By Nancy Larson
Governments from top to bottom are doing all they can to spur economic development in these trying times, but the state’s smallest cities have special hurdles to overcome in working to provide stability in their communities.
Those hurdles are especially evident in rural Minnesota, which is dominated by small cities struggling to remain vibrant despite declining property values, aging populations and limited staff and other resources. But in 18 years of traveling the state as the executive director of the Minnesota Association of Small Cities, I found what small cities lack in material resources can be replicated in ingenuity and a sense of community.
Where else but a small town would you find enough citizens to work free-of-pay to staff a café that was threatening to go out of business? Having a place to meet made that a priority for people living in one small city in Southwest Minnesota. In a small city located in Northeast Minnesota, building materials and cash donations were collected over a three year period, after which local carpenters donated time to build a new grocery store.
These examples may not be typical, although they occur much more frequently than people would suspect, but the willingness of citizens to make their communities work is typical. You see that in the flower boxes and gardens that line many main streets – all maintained by nearby store owners and residents. And things like those flower boxes are critical to the future of small cities because the attractiveness of a community is often the primary factor in deciding on whether to buy home or open a business in a community.
Downtowns aren’t the same as they used to be – in big cities as well as small towns –and people tend to judge the vigor of small towns primarily by their main streets. That is why appearances count. The businesses might be gone, but making use of the buildings and working together with the community to preserve the integrity of mainstreet can help strengthen the tax base and the economy of the city.
The reality is that old-time commercial enterprises have a difficult time replicating themselves in small cities. A long-time businessperson can live quite comfortably on his or her profits, but it can be impossible for a new buyer to pay for the building and its contents and remain profitable in a small town. This is one of the biggest problems small cities face, since outside assistance for small commercial enterprises is limited, but businesses like grocery stores, cafés and gas stations all provide a sense of place as well as essential goods and services for these communities.
The high cost of start-ups and moving is one of the reasons why retention and expansion of existing businesses is stressed by entities such as USDA Rural Development and the Minnesota Department of Employment and Economic Development (DEED), both providers of economic development assistance to small communities in rural Minnesota.
The state has tightened up on resources, though. And since even planning for economic development is a big ticket item, only cities that are really on the ball can tap the federal and state revolving loan funds needed to create jobs, according to Dassel City Administrator Myles McGrath.
A lot of other resources are also needed, according to Dennis VanHoof, the Economic Development Authority (EDA) director for the City of Granite Falls. According to VanHoof, a network of support such as local bankers, chambers of commerce and development corporations is needed to secure state and federal dollars for economic development projects. If, with the support of this network, you can develop a good business plan with a good financial history for a project that includes expansion and job creation, you have a good chance of success, he said.
That is a tall task for the state’s smallest cities which usually are just trying to hold their own, not trying to develop new jobs. The moral, according to VanHoof, “is to keep what you have, which can be difficult in this economic climate.”
Thanks to the federal stimulus package, there is more grant money in the pipeline than ever for water and wastewater updates though, and small cities are usually the biggest recipients of money for these projects. That should be cause for cheering, but those small cities are also most dependent on the Local Government Aid (LGA) program, which is being cut by Governor Tim Pawlenty.
“That has made some cities reluctant to move forward on projects,” according to Kevin Friesen, Community Programs Specialist with USDA Rural Development. Because of the stimulus funds, this should be a good time to invest in new infrastructure, said Friesen, but city councils worried about the effects the cuts in aid will have on their tax payers are reluctant to invest in the needed improvements.
The economic development prognosis for small cities in rural Minnesota is mixed, at best, with “holding your own” now getting a star rating. In order to succeed, it will take resourcefulness plus a united effort within – and between – communities. Maybe that will be the silver lining in the dark economic clouds now afflicting our nation. It might help tear down those barriers between neighboring cities and townships and unite them as one community. That would be a win.
A resident of Meeker County near Dassel and DNC member, Nancy Larson now serves as a legislative associate for Flaherty and Hood.
Photo (top): The old watertower in Cosmos, Minnesota, another small town in Meeker County.
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