Columbia Seeks Input From Property Owners in the American Bottom

Anticipating an upturn in the economy, the City of Columbia has begun laying the groundwork for marketing local opportunities for investment.  While the City has provided information to potential investors and used trade shows and other marketing venues to promote Columbia and Monroe County for many years, this year the City will broaden its tactics.

One of these tactics is enhancing the City's website.  Studies show that websites are the point of first contact for attracting most investors and suggest that marketing efforts should focus on this venue, at least initially, to attract new businesses and new development.  The City of Columbia recently updated its website and is continuing to make improvements designed to facilitate inquiries from potential new investors.

Over the next few months, the City will be making changes to its website to make information about areas of Columbia easier to find and inquiries more fruitful.  The City's website will deliver information about each planning district defined in the 20/20 Master Plan, adopted in 2005, and will offer general information about each district along with links to specific properties for sale or for lease.  Using information from the 2005 plan for a base, City officials will begin fostering community discussions in each district, seeking input from property owners and others to help define the current and future character of that district.  Ultimately, these efforts will culminate in a revision of the master plan document.

The first discussion will be held Monday evening, February 27th, beginning at 7:00 p.m., as part of the bimonthly City Council committee meetings.  Invitations will be going out next week to property owners in the I-255 Development District (Columbia's portion of the American Bottom) to seek their participation in an informal discussion about development goals for that area. 

Tell a Neighbor--the Lend Rush is On!

Many of Monroe County's financial institutions and entrepreneurs turned out this morning to hear a briefing from the Illinois Department of Commerce & Economic Opportunity (DCEO) on the Advantage Illinois program.  As with any other financing program, opportunities are limited--and the rush to qualify and submit projects is on!

Advantage Illinois began last October with $29 million allocated to its various programs through the U.S. Treasury as Illinois' share under the Small Business Jobs Act. Accessing the program requires participation from a bank, which must be pre-registered before it can submit projects for review and acceptance. To date, only twenty banks across the state have been registered as lenders and just shy of $18 million in applications have been received.  If DCEO can push applications beyond 80% of allocations in the first twenty months of the program, then another $29 million will become available; ultimately, the program may be authorized to provide $78 million of support to Illinois businesses.

Monroe County banks and small business owners have a competitive advantage right now as one of the very first communities to gain a briefing on the program.  Now, it's up to local banks to register for the program and for local entrepreneurs to submit great projects--pass the word!

For more information about Advantage Illinois and other financing programs available to small businesses in Monroe County, please contact Nora Feuquay at (618) 939-8681 x.309  or Paul Ellis at (618) 281-7144 x.118.

Looking Backward, Looking Ahead

The Roman icon for the New Year was Janus, god of beginnings and transitions, gates and doors, endings and time--usually represented as a two-faced god looking ahead to the future and backwards into the past (we derive both January and janitor from Janus).  This post, Janus-like, will review Columbia's progress and potential at the transition point into 2012.

As the recession wanes, Columbia seems to be emerging from the economic downturn in relatively good shape.  The long-awaited transformation of Shoemaker School into the Monroe County Welcome Center was completed this year, part of an expansion of local tourism. There has been some new commercial development (a Dollar General store and a new building for Quality Collision & Towing), more than forty new home starts, little increase in commercial vacancies and an upswing in the number of new businesses opening, including several along Main Street, which is developing a stronger identity through joint promotional efforts.  Sales tax collections are at a five-year high.

Even more important may be the foundation Columbia is preparing for future economic growth.  A county-wide tourism effort focused on the historic Cahokia-Kaskaskia Trail is gathering momentum and producing results.  Locally, Columbia is finally moving ahead with locating and commemorating Piggot's Fort, the largest fortified American settlement in the American Bottoms of the late 18th Century.  City leaders are beginning a marketing effort to retailers and other developers that may begin to pay dividends by matching businesses pursuing expansion plans (like ECF, Inc.) with developable parcels.  City government is also pushing ahead with updated planning and a long-awaited investment strategy for Main Street.  Economic development professionals from both the City's Community & Economic Development Department and the Monroe County Economic Development Council will be renewing efforts to support growth of small entrepreneurs in every way possible--both will be using the newly-developed strategic plan (completed in 2011) as a guide.

