Hibbing Economic Development 3.1
Community Goals 3.3 Information and Assessment 3.5-3.23 Recommendations 3.25-3.42 Implementation 3.43-3.63 3.2
Community Goals Goal 1: Diversify the city s industries. Goal 2: Support local businesses. Goal 3: Keep and attract young people in the area by creating more professional jobs. 3.3
Goals The clear message that came from community input into the comprehensive planning process is that economic development and growth, while highly desirable, should be directed at preserving and improving Hibbing s unique quality of life. This desire to retain a local way of life has become increasingly difficult for smaller communities throughout the country - especially those that developed around single industries which are progressively in decline. Features of the global economy, including highly mobile capital, big box retailing and the decline of certain traditional manufacturing jobs and industries, make it hard for small communities to sustain themselves economically. Increasingly economists and economic development specialists point to the development of a high quality workforce as the key to attracting and retaining jobs. They are also beginning to pay more attention to quality of life factors, as a means of attracting and retaining workers as well as business firms. These factors quality workforce and quality of life are consistent with the themes that emerged from community meetings, surveys and interviews undertaken as a part of this comprehensive plan. Based on this input, three primary economic development goals emerged: 1. To diversify the city s industries. 2. To support local businesses. 3. To keep young people in the area by creating more professional jobs. While many more sub-goals could be listed, these dominated. 83% of the community survey respondents believe there is a need for non-mining industrial development. 85% stated that there is a need for more retail/commercial businesses in Hibbing, and 87% believe that attracting more employment opportunities is important to the quality of life. 95% of residents said that ensuring the success of small business owners was very important (75%) or somewhat important (20%) to improving the quality of life in Hibbing. Many of the written responses to the community opinion survey cited the need to keep young people in town. Of particular interest is that 45% indicated that they or someone in their household was very likely or somewhat likely to move away from Hibbing in the next five years. 3.4
Goals These factors are consistent with the findings of a recent study commissioned by the Hibbing Chamber of Commerce on strategic planning for community economic development. It stated: Selling the local community as a place to work and live needs to be undertaken at early ages along with a plan for training and education that develops the skills needed to remain in the region. The report highlighted the important of workforce development and housing as a means of attracting industry and retaining young people in town. It is important to recognize that these goals are intertwined with one another. For example, many responses highlighted the need for more jobs to keep young people in town. At the same time, the responses suggest that there are other factors that may make it more or less attractive for young people to stay: 92% said that improving educational opportunities was very important or important to improving the quality of life in Hibbing. 87% said that additional arts, cultural and recreation activities were important to improving the quality of life in Hibbing. 88% said that affordable housing was important (a factor often important to young families); further, 48% said they ve looked for housing in Hibbing recently, and 57% said that they believe the range of housing options available is inadequate. More than half the respondents say that better sewer, streets and side walks are needed (responses on individual items ranged from 53% for city streets to 67% for storm sewers). Therefore, this plan takes an approach to economic development that looks beyond traditional economic development processes. It addition to looking at jobs and industry, it considers what types of changes in the community would be needed to support a healthy and sustainable economic base. Before discussing possible changes, this plan first reviews information about Hibbing s current economic health and progress. 3.5
Information and Assessment Introduction Local economic development relies on the successful expansion of the following essential components: locality development, business development, human resource development and community development. The following is a discussion of the current conditions and an analysis of the recent trends in the City of Hibbing and the region as they relate to these issues. By traditional definition, economic development is the creation of new jobs in a variety of industries through the design and development of the local economy. This comprehensive plan views economic development more broadly, however, recognizing the development of jobs and industry is integrally tied to the capacities of a community and its residents. The following sections put forth goals for Hibbing s economic development, look at key economic indicators and what they reveal about the City of Hibbing and its current economic condition, and finally provide principles, strategies and action steps that support economic development in Hibbing. Current Conditions Economic trends and indicators provide insight into a City s current economic conditions. Specifically, regional population and employment trends provide information on the employee base of Hibbing and give a general idea of the continued desirability of Hibbing as a place to live and work. The mix of and growth of industries and employers also indicated the level of diversity or specialization of the City. Finally, fiscal indicators such as tax base and property tax rate reflect on the City s ability to provide services and the affordability of property in the City. This section first provides trends and indicators, discussing