LAIC Buys into Main Street Program; Madison the New India?

Two noteworthy economic developments are afoot in Madison. First, I hear from my local correspondents that Lake Area Improvement Corporation director Julie Gross has officially endorsed—i.e., spent money!—on making Madison part of the Main Street program. The idea of the LAIC doing exactly what I recommend under previous do-nothing CYA director Dwaine Chapel. But Gross has bought into Main Street and convened a downtown development committee that is open to the public. I hope this isn't a sign that we are going to freeze over hard this winter.

The LAIC also gets to toot its horn about Dakota State University's new partnership with Advantenon, the evil overlord of Gamma Regulus whose robot hordes are invading this sector of the galaxy—oh, oops! Sorry, the cool alien name threw me.

Advantenon develops software for mobile devices. They base their business model on employing college students in rural areas to keep costs down—i.e., to pay less wages than they would hiring experienced talent in spendy urban areas. Advantenon discusses this strategy on a page called "Why Rural?"

Advantenon delivers mobile applications more efficiently, with fewer issues than applications outsourced to offshore teams, at costs up to 50% less than traditional on-site development.

By leveraging technically competent resources in lower cost rural communities, project costs are significantly reduced. By combining staff located outside major metropolitan areas with a limited number of onsite resource Advantenon delivers the benefits of rural and onsite flexibility [Advantenon, "Why Rural?" company website, retrieved November 5, 2012]. 

For years, IT companies have been saving money by offshoring labor to India and other lower-wage countries. The labor cost-savings outweigh the disadvantages of language barriers, time-zone separation, and quality control. As wages in India catch up with the West, the cost advantage erodes. South Dakota wages may still carry a premium over India, but they are 29% lower than in Minnesota, Advantenon's home base. Hire college students, and the premium is even less. For their money, Advantenon gets quality work (you DSU kids do have the storied Midwestern work ethic, don't you?) from folks who sprechen sie Englisch, are smack in the middle of most North American customers' time zone range, and are a short domestic flight away from a snap inspection by the boss.

This can be our niche, South Dakota! Get trained, know your tech, and you can be the next Indians. You won't even have to make up a normal sounding name to answer the phone... until the Chinese become our primary customers.

And when you get done with work, you'll be able to walk downtown and enjoy a wonderfully revitalized commercial and cultural core district.

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.

Randy Schaefer: SBS Project Using All Local Men and Material

You can't judge a building project's commitment to local economic development by its house wrap: landowner Randy Schaefer e-mails to say that the Menards house wrap on the Secure Banking Solutions building going up in his taxpayer-assisted commercial/residential development on South Washington Avenue is an exception to an otherwise keenly locally focused project.

According to Mr. Schaefer,

ALL building materials for my building were purchased here in Madison…at Pro-Build. That was my requirement when I bid it out. I hired a local contractor who hired local people and local subcontractors to build with locally purchased materials. It may have cost me extra to do so, but I did it because it’s the right thing to do, and I try to practice what I preach.

Why the Menards wrap? After listening to my rant about how for the love of all that’s good he could possibly have put Menards wrap on my local Pro-Build building, he admitted that he saved himself a little money…$420…by using wrap he had left over from a prior job [Randy Schaefer, personal communication, 2010.12.07].

Mr. Schaefer assures us that a new sign will be going up in front of the development shortly declaring the all-local nature of the project. If he's smart, he'll even put a link to this Madville Times article so people know who inspired the sign.

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.

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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.

Survey on Buying Local in Madison -- Click Now!

The shopping madness of Black Friday is almost here—perfect time to take a survey about your local shopping habits!

This "Buy Local" survey comes to us courtesy of a team of Madisonites taking the Madison Chamber of Commerce's leadership training course. They ask some simple questions about where we shop and why we shop there.

The Leadership Madison team also asks what "What type of new business/service/product would you most like to see in Madison?" Perhaps they would like to include in their calculations the results from this January Madville Times survey, which found 38% of you eager readers craving another big grocery store, followed by 26% angling for a Wal-Mart or similar big discounter and 16% looking for a clothing store.