Senator Durbin Proposes Deficit Reduction, Main Street 'Fairness'

U.S. Senator Dick Durbin met with leaders from across Southwestern Illinois this morning for a first round of discussion on how to balance the federal budget and help spur economic recovery on Main Street. The meeting, held in Collinsville, was organized by the Leadership Council Southwestern Illinois and drew about 70 participants from Madison, Monroe & St. Clair counties.

Durbin—the second highest-ranking member of the Senate and a member of the bipartisan National Commission on Fiscal Responsibility and Reform (aka the “Deficit Reduction Commission”)—focused his remarks on strategies he advocates to reduce the $14 trillion federal deficit. The overall approach, as he sees it, is to balance investments against spending cuts until the recession ends, then to aggressively attack spending cuts. Durbin is forthright about the scale of that task, observing that the nation will have to “get radical” and that “we cannot balance the budget without dealing with the rapidly rising costs of healthcare” despite many entrenched interests to the contrary.

Speaking to a group composed largely of businesspeople and local government officials, Durbin cited two specific pieces of legislation that he is pushing forward to help support economic recovery:

• Legislation to monitor and reduce the interchange fees imposed upon businesses by financial institutions for the use of debit cards;
• The Main Street Fairness Act, which would levy sales tax upon Internet sales—Durbin contends that this measure would “level the playing field” for brick-and-mortar retailers and infuse revenue back to state and local governments.

Fielding questions from the audience, Durbin reiterated his support for a “reasonable approach” to maintaining levees and noted that the latest version of the Congressional budget cuts funding for the Army Corps of Engineers.

Monroe County Forum to Feature Area Success Stories

Representatives from four area businesses will share their insights into not only surviving in this economy, but on improving and expanding their businesses at the Monroe County Economic Development Council's Annual Forum on Wednesday, February 16th.

Columbia Centre and Mokka Kaffeehaus, both of Columbia, are sponsors for the Forum.

Serving on the panel are:

• Steve Carter, Principal, Knight Hawk Coal;
• Jared Nobbe, Sales Manager, Wm. Nobbe & Co.;
• Mary Kay Prader, Owner and Executive Director, Lighthouse Child Care Centers;
• Bill Rebholz, Executive Director, Monroe County Surgical Center

The panel will be moderated by Bob Lewis, President/Principal for Development Strategies, Inc., a St. Louis company that specializes in economic research and planning.

These four companies share in common the ability to be adaptable, to focus on customer needs, and remain stable and even grow at a time when other companies are struggling.

For example:

• Monroe County Surgical Center recently broke ground on a new out-patient surgical center, scheduled to open later this year.
• Knight Hawk Coal has grown from 15 employees to 350 and dramatically increased its coal extraction.
• Wm. Nobbe has increased their Professional Landscape Contractor business over the last several years by partnering with John Deere Landscapes Company.
• Lighthouse Child Care Centers have steadily added new locations and new types of services to their portfolio.

Forum attendees will have a chance to ask questions of the panelists after the moderated part of the program.

The event will be held at The Falls Reception & Conference Center in Columbia. Doors open at 7 a.m. and the event will conclude around 9 a.m. Seating for the Forum is limited, so advanced registration is requested by February 11th. Registration cost (including breakfast) is $20 per person, either through the University of Illinois Extension website or by phone at (618) 939-3434.

New Strategy Hopes to Rearrange Regional Pieces Into a Vibrant Whole

A tectonic shift is underway in how the St. Louis region pursues economic development--a strategy that may be a real "game changer" in how region partners work together to build economic vitality.

Steve Johnson, Senior Vice President for the St. Louis Regional Chamber & Growth Association previewed an ongoing revision of RCGA's Economic Development Strategic Plan today for members of the Greater St. Louis Economic Development Network.  The Network affiliates more than 100 economic development agencies at the state, county and city levels in both Missouri and Illinois--including the City of Columbia.

