By Sara Quam
Luverne faces challenges in drawing new businesses to town, but Economic Development Director Tony Chladek hopes those challenges can be met.
Major blocks to new businesses are low unemployment and lack of office spaces, according to Chladek, who presented extensive business and employment research at the Tuesday EDA meeting.
Rock County's unemployment rate is at about 2.4 percent, the lowest in the eight-county southwest Minnesota region.
"I think that's a significant piece of information," Chladek said. "We're just not going to see huge employers coming to our area with the unemployment rate we have."
New businesses in the county are usually small and employ about three to four people to start with.
"A new business that employs 300 people is a homerun, and that just doesn't happen very often," Chladek said.
Chladek brought to the meeting many labor figures divided into employment areas.
Compared to the rest of southwest Minnesota and the state as a whole, Luverne is average or above average in most categories. For example, Rock County has a higher concentration of employees in the finance, insurance and real estate fields.
The state averages well above the county, however, in weekly wages with $643.97, compared to Rock CountyÕs $408.25. The countyÕs weekly wage rate averages to be slightly below southwest Minnesota which averages $424.72.
Growing in greater Minnesota
One thing in southwest Minnesota's favor is the support of the Minnesota Department of Trade and Economic Development, which has set a goal to help curb urban sprawl in the Minneapolis-St. Paul area.
It hopes to do that by encouraging new and expanding businesses to take advantage of rural Minnesota's quiet lifestyle, room to grow and good schools and amenities.
If those plans work, businesses will bring a higher population of workers as they relocate to greater Minnesota.
When businesses want to locate in a town such as Luverne, a deterrent can be that there's no available office space. Small technology-based companies often have few workers and just want a small office for their base.
That's where the term incubator building comes in. The term refers to a large building that houses a few to several office spaces. Businesses within the offices can be completely independent or share some facilities and resources.
Cities sometimes develop the buildings and rent out space to new businesses to help them get started - usually with a three-year time limit and increasing lease rates during the business's time there.
Some grants are available and some groups may be interested in sponsoring an incubator building project, which typically cost about $1 million for a new or retrofitted building.
"If we put out the feelers, we can make it happen," Chladek said.
The National Business Incubation Association says 87 percent of businesses who leave the incubator facilities are still in business and that 84 percent stay in the same communities they started in.
EDA looks at service training
The EDA will start offering monthly training for service industry employees. The cost of the project is free to businesses for a trial period and will cost the city about $1,000 after grant assistance.
The monthly seminars will help improve the first impression many travelers get about the city. Luverne Chamber of Commerce Director Dave Smith said it is good for employees, businesses and the community.
The classes will be an option for all Luverne businesses and employees. Smith said the image of service workers and their attitudes when curious travelers stop make a big difference in the success of the community.