the current economic trends and indicators for the City and the region. This includes a discussion on population and employee base for area businesses, employment growth, and salary trends. Other indicators include a description of the key industries and major employers for the region. Finally, several fiscal indicators are discussed including sales volume, property taxes and market values. It next briefly summarizes current economic development efforts and projects, including a description of current activities that the city and region are using in an effort to increase the tax and job base, such as industrial parks and tourism. Finally, included is an overview of the important economic development tools that are available to encourage and facilitate additional economic development. The combination of these indicators and current economic development activities will provide insight into how the City of Hibbing should create policies and strategies to accomplish the City s economic development goals. 3.7
Trends and Indicators In general, the following discussion focuses on the City if Hibbing and provides local data where available. However, several indicators are not available at the municipal level. Consequently, several of the indicators that follow apply to the general northeastern region of Minnesota. Each indicator includes a brief description, stating whether it is data provided at the municipal, county or regional level. The information shows that the number of employers and the number of jobs are decreasing. Additionally, the numbers of employees is decreasing as the population declines; yet, the rate of unemployment continues to be above the state average. These findings show that the City must focus on policies that encourage residents, especially the young, and attract new residents by creating more jobs, support local businesses, and provide a mixture of industries, which is wholly consistent with the goals outlined above. Labor Force Base. The labor force is an important factor that contributes to local businesses ability to attract and retain productive and competent employees. Several components that contribute to the labor force are population, salaries and unemployment. Following is a discussion of these indicators and how the City of Hibbing is faring with regards to these factors. 3.8
Population trends provide insight into the general growth of the region and indicate whether or not the City has enough residents to support its local business. Changes in the population will affect the number of people in the labor force and the ability of local businesses to find productive workers. A declining population, such as the City of Hibbing is experiencing, decreases the number of workers available to meet the demand from local businesses for employees. The City of Hibbing and St. Louis County are both experiencing a decline in population at a time when the State of Minnesota is experiencing a steady increase in population. Table 1 shows the population from the 1980 and 1990 census and estimates of the population in 1994 and 1998. Based on this information, the City of Hibbing is experiencing a decrease in the size of their population. The population declined by nearly 15% from 1980 to 1990. However, decrease in population size appears to be slowing, with less than 0.5% decrease from 1990 to 1994 and another 1% decrease projected for 1994 to 1998. This decrease in population represents a loss of the labor force. Specifically, of concern to the City is the loss of their young people to other metropolitan areas with more professional and technical job opportunities. Population Table 1: Population Trends, 1980 to 2001 2001 % Increase 1994 % Increase 1990 % Increase 1980 1994 to 1998 1990 to 1994 1980 to 1990 Hibbing 17,020-1.01% 17,964-0.45% 18,046-14.85% 21,193 St. Louis County 199,999 0.11% 198,866 0.33% 198,213-10.81% 222,229 State of MN 4,782,264 4.64% 4,570,355 4.46% 4,375,099 7.34% 4,075,970 Source: Minnesota Department of Trade and, Hibbing Community Profile/ www.mnworkforcecenter.org/lmi/laus/edr.htm 3.9
Salary Another economic indicator that reflects on Hibbing s ability to attract productive workers is the salary trends for the region. The average annual salary for this region is significantly less in northeastern Minnesota than the Twin Cities. In 1998, the average wage in the northeastern region was $25,413. Subsequently, the average household income in St. Louis County of $46,200 (Duluth-Superior MSA) was also significantly lower than the State median income of $57,900. On an industry by industry basis, the average annual salary is also less for this region than the Twin Cities. Table 2: 2001 Annual Salary by Industry Industry Average Salary Average Salary Percent of NE Minnesota Twin Cities Twin Cities Ave. Salary Agriculture, forestry, fishing, hunt Mining Utilities Construction Manufacturing Wholesale trade Retail trade Transportation, Warehousing Information Finance/insurance Real estate, rental, leasing Professional/Technical services Management of companies Administrative and waste services Educational services Health care and social assistance Arts, entertainment, recreation Accommodation and food services Other services $25,201 $51,624 $58,933 $34,545 $39,359 $35,358 $17,750 $26,231 $21,945 $38,661 $14,886 $33,259 $47,667 $17,306 $18,194 $26,133 $11,327 $9,565 $15,616 Table 2 below shows that employees in the northeastern region of Minnesota, earn significantly less than their Twin Cities counterparts. For example, on average, a Finance, Insurance employee would earn only 58% of the average salary of a Finance, Insurance worker in the Twin Cities. Lower wages can provide a competitive advantage for a locality. On the other hand, depressed wages may contribute to out $21,677 $56,042 $72,053 $49,416 $48,594 $55,987 $23,483 $45,932 $52,730 $66,425 $35,168 $60,847 $79,949 $25,886 $29,703 $35,234 $26,601 $13,534 $24,974 Source: MN Dept. of Economic Security Research and Statistics Office 2001 annual averages +16% -8% -18% -30% -19% -37% -24% -43% -68% -42% -58% -45% -40% -33% -39% -26% -57% -29% -37% migration of the City s younger residents to bigger cities. Source: MHFA 3.10