I picked "grocery store" on the Chamber survey, and even recommended three prime locations: right between Lewis and Montgomery's Furniture, between the Bethel home and Doug's auto lot, and that old farm lot across from Pizza Ranch at the 34-81 intersection. Another dream retail development: bring in a Hy-Vee or Wal-Mart to finally come in and get serious about developing the gravel lot where Nicky's, the bowling alley, and the movie theater sit. Those establishments have sat there for over thirty years with no exterior physical improvements. Let's bring in a big retailer, pave the lot, redo those three aging buildings, add a couple new shops, and make a Lousie-Avenue-style commercial complex.

The survey also asks "Why do you enjoy or not enjoy shopping in Madison?" That's an easy one: my enjoyment comes from riding my bike to shop. My disenjoyment comes from the knowledge that my sales tax dollars are funneled to support a Chamber of Commerce and a Lake Area Improvement Corporation that face no public accountability for their use of my tax dollars and which waste my tax dollars on silly things like banners, slogans, and Dwaine Chapel's $100,000 salary.

The survey lists no closing date, so go there now and tell the Chamber and LAIC what you think of shopping in Madison!

South Dakota Third Best for Retirement

I recall a visit to Carthage three summers ago in which a gal at the Straw Bale Museum talked about recruiting retirees to move to town as a major economic development strategy.

She was barking up the right tree: a new report from Money-Rates.com ranks South Dakota as the third best state in the nation for retirement. Based on life expectancy, crime rate, economic factors, and even climate, the only states found more appealing for retirees than South Dakota are New Hampshire and Hawaii. (Getting mentioned in the same sentence as Hawaii is almost always good... unless we're talking about new volcanoes.)

North Dakota is fourth on this list: North Dakotans pay more in taxes and living expenses, but they also live longer and currently have less unemployment. The report gives us a slight nod thanks to being a little warmer... but if you retire here, you'll still need to hire some strapping young lad to shovel your driveway out in the winter.

Iowa is the only other neighbor in the top ten, ranking fifth. Money-Rates.com doesn't make a full-50 list available, but given that none of our neighbors make the worst ten list, we South Dakotans appear to live in a pretty good neighborhood for retirement.

According to this report, Nevada is the worst place to retire. Vegas-land has the second lowest state and local tax burden in the nation (6.6%, compared to South Dakota's 7.9% and North Dakota's 9.2%), but the state has high crime, high unemployment, and below-average life-expectancy. Still, do you need to live longer when you can see Rod Stewart right now?

So add that to the economic development website, Carthage, and all you other South Dakota towns looking to boost your local housing market. Lots of old folks want peaceful small towns that are easy to get around in. They'll also create jobs, as they'll hire out more services, like snow-shoveling and RV repair. Build those straw bale spec houses, Carthage, and tell those retirees you are the new Florida!

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Update 2010.11.11: Mike Knutson at Reimagine Rural picks up the question of recruiting retirees for economic development. He notes that lists are good fun, but getting readers of those lists to up and move to South Dakota still takes a lot of good salesmanship and local work.

Events Center Team Lacks Input from Event Planners

It looks like Sioux Falls Mayor Mike Huether has a case of LAIC-itis. This malady, familiar to all residents of Madison and Lake County, causes public officials to pursue their own agenda for economic development without involving the citizens who would actually drive that economic development.

I base my diagnosis on the roster of folks Mayor Huether picked to help choose a design firm for the events center the mayor wants to build:

[from Ben Dunsmoor, "Downtown Group, Mayor Clash at Meeting," KELOLand.com, 2010.11.08] The team includes five men from from the different schools in town and the Sioux Falls Sports Authority:

• Mark Lee: University Center
• Willie Sanchez: University of Sioux Falls
• Frank Hughes: Augustana College
• Jeff Kreiter: Sioux Falls School District
• Mike Sullivan: Sioux Falls Sports Authority

It also includes these five department heads from the City of Sioux Falls:

• Mike Cooper: Director of Planning and Building Services
• Darrin Smith: Director of Community Development
• Don Kearney: Director of Parks and Recreation
• Tom Huber: Acting Director of Finance
• Mark Cotter: Director of Public Works

Good to see my Lake Herman neighbor Mark Lee on the list!

Then again, maybe it's not. Mark Lee is a good guy, but he probably won't be directly responsible for bringing any events to the new events center. The campus he oversees offers part-time classes for part-time students but, as far as I know, little in the way of entertainment or social programs that would require a big events center. Likewise for Augie and USF: they have their own performance centers for their campus activities. The school district and the sports authority might run some big events in a new facility; the five city employees on the team almost certainly will not.

