From the ashes of economic crises, Jackson builds economic diversity

David Fettig | Editor

Published April 1, 1993  | April 1993 issue

When representatives of Jackson, Minn., escorted Gwen Monson, an executive with Northwestern National Life (NWNL) of Minneapolis, to the proposed site for a new NWNL claims processing center, they had doubts about their endeavor.

"We kept wondering: 'How are we going to sell this place?'" says Richard Burud, general manager of the local Rural Electric Association and vice chairman of the Jackson Development Corp. After all, the proposed site was a burned-out bowling alley on the edge of town.

The building's exterior was covered with screaming blue and gold paint, bluntly described by Monson as "awful"; and the interior—filled with stale, charred air—was still adorned with blackened walls and other scorched debris.

But through it all, Monson says she could see possibilities for the building, which she called "a fixer-upper in the middle of the cornfields." Now, about three years later, NWNL employs 100 Jackson-area residents in its only rural claims processing center. And the building's renovated interior—with its raised front section overlooking the floor of claims processors—has sparked interest as a model for future sites.

On top of the ag crisis, another economic hit

Jackson, a town of about 3,500 in southern Minnesota, was once the home of a Unisys circuit board factory that employed 900. In December 1986, down to about 300 workers, Unisys announced the plant's imminent closure as part of the company's national restructuring. Already in the throes of the agricultural slump, the town was thrown into "an alarm kind of state" following the Unisys announcement, according to Burud.

But the town quickly got to work. The mayor called a town meeting to plan Jackson's response and to develop community consensus. Subsequent meetings were set for every Tuesday morning at 6:30, open to all citizens; those meetings are still held today. The Jackson residents were not neophytes when it came to economic development—the Jackson Development Corp. (JDC) was formed in 1972—but Burud acknowledged that the town had become complacent over the years because of Unisys' presence.

Rather than waste time fighting with Unisys about its decision to close the Jackson plant (some cities across the country engaged their state legislatures in attempts to force Unisys to change plans), Jackson's residents took a different tack. "We thanked them for the time they spent in our community, and we asked them for one favor," says Burud: Sell the building to the community at an inexpensive price.

Unisys agreed, and not only sold the building and equipment (worth about $1.5 million) to Jackson for under $200,000, but also gave the community a $25,000 grant to aid in marketing and reselling. Within one month Jackson had two bidders on the building and within a year Astoria Industry, maker of utility truck boxes and employer of 65, was operating in the former Unisys building.

The jobs keep coming

But that was just the beginning for Jackson. Technical Service for Electronics (TSE), makers of specialty cables, took advantage of the skilled work force that remained following the Unisys closing. TSE, which opened a shop next to Astoria in the town's industrial park, now employs 95.

Within a year of the Unisys closing, Cuddy Farms Inc., a turkey hatchery, announced that it would build a hatchery plant in Jackson. Today the plant employs 50 and produces 200,000 chicks a week.

The largest positive impact on Jackson since the Unisys closing came from a plant expansion and not a new business. Ag-Chem Equipment Co., a farm machinery manufacturer, doubled its work force from about 200 to over 400 in a major plant expansion. Based in the Twin Cities, the Jackson expansion was Ag-Chem's largest outstate investment during the past five years.

The NWNL announcement soon followed, as did an expansion by Pioneer Hi-Bred International's soybean seed manufacturing plant; it now employs 30.

Ag-Chem's expansion so thrilled the town that it threw a celebration in the city armory, complete with bunting on the walls, balloons and congratulatory signs for the company. While the party was meant to thank Ag-Chem for its decision to expand in Jackson, it was also a chance for the entire town to celebrate its diverse economic growth since the Unisys closing, according to Keul and Burud. "You have to celebrate successes," Burud says, "because you're going to have failures."

Tapping all resources

Jackson used a variety of resources to achieve economic development's three-pronged goal: retention and/or expansion of existing businesses, creation of new ones and, the acknowledged long-shot, luring new business to town.

The community tapped the services of the state's Department of Trade and Economic Development, the Southwest Regional Development Commission, federal agencies, the Rural Electric Administration, the McKnight Foundation's Southwest Initiative Fund and the state Department of Jobs and Training. Jackson also developed such local programs as tax increment financing, which was used to help finance Ag-Chem's expansion.

In addition, Jackson has the resources of the Southwestern Technical College, which not only offers 18 career options to students but means that new or existing businesses can ensure that workers will be trained to meet their needs.

The town also established a referral system that pays $2,000 to anyone who provides a tip that later results in a new Jackson business with 20 or more employees. That's how Jackson landed NWNL: Someone in town knew someone in Minneapolis who heard that NWNL was looking for a new claims processing site.

What the town did not do is hire an economic development "savior," says Jim Keul, president of the JDC and publisher of the local newspaper. "Some towns hang their hats on someone to come in and save their town," Keul says, adding that a town's expectations are usually unmet in such a situation. Jackson does have an economic development coordinator, David Anderson, but Anderson says his job is not necessarily to create a certain number of jobs, but to further the efforts that many JDC members have been doing on a volunteer basis, and to strengthen the city's ties with existing businesses.

Jackson has received some attention since the Unisys closing, including media reports and a write-up as a model community by the Heartland Center for Leadership Development of Lincoln, Neb. In its book, Clues to Rural Community Survival, the Heartland Center says that the most important lesson from Jackson's experience is that "community leaders need to keep talking, working together, taking a team approach to problem solving."

Communication within the community has been the key to Jackson's successes, Burud says. "We've got a committee," he says of the Tuesday morning group, "but it's the people within the committee that make it work. It's a very candid group. We will argue, we will debate."

The work that never ends

In addition to such economic development issues as job growth, that Tuesday group is now discussing other problems faced by Jackson, including the need for quality health care, more housing and ways to revitalize the city's downtown retail core.

Roger Lind, vice president at Bank Midwest in Jackson, has been active with a community committee charged with improving the city's health care facilities. To that end, the committee raised over a half million dollars in private funding a few years ago to build a new clinic adjacent to the community hospital. Without community support, Lind says the project never would have been completed. An adequate supply of senior housing, and profitable maintenance of the city's hospital, are the health committee's current "hot topics," according to Lind.

As for general housing, Burud estimates that about half of the new jobs created since the Unisys closing are filled by people living outside of Jackson. The city believes that if more housing were available, some of those workers would be willing to move to Jackson, but apartments are scarce and many of those new jobs don't pay well enough to create a wave of new home construction.

Jackson's retail problem is one that much of rural America faces. Local shoppers are increasingly enticed by regional shopping malls and large discounters within a brief commute. "It used to be that if you got the jobs, the downtown would follow. Not anymore," Burud says.