LAIC Wants More Time to Pay Off Tech Center

Included on Monday night's Madison City Commission agenda is a request from the Lake Area Improvement Corporation to give us taxpayers our money back more slowly. In a memo to the commission, the LAIC asks for an extension of the loan it got from the city to build the Hueners-cum-Heartland Technology Center on the north edge of town. The request reads thus:

Request to extend City Community Development loan on the Heartland Tech Center between the LAIC and the City of Madison.

Current Situation

• 3% interest only has been paid to City for 5 years
• LAIC has paid the City approximately $41,700 in interest payments
• Principal amount is $287,500 -- no payments on principal have been paid

Request of new terms

• Would like to extend the loan for 15 year term w/10 year balloon
• Principal amount would be for $280,000
• 4% interest
• Monthly payments of approximately $2,100
• New payment schedule to begin on January 15 2011 as a ACH into City account.

To date nearly 60 jobs have been created at the Heartland Technology Center. The initial intent was to build a spec building that would create jobs and bring a new company to the community utilizing DSU students.

The facility mission was reestablished and it became an incubator for new entrepreneurs and businesses. InfoTech, Logic Lizard, SBS, CAHIT, and the 2010 Research Center are a few of the businesses that have been housed at the facility.

In January of 2011 SBS will be graduating from the incubator and moving into a new facility, Washington Plaza II, and creating 40 new positions over the next several years. We are currently working on an expansion of one of the new tenants to take the existing space.

The mission of the incubator is to provide affordable space for a business to grow and mature. That has been accomplished and continues to work as designed.

The LAIC makes this request on behalf of job growth and job sustainability for Madison.

Note that this request appears to make $7500 in principal just disappear. Are we taking that out of the LAIC's annual tax subsidy? And while I'm thinking of it, did we ever get that budget Commissioner Abraham requested last summer? That budget would probably help us understand why the LAIC needs to change the conditions under which we loaned them the money for this project. But no: the LAIC likes to talk in vague inklings and passive voice and expect us to hand them more money at their whim.

I suppose I should be relieved to see that, if you want money from the LAIC, you at least won't be expected to write complete sentences in your proposal.

Save Big (Local Economic Development) Money at Menards...

Speaking of "reasons to go out of town for almost everything"...

Construction proceeds on new Secure Banking Solutions building,
Schaefer Plaza, Madison, SD, 2010.12.06

Some hardy fellows were out in yesterday's cold working on the new Secure Banking Solutions building in the Schaefer Plaza—you know, the little biz/rez district by the Second Street Diner that the Lake Area Improvement Corporation and your tax dollars have helped develop.

Is it still called house wrap when it's on an office building?

Note where the project gets its Typar HouseWrap. It's not Pro-Build up the street.

Not that I'm complaining: I'm getting ready for another big cereal run to Hy-Vee myself. And that big telehandler on the job says "Amert Construction," so the project is putting local guys to work.

But, as my commenters have pointed out in our discussion of supporting main street renovation, local economic development requires offering goods and services of real value. The LAIC's record on that score is pretty weak.

Memo to LAIC: Update Physical and Virtual Main Street Storefronts

My wife and I lament the pitiable state of many building façades in downtown Madison. Too many of the storefronts have tacked up tacky plastic and metal signs over

The Lake Area Improvement Corporation mostly ignores downtown. They briefly touted, then cold-dropped a Main Street and More! program that achieved nothing. The LAIC is apparently too busy pouring money into insider deals for housing developments and its federally subsidized industrial park on the edge of town. The LAIC's only demonstrated interest in building downtown came in its involvement in the real-estate shell game that has led to big ICAP move, which is another example of Madison's reliance on government handouts and socialism.

If the LAIC can't be bothered to promote real downtown renovation and capitalist opportunities, maybe we can arouse their interest in a little virtual downtown renovation. Mike Knutson at the Rural Learning Center discovers a really cool economic development project undertaken by the smart people in Ord, Nebraska. Since 2007, the Ord Chamber of Commerce has offered its downtown businesses $5000 no-interest loans to put toward fixing up their storefronts. Now the Ord Chamber is expanding the acceptable use of those loans to support updating online storefronts.

The Ord Chamber explains the new program on their blog (their blog, Dwaine. Their blog.). The program doesn't rely on a big federal handout. It got rolling when a local bank applied for an won a $25,000 grant from the Federal Home Loan Bank of Topeka.

The LAIC loves signs and façades; our economic developers should be all over a project that makes our downtown look better on the street and online. How about we raise $25,000 for a physical and virtual storefront renovation loan program this way: For every dollar us regular folks contribute, the LAIC will match with a dollar taken out of LAIC exec's Dwaine Chapel's $100K-plus salary. We could redirect $12,500 from unaccountable salary to real Main Street improvements... and Chapel would still be one of the best-paid Brookings commuters in town.