The unemployment rate represents the balance of employees to jobs. A high unemployment rate, such as St. Louis County has experienced, indicates that there are too few jobs to meet the demand. This indicates that there are more workers than jobs in this region. If residents are unable to find jobs close to home, they are more likely to leave, contributing to the population decline that Hibbing is currently experiencing. Consequently, increasing jobs through economic development efforts will encourage residents to stay. Balance of St. Louis County shows that the region has a higher unemployment rate than the rest of the State. In 1998, the State of Minnesota had an overall unemployment rate of 2.5%, while St. Louis County (not including Duluth MSA) was significantly higher at 4.10%. In 1999, employers in St. Louis County (including Duluth) employed 99,248 of the 102,887 available workforce resulting in a 3.5% unemployment rate. In general, the region has experienced a higher rate of unemployment than the state as a whole. However, with the booming economy, the unemployment rate for the region has been falling, even as the labor force grows. Employment Table 3: Unemployment Trends Year Balance of St. Louis St. Louis County Minnesota County Labor Force Unemployment Unemployment 1994 56,444 6.8% 4.0% 1995 56,392 6.0% 3.7% 1996 56,008 5.9% 4.0% 1997 56,521 5.2% 3.3% 1998 57,480 4.10% 2.5% 2002 106,651 3.8% 3.9% Source: Minnesota Department of Economic Security 3.11
Industry and Employment Base The job base in Hibbing is rather diverse. Following is a table showing the variety of industries and the number of businesses within the City of Hibbing. This table shows that the City has been partially successful in attracting more professional jobs. For example, Communication, Business Services, and Engineering & Management Services industries all experienced an increase in the number of firms in the City of Hibbing. On the other hand, several industries experienced a decrease in the number of firms, resulting in a net decrease in firms of 4% from 1996 to 1998. Table 4: Change in Number of Firms by Industry, 1996 and 1998 Industry No. of Firms No. of Firms % Change No. of 1996 1998 Firms Agriculture 13 13 0% Trade Contractors 14 17 21% Manufacturing 8 7 13% Communication 4 5 25% Wholesale, Durable and Nondurable goods 46 49 7% Retail 188 199 6% Grocery 18 12-33% Restaurants 56 50 11% Hotels, Lodging 8 7 13% Personal Services 41 33 20% Business Services 22 26 18% Automobile Sales, Repair and Services 61 54-11% Misc. Repair Services 19 15-21% Entertainment 18 13-28% Health 11 10-9% Engineering, Management Services 5 10 100% Miscellaneous and Undesignated 80 69-14% Total 612 589-4% 3.12
In addition to looking at the diversity of industries, it is also of important to look at the major employers in the region in order to determine the impact that these key companies have on the local economy. In Hibbing, several major employers provide over 3,300 jobs for local employees. These larger employers consist of mining, health, education, and manufacturing industries. Table 5 lists the top ten largest employers in the City of Hibbing and the number of workers that they employ. Although these larger employers play a significant role in maintaining the health of the local economy, there is great risk in concentrating a local economic base in a few large employers. If something happens to one of those companies, such as the recent closing of LTV, the local economy may experience an adverse shock. For this reason, it is important that the City also focus on attracting new business in order to diversify its employers. Major Employers The 5 T s Taconite Mining Transportation Tourism Timber Technology According to the 1998 Update of the Hibbing Business Retention and Expansion Survey and Report Series, Hibbing's Economic Base, the mining industry is still critical to the Hibbing economy. The report also made several other important findings. Both durable and non-durable goods manufacturing are important industries in Hibbing, providing over 1300 jobs in 1997. Services are another important industry, especially those jobs in the health and medical fields. Transportation and utilities industry also experienced significant growth in employment opportunities from 1996 to 1997. Table 5: Top 10 Employers in Hibbing Employer Product/Services Employee Count Hibbing Taconite Company Iron Ores 780 Reptron Electrical Equipment/Supplies 603 University Regional Medical Center General Medical Hospital 540 Hibbing Public Schools Elementary and Secondary Schools 425 Hibbing Community College Colleges and Universities 200 L&M Radiator Inc Motor Vehicle Parts 186 Leisure Hills Skilled Nursing Care Facilities 176 SMDC Duluth Clinic Hibbing Physicians Offices 140 Mesaba Clinic Fairview Physicians Offices 125 Golden Crest Nursing Home Skilled Nursing Care Facilities 118 Source: DTED 3.13
Hibbing is part of a larger regional area commonly referred to as Northeastern Minnesota. The Northeastern region of the state is dependent on four industries affectionately called The 4 T s taconite mining, transportation, tourism, and timber. Historically, mining has been especially important to the economy of the region with as many as 16,000 people in the mining industry in 1979. However, currently mining provides less than 5,000 jobs. This number continues to decline as mining operations close or are forced to make layoffs. This downsizing of employees is partially attributed to increases in productivity and improvements in technology, which have brought about new production processes for the manufacture of steel. On the other hand, the Northeast Region has several more specific industries that are experiencing significant growth. The health, social services, retail industries, and construction show the largest growth creating almost 30,000 additional jobs between 1990 and 1998. Table 6 shows the fastest growing industries in the Northeast Region (1990 1998) in employment. Table 6: Fastest Growing Industries in the Northeast Region, 1990-1998 Industry Employment Northeast Growth Rate MN Growth Rate Amusement Services 2,757 215% 84% Apparel 374 95% 53% Heavy Construction 1,199 67% 24% Business Services 3,893 62% 74% Health Services 16,878 53% 17% Social Services 5,010 50% 40% Construction Contractors 3,366 44% 36% Miscellaneous Retail 4,025 43% 27% Motion Pictures 366 34% 47% Auto Repair, Services 899 34% 28% Source: MN DTED, Northeast Minnesota Initiative Region, Analysis and Evaluation Office, 1998 3.14