Forget the fretting the Mayor Huether stacked the team with people he can boss around. The real problem here is the absence of convention planners. Where are the folks who host the Big Boys Toy Show, the farm and craft shows, and the other vendors who hawk their wares at the big weekend extravanganzas? Where are the political parties that might bring conventions and political rallies? Where are the artists and community theater folks who might organize arts festivals at the events center? Where are the people who will actually put this building to work?

Granted, the folks on the above team are just picking the design firm, not doing the design themselves. But let's hope the design firm will look beyond the team that gives it this plum job and seek input from all stakeholders.

Lake County: Money Isn't Everything?

A ruling from Judge Roberto Lange last week reminds me that our Lake County Commission may be more in tune with my thinking on economic development than I sometimes think. Judge Lange dismissed Ben Elliott's complaint that his rights were violated when the county denied him a permit in 2002 for a 940-head hog confinement operation.

That hog facility would have meant a boost in economic activity for the county. But the commission said some economic gains aren't worth the costs.

Likewise with the new public access area at Lake Madison. The best argument folks opposed to the project could offer was that the county could generate a lot more tax dollars by selling the land for private development of swanky McMansions on some of the last undeveloped lakeshore property. But the county said it has enough money for now, at least enough that we can forego a few dollars of potential tax revenue and protect quality of life in non-monetary ways.

I find such foresight encouraging.

Update 12:43 CST: An eager reader notes that credit for both of the above actions goes to previous commissioners Ron Jorgenson, Shirlee Leighton, Kent Peterson, Craig Johannson and Bert Verhey. The current commission of Chairman Verhey, Scott Pedersen, Chris Giles, Dan Bohl, and Roger Hagemann get credit for sticking with and finalizing the Lake Madison public access plan.

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.

Grand Falls Casino Synergy -- That's What I Said!

Last summer, when Iowa announced it was building its big Grand Falls Casino in Larchwood, right at the northwest corner of the state, various South Dakotans, including the man getting my vote for Governor today, flipped their lids. I suggested some of the concerns about the casino and proposed warlike responses to the project were exaggerated. I said that proper planning and marketing could turn the project into an economic plus for our state. "Think synergy, not scarcity," I said.

Synergy. That's the magic word. And it's already happening:

...Sands Drywall of Sioux Falls has one of the biggest jobs, putting up all the exterior and interior walls.

"This job hit at the perfect time for us. We're going to have containment on the whole project by Thanksgiving is what the schedule is, and it will keep us working inside all winter long," Greg Sands, owner of Sands Drywall, said.

Despite concerns that a 'Buy Iowa' first initiative was going to keep construction crews from other states off the job site, only 55 percent of the contracts that have been awarded have been to Iowa companies. The rest are from outside the state.

...The Sioux Falls companies working on the job site are glad South Dakota is seeing some benefits from the Iowa project.

"Their philosophy was to be compliant with what they had to do, and also to create synergy between them and the Sioux Falls market, and South Dakota. And they've done that. There's a lot of people working from both states. A lot of people working here from both states for me and there's just a lot of synergy," Sands said [Ben Dunsmoor, "Paying out for South Dakota," KELOLand.com, 2010.11.01].

Sioux Falls Mayor Mike Huether says he and his business pals are already thinking down the synergy line as well. We could try to compete, but it may be easier to simply capitalize on the Iowa megacasino. When Iowa gives you rhubarb, make rhubarb pie.

Iowa Gov. Candidates Debate Hyperion and Jobs

I just found this really good article from Matt Vasilogambros in the Iowa Independent about the proposed Hyperion refinery in Elk Point. Apparently the thus-far pipe-dream-only project is sparking more disagreement between Iowa's gubernatorial candidates than between South Dakota's.