---------------------
p.s.: The Dakota Drug building, one of the best-located retail properties on Madison's main street, has been on the market for two months. $99,900 gets you two stories and 6800+ square feet of prime retail opportunity. As of this morning, the LAIC still has not added this choice property to its Available Properties webpage.

Local Conversations about Arts and Everything Else

A couple of local conversation starters:

The Madison Area Arts Council somehow finagles space on the Lake Area Improvement Corporation website to talk about the arts as economic development. Is this a sign the LAIC is ready to open its ears to creative economic development? Or is this just more window dressing from an economic development corporation determined to maintain the status quo and tell artists (as the moneyed powers behind the ill-designed Dakota Prairie Playhouse did) that "We don't need your kind"?

Of course, the LAIC article, part of its all-new all-digital communications, doesn't include a comment section for the public. The LAIC should take a cue from the South Dakota State Extension Service, which is hosting community conversations in 80 towns around North and South Dakota throughout November.

The nearest Projects and Possibilities session will take place the Howard 4-H Building on Wednesday, November 17, from 11:30 a.m. to 2:30 p.m. Three hours is a hefty conversation... and a tough block of time to schedule. Middle of the day is a tough time to catch working folks; the crowd will likely skew older. Let's hope Howard High School lets students out to participate in this conversation as a civics field trip.

Community participants will upload their notes on their meetings to the Citizing website for more public discussion. Notes from the Aberdeen and Redfield meetings are already online. If you can't make a meeting in your town, you can take the project survey online... but just as you would if you went to a meeting, you have to put your name to your words and sign in via a valid Facebook account. The Extension Service agrees with me: nymity promotes better civil discourse.

Hey, Bjorklund, 9-12ers! Get Real, Shift Focus to Lake County Politics

Consider this post an open letter to the local Glenn Beck club, the 9-12 Project. Their candidates for public office, Jason Bjorklund here in Madison and Steve Sibson down in Mitchell, both came in last in their respective races. I am mildly alarmed that two know-nothing conservative talk-radio karaoke speechifiers can get one in five of my neighbors to vote for them... but one in five still doesn't make me feel surrounded.

Now that I've thoroughly insulted the Glenn Beck club, I want to invite them to practical political action. Instead of being a rather harsh caricature of Toastmasters with a topic list limited to guns, the President's birth certificate, full-reserve banking, and Marxism, Jason Bjorklund and his snarling pack of poli-sci-yenas have a golden opportunity to reverse their general election failure and re-assert their relevance to real politics by getting involved in local issues.

Lake County is fertile ground for a group of citizens interested in graduating from mere talk to practical civic action. We have a range of big issues just waiting for local citizens to get up and holler:

1. On Tuesday, November 9, at 7 p.m., the Lake County Commission will hold its first public hearing on the proposed revision of the county zoning ordinance. The proposed changes raised a number of sparky questions at last week's candidates' forum. The proposed changes will also lay the roadmap for the work of the new zoning and environmental inspector the county will hire in the coming months. The county contends that the zoning revision is meant to make the ordinance more user-friendly. The Winfred freedom fighters and other folks I talk to see the zoning ordinance creating all sorts of local government intrusion into our lives. 9-12ers, you should be meeting and hosting open educational sessions to analyze the zoning ordinance for signs of tyranny that you can fight right here in our backyards.
2. The Madison Central School District is pushing a colossal waste of local tax dollars on a multi-million-dollar luxury gym to satisfy the interests of a few elite basketball players and sports fans. There are practical alternatives to this boondoggle that would save the taxpayers millions. Jason Bjorklund has declared himself a "victim" of Madison's public education system. Here's a perfect chance for him to lead his fellow citizens in focusing our dollars on real educational improvements, not more play space for varsity athletes.
3. The Lake Area Improvement Corporation continues to receive and spend thousands of local tax dollars without any real accountability to the public. The LAIC pays its director over $100,000 to bestow favors on the powers that be and shut out broad public participation while failing to meet its own anemic job creation goals. The 9-12 Project is the perfect group to catalyze public dissatisfaction with this star chamber of crony capitalism to advocate for real change to more open and participatory economic development.
   

The local Glenn Beck club showed signs of civic usefulness last spring when it brought more statewide candidates to visit with Madison voters than did any other civic organization, my benighted Democratic Party included. They slid back during Mr. Bjorklund's largely irrelevant campaign. Real Lake County politics offers a chance for redemption. Drop the talk of guns and Obama and tyranny in Washington. Turn your attention to regulation, taxation, government waste and cronyism right here on Washington Avenue and throughout Madison and Lake County.