250% Growth Rates by Industry 1990-1998 Perent Growth 200% 150% 100% 50% NE Growth Rate MN Growth Rate 0% Amusement Services Apparel Social Services Heavy Construction Business Services Health Services Construction Contractors Miscellaneous Retail Motion Pictures Auto Repair, Services Industry Most general industries in Northeastern Minnesota have experienced an increase in jobs. The exceptions to this generality are the decline in workers in agriculture and mining. Table 7 shows the 1996 and projected 2006 employment by industry for the northeastern region of Minnesota. Overall, employment is expected to increase by 13% in the region, with most of the growth occurring in the Transportation, Communication & Utilities, Trade and Services industries. Several of the key industries for the County and region are Manufacturing, Retail/Trade, and Services. Largest Growth Transportation Communications & Utilities Trades Services Table 7: Projected Employment by Industry in 2006 Industry NE Region St. Louis County 2006 Projected Percent 1998 1996 Employment Change Employment Employment Agriculture 376 1,738 1,636-6% Mining 4,938 6,089 5,915-3 Construction 5,645 5,014 5,563 11 Manufacturing 13,989 13,933 15,449 11 Transportation, Communications, Utilities 8,007 6,792 7,585 12 Retail/Trade 28,636 33,090 37,441 13 Finance, Insurance and Real Estate 4,227 4,186 4,444 6 Services 54,487 51,020 61,868 21 Government 7,536 14,067 14,176 1 Self Employed -- 10,457 11,209 7 Total 132,333 146,386 165,286 13 Sources: MN DTED, Analysis and Evaluation Office and Minnesota Department of Economic Security webpage: http://www.mnworkforcecenter.org/lmi/proj/neind.htm 3.15
The Minnesota Department of Economic Security is projecting a significant increase in the professional, paraprofessional and technical occupation. Table 8 shows the projected increase in jobs by occupation for the Northeast region of Minnesota. Table 8: Projected Employment by Industry Industry 2006 Projected Increase Percent in Employment Change Professional, paraprofessional and technical 5,238 17% Service 4,874 17 Sales and Related 2,474 15 Operator, Fabricator and Laborer 2,297 12 Clerical and Administrative Support 1,465 6 Managerial and Administrative 1,426 15 Precision Production, Craft and Repair 1,147 7 Agriculture, Forestry and Fishing -24-1 Source: Minnesota Department of Economic Security Employment Outlook 2006, Northeast Minnesota 3.16
In addition to looking at the number of firms and the larger employers, the volume that these industries and employers produce is a significant indicator of the overall health of the economy. Table 9 illustrates the 1996 and 2000 gross sales in the City of Hibbing, indicating the importance of wholesale goods, retail and automobile sales and service industries to the economy of the City. However, this table also shows that in addition to a decrease in the number of firms as detailed above, the total volume of sales in all industries has increased by 19% from 1996 to 2000. For example, although the number of firms doubled in the Engineering and Management Services industries, sales decreased by over one third. On the other hand, the industries that have seen a significant increase in sales are trade, contractors, manufacturing, communication and business services. Sales Table 9: Gross Sales by Industry for 1996 and 2000 Industry 1996 Gross 1996% 2000 Gross 2000 % % Change Sales of Total Sales of Total in Sales Sales Sales Agriculture $ 642,913 0.1% $738,979 0.1% 11% Trade, Contractors 3,043,973 0.6% 4,498,786 0.8% 27% Manufacturing 12,081,380 2.4% 26,891,597 3.2% 32% Communication 8,945,725 1.8% 10,765,630 2.1% 14% Wholesale, Durable and Non-durable goods 119,273,936 23.7% 116,824,436 23.5% -2% Retail 75,503,490 15.0% 84,309,438 16.9% 11% Food 33,816,701 6.7% 35,900,120 7.5% 10% Restaurants 13,635,848 2.7% 12,073,411 2.4% -14% Hotels, Lodging 2,849,054 0.6% 421,841 0.6% 1% Personal Services 6,986,147 1.4% 4,496,758 1.1% -20% Business Services 1,568,747 0.3% 3,963,257 0.7% 122% Automobile Sales, Repair and Services 90,742,901 18.1% 120,463,097 16.8% -8% Misc. Repair Services 598,139 0.1% 325,861 0.1% -33% Entertainment 2,256,135 0.4% 1,298,096 0.4% -5% Health Services 10,475,356 2.1% 5,816,160 2.0% -% Engineering, Management Services 4,208,893 0.8% 6,796,143 1.14% 39% Miscellaneous and Undesignated 115,815,077 23.1% 133,686,108 22.33% 13% Total 502,444,415 598,603,357 19% Source: Department of Revenue, 1996, 2000 Sales and Tax Statistics 3.17
Taxes Property taxes and market values are significant economic indicators because they demonstrate the City s ability to provide quality services to residents and business as well as affordability for homeowners and a competitive edge for local businesses. For this reason, it is important to look at the level of property tax on homes and offices and the affect that it may have on the decision for someone to locate in or outside of Hibbing. The total tax rate for property in the City of Hibbing is higher than many communities in the State of Minnesota. However, the School s portion of the tax rate is lower than most school districts. As a general rule of thumb, the school district share of the property tax is half of the total tax rate. However, in Hibbing, the schools portion is less than one-forth of the tax rate. This may be because the school district is experiencing a decline in the number of students. This decline of school age children has also resulted in the recent consolidation of the two private Catholic schools. On the other hand, the county and city portion of taxes is significantly higher than other communities. Consequently, this higher tax rate will place a higher tax burden on the City s property owners, both commercial and residential. A higher property tax may influence the decision for a resident or business to locate outside of the City of Hibbing in order to avoid the resulting higher property tax. Table 10: Local Tax Rate Municipal Tax Rate 69.74% County Tax Rate 60.38% School Tax Rate 23.97% Misc. Tax Rate 1.51% Total Tax Rate 155.6% Source: Minnesota Department of Trade and, Hibbing Community Profile, 2002. 3.18
