Community works to keep its town thriving
By Larry Dreiling
In an era when it looks like small-town America is blowing away in a modern Dust Bowl, there are a number of places where community leaders and organizations have determined they're too tough to vanish and will keep pressing on.
Gothenburg, Neb., is one of those towns.
A city of 3,700 along the western part of Interstate 80, Gothenburg has roots as a place along the Pony Express Route and today is a place for scientific research, agricultural commerce and light industry. Four Fortune 500 companies have facilities in the community.
Like other farm towns during the 1980s, Gothenburg struggled with the bust in prices and subsequent threats of a few farm bankruptcies.
At that time, the city had one large employer--Goshen Rubber--which was recruited to Gothenburg in 1974. Now known as Parker Tech Seals-Nebraska, the company has 50,000 employees in 50 countries throughout the world including 70 in Gothenburg.
While Parker Tech Seals remains an important part of the community, there was a time when things weren't so good.
"Through the 1980s, with the farm crisis, we had struggles on the farms and in town. A small group of us said we have a choice to make. We can either let bad things happen to us or we can control our future and be proactive," said Matt Williams, chairman and president of the Gothenburg State Bank, who is also the current chairman of the American Bankers Association. Williams helped to begin the redevelopment efforts in his community.
In 1986, Gothenburg voters passed a half-cent sales tax for economic development. The initiative was included on the ballot of the three largest cities of Dawson County, Neb.: Gothenburg, Lexington and Cozad.
"Gothenburg was the only one of the towns that passed it. It passed by 22 votes," said Anne Anderson, executive director of the Gothenburg Community Development Office.
"We were first in the state to pass a half-cent sales tax primarily for the purpose of economic development. We passed it in Gothenburg even before the legislature voted to allow such a funding mechanism.
"Once we passed it we had to start collecting it, which meant going to the legislature to enact it. We were ahead of the time. It was 1993 before any other community in the state passed a similar tax."
Within a couple of years, Gothenburg Community Development had built up what Anderson calls "quite a bit of a war chest."
Adds Williams: "Since the vote we have been able to raise anywhere from $140,000 to about $180,000 a year that we can use for everything from travel to initial incentives."
In 1990, the group, Williams among them, recruited Baldwin Filters to come to town.
"Even before they opened the first phase of their building, they doubled the size of their building," Anderson said. Baldwin Filters has 140 employees with two 10-hour shifts working a four-day week in Gothenburg and is currently hiring new employees.
Gothenburg Community Development works with the city and Dawson County to use tax increment financing and the Nebraska Department of Economic Development's block grant program to recruit businesses to town. TIF is used by many local governments across the country for economic development and improvement projects. Those improvements can involve land purchases and new structures.
The cost of the improvement is assessed to future tax revenues by those taxing units that levy taxes against the property.
The taxing unit at the local level is responsible for determining how much of the increase in property tax due to the improvements will be used to repay the construction costs. The property that is seeking to use tax increment financing must be located with the city's jurisdiction.
"We've used tax increment financing to help these businesses settle here and get off the ground, with the idea that 15 years later they are going on the tax rolls and suddenly that money is coming back in," Anderson said. "We have a person here in our city attorney and head of our economic development board, Mike Bacon, who knows this type of funding inside and out."
Using this tax abatement formula, Gothenburg has managed to snare some other high-profile companies to their city.
One firm is Frito-Lay North America, a division of PepsiCo, Inc., which contracts with 140 corn producers in an eight-county area. In a good year, more than 600 million pounds of Nebraska corn will be shipped from the Gothenburg facility during the current crop year that are used to make snacks like Doritos, Fritos and Tostitos.
"Anytime someone buys a Frito corn-based snack west of the Mississippi River, it is almost a certainty the corn originated from the Gothenburg Frito-Lay Plant," Anderson said. Frito-Lay has 13 full-time employees, along with five managers and four temporary employees.
Another is Monsanto Co. with a plant breeding operation and its Water Utilization Learning Center. Opened in 2009, the $6 million facility employs a total of 24 full and part-time employees and many seasonal workers.
"Monsanto saw that they were positioned at the arid end of the sustainable corn market. That facility wouldn't particularly fit well in Iowa," Williams said. "They employ really good people with initials like Ph.D. behind their names. They bring their families. It helps the whole community."
Adds Anderson: "One of the neat things we are growing the number of young families who are coming in for the first time or are people coming back from the city to return home and raise their kids. We have jobs to offer these young people in this area.