Johnson began by itemizing the lessons that RCGA has learned while pursuing previous strategic plans over the past decade:

• The region needs to continue to overcome "knockout factors" like a slow growth rate and relatively low levels of educational attainment;
• When regional partners come together as they are designed to do, the region wins deals;
• The region struggles to compete for general manufacturing jobs, so efforts should focus on attracting those manufacturers that already have direct ties;
• Neither Missouri nor Illinois is competitive with other, neighboring states;
• Lack of access to capital remains a major impediment to business growth and--since neither state is likely to address this challenge--it must become a regional initiative;
• The region needs to address its need for talent as an economic driver;
• The region must work together as a region.

How can Greater St. Louis build upon this environment to be consistently ranked among the top ten of the twenty largest metro areas in terms of economic vitality?  The conversation is still continuing, but Johnson suggested four principles and five priorities that may shape the next strategic plan for the region.

Four Principles:

1. Balance recruitment, retention/expansion, and innovation;
2. Recapture the region's relevance as a center for commerce, transportation and distribution;
3. Achieve a purposeful alignment of supply and demand for talent;
4. Be regional in scope and highly collaborative.

Five Priorities:

1. Support growth in key industry sectors (e.g., financial & information services, medical science & services, advance manufacturing for aerospace & defense);
2. Target marketing & recruitment efforts;
3. Increase the rate of start-up ventures;
4. Better leverage all transportation assets;
5. Address talent as a strategic imperative.

Final Credits Rolling for Movie Gallery

Columbia's Movie Gallery location in Columbia Center is closing, limiting rentals and selling remaining stock as its parent company--the nation's second-largest movie rental chain, which also owns the Hollywood Video chain--enters bankruptcy.

Don't expect a replacement anytime soon.  Rival Blockbuster is struggling to survive in a market environment where consumers increasingly get movies through rent-by-mail services like Netflix, kiosks operated by Redbox and their own high-speed Internet connections.  The day of the corner movie rental store--once as commonplace as convenience stores--is surely gone, and consumers will have to pursue entertainment with more technological saavy.

Dow Rebounds, But Economic Signals Remain Mixed

The Dow Jones industrial average yesterday rose past the 10,000-point milestone for the first time in a year--evidence of a Wall Street rebound from the financial crisis--but fiscal woes are likely to persist, especially for state and local governments.

State tax collections across the nation from April through June dropped by a record 16.6 percent compared with the same period a year earlier, according to a report released today by the Nelson A. Rockefeller Institute of Government. The report observes that tax collections were down by $63 billion for the year ended in June—roughly twice the amount the states had received in stimulus money up to that point.

This dismal data highlights a hard truth: there can be a long delay between the time the economy begins to improve, as some economists believe is happening now, and the time that the change is reflected in state and local finances. Many people were out of work or earning less, income tax collections were down 27.5 percent for the quarter, and sales tax collections were off by 9.5 percent.

Will the economic climate get better soon? Not if history is any guide. While the most recent past recession officially ended at the close of 2001, states faced their worst budget crises in the two years that followed.

For States and Cities, the Downturn May Continue

Most economists now believe that the national recession is drawing to a close, but the impacts of the downturn will continue to be seen in budgets for state and local governments for at least the next year.

While stimulus funding has allowed state and local governments to avoid laying off teachers, prison guards, police officers and firefighters, revenues are expected to remain depressed, even as the national economy improves. The depressed value of housing will continue to mean lower revenue from sales taxes and property taxes. Continued high unemployment will mean reduced income-tax receipts, higher expenditures for unemployment claims and more demand for public assistance. Federal stimulus aid is declining, and many cities and states have already used up their emergency reserves.

The Council of State Governments projects that for the next two fiscal years, the states face a combined budget shortfall of $350 billion.

...But Local Cities Still Feel the Pinch

While there are signs that the economy is starting to strengthen at the national level, Metro East communities continue to suffer from the effects of the downturn.

Sales tax receipts--which contribute a large portion of revenues to the balance sheets of all cities--continue to be weak across the board:

• In Belleville, sales tax receipts are down 7.64 percent, about $112,857, over the first quarter;
• Despite cutting $2 million from the city budget in the past year, O'Fallon is operating about $117,000 over budget after one quarter of the current fiscal year;
• Edwardsville's sales tax receipts are down about 6 percent.