On our side of the Big Sioux River, both Republican Dennis Daugaard and Democrat Scott Heidepriem have said they support the refinery (Scott! Come on!) but have doubts about whether it will come to fruition. But in Iowa, Governor Chet Culver and challenger (and former governor) Terry Branstad appear to stake out opposing ground on the refinery. Branstad says environmental concerns expressed by the Sierra Club and Iowa's former Department of Natural Resources chief Richard Leopold are just bunk that stand in the way of economic development. Governor Culver's team responds that jobs are priority #1 but that the state still needs to protect the environment. Culver likens Branstad's position on Hyperion to the same pro-corporate thinking that led Branstad to open his state to huge polluting hog operations and the unhealthy DeCoster egg operations. (Worth noting:Branstad himself calls Jack DeCoster a rogue businessman.)

Vasilogambros also notes that Hyperion assures Iowans that they will get lots of the Hyperion jobs. (Does Hyperion provide a lesson for South Dakotans complaining about the Larchwood casino?) But Jim Redmond of the Northwest Iowa Sierra Club says that both Iowa and South Dakota will probably get the same bum deal from Hyperion that South Dakota got from TransCanada: Hyperion will import a lot of the labor it needs from other states.

Heidepriem on Economic Development: Think Local, Think Miner County!

Economic development policy is much more than magic phrases. But Democratic gubernatorial candidate Scott Heidepriem has said two magic phrases that signal he's my guy on economic development.

Phrase #1: "Smokestack-chasing"... as in don't do it. Heidepriem recognizes that the Toyota lottery doesn't pay off. He wants to refocus South Dakota's economic development efforts on retaining and expanding our native talent and resources. In an interview in Monday's print MDL, Heidepriem says "we need to get away from the idea of hitting a home run and instead think about getting a series of singles and doubles." Heidepriem sees more solid growth coming from retaining and expanding businesses that already call South Dakota home. Compare that to his Republican opponent in the governor's race, Dennis Daugaard, who wants to keep throwing incentives at footloose businesses to get them to relocate to South Dakota. (I still think you're asking for trouble when you build your business strategy around luring owners who will leave a community just to shave a fraction off their taxes.)

Phrase #2: "Miner County"... as in do what they're doing. Miner County is not the biggest or richest county in the state. But Miner County is doing economic development right. Miner County doesn't pin all of its hopes on landing one big factory or call center from who-knows-where. Miner County focuses on economic gardening, on building human capital among their own people through education and entrepreneurship, as epitomized by the broad, holistic economic focus of the Rural Learning Center. Miner County's developers try to be inclusive and open to conversations, as epitomized by their blog, Reimagine Rural. Miner County also makes an effort to learn from and share the lessons from other rural communities around the state and beyond, as shown by Reimagine Rural's regular attention to Heidepriem's hometown of Miller. (To his credit, Daugaard mentioned something about "small-town specialists" in his economic plan last spring.)

Economic development for rural South Dakota (and that's most of South Dakota) requires something more than the same old "We'll work hard for peanuts and not tax you" thinking that rules now. Heidepriem's economic plan suggests that he understands the need to develop our rural human capital in creative ways.
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Bonus Economic Development Plans: Daugaard says he'll throw another $60 million in the Revolving Economic Development and Initiative (REDI) Fund. He says he'll order a thorough review of the state's books to identify land and buildings we could sell to raise that money. I would think that, having been Lieutenant Governor for eight years, he might already have a pretty good idea of prime properties for the state to unload. And what if he does that review and finds we don't have $60 million worth of mostly useless property? Whither his plan?

Another party-line irony: while Republican Daugaard wants to put more state money into the REDI Fund, Democrat Heidepriem wants to privatize it, having private lenders float the loans while the state guarantees a portion of them. Heidepriem says that's how the Small Business Administration and USDA Office of Rural Development do it.

Madison Biz Opp: Downtown Corner Retail, <$100K

The Madison Daily Leader marks the retirement of longtime local pharmacist Bob Schamber. Schamber's retirement also brings the closing of Dakota Drug, a fixture of downtown retail since I was a kid...

...which brings us to this morning's underappreciated business opportunity. Go to HJN Team Realty's website, dig up Listing #2100643 for the Dakota Drug building. 6800 square feet. Two stories, including the really cool staircase and open second-floor retail space where I always looked at the puzzle books and comics when I was little. Great corner street parking and a big municipal parking lot right out back. Spectacular visibility, with a popular local restaurant right across the street. There's even an apartment included in the west side, the space where John Green used to have his studio.

Asking price: $99,900.

Less than $100K, for one of the best retail locations on Madison's Main Street.

