Winsted-Lester Prairie Journal, January 25, 1999

Area communities consider business retention program

By Luis Puga

Area business and city government leaders gathered at Winsted's city hall Thursday.

The focus of the meeting was a presentation from the University of Minnesota's Extension Service on a Business Retention and Expansion Plan (BR&E).

The details of the plan were presented by George Morse, professor and extension economist in the Department of Applied Economics.

The meeting was attended by community leaders from Winsted, Howard Lake, Silver Lake, and Lester Prairie.

The invitation, issued by Winsted, was to solicit interest in the U of M's BR&E plan. The program focuses on how communities can keep the businesses they currently have by opening lines of communication with them.

Morse said the focus is due to a number of reasons. Primarily, he states that most new jobs tend to come from expansion of existing businesses, not from new businesses.

He also said that communities need to focus on the industries they have because existing industries will influence new industries' decisions to come into a community.

The plan works in a series of measures. Initially, there is an orientation for the communities. They are asked to appoint a leadership team.

This team goes on to create and train a task force of volunteers who interview industries through what he calls visitations.

During the visitations, the interviewers ask the industry what concerns and problems they are facing locally.

The process then splits into two parts, with any critical issues being addressed immediately by the community. The remainder of the data is sent to the U of M for tabulation.

From this data, the university makes recommendations in the form of a report back to the leadership committee. Generating about 20 to 30 ideas, the community is asked to prioritize and focus the list to, at most, half a dozen.

From there, public meetings are held to explain the report and the process of implementation of projects begins.

The objective, according to Morse, is to show that the community is pro-business, to assist the firms with local problems, to help firms find state and federal assistance if necessary, and to reach a consensus on three or four efforts to assist the businesses.

While it may sound simple, the plan is essentially a way for a community to better its relationships with private industry.

The focus of such a plan can be any type of business, but Morse said that his BR&E plan has done mixed sector economies comprised of all types of businesses.

The communities would essentially be purchasing the expertise, training, and consultation from the university for about $8,000.

Morse said that not all BR&E plans are created the same, and his is a combination of the six best in the nation.

Cooperation

The underlying hope of inviting all the surrounding communities was to see if any combination of the cities would join together in the program.

While Morse did not explicitly state that the communities needed to do the project together, the majority of the anecdotal evidence of success he provided were of communities which banded together. He showed a half hour video which documented the success Sibley County has achieved using this program.

Moreover, the cost of the program alone is more manageable with multiple community involvement.

In fact, Winsted invited the other communities to attend in the hope that they might consider the program, and divide its cost.

However, hurdles were apparent from the beginning of the question and answer period. The first question posed was whether the needs of each community would be met equally and fairly.

Morse responded that the red flags would address individual industries in each community. He also said that some initiatives recommended by the report would have to be implemented by all the communities involved. This would mean that the communities would have to work in unison, he explained.

Questions also included concerns of how much response the consultants would provide, what industries should be focused on, how to get the community involved, and how Morse would recommend getting past a community's "us versus them syndrome."

Morse said that would be an issue the community would have to deal with. He recommended interviewing no more than 100 businesses.

He also said that it has been his experience that people enjoy the process, but they should be informed of the time commitment and should expedite the visitations.

Reaction to the presentation was favorable. Howard Lake City Administrator Christina Frankenfield said, "It's a little pricey for small communities, but it's a fantastic program. I'm not sure we could afford it if we did it by ourselves. We would have to combine with another community or we might do it with the county."

She said that Howard Lake has its own economic development program and would like to solicit their opinion of the plan.

Frankenfield added, "If we did the program, it would be a great benefit."

Lester Prairie council member Galen Hochstein had a different reaction though.

He said, "I think business retention is a good thing. Setting up a program requires a lot of people."

Hochstein listed examples such as Formative Engineering, which he has worked with in the past on business retention. "He remarked also on the importance to a small town of helping its businesses."

He agreed with Morse that it is the small businesses that will expand, while the chance of a large industry coming to a town such as his is not very likely.

However, Hochstein also said, "If you've got a business that is thinking of expanding, you don't want the whole world to know about it. You want first crack at keeping them there."

"Doing it on a group basis like this, I don't know how that would work out without giving away valuable information you want to keep quiet. I'm doubtful," he said.

In reality, each town could go its own way. The price of the program can be scaled by lessening the work that the university would contribute.

On one extreme, a community could just purchase materials and access to the web site, and do the program themselves.

As of now, no community has decided to do the plan, not even Winsted, which showed the initial interest in the plan.

Both Winsted and Lester Prairie have comprehensive plans which they are paying the Mid-Minnesota Development Council for right now. Doing two plans may be a bit much for each community.

As for Silver Lake, it did not comment on their interest or intention for the plan. Winsted will consider it at its next city council meeting, possibly looking to see if other cities are interested.


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