Metro East cities are coping with the continuing revenue pinch via a variety of strategies:

• Collinsville leaders sliced $1.4 million worth of road projects out of the budget to make up for lost income;
• While July sales taxes were $20,356 lower in O'Fallon than last year--$518,940 versus $498,584--the City had budgeted an 8 percent reduction in sales tax.

Indicators Suggest National Economy May Be Poised For Growth...

The current recession--appraised by most economists now as the worst since World War II--is showing signs of easing. Three articles over the past few days in national business sources suggest that better economic times may be just ahead.

A front-page story in Saturday's edition of the Wall Street Journal reported that U.S. gross domestic product contracted at a 1% annual rate last quarter, its slowest pace in a year, but a marked improvement from the first-quarter contraction of 6.4% and the fourth quarter's 5.4% pullback. "Consumer spending stabilized early this year," it was reported, "but businesses kept cutting back sharply on payrolls, inventories and new-equipment spending."

The Chicago Tribune on Saturday reported that economists, who were expecting GDP to be down at about a 1.5 percent rate in the second quarter, were largely heartened by the data. The report reflected much smaller decreases in business investments, a smaller drop in inventories and exports, as well as an upturn in government expenditures as the federal stimulus measures took hold. The GDP news, the article adds, "comes on the heels of a number of reports suggesting that the long-troubled housing market decline is bottoming and that manufacturing is also stabilizing." But the labor market remains troubled and, with the unemployment rate expected to keep rising until at least the end of the year, "many people will not feel a recovery."

In Bloomberg News this morning: "Manufacturing in the U.S. probably shrank in July at the slowest pace in 11 months as the recession eased and factories moved closer to stabilization, economists said ahead of a private report." The Institute for Supply Management's factory gauge increased to 46.5, from 44.8 in June, according to the median forecast in a Bloomberg News survey. Other reports indicate manufacturing, which accounts for about 12 percent of the world's largest economy, is improving.

Trim, But Prepare for a More Vibrant Future, Local Mayors Say

Do what's necessary to balance community needs against available revenue, plan strategically (and regionally) and get ready for the upturn--that's the course Metro East mayors are pursuing to lead their cities through the current downturn.

The mayors of Alton, Collinsville and O'Fallon spoke this morning at an event co-sponsored by the Southwest Illinois Council of Mayors (SWICOM) and the Leadership Council Southwest Illinois as part of a panel discussion moderated by Columbia Mayor Kevin Hutchinson. Despite a variety of city sizes and budgets, all four mayors are facing similar challenges and plan to meet them deploying--often--similar methods.

All four noted that the combined pressure of falling revenues and rising mandates--generally unfunded--from federal and state jurisdictions are requiring substantial changes in how their cities do business today compared with even a year of two in the past. All four are continuing to pursue economic development efforts despite a current paucity of proposed projects and all four cited the critical role of both incentives and "business friendly" policies in spurring economic growth.

Alton Mayor Tom Hoechst has had to oversee cuts in the number of city employees while struggling to meet payroll for the remaining workers. "In cashflow terms," he observed, "the City is broke" with only $2 million in reserves; fortunately, economic investments in "one of the premier marinas on the Mississippi" and a new amphitheater, as well as private investment in venues such as an anticipated new downtown hotel, promise new revenues as the recession eases.

Meanwhile, Collinsville Mayor John Miller is shaving costs through increased efficiencies. Instituting a City-wide improvement program to improve performance, restricting training to opportunities arranged in house, and freezing hiring have all contributed to the City's ability to keep its current positions that deliver expected services to citizens. Collinsville has an aggressive economic development program, a regional convention center and five-star hotel, and strategic location among its assets supporting future development.

In O'Fallon, Mayor Gary Graham is struggling to overcome the St. Clair County assessment system--which he claims is "broken"--and a lack of incentives for new development; nevertheless, he deploys the attitude that "we really want to have you here" to full benefit in attracting new businesses. O'Fallon today has more than 1000 hotel rooms as well as a new conference center, and the City is "sales tax rich," according to the mayor.

