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Business North - Around The Region - Duluth & Superior Newspaper
The northwest celebrates 50 years of regionalism
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10/27/2009 by Beth Bily |
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(Photo: Politicians of the day help break ground on Sept. 18, 1988 for the Biewer Wisconsin Sawmill in Prentice.)
For many, regionalism is a new concept, said Myron Schuster, executive director of Northwest Regional Planning Commission. “Here, they’ve been doing it for 50 years,” he said.
Local units of government launched the Spooner-based economic development agency in 1959. It was the first such regional planning commission in Wisconsin. Today its members and funders include Ashland, Bayfield, Burnett, Douglas, Iron, Price, Rusk, Sawyer, Taylor and Washburn counties as well as the tribal nations of Bad River, Red Cliff, Lac du Flambeau, Lac Courte Oreilles and St. Croix.
“Counties needed services and it was too expensive to provide those services individually,” Schuster said.
The regional planning commission celebrated its 50th anniversary this summer. Its original mission – “to examine problems, prepare plans and recommend solutions to community groups and governing bodies to carry (them) out” — has expanded since 1959. The agency assists members with comprehensive planning, natural resources, transportation and mapping/GIS and environmental services. More recently it has embraced economic development.
Economic development came more sharply into focus in 1984, when regional planners helped launch a Business Development Revolving Loan Fund. Initial funds came from a combination of federal and state grants, as well as private donations. The $1 million loan fund was a “pump primer,” making funds more available to small business than otherwise would have been possible through traditional lending. The focus for the fund was businesses that tapped into the region’s greatest economic opportunities — timber and wood products, tourism, diversified manufacturing and service industries.
The planning agency presently manages $11.5 million in revolving loan funds, said John Stroschine, the commission’s program manager.
Included is the Northwest Wisconsin Regional Economic Development Fund. The voluntary participation fund serves seven of the 10 member counties, with capitalization of $5 million. The commission created the fund in 2005 after the Wisconsin Department of Commerce selected the agency as pilot project to pool resources and better use 23 small revolving loan funds in those seven participating counties.
Tony Hozeny, Wisconsin Commerce Department spokesman, said the state agency selected the commission for the pilot due to its long-standing commitment to regionalism. “We always had a good relationship with Northwest Regional Planning Commission. They were already regional and they had the capacity to be the pilot,” he said.
Two-term Gov. James Doyle has focused upon regional delivery of state services, including economic development. His Grow Wisconsin plan for economic growth and job creation included a Regional Non-Profits Initiative, the vehicle that launched the pooled revolving loan funds to put them to better use. The local independent loan funds often were too small to finance worthwhile projects.
This regional approach to revolving lending seems to be working. Through all the funds, the planning commission and its affiliates have approved 298 loans for more than $20 million to small businesses. Those loans have leveraged nearly $157 million of equity and private financing, nearly $39 million in other public financing and helped to create 2,630 new jobs over the past 25 years.
Loans to small business are one part of a three-fold approach to regional development. Stroschine said the commission also manages an enterprise center network and has launched a venture capital fund to spur business in Northwest Wisconsin.
Several facilities within the enterprise center network incubate businesses of every stripe – from machining to medical products, even a winery. The enterprise center network includes 170,000 square feet of space, houses 25 businesses and has combined employment of 113 FTEs.
Schuster said the program has produced 12 graduate businesses. The combined annual payroll of the 37 past and present companies in the network totals $12 million, he said.
Tenant vacancies can make business incubators difficult to operate, and the network structure of the enterprise centers reduces risk, Stroschine said. “The network provides strengths,” he said. “One enterprise center can cash flow the other.”
The commission owns and operates its enterprise centers in Siren, Spooner, Grantsburg, Iron River and Medford. It also provides technical assistance to incubators in Ladysmith, Superior and Ashland. Another enterprise center will open this fall in Phillips.
Schuster asserts the enterprise centers have gone beyond simply luring a few small businesses. They also have improved the region’s quality of life, he said.
“We were trying to attract businesses with high paying jobs,” he said. “The 2008 average wage (in the enterprise centers) was $42,496. That’s 40 percent higher than the regional average, 10 percent higher than the state average and 4 percent higher than the national average.”
Meanwhile, the commission’s venture fund, capitalized at $2 million, provides equity financing from $50,000 to $250,000 for startup and early stage manufacturing businesses. This third leg of the planning commission’s approach to development is one that Schuster hopes to grow in the future. He plans to increase capitalization to $5 million.
“It’s (the venture fund) desperately needed to get businesses to relocate in this region,” he said.
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