mixed use development was identified as the preferred development. The fact that very few mixed developments are being built, and that we had to pay the Crossings millions of dollars to be build what they did build, points to the fallacy that you can legislate economic success.

  14. If you disagree that Northfield has an attitudinal problem with business, go read paragraph 8.d. of the Findings on the proposed rental code.

  15. David,
    you stated:
    “For local businesses, property taxes, health insurance, cheap housing, and other economic issues tend to be the most important determinates of success. ”

    I consider customers to be the most important. I chose to open a coffehouse, then a bookstore in Northfield after doing some market research and realized this is a good place for both. The items you mentioned are important and are part of the business plan, but the customers are the key.

    personally, I would like to see the EDA and NEC work with existing businesses to help them improve and grow. I could use the cultivation.

  16. Perhaps it is not so much the organizing the garden but rather the type of soil used. For example, the traditional command and control model of land use planning or is that planting, is very inefficient. So far we can list, institutional favoritism, City self interest, and lack of cost/benefit analysis, just to name a few. So creating the laundry list of issues that we think would create a better “economic garden”, perhaps we should actually focus on the soil that we all spend so much time tendering.

  17. As Chamber President, I would like to take something concrete and actionable back to the Board. Also, what in the current Development Principles could be considered economic gardening?

    The only recent example that comes to mind with economic hunting is the Crossings project where we went A) out-of-town to find a developer to build a partly B) residential property partly supported with C) tax dollars. I know that there were in-town developers interested in building without tax dollars. Tracy, isn’t this an instance where “sense of place” trumped economic gardening?

  18. David:

    Given your interest in the Comprehensive Plan Revision Process and Economic Development in Northfield…I urge you to attend the Planning Commission Meeting tonight when we discuss CHAPTER 10 of the Comp Plan:

    ECONOMIC DEVELOPMENT!

    See you there,

    Ross

  19. Ross, Is there a chance that I can get my hands dirty with regards to commenting on the comp plan revisions presented to the planning commission this week? Are you taking public comments at the meeting? Or do I need to wait for the CC public meeting meeting?

  20. Peter:

    I’m sure any member of the Planning Commission would be open to your comments, however, submitting them through the NorthfieldPlan.org website is the most “official” and probably the most reliable method.

    We are soliciting comments at the public meeting on September 18th and that would be another opportunity for you.

    Ross

  21. Thanks Ross,
    Appreciate the response. I would like to know what type of response mechanism is in place for the City staff and consultant that will to answer specific comments. For example, if a suggestion or idea is made, will there be a written response explaining how that issue will be handled? I would hope yes, in the sense that specific comments by individuals are specifically addressed.

    I know I have made comments either in this forum or through the Comp Plan website that have been addressed by individuals, but not by the City Council, staff or the Planning Commission. Most of my comments have not been addressed officially.

    I hope this will change to allow voices not just to be heard, but actively listened to as well by the City. Perhaps you can see what official response mechanism is in place.

  22. Peter – I know the consultants, staff, and commission members are reading each and every comment and suggestion, but I don’t think there’s any practical way to ensure that everyone gets a response. All we can promise is that they’ll be heard and considered.

    If I were in your shoes in this situation and had something I wanted to be sure was heard, I’d write and send a copy of the letter/fax/email to each planning commissioner, a couple levels of city staff, and the consultant(s); I’d hope that at least one of them would give me the courtesy of a response.

  23. Thanks Tracy,
    This forum makes it easier for a response to take place by individual voices. I would like to see a more official response mechanism in place BEFORE the draft becomes final and the during the draft stage to allow responses to community voices.

    From recent past experience, I think the City could learn from the Woodley Street project that one or two “open houses” do not equal public consultation. Active listening to voices and concerns with adequate feedback is required.

    With regards to the Woodley St project, a good question for the City is was there any written responses made by the City to the residents that did speak up regarding their concerns? I would imagine that the Minnesota nice excuse is worn out and that its time actively listens and respond.

    To many times issues reach glazed eyes and become vague comments imbedded within meeting minutes.

  24. Hey Tracy –

    One of the things that folks have suggested would help make Northfield more “business-friendly” is increased coordination and collaboration among the economic development entities in Northfield.

    Tomorrow at the Monthly Forum, the Chamber of Commerce, the Economic Development Authority, and the Northfield Enterprise Center will be the NDDC’s guests. Coordination and collaboration will certainly be one of the topics.

    For more details, see: http://nddc.org/weblog/post/995/

    Maybe we’ll see you there…

    – Ross

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