Towns draw lots for business referrals

North Dakota State Roundup

Published January 1, 1994  | January 1994 issue

Northwestern North Dakota communities participating in a Minot State University business referral program drew lots for first crack at luring a new business to their town.

The lottery system, which assigned sequential numbers to the communities, was created to ensure fairness and avoid politicizing the process, says Bob Lower, director of the university's Business and Community Assistance Center. Through a business broker the center searches for companies up for sale or expansion that might fit with small, rural communities.

The center screens companies in 28 states and refers only those businesses that have been in operation for three years or more and sell for $1 million or less.

Once a company is referred to the first town on the list, and that town indicates an interest in purchasing the business, the center offers financing guidance through the maze of state and federal small business and economic development loan programs.

The original lottery involved 28 communities, but since the program began in September that number has risen to 34. To qualify, the communities must be economically distressed. "They are all the focus of rural economic development programs," Lower says.

Although Newburg, which drew the first referral, did not sign up its first company, the center's pilot community did. Westhope has secured a natural fiber clothing manufacturer that is predicted to result in about 50 jobs over the next year and a half for this town of 600.

Terry Zeltinger, Westhope's economic development director, says a buyer in Minneapolis was interested in the company and willing to locate it in North Dakota. And with the center's assistance, the community offered the buyer a financial package that included tax exemptions and low-interest loans. Westhope also provided a building that once housed the local John Deere farm implement dealership. "Besides bringing new wealth to our community, we hope our success will give inspiration to other towns," Zeltinger says.

But Zeltinger says what is most important is the attitude of the university and the community of Minot. "They realize the success of the city relies on the success of the region."

Kathy Cobb