Cities Turn to Nonprofit Incubators to Grow Local Business

Although cities have long offered tax incentives to encourage companies to stay or relocate, an increasing number of them are turning to homegrown nonprofit incubators that nurture new businesses from the ground up as a way to prop up their struggling economies, the New York Times reports.

One of the pioneers of the model is Pennsylvania's Ben Franklin Technology Partners, which was created by Dick Thornburgh, then the state's governor, in 1983. Since then, a number of similar business incubators, including the Chicagoland Entrepreneurial Center and Pittsburgh-based Innovation Works, have sprung up around the country with varying degrees of government and private support. Such groups are often the biggest source of early stage financing for technology companies in their regions and tend to be found where there is a steady supply of innovation coming out of nearby research universities.

One such nonprofit is five-year-old Jumpstart, Inc., which provides seed money to entrepreneurs with promising businesses in the Cleveland area. Like a venture capital firm, Jumpstart identifies companies to invest in and advises them on their next steps. But in a departure from the traditional venture capital model, Jumpstart relies on charitable donations, many of them from the private sector, for its financing and does not return a share of profits to those who provide the investment dollars. Instead, returns come in the form of satisfaction derived from boosting the region's economic standing and future.

Early estimates of the impact of Jumpstart's work are promising. According to a study by researchers at Cleveland State University, Jumpstart's investments have generated ripple effects throughout Northeastern Ohio, including the production of $56.3 million in goods and services and the creation of nearly three hundred and fifty new jobs. While the numbers are relatively small, Jumpstart executives believe that those ripple effects will spread exponentially.

Robert Litan, director of research for the Ewing Marion Kauffman Foundation, is among those who see great value in Jumpstart's approach. "The traditional model for helping relatively depressed areas of the country is smokestack chasing, where a city provides incentives to attract companies or to keep them from leaving," said Litan. "But the problem with that approach is that it is very expensive and it is a zero sum game from the point of the country as a whole, because if I attract a company to my city, then I win, but the city where the company used to be from loses."

Article courtesy the Foundation Center

Judge Dismisses Developer's Suit Against City

A federal judge today tossed out a Missouri developer’s lawsuit against the City of Columbia stemming from a dispute involving the proposed Columbia Crossing project near the Jefferson Barracks Bridge.

G.J. Grewe Inc. was seeking millions from Columbia, alleging that it had failed to live up to a three-year-old development contract, but U.S. District Judge Phil Gilbert dismissed the suit, writing "there is no express or implied authority" allowing the City to enter into the agreement in the first place.

The ruling represents a victory for the City--in effect, granting the motion for summary judgment that Columbia requested. While Grewe may very well appeal this decision, necessitating additional costs to defend the lawsuit, the ruling presents an opportunity for Columbia to begin moving on beyond a situation which has shadowed local economics for many months.

"I am hopeful that this will be a turning-point and that the Council can come together to proactively work toward the betterment of our City," Mayor Kevin Hutchinson stated upon hearing the decision. "I have been very vocal and consistent in expressing my belief that Columbia needs a healthy balance of residential and commercial development to sustain our current service levels," he reflected.

"I am eager to work with the rest of our Council and with our community to develop innovative new ways that we can sustain City services by increasing our currently flat and/or declining revenues without unduly burdening our residents."

A Pox on the 'Big Box'?

Much of the discussion at last night's City Council meeting was focused on the impact of "big box" retailers on local development patterns and the economy of Columbia and Monroe County.

Two citizens addressing the Council supported imposition of a ban on "big box" stores; both cited the book Big-Box Swindle by Stacey Mitchell, chair of the American Independent Business Alliance. In her book, Mitchell argues that the growth of mega-retailers--from big boxes like Wal-Mart and Home Depot to chains like Starbucks and Old Navy--leads to the decline of locally-based independent businesses, and she further argues that current government policy unfairly supports expansion of the "big box" enterprises. Mitchell contends that communities composed of many small, locally-owned businesses are healthier and more prosperous than those dominated by a few large chains--precisely the argument advanced by economic development professionals for economic gardening (more about that in a future post).

Responding to this citizen input, the City Council determined to look at both sides of this issue. The City will engage planning consultant Jim Pona, who drafted Columbia's 20/20 Master Plan, to examine the pros and cons of establishing a moratorium on "big box" stores and report back to the Plan Commission, which will recommend future policy.