The majority of the assessed market value of property in the City of Hibbing is in residential buildings with a total of $329,143,130 in assessed market value. This indicates that the majority of the tax burden is on homeowners and residents. On the other hand, the commercial value is less than 15% of the total assessed market value in the City with $60,589,375 in assessed market value in Commercial/ Industrial land uses. Table 11: Assessed Market Value Commercial/ Industrial and Residential Land Uses Land Use Assessed Market Value Percent of Total Commercial/Industrial $60,589,375 14.4% Residential $329,143,130 78.2% Other $31,128,847 7.4% Total $420,861,351 Source: Minnesota Department of Trade and, Hibbing Community Profile, 2002. Another factor that may affect the Cities taxes and ability to provide services, is the recently established the taconite fiscal disparities tax base sharing program. This program was designed to share the regions tax burdens by pooling taxes on new development and providing additional tax revenues for depressed areas unable to support themselves. It is still unclear whether Hibbing will be a net contributor or gainer since 2000 was the first year of the taconite tax-sharing program. Source: Minnesota IMPLAN Group 3.19
Efforts In addition to the indicators, the economic development tools that are available and the projects that are underway reflect on Hibbing s current ability to promote economic development. Following is a brief overview of the economic development projects Hibbing is currently pursuing. Second, a discussion of the transportation amenities that provide access to the City and connect it to the State and the region, highlights the City s ability to attract tourists, bring in businesses and exchange goods. Third, tourism has also been a focus of Hibbing and other cities in the region in order to attract visitors and generate additional income. Following is a list of the attractions and current activities focused on bringing in tourists. Finally, Hibbing has several key economic development tools such as tax increment financing, grants, tax abatement financing, Minnesota Community Capital Fund, IRRRA funding and specialized funds aimed at creating jobs in the Northeastern Minnesota. Current Initiatives Within the Comprehensive Plan, three basic types of economic development initiatives are considered: infrastructure development, corridor development, and industrial/business development. Infrastructure development involves projects such as: water and treatment facilities, wastewater treatment, communications and transportation. Corridor development addresses business and recreational opportunities along the community s major corridors. Industrial and business development includes industrial/business parks and redevelopment opportunities. These initiatives are also considered at two overlapping scales. The following maps illustrate the larger regional projects as outlined in the Central Iron Range Initiative, and the second map illustrates those projects particular to the City of Hibbing These projects are explained in greater detail in the Implementation section. Transportation. The City of Hibbing is connected to the rest of the region and state via the Minnesota Highway system. These major highways include US I-35, US 169, MN 37 and MN 73. These highways make Hibbing accessible for trucking industries and the shipping of goods. Currently Hibbing is home to three truck lines and two truck terminals. 3.20
Hibbing is served by the Chisholm-Hibbing Airport, which is only five miles from the City. The airports paved and lighted runway provides service for charter, commercial, freight and personal jet aircraft. Major carriers include Airborne Express, Federal Express, Mesaba, Northwest Airlink, Taconite Aviation and UPS Freight. These airlines provide transportation connections for residents, tourists and business travelers, as well and shipment for materials and goods. Tourism Development. Although there are several lodging and tourist attractions, in 1996, only 1% of the gross sales in the City was from recreation and hotel facilities (DoR). In 1997, 17% of the total tourism dollars for the State of Minnesota was spent in the Northeast region. (DTED) Tourist attractions in the region include: Paulucci Planetarium Fortune Bay Resort and Casino, Tower Hull Rust Mahoning Mine, Hibbing Hibbing Racing, Hibbing Ironworld Discovery Center, Chisholm St. Louis County Fairgrounds, Chisholm Minnesota Museum of Mining, Chisholm Hibbing Historical Museum Greyhound Bus Museum, Hibbing McCarthy Beach State Park Historic Downtown Camping, hotel and resort facilities in the area provide a diversity of lodging accommodations, including: Adam s House Bed and Breakfast, CC Campground 717 Chisholm Inn and Suites Forest Heights Campground and RV Park Hibbing Park Hotel Super 8 JKO Campground Source: Hibbing Chamber of Commerce 3.21