Toward that end, I offer my services. Mr. Bjorklund, I am willing to be the featured speaker at your next 9-12 Project meeting. If you will invite me, I will come lead a conversation with your members about applying your Nine Principles and Twelve Values to local politics.

And don't forget, Glenn Beckers: there are elections for city commission and school board coming up in the spring. Let Kristi Noem carry your water against President Obama: think about making a difference for your neighbors right here in Lake County.

Lake County Unemployment Drops to 4.3%

Is the stimulus working? We can debate that.

But more Lake County residents are definitely working! The latest figures from the South Dakota Department of Labor show Lake County's unemployment rate dropping a whopping seven tenths of a percentage point, from 5.0% in August to 4.3% in September. That number is straight-up good any way you slice it: 75 people joined our workforce (now at 6,590), and 120 new jobs got filled (total jobs now 6,310). That means the number of unemployed folks dropped from 325 to 280.

Our neighbors in Brookings County fared just a tick better, with September unemployment dropping from 4.2% to 3.4%, with gains in both labor force and jobs.

Around the septa-county neighborhood, the unemployment rate dropped for everyone but Miner County, where unemployment stayed steady at 5.2%. Elsewhere:

• Kingsbury County: 4.4%, down from 4.9% in August, but labor force and jobs both shrank.
• McCook: 4.3%, down from 4.7% in August, labor force down five, jobs up five.
• Minnehaha: 4.2%, down from 4.5% in August, fewer workers, more jobs.
• Moody: 5.7%, down from 8.7% in August, fewer workers, more jobs.

And in our ongoing tracking of the big Forward Madison job creation metric of sustaining the expected job growth of the status quo, we are now have only 375 fewer jobs than when the Lake Area Improvement Corporation started its big job creation push in October, 2006. We need to create just 775 jobs over the next fourteen months to meet the Forward Madison goal of creating 400 new jobs. Work harder, Boxer!

Bonus Local Stat: Taxable sales in Lake County in August increased 6.9% over last year. What recession?

LAIC Industrial Park Violates Madison Mowing Ordinance

Nobody mows 'til Dwaine Chapel mows!

Last summer I had fun teasing the city for not following its own six-inch-grass rule. Now that the city has imposed a $200 fine for lazy lawnmowers, we can expect neat, well-trimmed grass everywhere to maintain our city's image, right?

Not in the industrial park owned by the Lake Area Improvement Corporation. An eager reader says he found excessively altitudinous verdure near the gateway to our fair city. The Madville Times mobile unit sprang into action to confirm this stunning news. Sure enough:
I brought my Mayor Hexom ruler and found this grass in LAIC land south of the bike trail clearly violating the six-inch rule.

Likewise these wild miscreant sunflowers, dwarfing my modest ruler near a bike trail intersection.
If Mayor Hexom comes a-measuring your grass, try this: mow just a swath or two along each side of your sidewalk, and tell the mayor, "See? Good enough for the bike trail, good enough for my yard, right?"
But hey, why should we complain about these tall weeds in the industrial park? The LAIC needs those sunflowers: they serve as natural, compostable bike racks for all the cyclists who come to survey the property for their economic development plans. Brilliant!

Now I didn't catch an exception in new mowing ordinance for commercial property. So let's see how long it takes for LAIC to call Madison Arborcare and chop those weeds... or for Chief Pulford to issue the LAIC a ticket.

LAIC Slow on Accountability, Doesn't Deserve Public Handouts

On July 20, City Commissioner Nick Abraham asked the Lake Area Improvement Corporation to submit a detailed budget to support its request for continued taxpayer funding to the tune of $240,000. LAIC exec Dwaine Chapel, whose salary eats up $100,000, agreed to submit said budget. Six meetings later, the LAIC budget still hasn't popped up in the city commission agenda packet or minutes.

Funny: if I were trying to get $240,000 in taxpayer money, and the taxpayers asked me for a document, I'd have that document to them before first thing in the morning. In triplicate.

Lake County publishes its proposed budget for FY2011 in the paper. As discussed previously, the county commission doesn't think it can afford $1000 to support Prairie Village, but for the second year in a row, the commissioners do think they have $25,000 to throw at the LAIC, which is currently more than 900 jobs in the hole on its job creation goals.

Let me apply the thinking of county commissioners Verhey and Hagemann to the proposed handout to the LAIC:

1. Gee, if the LAIC has over $100,000 to pay Dwaine Chapel to produce no results, they obviously don't need our financial support.
   
