From the Ground Up

by

Published: April 9,2001

Dear Phil: You have written several columns on what makes a community successful. I’m interested in your take on what you see in unsuccessful communities. I live in a town that can’t seem to grow or get it together. Your thoughts?

Answer: Good question. One should not assume that communities that are not thriving have the opposite characteristics of communities that are prospering. There are several things that I have noticed in the communities you describe.

1. They don’t take care of existing businesses. They make local businesses feel underappreciated and taken for granted. When an existing business expands, they don’t celebrate or publicize it like they do when a new business opens or comes to town. Worse, they don’t ask existing businesses to get involved in community affairs.

2. They are not ready for new industry. Such communities don’t have an appropriate industrial or commercial park, nor do they have any existing available buildings. They cannot accommodate a new industry that wants to move in now. They also don’t have a solid land use plan, or much of any other plan for that matter.

3. They assume that if a new industry wants to come to their town that they will have time to react. They are under the belief that a new industry will discover them, and at that point they can customize their community to the new industry’s needs.

4. They neglect their public schools. There is a growing realization that the communities that take pride in their public schools are getting the new businesses.

5. They have no local leadership. Their elected officials are caretakers who are concerned with keeping constituents happy. They do not plan for the future. Leadership is reactive instead of proactive.

6. They are not connected to the outside world. These communities’ leaders do not attend statewide conferences or meetings. They are not members of regional or national associations. They don’t go to Jackson or Washington to visit with state and federal officials. They are very inwardly focused and don’t think of their community and how it relates to the larger world.

7. They believe that community development is short-term. Their economic developers have a high turnover rate. They therefore place blame on someone else if the community does not grow or succeed.

8. They hire consultants, but never implement their recommendations.

9. They constantly deal with the same issues. That is because they never accomplish any of the difficult projects.

10. They are fragmented. The community has not come together. There are divisions and many personal agendas.

These are the kinds of communities that lose population because good people want to get away from them. It sounds harsh, but it is true.

Dear Phil: We are considering buying a vacant lot next to our retail business. We need the parking, but my partner and I are having a serious discussion over how much we should pay for the property. The owner wants $26,000. I know for a fact that he bought the property for only $15,000 three years ago. My partner says that makes no difference. What do you think?

Answer: I agree with your partner. What a buyer is willing to pay should be based on the market value of the property. What the owner paid for it, and what his profit might be, is immaterial.

Dear Phil: We are in the process of hiring an economic developer for our town, which is a suburban community in a larger area. We only have funds to pay a part-time person, and the best qualified person appears to be a local commercial real estate broker. We want to hire him, but feel there might be the appearance of a conflict of interest. Any advice?

Answer: I know of a town with a similar dilemma that hired a commercial real estate broker, but had an agreement with him that he would not receive any commissions on properties sold in the town. At first glance, it might appear that such an arrangement would encourage the broker to show a bias towards properties outside the city because he would receive a commission. Nevertheless, it has worked well for both parties for many years, and the broker does not have conflicts with other brokers and/or property owners. This type arrangement obviously has a better chance of working well for both parties in an urban area than a small town where there is less real estate activity.

Phil Hardwick’s column on Mississippi Business appears regularly in the Mississippi Business Journal. His e-mail address is phil@hardwick.com.


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