Now if I had $100K burning a hole in my pocket, I'd still rather acquire the Masonic Temple and put a down payment on renovations. But the more sensible entrepreneurs among you, dear readers, must be able to see the potential of this prime downtown location. Perhaps Madison's bookstore could expand and open a used book emporium in the upstairs. Perhaps another electronics store could open to compete with Radio Shack across the street for the burgeoning market of technogeek DSU students. Perhaps a second coffeeshop could open and put out shady tables where we prairie intellectuals could gather to mock the tacky signs at the Stadium grill. Perhaps a frame shop and gallery could open to serve the remarkable number of artists in the neighborhood... and rent out the apartment as a rural artist retreat!

Given the importance of this building as a Main Street retail anchor, it's surprising the LAIC isn't promoting this business opportunity. (Then again, the LAIC's "Available Properties" page also fails to mention Bub's Service, Kearin's Service, and Doug's Auto, three other business opportunities just waiting for progressive, ambitious buyers eager to serve Lake County's automotive needs.) But hey, don't let the LAIC's blinders keep you from seeing the possibilities. Can you find the niche (sports equipment? outdoor store? baby gear?) that lets you compete with Pamida and Lewis? Can you repurpose this building into a community cultural center? Put your thinking caps on, get out your checkbook, and think up a new use for the Dakota Drug building!

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.

What Recession? Brookings Gets 6 New Businesses Downtown Since January

Wow. The Facebook page for Brookings Downtown Inc. notes that six new businesses have opened downtown since January. Six:

1. Wedding Creations
2. Eddie Edwards Jewelry
3. Food and Health Concepts
4. Boss' Pizza (that's a problematic apostrophe)
   
5. Hometown Tire
6. Tom Anderson Optical

Can anyone tell me how long it has taken six new businesses to open in Madison's downtown? And can anyone tell me how long it will take Madison to follow Brookings's lead and engage in a serious downtown revitalization program (like the one the LAIC killed two years ago)?

Wanted: Artists to Reimagine Community, Build Future

Somewhat related to my morning comments on walking, parking, and Madison's proposed new gym, here's the Tweet of the Day from the Midwest Rural Assembly happening right now in South Sioux City

Grow more artists, not just corn and athletes. Artists are the ones who reimagine a place, help create the future.

—Becky McCray, rural economic development guru, 2010.08.16

South Dakota Attracting Minnesota Jobs? If Only!

Minnesota gubernatorial candidate Tom Emmer is fanning those good old Perpich-Janklow flames with billboards warning Ole and Lena about the great economic menace to the west, South Dakota. His billboards say, "Don't Lose Another Job to South Dakota." Emmer's ag issues webpage says "Minnesota’s increased regulations and taxes have pushed many producers to relocate in South Dakota." (I sure hope they bring their nice topsoil and not just Rick Millner's ill-managed cows.)

South Dakota could certainly use an infusion of good Minnesota jobs. Alas, there is no hard evidence to support Emmer's claim that Minnesota is losing jobs to South Dakota. For some economic straight talk, we turn to Art Rolnick, currently at U. of M., formerly head of research at the Minneapolis Fed:

"If you just look at taxes, business taxes, South Dakota has a much different structure, a much friendlier business structure," Rolnick said.

But Rolnick said Minnesota has a bigger, stronger economy than South Dakota -- the per capita income is 10 percent higher than in South Dakota and Minnesota is one of the top states for the number of Fortune 500 companies. It also has a highly educated work force and can attract businesses looking for a place that will attract good workers.

"I'm not saying taxes don't matter, but you have to look at the full picture," Rolnick said. "Over all these years when this debate has gone on, Minnesota's economy has done quite well" [Elizabeth Dunbar, "Rolnick: No numbers support claim of jobs leaving Minn. for South Dakota," Minnesota Public Radio, 2010.08.12].

Rolnick recognizes that Minnesota's higher taxes pay for public goods that improve the quality of life and add more value to the business climate than the taxes take away. That's why outside observers can rank five Minnesota cities in the top 20 best small cities while ranking Sioux Falls back at 77th. That's probably related to why Minnesota universities can provide a better return on your tuition investment than South Dakota universities.