2. Over the last few years, the LAIC's total assets have increased from a quarter million to nearly $4.7 million. Looks like they're doing just fine and don't need a public handout.
   

Any chance Commissioners Verhey and Hagemann will raise these issues when they sit down to approve the final budget?

Weekend Reading for Madison's LAIC Board

Hey, Dustin Williams! And Linda Salmonson, Mark Stoller, DeLon Mork, Jerry Johnson, Chris Giles, Karen Lembcke, Doug Knowlton, Jeff Bloom, Mike McDowell, and Floyd Rummel. Yeah, you. All of you. You're the board of directors of the Lake Area Improvement Corporation. You're supposed to be boosting economic development here in Madison and Lake County. Quit reading the boring reports Dwaine Chapel submits. If you want to know how to fix Madison (and that's our shared mission), here are some things you should be reading:

1. Why Rural Communities Need Artists. Mike Knutson brings back some great lessons from the Midwest Rural Assembly. Among those lessons, Knutson points out the importance of the arts to economic development. Art isn't just a couple John Green prints hanging in the lobby. Art is the force that brings visionaries to town and keeps them here to help solve problems.
2. Progressive on Purpose: The Levelland, Texas, Economic Development Corporation has a blog. Their executive director, Dave Quinn, uses it to post local news and photos. He communicates with the public. He invites comments. He takes negative feedback and responds to it in a way that invites more discussion. Dustin Linda, DeLon, et al., your executive director does not do that. Your executive director should.
3. Economic development depends on government. LAIC board, how many of you are Republicans? How many of you are lapping Kristi Noem's talk about how government is too big? Read last night's paper, the story about Kevin Streff's success with Secure Banking Solutions. Highlight the sentences that remind us SBS got its start in the Heartland Technology Center, a project built on tax dollars. SBS's new facility is planned for the tax increment finance district created by the city to use tax dollars to cover the developer's infrastructure costs. Yesterday's MDL article reminds us that SBS has thrived in part thanks to grants from the National Science Foundation and the USDA. SBS's expansion and jobs are great for Madison... and they wouldn't exist if we ran our country according to the anti-government rhetoric of some of your favorite Republicans.
   

Happy reading! The Madville Times is happy to help.

Madison Lives on Pork: Another $190K for LAIC

Local Glenn Beck-sters, arise! Madison is suckling again at the teat of big government socialism! Madison's Republicans-In-Name-Only (that's the proper term, right?) are celebrating yet another $190,000 federal earmark to build improvements to support private business. Democratic Senator Tim Johnson announced the Lake Area Improvement Corporation will receive a $190K grant—free money, a handout, a boost to the federal deficit, money our grandkids will have to pay off—to pay for one new street and one street extension we built last year in the industrial park on the southeast edge of town. If I'm reading the news correctly, this earmark duplicates an earmark President Obama sent Madison last year for industrial park infrastructure.

Somehow, I get the feeling the only Madison conservative I can count on to say Madison should reject this blatant dependence on liberal Washington pork is Jason Bjorklund.

265 Jobs Disappear from Lake County in June

Planting must be done: 265 jobs disappeared from Lake County in June. The latest South Dakota Department of Labor statistics say that the number of people working in our fair county decreased from 6425 in May to 6160 in June.

255 laborers also disappeared from our workforce, down from 6740 in May to 6485 in June. The number of officially unemployed people thus only increased by 10, from 315 to 325, for a June unemployment rate of 5.0%.

Now some economists will tell you 5% unemployment is actually full unemployment—after all, you're always going to have some people between jobs. But that's cold comfort for the LAIC's Forward Madison committee, which is now has to create 925 jobs by the end of next year to meet its "400 new jobs!" goal set in 2006. Uff da.

The news from the septa-county area is mixed. Brookings County remains the beacon of eocnomic hope with the lowest unemployment in the area, 4.1%. Still, that's an increase from May's 3.9%.

Miner County also saw an increase in unemployment, a full percentage point from 4.8% to 5.8%. But don't be fooled: Miner County actually added 25 jobs in June; they just had 15 more people than that jump into the labor pool.

Same situation in Moody County: they created 45 jobs, but had 140 new people come to town and say "I wanna work, too!" Moody's unemployment rate thus junped from 5.2 % in May to 7.4% in June.

Kingsbury, McCook, and Minnehaha all managed to post declines in unemployment, with jobs created growing faster than the increase in their county workforces.

Commissioner Abraham Asks for LAIC Budget; Now How About Benchmarks?

