Tag Archives: economic development

Luring and growing businesses with local subsidies: What’s Northfield’s track record?

Northfield City Councilor Betsey Buckheit has a new blog post titled The cost of doing business:

Betsey BuckheitIn the “try to lure business at all costs” department: Part 1 of the New York Times’ United States of Subsidies series As Companies Seek Tax Deals, Government Pays High Price is another piece to add to my collection of anti-subsidy posts…

Politically, this should bother Democrats and Republicans.  For small government free market types, this is heavy government meddling in the private sector with your tax dollars.  For liberals suspicious of big business, the money flowing to enrich corporate America should be infuriating.  For anyone interested in transparency and accountability it’s trouble.

Her post makes me wonder what Northfield’s recent (past ten years or so) track record is with using tax dollars to lure companies to Northfield and grow ones already here.

Chris HeinemanIt might be helpful information for our new Director of Planning and Community Development,  Chris Heineman, who’s also serving as our Economic Development Director. (We recently had three city staffers doing his job.)

And it might be helpful to current members of the EDA as well as for those being considered for the two vacant positions.

So let’s crowdsource this: What’s Northfield’s track record at luring and growing businesses with local subsidies larger than, let’s say, $10,000?  Contact me if you’re reluctant to comment here.

Local governments and their economic growth model: behavioral change needed?

Strong TownsFor decades people have sensed (and feared) that developers and land speculators have sold small towns bills of goods that inflate the cities expectations of returns on infrastructure investment. Groups like Strong Towns have finally quantified this sense by doing the numbers on the economic growth models we have employed since WWII. What they find is alarming. For example, I have suggested in the past that before towns (both Northfield and Dundas) commit to new housing development they should have a good inventory of

  • how many houses have been on the market for more than 3 and 6 months
  • how many houses have be de-listed without selling in the last 6 and 12 months
  • how many houses are in foreclosure
  • how many houses are underwater by more than 10% of the amount owed on the house

Some of these questions are harder to get answers to than others, but to make bets with the taxpayers money requires that we do our best to answer them. Enlisting the help of the experts (staff, realtors, bankers) would require a large grain of salt, since they are sometimes damaged by even the simple public knowledge of these data. And we elected officials too often abrogate our responsibility in favor of reports from those self-same developers, who love to ply us with eight-by-ten colour glossy pictures of the scene of the future crime.

So, the question I pose is this:

What changes in local governmental behavior (bonding, taxation, saving for future expenses, if any) do you think we should embrace in light of national and international issues like the end of the era of economic growth economies, global warming (for its local impact on agriculture) , and the debt crisis?

References:

During his 1949 inaugural speech President Harry Truman identified the development of undeveloped areas as a priority for the west:

"More than half the people of the world are living in conditions approaching misery. Their food is inadequate, they are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas. For the first time in history humanity possesses the knowledge and the skill to relieve the suffering of these people … I believe that we should make available to peace-loving peoples the benefits of our store of technical knowledge in order to help them realize their aspirations for a better life… What we envisage is a program of development based on the concepts of democratic fair dealing … Greater production is the key to prosperity and peace. And the key to greater production is a wider and more vigorous application of modem scientific and technical knowledge." http://www.bartleby.com/124/pres53.html

We are like a poor person who scraped enough together to buy an expensive sailboat, only to find that they could not afford to maintain and keep it.

"The American Society of Civil Engineers released a report in 2009 giving the nation’s infrastructure a ‘D’ grade and identifying $2.2 trillion in repairs and upgrades that are needed over the next five years. For context, this is over $29,000 in the next five years for a family of four just to catch up. In the meantime, our infrastructure continues to deteriorate." http://www.strongtowns.org/facts/

The economic growth model (a variant of a Ponzi scheme) is over

"The “party” [growth without worrying about limits to growth] was humanity’s one-time-only opportunity to fuel economic growth and technological innovation with a bounty of cheap, abundant energy from fossil fuels. The harvesting of oil, coal, and natural gas has inevitably proceeded on a best-first or low-hanging fruit basis. While the Earth still possesses a wealth of unexploited energy resources, the cheapest and easiest-accessed of those resources have by now already been used. All of these fuels are in the process of becoming more expensive, and the various energy alternatives are limited in one way or another in their ability to replace hydrocarbons. That means we are currently seeing the end of economic growth as we have known it. The impacts for transportation, globalization, and world food supplies will be serious indeed." http://www.ecobuddhism.org/science/coal_oil_nuclear/party_over/

Economic growth models are essentially Ponzi schemes

"And here’s the ugly economic reality. All growth schemes that assume indefinite future growth are Ponzi schemes. Because nothing can grow forever in a finite world, and when growth stops, people who were hoping to make future gains are stuck." http://www.uwgb.edu/dutchs/PSEUDOSC/Ponzi.HTM

Two build-outs underway on downtown’s West side. Guess the businesses; guess the media coverage

300 Water St - exterior 300 Water St - interior
The space at 300 S. Water St., most recently a photography studio, is undergoing a build-out. Guess what current Northfield business is moving in there?