Levee Low-down Next Week

As noted in a previous post, the Federal Emergency Management Agency (FEMA) has released new maps for Southwestern Illinois that show the American Bottoms, from the Mississippi River east to Bluff Rd., as no longer protected. Next Tuesday evening, the public will be able to see those maps for the first time:

Tuesday, July 29th
5:00 - 8:30 p.m.
Monroe County Annex (901 Illinois Ave.) in Waterloo

Representatives from FEMA and the Illinois Department of Natural Resources will be on hand to answer questions and accept comments regarding the flood mapping project. Those attending this open house will have the opportunity to:

• Locate their property on the newly produced Monroe County digital Flood Insurance Rate Map (FIRM);
• View the new Flood Insurance Study Report (FIS);
• Review map panels & FIS for accuracy & submit comments;
• Learn about the National Flood Insurance Program (NFIP).

Understanding the new maps and checking their accuracy are among the most important things that property owners can do to protect their interests--plan to participate!

Celebrate Summer at Columbia Daze

Columbia’s traditional summer festival--billed under the playful name of “Columbia Daze”--will be held this year on August 15th & 16th at Turner Hall (211 E. Cherry St.). The event kicks off at 4:00 p.m. Friday and continues all day Saturday with carnival rides, games, and food vendors. Live music by the band Freefall will be offered from 8:00 p.m. until midnight on Friday, and the event wraps up Saturday evening with a performance by Aftershock, also from 8:00 p.m. until midnight.

And more--there's actually a host of activities around town on Saturday, including:

• Historical trolley tours provided by the Columbia Heritage and Preservation Commission using actors from Monroe Actors Stage Company; the tours--which view historic homes throughout the city from the climate-controlled comfort of a replica historic trolley, cost $8.00 and leave from City Hall every hour on the hour;
• The Columbia Daze Parade will begin at Bolm-Schuhkraft Park at 5:00 p.m.; the parade is open to local businesses, clubs, and groups (a donation of $10.00 per vehicle is required), and organizers have already booked several bands including the Bud Light Brigade and representatives from Columbia and Gibault high schools--to participate, please contact Paul Koury at (618) 281-7133;
• Food--the Columbia Fire Department will be frying fish, the Pork Producers will have butterfly chops & pork burgers, plus there will be bratwurst, hot dogs, pizza, chicken on a stick, funnel cakes, cold beer and soda; proceeds will benefit the local groups that provide each booth.

For more information on Columbia Daze activities, call Turner Hall at (618) 281-5393.

Levees: Rising Above That Sinking Feeling

Yesterday's post about regional efforts to fund Mississippi levee improvements was a "big picture" post; today I will focus on what citizens and business owners can do to control their costs, both as individual entities and collectively.

Columbia City Engineer Ron Williams serves on a task force created in early 2008 by the East-West Gateway Council of Governments to help restore the levees and build support for the funding that will be needed to achieve recertification by FEMA. Yesterday I participated in a briefing hosted by Ron's group for other local officials where I garnered the following advice applicable to small business owners, major employers and local residents alike--especially those who own property in the Bottoms:

Know your property's designation within the restoration zone--every parcel in the flood plain has been assigned a flood risk profile that you can access online requiring only your address.

Carry flood insurance--property owners in the Bottoms currently enjoy a preferred rate which will vanish when decertification is complete; it makes economic sense to purchase now, when rates remain low, and have an additional year to assess the next step. The AR zone will require that residents and businesses purchase flood insurance but will guarantee a reduced rate.

Know your limit--the National Flood Insurance Program provides government-mandated low rates for just the first $250,000 for residents and $500,000 for businesses, but this coverage is a good start for an umbrella supplemented by private carriers.

Drove My Checkbook to the Levy...

Property owners in the Mississippi Bottoms take note--it's not what was rising (river waters) that you need to worry about now as much as what's about to rise (your taxes and other costs). A little time and attention now may save a good deal of money in the future.

Last summer, the U.S. Department of Homeland Security's Federal Emergency Management Agency (FEMA) shocked communities across the nation by announcing that it would decertify many levee systems which badly need restoration and repair. In the Metro East, the Corps cited past problems with floods and current issues with underseepage and sand boils as evidence of the need for as much as $180 million in repairs; worse yet, Congressional leaders were quick to caution communities here and elsewhere across the country not to expect federal funds to pay for these repairs.