Many of us wonder just what the Lake Area Improvement Corporation does with our money. Now, thanks to Madison City Commissioner Nick Abraham, we may find out. At Monday's night's commission meeting, when LAIC director Dwaine Chapel made his request for $240,000 in taxpayer dollars, Commissioner Abraham asked the economic development corporation to submit a detailed budget. Chapel agreed to do so.

The request seems logical enough. Combine the LAIC and Chamber of Commerce funding requests, and Madison taxpayers are pouring over $300,000 into economic development activities. $140K of that comes from the third-penny sales tax, a levy that was supposed to sunset when the Community Center was paid for but which has somehow remained on the books. When taxpayers are footing the bill, they're entitled to see the budget.

But what we really need are benchmarks. What is our $240K investment in the LAIC getting for us? Here's the LAIC's explanation, as summarized in the Madison Daily Leader:

Chapel said that LAIC has worked with two companies, one for about 1 1/2 years and another for about seven months, concerning Madison expansion. He added that the development corporation was also negotiating with several other businesses. Chapel described the work as "an ongoing process" and added that LAIC officials had "focused real hard" on retaining jobs already in the community [Chuck Clement, "LAIC, Chamber Officials Request Annual Funding from City," Madison Daily Leader, 2010.07.20].

Talking, negotiating, and focusing real hard are important. But shouldn't we expect some quantifiable performance? If I were getting $240K from the city, I would expect the city to demand some proof of return on investment. Along with a detailed budget, the city should demand answers to the following questions before giving the LAIC one more penny:

1. How many jobs has the LAIC created? (Context for that answer: four years ago, the LAIC set a goal of creating 400 new jobs in five years. Lake County has since lost 435 jobs.)
2. How many new businesses has the LAIC directly recruited (not every single business that has started, but only those businesses that the LAIC can demonstrate wouldn't be here without specific LAIC action)?
3. How many affordable houses has the LAIC sold in its TIF district?
   

I remain appalled at the lack of accountability and transparency in how the LAIC spends our money and at our local governments' willingness to keep throwing money down this hole without asking questions. Commissioner Abraham's request for a detailed LAIC budget is a step in the right direction, and I will be eagerly awaiting the publication of that budget in the city commission agenda packet. Now it's time for the city (and county!) to say, "You can use our money, but here's what we expect for the investment."

Local Marketing 101: Put People in Photos

Reimagine Rural gets me thinking, as usual. Morgan Andenas writes about the importance of including people in your local promotional photos. Putting photos of buildings and landscapes with no people can leave the impression that you're promoting a ghost town, says Andenas (who also cites Becky McCray of the rural/small-town development blog Small Biz Survival).

Naturally, I get to wondering how Madison does on this score. Let's take a look!

Here are the banner images I find this morning on MadisonSD.com, the promotional website owned and operated by local Infotech Solutions, one tentacle of local marketing specialists Bulldog Media Group:


Of the eight images on the main and top-level pages, three include people. Only one photo, on the Education page, shows a person in an identifiable local context. Even in that photo, the comely young woman is far to the left, separated from the DSU Tunheim Building by a big dark tree. That photo leaves me with a sense of detachment, or a sense that the photographer was more interested in graphic composition than storytelling.

The photo of the kids tubing is nice, but it could be anywhere: Lake Herman, the Missouri River, Key West.... The piggyback photo could be from any old inspirational calendar (although I'll admit it's pretty awesome that Bulldog Media got Daniel Craig to pose for a photo.. or is that Ed Harris?).

Now I wonder: do pelicans count as people? If they don't, the majority of MadisonSD.com's photos fail the people-storytelling criterion posited by Andenas and McCray.

I turn to the Lake Area Improvement Corporation, expecting to find a barren wasteland of deserted buildings. But surprise! unlike the LAIC's TIF District house, many photos on MadisonWorks.com have people in them.


Six of the nine banner images on the LAIC website clearly show people, some of them even clearly identifiable as authentic local residents. The exercisers in the Community Center look a bit like ghosts in the machine of the weight room, but they're there. We might even add the Prostrollo's shot as a seventh people picture... although if there are people in that photo, they are tiny dots, dwarfed by the commercial beast (which is metaphorically appropriate for Lake County's monopoly new-car dealer).

Let's not fall prey to Madison's obsession with marketing: even the most spectacular and well-peopled photos won't end the recession and create jobs. But some authentic shots with actual residents, like a number of the pix on the LAIC website, can make your town look like something more vibrant and inviting than a ghost town.

City Sells Rosebud Lot to ICAP at 66% Loss

Roadmap for Saving the Masonic Temple?

After holding a twice extended option for a year and a half, Inter-Lakes Community Action Program is finally laying down the cash to buy the old Rosebud property and put up its own building. Saturday's MDL (not online yet) gives a cheer for this economic development. I'm happy for ICAP... but Madison is losing big.

