City eyes new strategies
Council re-examines economic development
Minot city leaders are re-examining how the community does economic development.
As a step in that process, the Minot City Council heard Monday from City Manager Harold Stewart, who shared the perspective of his experiences working in Missouri, Iowa and Nebraska.
Economic development was one of Stewart’s strengths that elevated him to be considered for the city manager position in Minot last fall. The Missouri community he came from had successfully landed a $120 million distribution center that brought 500 new jobs during his tenure.
Stewart stressed the need to aggressively seek retail growth as well as primary-sector industry. He cited the importance of retaining and expanding existing businesses and then recruiting their suppliers to create business clusters.
He also suggested Minot is not using its MAGIC Fund to its potential.
“You have a lot of money and resources there. But we’re not using it,” he said. “My opinion is that we need to have some conversation about restructuring how that MAGIC Fund money is put to work for economic development within our community. You’re sitting on the golden egg. But it’s not working as hard for you as it should be.”
Minot invests 15% of a 1% sales tax into economic development, which supports air base retention, an economic developer position, funding for Souris Basin Planning Council and the MAGIC Fund. Over the years, the MAGIC Fund largely has focused on primary-sector business and infrastructure to recruit businesses. Recent allocations have included a One Brand effort, a revolving loan fund for businesses and purchase of a building for a career and technical education center.
Finance Director David Lakefield reported a current MAGIC Fund balance of $8.9 million, with some allocated funds not yet paid out.
Council member Paul Pitner agreed with increasing the investment into Minot through the MAGIC Fund.
“We need to put those dollars to work,” he said.
Stewart reviewed a number of economic development strategies that could result in significant improvements, including some requiring little effort.
“We’re not doing a good job, maybe, in getting out and telling our story as best we can. We’re not doing a good job of getting the data,” he said. “Those are easy fixes. That’s low hanging fruit.”
Getting good data involves accessing census information and conducting a retail leakage analysis, he said. An analysis would include obtaining cell phone, credit card and tourism data to get a picture of spending in Minot and examining employment and job growth. Stewart also recommended attending retail conferences to encourage businesses to look at Minot.
“Retail recruitment factors into your quality of life and keeping money local,” Stewart said. He noted many communities focus on the primary sector and assume retail will follow.
“It does to a certain extent, but not as effectively and as productively as it should, and most communities that are growing are very aggressive when it comes to retail recruitment,” he said. “Minot has done a fairly good job in the primary sector, but so far no one’s really been paying attention a whole lot to the retail side of things and how we recruit them.”
He said that doesn’t mean tax abatements and financial incentives for retail but it does mean the right type of active recruitment.
“Each of those businesses has a business plan. They spent a lot of money figuring out how they can be competitive and make money. So you’re not going to do any good trying to convince them to come somewhere that doesn’t meet their business plan,” he said. “You have to have the data to be able to tell how you meet that business plan and really need to be in the right place at the right time to have a conversation with them.”
“We need to embrace that idea still that we are the retail hub for northwest North Dakota,” council member Lisa Olson said. “We have a big area of the state that we need to provide retail services to so I’m hoping that they probably are part of that conversation, as well as the Canadians.”
Stewart said the most successful strategy for economic development entails building on what already exists.
“Nationwide, about 85% of your economic growth will come from maintaining your current businesses. These are businesses that have already proven and indicated that they can be successful in your environment,” Stewart said.
He recommended visiting regularly with existing businesses to find out their investment plans and challenges and to determine the financial tools, infrastructure or skilled labor that are needed. Another focus needs to be on entrepreneurship, he said. Encouraging fledgling entrepreneurs is accomplished through mentoring programs and access to financial tools and cost-effective spaces.
Stewart also stressed the importance of Minot building stronger partnerships within a community, which in Minot’s case includes the air base, hospital and university. Additionally, focusing on quality of life and creating a strong online presence will be important for Minot, he said.
Stewart talked about drafting an economic development plan, an idea that resonated with council members, who have wanted to do strategic planning. He said the International Economic Development Council report developed through the city’s resilience program was downtown-centric and doesn’t serve as a comprehensive economic development plan.
Finally, there needs to be a better way to measure economic development success, he said.
“The best way to measure economic development success is, ‘how much are you increasing discretionary income of your constituents?'” he said. “The more success you can have in generating more discretionary income, the more success and sustainability you’re going to have economically within your community.”
Stewart said creating better paying jobs is a good way to provide that increased discretionary income.