Recession provides one blessing in disguise
Even during difficult economic times with layoffs and business closures there are opportunities for economic development.
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Between January and June, the Brainerd Lakes Area Development Corp. worked with 228 inquiries, which boiled down to 55 potential projects. Those projects broke down into 19 startups, 23 projects involving business retention and expansion and 13 projects regarding attracting business here, such as a data center.
Between 2004 and 2008, BLADC annually averaged 18 projects per year, $16,600,000 in investments, 132 new jobs and $1,800,000 in grants/economic development funds for area communities. In 2008, there were 17 projects but BLADC reports fewer jobs were created and the year's investment was half the annual average.
By the numbers
• Median household income 2005, Crow Wing County - $44,644.
• Age trends - from 2005 to 2035 - most of the population growth will be in the 65 to 85 age group with retirees growing from 6,757 to 14,400.
• In 2007, Crow Wing County had an average of 2,242 businesses with an average of 29,081 employees and an average weekly wage of $583, for an average full-time annual wage of $30,316.
• For 2007, the average weekly wage in the state was $853. In 2008, the county's average weekly wage was $598, an increase of 18.7 percent since 2000. However, the county's weekly wages fell from 74 percent of the state's average to 67.9 percent between 2000 and 2008.
• The Brainerd Lakes Area Development Corp. reported low wages and slow wage growth likely contributed to the county's employment rate outperforming the state's employment rate. The county's employment grew by 10.6 percent compared to the state's 2.6 percent from 2000 to 2008.
• BLADC reported wage growth in the county was insufficient to keep up with U.S. inflation, which was 29.3 percent.
• Education and health services increased from 21.3 percent of the county's work force to 25.2 percent from 2000 to 2008.
• Between 2000 and 2008, manufacturing decreased from 13.5 percent of the county's work force to 9.4 percent. And the number of employees per manufacturer fell from 31.2 to 20.5.
• From 2005 to 2035, the county's labor force is projected to increase by nearly 20 percent from 31,340 to 37,900.
• Crow Wing County's labor force makes up nearly 40 percent of the Region Five projected labor force of 92,950.
• In 2012, the estimated income in Crow Wing County is expected to be $29,617 per capita or $56,838 per median household.
Source: Brainerd Lakes Area Development Corp.
So far in 2009, BLADC worked with about eight projects, about 200 jobs and $14,000,000 in total investment, with $1,498,000 in grant money.
Sheila Haverkamp, BLADC executive director, said, "We're seeing many individuals who have been seeking employment - for whatever reason layoffs or reductions - that have some entrepreneurial spirit. From a community economic development perspective that can be wonderful. A lot of the companies that we know today in our marketplace were individuals just like that - that had this entrepreneurial spirit that wanted to start a company that eventually leads to a major employer in our marketplace. We're glad we are seeing those startups and they are out there. ... I see that as an opportunity."
Prospective startups included a care facility, bar/restaurant, renewable energy company, distribution company and wood products manufacturer. Other projects included a recycling operation, restaurant and brew house re-development, recreation manufacturer, a software and technology company, wine manufacturing/events center and bistro, manganese mining operation, big box retail development and an apartment complex.
Anytime someone attempts to start a business there is a need for funds to launch the project. And Haverkamp said in the first time in her 20 years in economic development, there is a major challenge in a significant need for equity.
Business development projects in the area include a handful of manufacturers. Brainerd Lakes Area Development Corp. lists success stories for the first quarter of 2009 with job creation and redevelopment projects such as Jimmy John's restaurant, now under construction, with 20 anticipated jobs, Wausau Paper's 16 new jobs and Tek-Car Metals Corp. with 12 jobs among other projects. Brainerd Dispatch/Kelly Humphrey» Purchase reprints of this photo.
People may tap their savings, retirement accounts, home equity, investment dollars from friends and family or other investors with an interest in the community and BLADC assists those startups with planning and the search for funding.
BLADC works to help existing companies expand and retain jobs and works to attract companies here. Programs for economic development tap into local, regional, state and federal options such as lower interest rates, longer terms, cash flow incentives, tax exemptions and loan guarantees.
This year's projects, which BLADC lists as success stories, include True Protection Security with 200 jobs expected in the new call center in Pequot Lakes by 2010. The Brainerd Lakes Heart and Vascular Center is expected to provide 26 jobs. The expansion of the Brainerd-based Adventure Creative advertising firm is anticipated to bring in at least 14 additional jobs in the next three to five years. Work with Tek-Car Manufacturing in Emily in 2009 retained 18 jobs and is expected to add 12 more in the next two years. And Jimmy John's Gourmet Sandwiches restaurant, which re-developed the site of a closed convenience store, is expected to add 20 jobs in northeast Brainerd.
"I feel like it's starting to be more positive," said Elissa Rogers, BLADC economic development specialist.
The climb out of the recession is not expected to follow the steep incline up a mountain road to match what has been a more dramatic economic drop into the valley. Job recovery is anticipated to lag. Haverkamp said a positive sign came as Brainerd's unemployment recovered from 20.1 percent in April to 15.6 percent jobless in May.
However, for businesses that struggled through a less than stellar summer, at least one more winter of potential discontent looms as companies look as cash flow.
"Winter is always a difficult time and with a softer summer, it's even going to be more of a challenge to make it through those months," Haverkamp said.
Beyond promoting the area, BLADC coordinates business proposals/inquiries along with government resources, helps businesses with site selection, offers technical and business planning assistance, among other efforts.
BLADC recently hosted an economic development consultant who works with company site selection with hopes to gain from expertise in developing Shovel Ready-certified sites through the state's economic development program aimed at attracting new industry. The idea is to have much of the basic work done on a site before it is marketed - such as soil analysis, surveys, title work, environmental studies, planning and zoning and public infrastructure engineering. With preliminary work done to eliminate a number of unknowns, the hope is the site will be more attractive to a prospective company.
Earth-moving projects have slowed with the recession, but dozers were at work this summer constructing the Jimmy John's restaurant in northeast Brainerd. Brainerd Dispatch/Kelly Humphrey» Purchase reprints of this photo.
Brainerd applied for Shovel Ready certification for its phase four industrial park site south of the Crow Wing County Fairgrounds. It was one of four applications submitted in the first round and was the only outstate project. BLADC reported Potlatch may have a future application for the former wood yards site in Baxter.
Another economic development opportunity may come from data centers. BLADC reported the lakes area was recently identified as possessing the amenities to attract a data center, particularly with the fiber technology available and more than one major electrical provider. BLADC continues to look at what sets the lakes area apart as a strength to attract development, investment and jobs here.
While the area has witnessed layoffs and business closings during the current economic turbulence, BLADC reports seeing steady activity with potential business startups and works to attract new business and retain existing jobs and companies while helping others expand. Haverkamp reported BLADC is "optimistic that the majority of Brainerd lakes area companies will be stronger and more dynamic than ever following this recession."
RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.