Let's check the numbers:

• On February 15, 2008, the Lake Area Imrpvoement Corporation bought Rosebud's downtown properties for $500,000 as part of its land shell game to lever Rosebud's undesirable manufacturing out of downtown and out to the edge of town to refill the shuttered Arctic Cat plant. (The LAIC has since sold a couple of the smaller Rosebud plots for $35,000 and $500.)
• On February 15, 2008, the City of Madison bought the main half block of the Rosebud property, across the street from City Hall, for $400,000.
• In December, 2008, the City of Madison approved a deal arranged by LAIC for ICAP to purchase the Rosebud half-block from the city for $350,000.
  
• ICAP didn't buy right away. ICAP paid $5000 for a six-month exclusive purchase option. ICAP extended that option twice, $5000 each time. Total paid so far: $15,000.
  
• The city commission will consider a purchase agreement Tuesday night that gives the land to ICAP for $135,000. Minus the option payments, the actual cash to change hands is $120,000.
• ICAP will kick in up to $10,000 for remediation costs—i.e., removing lead-impacted soil. If I'm reading the agreement correctly, ICAP will also share up to $5000 of the cost of soil testing done since this year March 31.
  
• The city will approve Tuesday a brownfields grant agreement with the state Department of Environment and Natural Resources that should put another $50,000 of federal money toward removing and replacing about 400 cubic yards of lead-impacted soil.
• The city still bears the cost of demolishing the Rosebud buildings. I don't see a cost estimate on that aspect of the project in the city agenda, but I image we could lower that cost with a Crazy Days sledgehammer contest....
  

Looking at just the property purchase costs, the LAIC and City of Madison thus appear to have arranged a $265,000 handout to ICAP, 66% of the original purchase price.

I thought LAIC exec Dwaine Chapel once told me that the LAIC doesn't believe in handouts. I am at least pleased that they have changed their tune to benefit an organization that does good work like ICAP.

But subsidizing the community work of ICAP is the only justification our city fathers can offer for this project. The land swap and sweet deal certainly aren't economic development: we've only moved players around, not added any new ones. We're not increasing the tax rolls: ICAP is a non-profit. The only stretch by which we might offer an economic justification for this fire sale is that maybe, just maybe, ICAP was saying they were going to leave town if they didn't get this property cheap, and the LAIC and city thus acted to keep Madison from losing jobs.

Given this math from the city, we have a proposal. There is another derelict property in downtown Madison, the Masonic Temple, just crying for development. My wife and I and some friends are prepared to form a non-profit organization to acquire, renovate, and preserve the Masonic temple as a non-profit community cultural center hosting a wide variety of education, entertainment, tourism, and economic development projects.

The last purchase price for this architectural landmark was $46,000. If the LAIC and City of Madison would buy out the owner for that amount, then sell it to our non-profit group at a 66% loss... well, that's less than $16,000. I could line up that funding by the end of the month.

Arrange this Masonic temple buyout and transfer, city leaders, and you don't just keep jobs: you add cultural and economic activity where there currently is none. Essentially, arranging a deal analogous to the Rosebud-ICAP deal for the Masonic temple is a $30,000 investment that creates new economic activity. What say you, commissioners?

LAIC Celebrates Past, Fails to Build Future

The Lake Area Improvement Corporation publishes warm and fuzzy praise of Jerry Prostrollo. Yes, yes, he saved DSU, recruited Gehl, built Prairie Village, brought back the railroad... we should just rename the town Prostrolloville.

But that was yesterday. What's happening today in Madison?

A new group now is working on economic development and Prostrollo is satisfied with the direction economic development is moving in Madison [LAIC puff piece, May 2010].

The minor note: "A new group"? Really? You mean someone has replaced the old rich guys who gather 'round the traveling card table and make all the rules for Madison? The "new group" must not be the LAIC, since the LAIC wouldn't be so dense as to publish its own rah-rah propaganda and not name itself, would it? Good grief: can the LAIC never just say things directly?

The major note: "satisfied with the direction economic development is moving in Madison"—really? Let's see...

1. Rapid Air, also mentioned as one of Prostrollo's successes, announced the closing of its Madison plant last fall.
   
2. Another Prostrollo "success," the Mafia-run Guerdons, disappeared 30 years ago.
   
3. We closed a competitive video store this winter and replaced it with another liquor store.
   
4. The LAIC cancelled its much needed Main Street and More redevelopment program.
   
5. The Forward Madison initiative dreamed of creating 400 new jobs but has actually overseen the loss of 500 jobs.
6. The LAIC's homebuilding project has stalled, with, as far as I know, only one house occupied in the Silver Creek tax increment finance district the LAIC facilitated with its money.