Minnesotans in general aren't fooled by our "no taxes!" marketing ploys. Minnesota radio host Matthew McNeil recognizes that relocating a business purely for tax reasons is a "reckless business decision" that "could bankrupt a company" as it struggles to transfer machinery, recruit and train new employees, and deal with increased shipping costs.

A look at the South Dakota migration map also shows that attracting residents (you know, the folks who make business possible as workers and customers) is much more than our statewide tax policies. From 2000 to 2007, ten South Dakota counties saw net in-migration. The other 56 counties saw more folks move out than move in, despite having the same no-tax/low-tax business climate as the gainers. (See also my March article on Census data showing 90% of our population growth happening in just five counties.) Recruiting businesses and residents requires much, much more than letting corporate raiders off the tax hook.

Candidate Emmer's effort to bogeymanify South Dakota as the great Minnesota business sucker has no evidence to back it up. It's also not likely to play well with Minnesotans, who will find the suggestion that they should be afraid of South Dakota risible.

Miracle Treat Day Lessons for Creative Community Development

When I blog about Miracle Treat Day at the Madison Dairy Queen, I try hard not to politicize the event. Madison DQ owner DeLon Mork and his crew continue to lead the nation in making the fundraiser a success: the store sold 20,955 21,405* Blizzards for the Children's Miracle Network on Thursday. Dairy Queen and the community do good for sick kids and their families—that's the main story, and all the story there needs to be.

Patience is a virtue: the line for Blizzards at 7:30 p.m. snakes around the entire inside of the Madison DQ and out the door to the sidewalk.

But if we want to broaden our focus—and I think we can without doing injustice to the event itself—the success of Miracle Treat Day in Madison has some lessons for creative community development in our small town and other rural communities.

I think a lot about how Madison and other small towns can throw successful cultural events that enliven our downtown. I don't have to think that hard: the Madison Dairy Queen pretty much shows a small town how to throw a party. What do we learn about staging good community cultural events from Miracle Treat Day?

Busy behind the counter: Madison Dairy Queen runs at full staff and then some during Miracle Treat Day

First, even when you're small, don't hesitate to think big. South Dakota has bigger Dairy Queens with more seating, more counter space, and kitchen space. That hasn't stopped DeLon and his crew from increasing sales and turnout each of the five years they've done Miracle Treat Day. Staff work shoulder to shoulder behind the counter; customers wait shoulder to shoulder at the counter and in the line that snakes through the entire store and out to the sidewalk. Customers wait patiently. Midwesterners overcome their customary outsized prairie bubbles and accept some Manhattan-style crowdedness for a few minutes. You can do more with your space than you think.

Parking is everywhere: folks parked a block or more away up Harth Avenue to come get Blizzards and enjoy the music.

Corollary: parking is not as big a deal as you think. There's no way the Madison DQ parking lot could hold all the people who come to the store on Miracle Treat Day, let alone everyone who comes to listen to the music and bring their kids for the games on adjoining Harth Avenue. If you don't have a big parking lot for the community event you're planning, do you give up? No. You make it big enough and good enough that people will be willing to walk. I saw cars parked up and down Harth Avenue Thursday night... about as far as people walk to cross the parking lot to Hy-Vee or Wal-Mart in the big city. People walk a lot farther to get to the Brookings Summer Arts Festival. Don't sweat parking! Throw a good enough event, and people will burn shoe leather to get there.

Madison police direct traffic on Highway 34 outside the Madison Dairy Queen. Note the signs and the fire truck boom, getting drivers' attention from blocks away so they know they'll need to slow down.

Culture shift: Take back the streets. All those visitors mean drivers will see something they aren't used to in a small town: lots of people walking around, enjoying themselves, and taking up valuable space on the sidewalks and the streets. We rural drivers get used to thinking of stop signs as the only obstruction to our unimpeded travel. The streets sometimes figure in our psyche as inviolable spaces for machines only.

Nuts to that. Plan that big event. Get the city to barricade a block or two. Draw a crowd that spills over from the sidewalk to the boulevard to the street. Get a couple city cops to come direct traffic. Trust me: if your town is Madison or any similar size, the police aren't too busy to come help. Besides, what more logical place for the police to do their job of protecting the public than the big event where you've got the biggest concentration of the public? Put up the signs, get drivers' attention, slow them down, remind them that the streets belong to the entire community, not just people in cars.