Hibbing is located in a county that has been identified by the State Legislature as a place for focusing on tourism development. This designation has special implications concerning the use of tax increment financing. With this designation, the City may create special economic development tax increment financing district for the sole purpose of promoting tourism. Assistance There are four levels of assistance that the City and local businesses can tap into to facilitate economic development: (1) federal, (2) state (3) regional and (4) local. Federal. At the federal level, the US Department of Agriculture provides funds through the Rural Development and Rural Small Business Cooperative programs, designed to maintain and create jobs in rural areas. The Rural Development program provides loans guarantees for businesses and industry to assist in the purchase of land, buildings and machinery. The Rural Small Business Administration provides business assistance for expansion. State. The State of Minnesota has several programs through the Minnesota Department of Trade and (DTED) that provides assistance for economic development. The Tourism Loan Program provides consulting services and low interest financing for tourism development. In addition, DTED offers several programs to assist in business and economic development. The Minnesota Department of Jobs and training has an area office located in Hibbing, focuses on training region workforce and matching workers with area jobs. Minnesota Technology, Inc. (MTI), also provides assistance in the form of consulting services to out-state communities to provide economic and community development. Regional. Regional programs focused on promoting economic development in northeastern Minnesota are even more abundant and diverse. The Iron Range Resources and Rehabilitation Board (IRRRA) is a significant contributor to the economic development of the region. The IRRRA operates on taxes paid by the mining industry; the taconite tax, providing funds through the do IT program aimed at attracting technology firms to the area. Activities include running fiber optic cable for high-speed communication. The IRRRA is hoping to have annual investment of $30 million by 2003. As an example of one of it many programs, each year the IRRRA provides grants up to $10 million for the reclamation of environmental sensitive areas or expansion or modernization of existing plants. The IRRRA also provides information about and links to other programs available to businesses for economic and business development assistance. These programs provide financial resources, technical assistance and small business development center access to both businesses starting out and those expanding. Source: IRRRA 3.22
Another regional resource for economic development funds is the taconite production tax, collected instead of property taxes on the mining industry. The taconite production tax funds provide the resources for economic development and property tax relief in the Iron Range. Local. The City of Hibbing actively encourages economic development through the Hibbing Authority (HEDA). HEDA promotes economic development through low interest loans, tax increment financing, tax abatement financing, IRRRB funding, DTED funds and industrial revenue bond programs. In addition to these programs, HEDA also offers the following economic development incentives: Two industrial parks Employee training grants Low cost land and buildings District steam system for affordable heat The Hibbing Housing and Redevelopment Authority also works with HEDA in the provision of housing for Hibbing's labor force. The Hibbing Growth Alliance was established by the City to attract new businesses and retain existing firms. HGA membership includes the City Council, Chamber of Commerce, Coordinator, HEDA, HRA, Airport Authority, and Hibbing Community College. Source: City of Hibbing and Hibbing Chamber of Commerce Tax Increment Financing has been an important development tool in the State of Minnesota since the 1970 s. Hibbing currently has eight active tax increment financing districts. Source: MN Department of Revenue Tax Increment Property Tax Data, 2000 3.23
Corridor Development Improving the region s major transportation and recreation corridors are key issues for the region s development. 1. Chisholm to Buhl Area Recreational and Residential Development At the edge of water-filled, abandoned mining pits, building sites offer spectacular vistas and access to recreational opportunities. 2. Highway 169 Development Property available along the highway allows a wide variety of commercial and light industrial development that requires highway access and substantial acreage. 6. Hibbing - Chisholm Corridor Development Utilities, business and industrial sites, offer opportunities for development all along this well established and highly traveled range highway. 9. Carey Lake Area Recreational and Residential Development This is a prime area for fishing, boating, recreation with an established seaplane base on the lake and recreation trails throughout the area. 10. Highway 37 Development The City of Hibbing s significant investment in infrastructure and rezoning has created opportunities for uniform development. This map illustrates the first large scale conceptual thinking of regional development projects Expanded regional trail and open space system Regional Initiatives Base map courtesy of Architectural Resources Infrastructure Development The Central Iron Range Initiative stresses community and industrial infrastructure development that are key to successful regional economic development. 3. Pump Storage Electrical Generation Facility Utilize the water filled abandoned mining pits, with gravity driven hydro-electric pumps at the lowest pit and water pumped to the elevation of the upper pits at of peak. 5. Central Range Utility District - Sewer and Water Collectively address wastewater treatment infrastructure needs and initiatives that the surrounding communities cannot solve independently. 7.Energy Park/Electrical Power Production Facility To locate a sizable electrical generation facility in the corridor with rail, existing transmission lines and available water supply on or adjacent to this site for industrial opportunities. Industrial Development The region s existing industrial infrastructure provides opportunities for expanded industrial development. 4.Motorplex - Law Enforcement Training Center A public-private partnership with an oval dirt track and a road course, also be used as a regional law enforcement training facility. 8. Industrial Park Development 800-1200 acres of prime, light and heavy industrial property, located across from the energy production site. 11. Airport Business/Industrial Park Development 540 acres for air and transportation related light industry.