In summing up, Columbia Mayor Kevin Hutchinson described how dealing with the ongoing fiscal crisis has helped him (and presumably other city leaders) distinguish more clearly between "wants" and "needs" in the budgeting process. He said that Columbia's fiscally conservative leadership over many years--avoiding the maximum carrying capacity for long-term debt, for instance--and well-managed initiatives like a successful Tax Increment Financing (TIF) district have given his City a firm foundation for growth. He anticipates that future growth will benefit from a more regional perspective coupled with strongly-supported local efforts like the Think Monroe County First! campaign.

Columbia's Count is Up, But By How Much?

According to estimates released yesterday by the U.S. Census Bureau, Columbia's population steadily increased from 2000 census estimates, when 7,996 people called Columbia home, to the latest census estimate in which that number grew to 9,342--an increase of 16.8 percent.

The increase is good news for the community, since some regional and state funds are distributed based upon population. During the same time period, nearby municipalities such as Venice, Brooklyn, Fairmont City, East St. Louis, Washington Park and Granite City have all seen decreases, according to the new Census estimates. It's not an entirely accurate benchmark for Columbia, however, since a special census conducted for the city in 2007 pegged the local population at 9,818.

The estimated census numbers released by the Census Bureau do not include the numbers from any special census counts held by individuals cities, towns or villages and performed in collaboration with the federal government if only a portion of the city is counted or if the city has annexed land. That's the case with Columbia, so final figures from the 2010 count should show an even bigger increase.

Mid-Sized, Mid-West Cities Weathering Downturn Best

As banks pull back on risk-taking across the nation, consumer lending is rising in places like Columbia. Many midsize cities are outperforming their larger counterparts, owing to more disciplined economic development strategies in those cities, more diverse employment and lower costs.

States in the Great Plains and Rocky Mountain West are experiencing either mild recessions or none at all. Lingering effects of high commodities prices have helped, but the lack of a real estate boom may be the more important factor.

Columbia may be able to learn from Germany, where the Mittelstand (small- and mid-sized enterprises) are acting as a shock absorber against the economic smash-up. Firms with up to nine employees are the backbone of the German economy, making up 93 percent of the country's 1.6 million enterprises. While small and middle-sized firms hire two-thirds of new employees--an even greater percentage than in the US and Britain--the Mittelstand has avoided large-scale layoffs so far.

After the Bust, Retail Leasing Shrinks, Shifts

Within the next several years, the amount of U.S. retail space devoted to specialty stores will contract by about 10 percent, according to a study just released by UBS Securities LLC. This trend will be driven by reductions in store size, closures of malls and the retrenchment of chains that had launched concepts for new demographic groups during the retail building boom.

According to Costar Tenant, a national commercial property service, landlords "have no choice but to be creative and think of alternative uses" as they seek to lease space in this new environment. Analysts expect that retail centers--especially those in less than prime locations--will increasingly seek to fill vacancies with alternative, non-traditional uses such as state and local government offices, satellite colleges and universities, medical offices, family fun centers and churches. Second-hand or overstock dealers and seasonal outlets--which have been considered less desirable uses--will also find more space available in this new environment.

Locally, Crestwood Court mall is experiencing success by turning vacant space into an artisan community. At ArtSpace, local artisans rent space for studios where they can create, display and sell their works; space for art classes as well as live theatre is also on the premises. While ArtSpace was originally planned as a temporary use, it's caught on in the community.

Obama Takes Stimulus to Main Street

Small businesses historically have created about 70 percent of the economy's new jobs. That's why many economic observers have to date criticized the federal government's stimulus program for focusing, they say, on Wall Street rather than on Main Street.

Working to restart the economy's engine of job creation, President Obama announced yesterday that the Treasury Department will invest as much as $15 billion to boost lending to credit-hungry small businesses. Under the new program, the Treasury Department will buy as much as $15 billion in loans made by banks and guaranteed by the Small Business Administration (SBA); the SBA's loan volume has fallen from roughly $20 billion a year to below $10 billion this year, projections show. The funding for the program will come from the government's $700-billion financial rescue package enacted last fall.

In addition to buying loans, the administration is proceeding with plans to eliminate fees for borrowers and reduce fees for lenders in its two signature small-business lending programs and to increase temporarily the percentage of each SBA loan guaranteed by the government. The Internal Revenue Service also released information Monday on a provision of the stimulus bill passed last month that would allow small businesses to use losses incurred in 2008 to get refunds of taxes paid on income earned as far back as 2003--an increase over the former two-year limit.