Solve problems. The bigger your plan, the more moving parts you install, the more unforeseen problems you'll have. This is not a reason to plan small. This is a reason to think ahead, brainstorm anything and everything that could go wrong... and still be ready to come up with solutions when the problems you inevitably can't foresee arise. Don't be scared: be excited! A big event is a chance to say, bring it on! I can fix anything!

Madison Masonic Temple gets a new elevator... with a view!

Consider Thursday: M.O.B. thought it would be cool to play some music from the roof of the Masonic Temple across from the Dairy Queen. DQ owns the temple, and DeLon said, "Sure, why not?" But dang—how do we get the band's equipment up there? Call a friend with a telehandler. Problem solved! and that great old vacant building gets its first practical use in years. Beautiful.

Oh, but wait! The music was great, but situated right across the parking lot, the music drowned out the drive-up mic. The gals in the store couldn't hear drivers' orders. Oh no! What do we do? Shut down the music? Tell Michael Hope to go acoustic?

No, we solve the problem. The drive-up gal has a headset, right? Send her outside to take orders face to face. Radio the orders inside—boom, problem solved. We keep the music going, the store provides even more personal service with a smile... and at least one lucky DQ gal gets to step out from behind the crazy counter and get some sunshine and fresh air.

Madison Dairy Queen, Miracle Treat Day, August 5, 2010.

You don't need beer. I hear lots of folks talk about how you can't make a street dance or a concert fly if you don't have alcohol. Everyone knows I'm a teetotaler, so I don't need to belabor my disgust with the "gotta have booze" mindset. Let me just remind everyone that there's not a drop of alcohol at Miracle Treat Day, and it's one of the busiest, bubbliest downtown events Madison has.

Bring downtown alive. This is the big takeaway. People want to see their community alive and vibrant. They like the transformation of a normal everyday street into a noisy, bustling place filled with music and neighbors. Give them a reason to come sit outside where they can see and be seen. Find a way to make your downtown into a gathering place.
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Update 2010.08.10: DeLon called and said they "found" 400-some more Blizzards sold on Thursday, raising the total from the originally reported 20,955. Another lesson for planning a good event: always double-check your spreadsheets! :-)

Broadband Essential for Entrepreneurs... But U.S. 23rd in Fast Web

Memo to all rural economic development specialists: Mike Knutson at Reimagine Rural notes that broadband is essential for entrepreneurship on the prairie:

Those of us who live and work in rural communities know the importance of high speed Internet connections. Because of it, the barriers of distance are broken and more businesses are possible in small towns. In fact, just the other week I met with an entrepreneur from Howard, SD whose business would not be possible without it. The owner has an engineering background, and he needs the Internet to connect with clients around the country. He’s a creative guy and wants to live in a rural community. Without broadband, he might have to consider moving to a city [Mike Knutson, "Broadband: An Entrepreneurial Requirement," Reimagine Rural, 2010.07.28].

In just two decades, broadband Internet access has become as essential to business growth as telephone and electricity. The broadband need Knutson highlights poses a challenge to my local self-sufficiency paradigm: I like to advocate building as much of our economy as possible on local people producing locally used goods and services... but lots of creative people have money-making skills that just can't find a sustainable market in small places like Howard or Madison. Even if you have a product or service that you can make a living on exclusively within the South Dakota market, you need fast Web to get your message (and your images, and your video!) out to your customers in Sioux Falls, Milbank, and Hill City.

Unfortunately for all of us, the United States is lagging in broadband deployment. In a survey of 57 countries, we rank 23rd in getting good Internet and all of its concomitant business opportunities to everybody. Why are we lagging?

The United States... trailed the rankings in a number of the five index components. [Analyst Ben] Piper says competition—or the lack of it—is to blame for the high prices and low average speeds in the US.

"With essentially zero intra-platform competition, US service providers have little incentive to innovate offerings or differentiate beyond par," said Piper ["U.S. Ranks 23rd in Broadband Development," StrategyAnalytics, 2010.07.20].

What? You mean the free market is working better in those darned socialist countries like France and Germany and Lithuania than it is in the U.S. of A.? My world is being turned upside down all over today.

Let's hope some of those mystery companies LAIC's Dwaine Chapel is confabbing with behind closed doors are broadband companies to bring zoom-zoom Internet, competition, and entrepreneurship to Madison.