Recommendations as a City-Building Process Roberta Brandes Gratz, author of The Living City, writes: Economic development is really a process, not a development project or an end product, a process of many different things, including venture capital, employment training, technical assistance and locals that build on the inherent strengths and indigenous talents of a work force and strengthens the outlets for those talents. Economic Development Principles The key here is the suggestion that economic development is a process it comes about by attending to the underlying conditions that bring about or impede the development of healthy cities and towns. For example, if your goal is to win the Superbowl, you don t go out and construct a football field. You engage in a process of recruiting talented players and coaches, raising funds, intensive training, building teamwork, ensuring an appropriate set of rules, promoting the team, etc In short, it s not the project or series of project that leads to thriving cities and towns, but a process of developing the conditions that enable them to thrive and adapt over time. What are these underlying conditions? In a review of various writings on the subject, several themes emerge: Preservation of existing assets Gratz puts in this way: The condition of a city s fabric its street life, human scale, architectural variety, cultural and commercial diversity and patchwork blend of old and new is the key to its ability to weather economic shifts and social change. If the texture is destroyed, nothing is left but shreds and tatters. Development of small businesses Many economic studies suggest that small businesses are the growth engine for new jobs in our economy. Moreover, small locally-owned businesses help keep dollars in the local economy. Good housing Housing is important for any number of reasons, but almost always seems to be a key factor in strong cities and towns. Residents who feel ownership of the neighborhood The one-shot mega-project is rarely the source of success for cities and towns that have turned themselves around. Instead it is usually the accumulation of patient hard work and investment of residents. Quality built and natural environments This factor becomes more important as people and jobs become more mobile. People want to live where there is a high quality of life. Increasingly, as capital becomes more mobile, firms too are looking at quality of life as a factor in where they decide to locate. 3.25
Quality city services It s important to invest in people as well as buildings and physical infrastructure. Libraries, recreation, job training all provide opportunities for residents. Quality education for all children is an imperative. Education may not directly affect the health of a neighborhoods, but if that health is seen as an ability to adapt and cope over time, and if in our global economy, the economic health of cities is linked closely to its residents educational attainment, then education clearly becomes a primary factor over the long term. Principles By approaching economic development as a city-building process, a number of economic development principles can be articulated: Emphasize the condition of a Hibbing s historic built and natural environment as a key to building its unique identity and its ability to sustain itself and adapt over time. Nurture small businesses and encourage new ones. Concentrate efforts on the expansion of new industries (which research shows is the most productive and cost-effective means of economic growth), as opposed to attracting new industries through large subsidies. Invest in people and services. It is as important as investment in buildings and projects. Focus on small well-designed and linked projects (as opposed to mega projects), so big infusions of funds are not necessarily a requirement for progress. Invest in quality education (to develop a workforce that attracts businesses). Invest in a quality physical and local environment (to attract and retain residents and workers), including housing, infrastructure and physical and cultural amenities. Develop a unique identity and image (to distinguish Hibbing from all others). Build resilient and flexible (local and regional) institutions that can adapt to rapidly changing circumstances. 3.26
The development of an effective regional economic development program encompass aspects from having a good base data to developing the marketing approach. Within the regional framework, the expectation is to develop both regional and community-based economic development initiatives. Organizational Structure Four key ingredients are: Creating a data base which identifies what there is to work with. Identify needed infrastructure which will keep the region competitive. Develop a cooperative community communications network to ensure a comprehensive regional strategy. Implement a marketing plan which builds on the region s strengths. Create a data base This task will inventory and identify what there is to work with. This will include elements of regional economics and the physical community. Elements of the data base include: Mining Natural resources Downtown Buildings and property Retail Recreation Housing Land use Medical research Identify needed infrastructure Building from the data base, this task will identify what key community elements need to be in place for a successful economic development program. Elements of the infrastructure include: Utilities Transportation Improving Hibbings fiscal strength Community technology Educational opportunities Quality of life improvements Work force Hwy 169 corridor 3.27
Develop a cooperative communications network This task will outline improvements to the regional and inner-community communications. Elements of a community communications network include: Intra-community relations Promote inter-community relations Promote awareness of economic development activity Implement a marketing plan This component will identify and focus on the key elements of the marketing plan. Elements of a marketing plan include: Business retention and expansion Business recruitment Creating a diverse economy Marketing Hibbing Retain and recruit youth Promote tourism 3.28