That's an awful lot of either no direction or backward direction... and we're satisfied? Satisfied?!?!

It's no wonder the LAIC wants to write puff pieces about our wonderful people and our wonderful past. If I were an economic development corporation failing to produce lasting results for the future, I'd want to publish happy distractions as well.

Madison Misses Message: Homegrown Entrepreneurs More Reliable Than Toyota Lottery

Jack Schultz of the Boomtown Institute would be a great expert to bring to Madison to discuss rural economic development. His book Boomtown USA: The 7½ Keys to Big Success in Small Towns explains that the surest way to expand your local economy is to focus not on landing big outside employers but on building your own homegrown entrepreneurs, local movers and shakers who have great ideas and a stronger commitment to the community than any itinerant credit card company or retailer will offer.

To support this argument, consider a number Schultz tossed out at a presentation at USD last week. As Mike Knutson heard it, Schultz said there were maybe "only 200 significant 'smokestack chasing' projects in the entire country" last year. Schultz means the kind of big industrial developments cities and towns try to recruit in what some call the "Toyota lottery." So what are the odds of winning that lottery?

1. Suppose there are 10,000 towns competing to recruit those 200 wandering employers.
2. In a given year, your town's chances of landing that big employer are 200/10,000 = 2%.
3. Over four years (the amount of time our current economic development exec, Dwaine Chapel, has been at Madison's economic development corporation), the chances failing to win that lottery even once: 92%.
4. You could play the Toyota lottery for 34 years and still have a 50% chance of not scoring one big smokestack project.
   

Of course, Madison is unlikely to follow Schultz's advice (advice often offered in these very pages). Our local economic development corporation, the LAIC, focuses on the big score, trying to land the mega-employer who will bring dozens or hundreds of jobs to Madison all at once. (That plan's not working so well.) And the LAIC can't even play that game very well, losing a 75-job call center to Arlington, despite our very best marketing. Small employers and budding entrepreneurs get little sustained attention from the LAIC. Like Harrisburg, the LAIC keeps looking outward for solutions that could be right under our noses, in our on people.

Building more small local businesses gives more local people a chance to be their own bosses. That creates more community leaders who, in their experience helming their own small businesses, get used to exercising their initiative and leadership and thus have more time, money, and inclination to get involved with leading other local projects. That means more social capital moving around a small community and making good things happen.

Strangely, the LAIC just doesn't seem interested in expanding that class of local entrepreneurs. I wonder: maybe too many individual owners with successful independent businesses would create too much independent wealth, too many independent movers and shakers who would upset established power structure of the community.

We'll know that's not the case when we see the LAIC inviting Jack Schultz to speak in Madison.

Russell Olson's Greatest Legislative Achievement: Bingo at LAIC

Senator Russell Olson (R-8/Madison) can celebrate his greatest legislative victory yet: yesterday Governor M. Michael Rounds signed into law HB 1095, which allows economic development corporations to conduct bingo and lotteries. Senator Olson was primary sponsor.

Yay.

Since job creation isn't working, the LAIC can turn to gambling to build Madison's economy. Maybe the LAIC will convert the old Wenk's plant across the street into a city bingo parlor. Dwaine Chapel can get an old-time saloon keeper's suit and call the numbers. Julie Gross can line up some Chamber members to dress up as showgirls and serve drinks. We can all go downtown and have more fun on Friday night.

All thanks to the hard work of our state senator.

Correlation from Ord, Nebraska: Openness and Economic Development

Mike Knutson draws my attention to Ord, Nebraska, and that town's avidly blogging economic development director, Caleb Pollard. Pollard runs both the economic development agency and the chamber of commerce in Ord, and he still finds time to blog. He runs the community's economic development blog, Ord Sunshine Pumpers, on a free Wordpress account—no fancy domain name or web hosting for these guys!* The blog puts up new posts a few times a week. Pollard uses the blog to feature positive local business stats like this: over the last nine years, Ord has seen 100 new business start... and 78 of them are still operating.

Ord sits in the middle of Nebraska, with 2200 people in town and 4500 people in the county. My hometown of Madison has 6500 people, with 11,000-some countywide. How many new business have we started?

Ord's economic development director seems totally engaged with his community and a broader Web audience, blogging regularly to tell Ord's story.

Madison's economic development director appears to find open communication with the community a tedious challenge. After years of vague, passive-voiced, and occasionally plagiarized monthly columns in the Chamber newsletter, our economic director appears to have given up even that rare writing and hired a freelance-writer to communicate the LAIC's message. So much for authenticity.