Earlier this year, the Illinois General Assembly passed SB836 and SB2052, authorizing the formation of flood protection districts by the three counties in the Metro East. These new districts are expected to be given the authority to impose a 1/4 cent sales tax to raise revenues needed to fund levee repair work--taxes that will start being collected in the spring of 2009--allowing them to pay for levee repairs now and be reimbursed by sales taxes later.

The new districts are part of a regional effort involving Madison, St. Clair and Monroe counties as well as 25 cities and villages to restore certification for the five levees between Wood River and Columbia that protect the Metro East’s flood plain. This flood plain is home to more than 150,000 people and 50,000 jobs. The regional effort is needed because the infrastructure of roads, transportation, and jobs in the American Bottoms is a shared resource and because the five levees represent an interdependent system that is hydrologically connected.

As the first step in decertification, FEMA has released new maps for Southwestern Illinois that show the American Bottoms, from the Mississippi River east to Bluff Rd., as no longer protected. The regional effort hopes to achieve a special designation known as a restoration (AR) zone. This designation recognizes that the levees still offer a significant level of protection and that restoration is underway.

The funding for this regional effort, mandated by federal action, will come from local sources. Property owners in the Bottoms, especially, need to find out what improvements are proposed and what alternatives (limited though they may be) currently exist for paying the bill. A few resources are already being deployed to help business owners and residents better understand the costs of proposed action--and the potentially higher costs of doing nothing.

FEMA and the Illinois Department of Natural Resources will host a flood risk information open house in Monroe County in about two weeks:

July 29th - Monroe County Annex Bldg
Public Officials Briefing - 1:00 - 3:00 p.m.
Public 5:00 - 8:30 p.m.

This open house will educate and inform residents and business owners about the remapping process affecting the region. Recently released preliminary flood plain maps will be on display during the event.

That Secure Feeling

The Monroe County Clarion has posted a series of articles today detailing Columbia Police Chief Joe Edwards' recent completion of the FBI National Academy program and how he plans to put what he learned into practice locally. Internationally recognized for its academic excellence, the program offers ten weeks of advanced investigative, management and fitness training for selected law enforcement personnel from around the nation and, more recently, from other countries.

Only individuals with a proven record as leaders in their profession are selected to participate in the all-expenses-paid program. Each year the FBI selects no more than 1,000 officers to go through the National Academy—only about 1% of law enforcement officers in the United States.

Edwards received training in the following areas while attending the Academy:

• Labor law
• Interviews and interrogations
• Media relations
• Stress management in law enforcement
• Crime scene photography
• Physical fitness

Edwards, a 15-year veteran of the Columbia Police Department, has been Columbia’s Chief of Police since March of 2004. “This recognition of Chief Edwards is an honor,” reflected Columbia Mayor Kevin Hutchinson. “Although his participation was at no cost to the City or its citizens, benefits will accrue to Columbia for years to come.”

$4 gas may help smaller towns as shoppers stay local

An Associated Press dispatch filed yesterday reports that higher gas prices are helping small town retailers “to enjoy a little life after years of seeing customers bypass them for distant malls." If the change persists, "it could lead national mall developers and merchants to rethink where to build, and challenge a basic tenet of retailing," which is "[b]uild, and shoppers will come from miles away."

In Thomasville, AL, Mayor Sheldon Day (a former Wal-Mart store manager) is trying to revitalize his town with additions such as a new civic center, and he is also trying to lure J.C. Penney and Target into town. Even without those national retailers in place, Thomasville has already seen a five percent increase in sales tax revenue this its fiscal year. The same thing is true in Brewton, AL, a town of about 5,000 people where sales tax revenue is up six percent in recent months.

The opposite is occurring in the cities where people used to shop--city officials in Mobile and Montgomery say they're dealing with shortfalls, in part because out-of-towners are staying close to home.

If this is a trend, it bodes well for small towns like Columbia. We'll crunch local sales tax numbers for the past few months and report the results in a future post.

Welcome to Columbia Connections!

This blog (abridged from web log) is an ongoing communciation vehicle for the City of Columbia, Illinois, and is maintained through its Community & Economic Development Department.

Columbia is a city of about 10,000 in Monroe County, the southermost jurisdiction in what is typically considered Southwestern Illinois--also known in its St. Louis region as the Metro East. Columbia is a fast-growing municipality just across the Mississippi River (via the Jefferson Barracks Bridge) from the city and its suburbs.

The purpose of this blog is to increase communication between City officials and local citizens, as well as to increase civic involvement. Columbia is following the lead of a number of other municipal governments across the nation (see roll at right) in deploying a blog.