It is important to recognize that these goals stated at the beginning of this section do not stand independent of one another. Likewise, the strategies used to accomplish one goal may well support another goal. For example, the development of a new tourist attraction would help diversify the economic base, create a new local business, and add professional opportunities. Therefore, the following strategies are not itemized by goal, but rather are designed to help Hibbing develop a holistic approach to economic development one in which the entire town prospers, encouraging economic development and using economic development as a means of promoting Hibbing s ability to retain and improve its unique quality of life. Creating the Data Base Mining Strategy: Use mining as a base for future development efforts, while planning to reduce future reliance on mining and the taconite tax. Actions: Identify and support the research and development of spin-off industries and technologies from mining, that will have value in the economy even as the mining industry itself recedes. Develop a program for the reclamation and reuse of mined lands. Assume and plan for the decline of mining in the region. Economic Development Strategies and Action Steps Downtown Strategy: Continue and expand efforts that emphasize downtown as a central gathering place with an image that promotes Hibbing s unique heritage. Actions: Hibbing s downtown, with its many remaining historic buildings, represents a unique asset to preserve and protect. In addition to the store front rehabilitation program, consider developing an historic preservation program to assist in the redevelopment and upkeep of these properties. Monitor the impact of the large box retailers on local/downtown businesses, and if necessary, develop a program to retain a healthy local business sector perhaps helping them to compete on factors other than price. Develop an integrated program to market and support local downtown businesses, such as the Main Street program funded by the Local Initiatives Support Corporation. Strive to retain and improve the mix of uses along Howard Street including entertainment, office, public and social services, retail to keep Howard Street lively and to give people a multitude of reasons for visiting. 3.29
Retail Strategy: Continue to develop an appropriate mix of retail to serve the region and the communities. Actions: Identify what retail is needed for the region and the scale of that retail for the community. Identify opportunities for companion retail to mix with existing retail. Housing Strategy: Continue to provide for life-cycle housing at all income levels. Actions: See Chapter 6 Neighborhoods and Housing for a detailed list of recommendations and action steps. Create more downtown housing opportunities. Attend to special housing needs. Pursue current planned unit developments Improve existing mobile home parks 3.30
Medical Research Strategy: Continue to expand the medical related businesses for the Central Iron Range. Actions: Develop a long-range view of the needs and potential expansion Identify related business opportunities and recruitment Continue doctor recruitment Natural Resources Strategy: Manage the natural resources as an economic and recreational advantage for the region. Actions: Continue to work with the DNR and the mining companies to understand future mining implications and land redevelopment opportunities. Develop linkages between the economic base and potential future recreational uses. 3.31
Buildings and Property Strategy: Develop building and property information to assist in economic development decision-making. Actions: Build an electronic data base which links property information, zoning, use and building condition. Continue to develop and add information to the community s Geographic Information System. Recreation Strategy: Develop recreational opportunities as an integral part of community life in conjunction with the needs of visitors. Actions: See Natural Resources above See Chapter 7 Parks, Open Space and Recreation for a detailed list of recommendations and action steps. Provide opportunities for recreation for all residents of the subregion. Enhance / promote this subregion as an attractive placed to visit year-round, paying attention to the unique cultural, historical and natural attributes of the subregion. 3.32
Land Use Strategy: Develop land use information to assist in economic development decision-making. Actions: Build an electronic data base which links property information, zoning, use and building condition. Continue to develop and add information to the community s Geographic Information System. Identify any ownership or access issues that may influence economic development initiatives. Establish land use principles for all development activity that are flexible, coherent, applied fairly and consistently, and that will ensure the sustainability of the subregion's economy and quality of life. Establish "smart growth" land use principles for all development activity to ensure the sustainability of the subregion's economy, natural resources and quality of life. Establish a community-based framework for decisions and actions related to land use. 3.33
Infrastructure Utilities Strategy: Ensure that the community s utilities are continually updated and provide for expansion should community or economic development activities dictate. Actions: Complete a through inventory of extent, condition and needs of existing utilities. Continue to develop and add information to the community s Geographic Information System. See Chapter 4 Public Infrastructure for a detailed list of recommendations and action steps. Improve wastewater treatment facilities * Address infiltration and inflow issues with storm sewer systems. Improve internet services including high speed cable, T-1 lines, dialup services and wireless. Rebuild / expand / update infrastructure systems in a cost effective, timely manner so that this subregion remains an attractive place to do business, work, live and visit. Transportation Strategy: Ensure that the region s transportation needs are continually updated and can provide for economic development initiatives. Actions: Complete a through inventory of extent, condition and needs of existing transportation system. Continue to develop and add information to the community s Geographic Information System. See Chapter 5 Transportation for a detailed list of recommendations and action steps. Develop a comprehensive transportation system that offers a safe / convenient access to subregional jobs, shopping, educational, recreation and tourism opportunities, as well as residential neighborhoods, for all modes of transportation. 3.34
Improving Hibbing s Fiscal Strength Strategy: Improve Hibbing s fiscal strength and independence. Actions: Develop a long-term plan for city budgeting that helps the city become less reliant on the taconite tax and builds local tax base. Develop the expertise to make maximum use of historic preservation tax incentives, such as tax credits and facade easements. Identify the necessary national, state, regional and local funding sources that may be available to fund the economic development strategies. As a separate task develop a reference library from national, state, regional and local funding sources for economic development. Explore financing options for anticipated economic development initiatives. Identify any community resources relating to economic development that may not be in place. Community Technology Strategy: Identify any community technology resources, technology infrastructure and business opportunities relating to economic development that may not be in place. Actions: Complete a thorough inventory and assessment of community technology resources relating to economic development. Develop task forces as necessary to create the needed community resources. 3.35