209 S. Water St - exterior 209 S. Water St - interior
Likewise, the space at 209 S. Water St., formerly Erbert & Gerberts, is undergoing a build-out. Guess what two businesses are moving in there? Hint: they are not retail and they are not currently Northfield businesses.

Bonus question: Will Northfield Patch or the Northfield News be the first to run stories on these developments?

Randy Jennings excoriates the City Council for its economic development practices

Northfield Economic Development banner

Randy Jennings has a guest column in yesterday’s Nfld News titled What is economic development? Yawn? Nosiree. It is a benign title for a hard-hitting piece.  (I assume the headline was crafted by the editorial staff at the paper, hence my use of the word ‘excoriates’ in the blog post title. It essentially means ‘kicks the ass of’ but you can look it up.)

It’s a well-written piece, so I encourage you to read the whole thing. But here are some excerpts:

With its takeover of the Economic Development Authority and the resignation of yet another member of the city’s professional staff, the city council has completed its dismantling of Northfield’s economic development, community development and city planning efforts…

Since then, the city council has new members with their own agendas and priorities. Community re-engineering ideas with clever names like “green steps,” “strong towns” and “complete streets” get attention. Job creation and tax base expansion do not…

Several current council members are actively opposed to commercial and industrial development. They spent more than a year angling to take control of the EDA without advancing a single idea about job creation or tax base expansion. They are instead funding specific organizations and activities that enhance their definitions of quality of life in Northfield. No impact on attracting jobs or expanding the tax base. Not economic development…

Perhaps the next election will serve as a referendum on what kind of a future Northfield would like to develop: more quality of life re-engineering, or more jobs and an expanded tax base…

I’m not well-informed on matters of economic development but I’m more supportive of the direction the current City Council has taken.  Two large Northfield employers, Monster Games and Perkins Specialized Transportation Contracting, were featured in the Northfield Community Video project for which Randy was hired to be the Project Coordinator by the EDA. If you watch the videos that feature their owners (here and here), you’ll see that they attribute their location of their businesses in Northfield in large part to the very things that Randy criticizes in his column: Northfield’s vibrant downtown and overall quality of life.

So let’s talk Northfield economic development: the good, the bad, the ugly.

Northfield should be grateful for the area’s big-box stores, especially the Menard’s in Dundas

In last Sunday’s Strib, Eric Wieffering’s business column was titled Vibrant economies aren’t found only in cities. Citing the recent Trade-Center Hierarchy in Greater Minnesota report by the University of Minnesota’s Center for Urban and Regional Affairs (CURA), Wieffering wrote:

Trade-Center Hierarchy in Greater MinnesotaWhile the survey measures more than retail activity (it includes taxable sales reported by a dozen different industry classification codes), the presence of a single big-box retailer can significantly boost one city’s fortunes at the expense of another.

Schwartau illustrated how that’s happening in Fairmont, a city that doesn’t have a building materials retailer. His analysis suggests people are leaving Fairmont to buy building materials at the Home Depot in Mankato. Once they get there, it only stands to reason that they’re more likely shop for other things as well, such as clothes or groceries.

The anti-big-box crowd might say this illustrates exactly why small cities should be discouraged from recruiting chain retailers, but Schwartau suggests the opposite might be true. The best way for Fairmont to protect its local retail base might be to recruit its own big-box home improvement store.

From the report:

Destiny is not preordained. Cities of similar size and location often experience different outcomes. Albert Lea in southern Minnesota appears to be outperforming nearby Austin. Owatonna has outperformed Faribault. Cities can change their own vitality by making conscious decisions and investments. For example, Owatonna was successful in attracting Cabela’s, Target, Lowe’s, Walmart, and an outlet shopping center, thus becoming a retail destination.

Menard'sAre Northfielder’s grateful that there’s a Menards and a K-Mart just across the border in Dundas, as well as a Target nearby, just inside our city limits?

I am.  It saves having to make a lot of trips to the south Metro or to Faribault.

I wonder, though, if more couldn’t be done to attract those who travel to the area for our big-box stores to our downtown. Any ideas?

Photo fraud committed for NDDC alumni entrepreneur recruitment poster

NDDC poster, The Lion's Pause, St. Olaf NDDC poster, The Lion's Pause, St. Olaf 
When I was up at St. Olaf’s Buntrock Commons a couple weeks ago for the Eat Local Challenge, I noticed a big NDDC poster outside of The Lion’s Pause with the headline: Locate your business in downtown Northfield.

NDDC Executive Director Ross Currier published an Oct. 3 blog post that explains. An excerpt:

One of the new initiatives that this group developed was alumni entrepreneur recruitment. In addition to promoting downtown Northfield as a marketplace, we wanted to promote it as a business location, particularly to the graduates of Carleton and St. Olaf Colleges. We introduced the concept for the first time at this year’s Homecoming Weekends.

I knew this poster was in the works because back in early August, Ross had asked me to contribute photos for it and they needed one additional: a photo of creative class types working in a coffeehouse.

Creative class working at the Goodbye Blue Monday coffeehouse, Northfield, MNAll month long, I kept watching for a good photo op from my early morning corner office at GBM but it never quite came together. 

