HOW ARE WE DOING?

Growth begets growth.

As more people come to the lakes area, more businesses, franchises and developments are attracted by the numbers. As more retail stores arrive and more restaurants are added to the area, it becomes more attractive to people who want the quality of life but also want a few of the consumer comforts they would leave behind.

"It makes the place more desirable for people to move in -- so that can feed on itself," said Anthony Schaffhauser, Minnesota Department of Employment and Economic Development regional labor market analyst.

A significant milestone in the not-too-distant future comes in 2010 when the first major wave of baby boomers begins to retire. The lakes area faces competition from warmer climates but still appeals to a retiring population segment looking for a combination of natural resources, recreation, restaurants and retail.

"In that sense Brainerd/Baxter is a sure thing -- at least we are in a better position for further growth," Schaffhauser said.

Sheila Haverkamp, Brainerd Lakes Area Development Corp. executive director, said the regional hub of Brainerd/Baxter and the region in general was not hit as hard by the recession as other areas of the country.

"I think that says something about our area to withstand this economic downturn," she said. "The (Potlatch) loss was substantial -- no doubt -- but we were fortunate some of the industries were growing and adding jobs."

And Haverkamp said the new JOBZ program, creating tax incentives for job growth and company location in greater Minnesota, also is a plus for the area's future.

Challenges to this growth are well established -- affordable housing, increased traffic congestion, rising cost of health care. There is a higher poverty rate in the lakes area for single-family households compared to the state average.

But there are strengths as well.

The lakes area location, relatively close to the Twin Cities and St. Cloud, is considered a plus. The area is well documented as one that is attractive to retirees. But there also is an influx of people age 30 and older.

"So what we have is experienced workers who want to live here," Schaffhauser said.

The available workforce is one way to attract a business relocation. The lakes are a distinguishing feature of the Brainerd area.

"You look at where the lakes are and where the population is growing -- you are looking at the same thing," Schaffhauser said.

While the Brainerd lakes area is not alone in the region with natural attractions, Schaffhauser said the Brainerd lakes area does provide an opportunity to buy property less expensively than in Alexandria. And the lakes region has better transportation access to the Twin Cities than Grand Rapids or Bemidji.

"There is almost like a sweet spot there that makes the community attractive to a lot of people," Schaffhauser said.

In turn, Schaffhauser said people who want to live in the area's natural amenities will accept lower wages -- a trend documented for communities with beaches, mountains or lakes.

Brainerd/Baxter is well documented as the gateway to the northwoods, Schaffhauser said. The labor force is drawn from six counties. That is significant as a big area to draw workers, Schaffhauser said.

Between those two forces, jobs and travel, Brainerd/Baxter is a busy regional city complex.

There are a couple of scenarios for future job growth. The manufacturing base may evolve and change, developing niche markets and good wages but fewer jobs as greater efficiencies are sought to be competitive in a global economy.

The economy may move to more service-related options, retail and health care with retirees providing an economic engine for medical care and amenities and bringing new dollars to the community.

"Probably what is going to happen is something in between that," Schaffhauser said.

An unknown is whether the area may gain more of what Schaffhauser refers to as "back office" business for data processing for financial or insurance services.

The knock against a service economy has been that it does not generate economic wealth but passes dollars around.

Retirees bring their wealth with them.

"So you are having wealth come into the area -- those things are not as clearly economic engines but those sorts of things are important," Schaffhauser said.

New manufacturing jobs are expected in niche or innovative markets or ones where service is at a premium. Construction has had strong slower growth. Low-interest rates combined with people moving to the area created construction job opportunities.

Another link in economic development is transportation, including improvements in the Brainerd Lakes Regional Airport.

A second carrier to compete with Northwest Airlines has long been sought. Another step will be an economy that is robust enough for at least a year with a good forecast, so the traveling public feels comfortable using disposable income to take a trip, airport manager Steve Sievek said.

He said the current $16 million runway project -- expected to be operational in the fall of 2005 -- is in preparation for continued area growth and the coming baby boomers.

Reggie Clow, BLADC president, said when he thinks about the future the first thought is the Brainerd and Baxter area developing as another St. Cloud.

"With more beauty of course -- you have to maintain that -- you don't want to lose the attraction," Clow said.