Oh yeah, and the Ord economic development blog is open to comments. In Madison, the only major website allowing direct user participation is the Madville Times. LAIC, Chamber, MadisonSD.com, city, county, Madison Daily Leader, KJAM,—not one of them thinks you have anything worth contributing.

Ord Sunshine Pumpers demonstrates that if you want to tell your community's story (or "market" it, as I'm sure our ad-obsessed LAIC board would say), it doesn't hurt to open the doors and let the community tell that story. Ord also shows you need to have a passionate advocate at the helm, a stakeholder, someone who lives in the community who is deeply invested in seeing it succeed, someone so invested that he will write honestly, passionately, and prolifically about what's actually happening in his community.

Hmmm... that sounds so familiar....

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Update 2010.08.05: The free blog gets you started, but once you get your Web legs, you'll probably want to upgrade. After a year-plus (and 60K pageviews!) on Wordpress, the Ord Sunshine Pumpers moved up to a domain of their own, OrdNebraska.com. Pretty slick!

What's the Delay on Developing Rosebud's Old Downtown Site?

Over a year ago, Madison's city commission and Lake Area Improvement Corporation played a remarkable downtown development shell game, booting Rosebud Manufacturing out of downtown to the industrial park on the edge of town, then arranging a deal with the Interlakes Community Action Program to build a new headquarters on the old Rosebud property. Jon Hunter thought these moves were great; I asked whether ICAP's move was really the best we could do for downtown development;—more like downtown maintenance, since we're not really adding any new business.

Agree or disagree, we're all still waiting for development to happen. ICAP and the city negotiated a $350K purchase price for the half-block Rosebud vacated on Van Eps Avenue. Around the beginning of 2009, ICAP paid $5000 to secure a six-month exclusive purchase option. Mid-year, ICAP extended the option for another six months, for another $5K.

Monday ICAP and the city commission will consider another six-month, $5K option extension.

Read the purchase agreement in the January 11 city commission agenda packet. It says "Time is hereby declared to be of the essence in this Option." ICAP and the city's dawdling suggest the contrary.

ICAP is essentially getting to mortgage an entire half-block of downtown commercial property for $833 a month. If the city approves the latest option extension, they'll have kept this developable property off the market for 18 months. We're collecting no property tax from it now, and ICAP expects the property to be tax exempt when (if) it finally purchases the land. We're sitting on a big vacant lot instead of creating a competitive economic opportunity.

As I've said before, ICAP does fine work. I have no beef with them. But Madison has hundreds of unemployed and underemployed (read Gehl) workers. We are 725 jobs short of our five-year goal to create 400 jobs by 2012. If I'm an aggressive economic developer, I say to ICAP, "Poop or get off the pot." I could put that land on the market, find a commercial developer who could put up something like Randy Schaefer's strip mall, and fill it with ten businesses that would create jobs, sales tax, and property tax.

Of course, I'm not an aggressive economic developer. Neither, apparently, is the city of Madison.

Lake County Workforce Shrinks, Dropping November Unemployment to 5.9%

Unemployment in Lake County dropped to 5.9% in November, down a full percentage point from the revised 6.9% figure from October.

Unfortunately, that doesn't mean more of our neighbors are working. October is traditionally our best jobs month, but we shed more jobs than usual in November. 100 Lake County jobs went poof last month. Luckily for our stats, 180 people went poof from the workforce, producing a net decrease in unemployment from 480 to 400.

So, for those of you keeping score at home, Lake County is now down to 6360 jobs, down 325 from October 2006, when the Lake Area Improvement Corporation declared its goal of creating 400 new jobs in five years. We thus have 725 jobs to create in two years. Let's get to work!

Looking around the septa-county region, our neighbors in Moody and Miner are having a tougher time finding work, with respective jobless rates of 6.8% and 6.3%. But Miner County actually added five jobs in November and saw fifteen people join its workforce. Brookings County had the best unemployment rate in the neighborhood, creeping up just a tick in November to 3.5%. Last month Brookings managed to add 125 new jobs, only to have that number outpaced by 160 people joing the workforce (maybe that's where Lake County's workers went?).

Lake County's unemployment rate was the 14th-highest among all counties in the state. Buffalo, Shannon, Jackson, and Dewey counties are the only areas reporting official unemployment rates in double digits.

Yankton is back at the top of the heap of big towns where it's hard to find work, with November unemployment at 7.3% (which still beats the pants off the national rate of 10%). The cities with the lowest unemployment numbers: Pierre (2.9%), Aberdeen (3.2%), Vermillion (3.4%), and Brookings (3.5%).