So on Aug. 29, noticing that I had the raw material for a photo, I asked the laptop users to switch tables.  I then asked Nancy Amerman who was sitting with a group of runners to sit at my laptop for the photo.  Perfecto.

It should be noted that Nancy felt no shame over helping to perpetuate this fraud, whereas at least I felt conflicted. And yet she calls herself a Christian. Go figure.

Curbside Chat companion booklet now available from Strong Towns; they’re coming to Northfield in November

Strong Towns 

Strong Towns is a Minnesota-based non-profit that advocates "for changes in our pattern of development and a complete understanding of the full costs of our methods of growth." Their mission is "to support a model for growth that allows America’s towns to become financially strong and resilient."

They’ve been invited to bring their Curbside Chat program to Northfield on November 29. I don’t yet have the details on time/place.

Earlier this week they published a Curbside Chat Companion Booklet:

Curbside Chat Cover

This booklet is a companion to our Curbside Chat program. The Chat presentation itself contains so much information—information that challenges the very core of our collective beliefs on growth and development—that it was overwhelming to many participants.

Our hope is this companion booklet will be an additional resource which people can go back to again and again to absorb, at their own pace, the enormity of the change that is upon us. We urge you to share it with others.

Northfield City Councilor Betsey Buckheit attended a Curbside Chat in Richfield this summer (her blog posts about it are here, here and here) and helped with some editing of the companion booklet.

In preparation for their Nov. 29 visit to Northfield, I thought it might be interesting to engage in some online discussion of the Strong Towns approach to development and how it relates to Northfield.

In the meantime, keep up with Strong Towns via their blog, Facebook page, Twitter, podcast, email list.

The Northfield Roundtable: a public planning group without the public

For the past year or so, I’ve been hearing bits and pieces about a group called the Northfield Roundtable (also referred to with three words–the ‘Northfield Round Table‘–making online searches trickier). They met last Saturday in the conference room of the Archer House and I took a few photos.

Northfield Roundtable, April 30, 2011 Northfield Roundtable, April 30, 2011

Consultant Bill Johnson, Northfield Roundtable, April 30, 2011 Northfield Roundtable conceptual framework plan Northfield Roundtable conceptual framework plan

The Northfield Roundtable has been around since at least the fall of 2009. The EDA packet for June 24, 2010 contains a letter (page 25) from the group with their request for $9,000 from the EDA (the EDA minutes for that meeting show that the funding request was approved) for the services of consultant Bill Johnson, pictured above.  Members of the group at that time:

Blake Abdella, Dixon Bond, Rick Estenson, Margit Johnson, Bruce King, Joel Leer, Art Monaghan, Suzie Nakasian, Dave Neuger, Brett Reese, Fred Rogers, Jennifer Sawyer, Alice Thomas, Dave Van Wylen, Steve Wilmot.

How did the group form? How were members selected/invited?  What is their mission?  Who do they report to? Where are the results of their planning sessions?

It’s tough to find out, as there’s no overview document, brochure, or website for the group that I could find. Has the Northfield News, KYMN, or Northfield Patch done any reporting on the group? Apparently not.

Planning Commission Chair Tracy Davis included this update in a blog post last September:

Commissioners Davis, Imm, Herreid and Schulte participated in a workshop sponsored by the recently-formed Northfield Roundtable.  Commissioners Nakasian and Thomas were also participants in the workshop as Roundtable members.  Other participants included Messrs O’Connell and Olson. 

The fifteen members of the Roundtable, all volunteers, work to clarify, support and facilitate a clear vision and framework for development and redevelopment opportunities that enhance the economic vitality and livability of Northfield. 

The workshop was conducted to solicit ideas for improving connectivity and encouraging development in the rectangular commercial area bisected by 2nd Street, touching the Library and Q-Block on the east and west, and extending north to south from the Crossing to Bridge Square.  Ideas solicited by a consultant from the workshop participants will be packaged by the Roundtable into a future report.

So it seems that a group of influential community members has formed on its own to conduct brainstorming/planning sessions for Northfield-related public development, with public financial support, without much (any?) public process, public transparency, or public engagement.

Sure, whatever results or recommendations generated by the Northfield Roundtable would go through the various public bodies (Planning Commission, City Council, etc.) before any actions are taken.

But by then, all the educational opportunities are gone, the interesting discussions have already occurred, the influential positioning has taken place, and average citizens are pretty much left with just weighing in pro or con, as any public hearings appear to be mere formalities.

And public cynicism deepens.

Councilor Betsey Buckheit: What would an economically healthy Northfield look like?

City of Northfield Councilor Betsey Buckheit has a new blog post today titled What would an economically healthy Northfield look like?

Betsey Buckheit(More) Jobs and (increased) tax base are good things which I, too, would like to see, but pursuing these as isolated goals, throwing huge dollars at big projects and subsidizing individual businesses is not how I think Northfield should allocate its (very limited) resources. 

I have a bigger vision for an economically healthy community than the Mayor’s and EDA’s rather old-fashioned conception of economic development (I’d call the Mayor and EDA firm Second Wave proponents).  Here are 2 visions:

Discuss her vision here or there.