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Tuesday, October 6, 2009

Harrisburg Alderman Shows Economic Development Myopia

KELO serves up another example of small-town officials who don't understand that the best economic growth comes from what you have, not from what you import:

“We've had a couple contacts with some chains for grocery stores. We'd like to see a Subway or Taco Bell or John's come in to town. We are working on eateries and commercial business.”

[Harrisburg alderman Steve Becker, interviewed by Erica Johnson, "Small Town Sprawl," KELOLand.com, 2009.10.05]

It makes me cringe every time a small town expresses the myopic idea that they'll really have made it when they land some chain store or fast food joint that will make them look just like everyone else. Such statements ring of that common small-town inferiority complex. It's as if nothing we make here is good enough; we must seek the validation of outside corporations. We're just second-raters; we need someone else to study our market and make our sandwiches. (That's exactly what McDonalds wants you to think.)

I can only hope that the Harrisburg city council and its economic developers are spending at least as much time encouraging local folks to start their own businesses as they are extending invitations (and incentives?) to big national chains. Harrisburg in particular is in an enviable position. They aren't looking for some miracle retailer or factory to save a dying small-town economy. Harrisburg is going to grow. Thousands of Sioux Falls people are going to come build houses and at least sleep there. Their school district may double and double again. Growth is guaranteed.

Harrisburg thus doesn't have to stick with the tried and true model of familiar chains to establish itself. Harrisburg is fertile ground for local entrepreneurs to establish their own diners and shops now and ride the wave of inevitable growth long-term profitability. Forget Subway: start a unique local place, a gathering place that could be to Harrisburg what Nick's is to Brookings (the Harrisburger, anyone?). Don't let the mass market define you: start local businesses that define Harrisburg as someplace unique.

I like Potato Olés as much as the next guy (though I prefer the Norwegian pronunciation, thank you), but I've got to tell you: Taco John's is not the sign that you've made it as a community.


  1. I enjoy stopping at local places to eat. You never know what you'll get, but there are a lot of gems out there.

    I like the idea of the Harrisburger. Throw in an old time malt counter and an Art Deco interior and people will be driving down from Sioux Falls to eat there. A Taco John's not so much. Bring outside people to your town to spend money rather than sending all the profits to some far off corporate headquarters.

    Don't forget Eastern South Dakota's best Mexican Restaurant right there in Madison (now with new decor). It puts Taco John's to shame.

  2. Cory,
    Not only are local shops and restaurants attractive to a lot of people looking for a place to live, but they also hold great potential for helping a community build social capital.

    Sociologist Ray Oldenburg was the first to note the importance of informal public gathering places such as local cafés, pubs, bookstores, community centers and main streets. He called them “third places” (first placing being our homes and “second places being our places of work), and suggested they were the bedrock of a working democracy.

    Oldenburg, who grew up in rural Minnesota, noted the decline of third places resulting from the rise of suburbia, and feared their demise would result in a community’s loss of social vitality. Without places for people of disparate backgrounds to meet, how would people learn to trust one-another.

    As I reflect on all the turmoil the Harrisburg school board has endured the last 3-4 years, I can’t help but wonder if Harrisburg isn’t a classic example of a community without a third place.

    I’ve written about “third places” numerous times on our blog. Anyone interested, can check out this post - http://reimaginerural.com/coffee-shops-as-third-places/ - if they are interested in learning more

  3. Third places—exactly! You and Oldenburg know your stuff!

    Subway and McDonalds just don't feel like third places. Can outsiders (and corporations) build third places?

  4. DQ of madison would definately qualify!! - id live there if i could..

    and here in huron we are blessed to have Manolis Grocery - have a sandwich and join in on the daily b.s. sessions with the owners and over half the people of huron that seem to drop by almost every day...

    gotta love places like these - real community gathering spots :)

  5. Cory, I think Michael answered your question: With outstanding leadership, a franchised operation can develop into a third place. But Delon Mork is probably the exception. For me it is also important that people of all economic backgrounds come together for conversation. Otherwise, the trust that results from the conversation is pretty shallow.

  6. When I think of community and not allowing the chains in the city limits - or inner city limits, I think of Northfield, MN. If you've never had the Ole French toast treatment at the Ole Store, you are in for a real treat.

    Historic buildings and a wonderful MN feel -- Target just outside or possibly a few feet in city limits, but not taking away from the small town feel.

    I do think there might be a Taco Bell on a busier strip, but those fast food places are found more further out.

  7. Cory -

    It's not always as simple as you think.

    It's less a case of "who" provides a product or service in a community and more of one that "someone" provides it.

    If someone has to go out of town to get a service, they're going to spend their money on other things out of town.

    (One reason why when we yank schools out of communities, it's the beginning of the end for towns. )

    Franchises are attractive to many communities, because they're very pre-packaged, and they know their stuff when they come into a community in terms of "time to open," profitability, etc.

    Someone else starting a business probably doesn't have that built in knowledge or experience from doing it in a dozen to a hundred communities. And in the first five years, the majority of small businesses fail.

    So, in terms of our tax dollars or Community promotional dollars, would you prefer they be spent on a sure thing, or on a wild card?

    Therein lies the rub. They're no different than any other local group - they'd love to invest locally. But they don't want to make a bad investment.

    It's not an easy answer. I've started (and/or closed) small business operations myself and it can be a tough go.

    THAT is exactly why to make it easier and give small businesses a better chance to make it, we need to reduce taxes and red tape on small businesses.

  8. Oh, Pat, I recognize all sorts of complexity here. I have no problem with cutting red tape and making responsible tax cuts (i.e., cuts that might help business but still ensure businesses pay their fair share). But whether we're talking about removing negative burdens or going further and offering positive incentives like targeted tax breaks or development grants, I would ask why would give that money to a big corporation that doesn't need government's help rather than a local start-up that could use a leg up.

    Let's also consider a more complicated analysis of return on investment. Suppose we have some pot of development money we can use to entice a new main street business to start. We can take the safe bet, say Subway will more likely generate more sales and tax revenue, and hand them money. Great. But if we invest the same money in a local outfit, more of that money stays in town from the start. Plus, we are supporting someone who will develop more independent business skills, who will have more freedom to do what she/he wants to do with that business, including investing back in the community. We have a local shop with workers who are not indoctrinated in some national branding campaign, who are closer to the point of decision making. That's the kind of business that is more likely to generate the kind of local leadership that makes the community move and shake in other areas.

    Now I know that's still a hard choice. If Dwaine Chapel at the LAIC is considering throwing some Forward Madison money behind a new employer, I'd have a hard time convincing him to pick me with my homemade business plan that's never been tried before versus a premade template from Taco Bell corporate. Investing in local ideas and talent is a leap of faith.

    And that goes back to my original point: If Alderman Becker is taking the safer bet you describe, there is an enormous irony in the fact that we would put more trust in a big external entity, a large corporation, than we would in our own neighbors, people we've lived with for decades. Doesn't that support the notion that we think we aren't good enough to come up with reasonable business plans of our own? Is this a rural inferiority complex?

  9. I was born and raised in Howard and am now attending college in Bozeman, MT. Bozeman may be bigger (~35,000 permanent residents and a campus community of 12,000) but they have a thriving Main Street filled with local businesses.
    If a professor hears you went out to eat at Applebee's by the interstate on Thursday night instead of The Garage on Main, you will definitely get an ear-full.
    I think rural SD needs to better appreciate their local businesses and stop relying on others to come save them. If every small town member had the same attitude about downtown as my professors, rural would be a lot more profitable.


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