"That's not just in Gothenburg. Down the road in Lexington, there's Tyson Fresh Meats and Orthman Manufacturing. We have a large number of people who work for the railroad in North Platte but live here because of the quality of life."
It takes more than just a positive tax structure or special financing to bring new businesses into communities like Gothenburg, Williams said. It takes personal contact and commitment from leaders in the city as well as buy-in from all sectors of the community.
"We also organized our county and towns--Dawson County, along with Lexington, Gothenburg and Cozad--into Dawson Area Development," Williams said. "We put the entire county together and quit worrying who beat who in the Friday night football game, ending the jealousies, and got this organization going to work together for the good of the county."
From that point on, it became more than a matter of offering money to companies to move into the area. Instead, Williams and Anderson said, quality-of-life issues came into play.
"Frito-Lay, Monsanto, big companies like that, don't need incentives. It's a carrot that gets you to the table. It's personal relationship building that gets you there," Williams said.
"When we talked to the potential plant manager from Frito-Lay, who was going to move his family here, we had to demonstrate that we had a school system that he'd be proud to educate his children and medical facilities with good doctors that he'd be comfortable having his family cared for. If you don't get to that point you can't make the deal. It's got to be more than financial incentives to close the deal. We asked a lot of questions, as in 'What do we need to do to close the deal?'"
Community leaders must be willing to commit to doing the small things right then hope to hit a home run, Williams said.
"Not every win will be a Frito-Lay. There's a lot of a smaller things out there. Realize you will have to fix other things in your community before you can recruit.
"If you go out and find a guy who's ready to move but says 'My wife isn't ready to commit because of the schools,' you'd better listen and prepare to fix those schools. You have to show you have good medical care or at least have access to it. It does not come down to dollars and cents. It is an emotional decision based on fact."
It took three attempts before a bond issue to build the new school building passed. Williams said the effort offers lessons learned.
For example, the new Gothenburg Junior-Senior High School opened in 2004. It's part of a school district now serving more than 900 students.
"We never did it right the first two times. When the person trying to do the selling is the school superintendent, it's a hard thing to sell," Williams said. "Instead we had people in the community go out to the civic clubs and all these different groups to explain what the vote would do. We got lots of different people involved in the planning of the building. It gave us a lot of buy-in. The financial community did its part, too. We sold the idea of how this would benefit all of us.
"Now, our school system has its largest ever enrollment," Williams said. "That's because we've created 600 new jobs in this area since the late 1980s. Those companies have spent $60 million in brick and mortar. In 1990, our tax base was just shy of $40 million. Today, it's over $180 million. Our professional people are young and the average age of the counties' farmers has gotten younger because there are opportunities for them and their children."
Adds Anderson: "Our new $3.2 million medical clinic opened in February. That is bringing top doctors to the area, along with some new specialists. We have a fine hospital to go with it. The initial building was built in 1969 and then we added a $3.5 million addition and renovation project in 2004."
In terms of recreational opportunities, there's an extensive park system as well as a highly rated golf course.
"Another source of pride is Wild Horse Golf Club, rated as a top five low daily fee courses in the U.S. by Golf Digest," Anderson said. "We get over 10,000 rounds a year from people outside the county a year. People from all over the country will stop off I-80 to play here in Gothenburg.
"We also have something unique in town and that's a first-run movie theater that for the last 25 years has been run by volunteers. It's the only theater between Kearney and North Platte, so we get a lot of traffic for it. It's open every weekend. Of course, we still have anywhere from 20,000 to 25,000 visitors to our Pony Express Station Museum. It's staffed from April through October."
Not every economic development effort works and lasts forever. Earlier this year, down the road in Cozad, 400 jobs were lost when Tenneco moved its ride handling operations to other locations. It's made leaders in Gothenburg aware of keeping in touch with these major employers.
"Things like that teach that you can't be reliant on one thing for jobs," Williams said. "We've worked hard to keep Baldwin Filters in town since they've been here now for over 20 years. They have had continuing needs as technology and the workforce have changed.
"We are there for them. If they have a question or issue, they come to us first. We find a way to solve the problem rather than ignore them. It's just like running a bank. If the customer doesn't like how he's treated, he'll go someplace else."
Bringing businesses to a community is like an entrepreneur starting his or her own business, Williams adds. It means having a dream.
"It takes some vision among a community's leaders to be willing to dream. If you don't have the vision to start with you won't get there. I'm a big believer in getting as many people involved as we can in the effort. That way, we can say, 'In Gothenburg, we dream big.'"
Larry Dreiling can be reached by phone at 785-628-1117, or by email at email@example.com.