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State, Region Officials Tour City
October 15, 2009 (Scottsville, KY) [By Matt Pedigo, Citizens-Times Editor]
State legislators and local officials from other area cities and counties converged on Scottsville last Thursday and Friday for a meeting that dealt with economic development issues ranging from agriculture to small business entrepreneurship.
The session began in the Allen County Cooperative Extension Service with a meeting of legislators from across the state who now serve in the Kentucky General Assembly’s Interim Joint Committee on Agriculture, chaired by the Ninth District’s new senator, David Givens (R).
Allen County Economic Development Director Richie Sanders was one opening speaker, noting that seven Kentucky counties had beaten the national average for small business entrepreneurship—and Allen County was one of them.
(Pictured from right to left, Heath Seymour, Main Street Manager and Richie Sanders)
Western Kentucky University Innovation and Commercialization Center (ICC) Executive Director Buddy Steen addressed the committee, detailing a recently-announced partnership with The Halton Company to bring a business accelerator facility to Scottsville. The facility will be smaller than the ICC campus in the old Bowling Green Mall, but the principle will be the same: Providing a place for new ideas to meet resources to develop and market them.
(Pictured below from left to Right, Richie Sanders, WKU President Gary Ransdell, and Rick Bagwell, President of Halton Group Americas.)
Steen said the ICC will soon be the home of the world’s largest electron microscope, and that a supercomputer was slated for the Scottsville facility.
“Our mission is to take the ICC, and develop concentrically around it,” Steen said.
Among other speakers, the committee heard from University of Kentucky economics professor Ron Hustedde, who discussed the importance of smaller businesses in the state’s economic picture.
Hustedde compared Kentucky’s economic development to a three-legged school. The first is traditional industrial recruitment. The second leg is new smaller businesses, and the third is retention and expansion of existing businesses.Hustedde advocates a shift in resource allocations, noting that Kentucky is focusing 94 percent if its economic development resources on industrial recruitment.
That’s important, he said, but the resource ratio does not reflect economic realities in the state. He noted that new or existing small businesses account for 75 percent of all new jobs nationally, and accounted for half of Kentucky’s private-sector employees. He also cited a US Department of Agriculture study which projects that, by 2015, one of every four rural-area workers would be self-employed.
“Why not shift some of those resources?” he said. “Why are we putting all of our eggs in one basket?”
To help the latter cause, Hustedde and other UK experts have launched the Kentucky Entrepreneurial Coaches Institute (KECI). The specialized curriculum trains and develops “coaches” who provide advice and resource information for those hoping to establish a small business, or keep or expand an existing one. It is particularly focused on counties that had been heavily economically dependent on tobacco.
Thus far, he said, KECI has graduated 55 coaches, including David Dinwiddie, who serves the Allen County area. The program was launched in 2005. KECI coaches have since assisted projects in 42 counties, resulting in 94 new business starts, 57 existing business expansions and 131 jobs created. They’ve also helped bring in $3 million in grant funding, Hustedde said.
In the Thursday afternoon session in the Washington Office center, Hustedde also said Allen County was poised to be a national leader in small business ventures. According to KECI statistics, Allen County has a total of 218 active businesses with employees; of these, 124 have just one to four employees. Forty businesses have five to nine workers, 24 have 10 to 19 and 17 have 20 to 49 workers. Only 13 have 50 or more employees.
United Parcel Service executive Jim Fortsch, who heads the UPS Capital Export Credit Agency Finance, detailed this venture, a large-scale entrepreneurial effort by the worldwide shipping company intended to help expand American exports. He noted that Kentucky exports totaled $19.7 billion in 2008, placing it 21st among all US states. Leading economists now say that increasing exports will be a major key in a lasting economic recovery, and UPS Capital is designed to foster that, Fortsch said.
Formed in 1998, the program offers loans—which can be unsecured—for up to 85 percent of the cost of capital investment in business expansions or starts. Repayment terms range from six months to 10 years. The program recently helped a Louisville medical equipment firm edge out a German company for a contract in Turkey. It has also aided in more than 800 other transactions, Fortsch said.
In Thursday’s afternoon session, Burt Chojnowski, founder of Brain Belt Consulting, discussed the success of Fairfield, Iowa’s downtown business generation/retention program. Around 2003, the town’s business district had been decimated by what Chojnowski called the “Wal-Mart effect”—a Wal-Mart had opened away from the town’s center, and the area was economically drying up. It soon had 40 percent of downtown buildings and storefronts standing empty.
To generate re-investment, four local banks had collaborated to create a business loan program, eventually offering loans of up to $100,000 to establish or refurbish downtown businesses. Long-term plans were developed, and the result was the creation of a cultural/historical district, featuring art shows and other events that draw thousands. Fairfield’s street-scape design was also changed to accommodate more pedestrians and bicyclists.
The town of just 9,400 has won national acclaim as a model for downtown rejuvenation. It now has more restaurants per capita than San Francisco, Chojnowski said.
Chojnowski added that Scottsville has the potential to be a model as well. The officials who stayed late enough got a tour of the renovations to Scottsville’s square, led by Main Street Manager Heath Seymour. Among the group was former Scottsville doctor and now Cave City Councilman Gary Hogan, who said Cave City was seeking improvements. He attended to get some ideas.