'Stimulus' Comes to Main Street

The Wall Street Journal reports today that many cities, counties and states across the nation are launching home-grown economic-stimulus plans aimed at spurring local spending and keeping small businesses afloat during the recession.

Strategies are as diverse as the local governments employing them, including:

• Cutting corporate taxes;
• Paying residents to shop in local stores;
• Giving real-estate brokers bonuses for bringing tenants to empty strip malls;
• Reducing fees on new development;
• Critiquing local restaurants and giving owners feedback on how best to bring in customers.

Leaders of many struggling cities and states say they can't afford to wait for their slice of the federal pie. Although their tax revenues are declining, forcing some to slash budgets and, unlike the federal government, they're constrained by balanced-budget requirements they're floating bonds, raiding reserves and shuffling money among various accounts to free up capital for local stimulus efforts.

Guarded Optimism Accompanies February Retail Sales

In February, chain store sales across the nation stopped declining as fast as they have been for the past several months, according to the International Council of Shopping Centers (ICSC). Too soon to call it a trend, but retail experts are viewing the figures with guarded optimism.

Warm weather conducive to spring merchandise sales, lower gas prices and leaner inventories helped many chains recover some from the economic doldrums of recent months. Wal-Mart led with a year-on-year comparable-store sales rise for the month of 4.5 percent--the big box retailer's best performance since last June, when sales rose 5.8 percent (February represents its fifth consecutive month of traffic increases). Department store and specialty apparel chains fared the worst, down 9.8 percent and 7.9 percent, respectively. Luxury department stores were hit particularly badly, with sales down 19.2 percent.

ICSC expects March sales nationwide to be flat to one percent off from a year ago. ICSC is the global trade association for the shopping center industry, representing 70,000 members in the U.S., Canada and more than 80 other countries.

While recovery may be beginning, it is spreading faster in areas considered essential by most consumers. Fast food, discounted apparel, haircuts and cable television are four items people won’t cut, according to a survey of about 4,000 consumers by the National Retail Federation (NRF). Among items respondents consider expendable are luxury handbags, specialty apparel and high-end cosmetics, and they say they can dispense with fine dining as well, according to the survey. Some 80 percent of respondents said they refuse to give up Internet service, 64 percent said they would hang onto cell phone service, and 61 percent would cling to cable/satellite television--come what may. Ninety-two percent said they will give up luxury handbags for now, and 91 percent said the same about specialty apparel and cosmetics.

NRF is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services.

Palmer/Quarry Rd. Wins ARRA Dollars

The East-West Gateway Council of Governments decided today to award $350,000 to the City of Columbia for improvement of Palmer/Quarry Rd. from DD Rd. to Ghent--one part of the $58 million in federal funds from the American Recovery and Reinvestment Act to 75 transportation projects across the St. Louis region.

The decision was made during a board meeting today at the agency's headquarters in St. Louis. Columbia Mayor Kevin Hutchinson represents the city on the board, and participated in today's meeting.

City Engineer Ron Williams reports that the project has been designed and is ready to go, and he expects that work will begin within ninety days.

ARRA Signed--What's Next?

President Barack Obama signed the $787-billion American Recovery & Reinvestment Act (ARRA) into law today amidst controversy over what the bill really includes and how it will benefit the ailing economy.

The legislation will create or save 69,000 jobs in Missouri and 148,000 jobs in Illinois, and Missouri will receive at least $10.33 billion and Illinois will get at least $22.74 billion from the package, according to pro-Obama sources. The mammoth piece of legislation includes funding for infrastructure, education, health care, unemployed workers and state aid, as well as some new tax breaks.

The City of Columbia is submitting a list of "shovel ready" infrastructure improvements today to the East-West Gateway, which is coordinating regional requests for stimulus funding. City officials have been told to expect an amount roughly equal to what is receiving during a normal annual cycle.

Some city and village leaders in Illinois are concerned that bottlenecks in state government will keep funds from being deployed in time to help the recovery. While Missouri officials began work to replace a dilapidated bridge over the Osage River today, no similar announcement was forthcoming from the Illinois Department of Transportation.