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How the U.P. can fight population decline and foster economic development

Issues and Answers call center, Iron Mountain

Jim Carollo of Issues and Answers call center, Iron Mountain

State Farm interior, Iron Mountain

newly updated facade, Iron Mountain

Bruce Orttenburger of Dickinson Area Partnership, Iron Mountain

Like many rural areas, the U.P. has struggled with population decline for decades. We explore what cities, state agencies, development groups and entrepreneurs are doing to lessen its impact and create new opportunities.
The 2010 census confirmed what leaders across the U.P. already know: the region, like many rural areas, continues to lose population. The trend is partly due to the U.P.'s demographics, which skew older than the country's urban areas, and partly due to residual effects from the loss of major employers like K.I. Sawyer Air Force Base. It's likely to persist for the foreseeable future, whether due to the apparent final closing of the Empire Mine in Marquette County or the potential loss of a lucrative military contract at Marinette Marine, which would affect Menominee County.

But the U.P. has a bounty of natural--beyond traditional resources like timber and iron ore--and human assets that have yet to be tapped. So what are the region's business leaders, economic development authorities, local governments, and tourism agencies doing to stem the negative effects of population decline and attract or retain residents? More than you might think.

Focusing on Economic Gardening

Stemming population decline is inextricably bound up with economic development, so the folks on the front lines of these efforts work closely with local business leaders.

"85 to 90 percent of economic development, not just in the U.P. but in any rural area, consists of business retention and expansion, not attraction," says Bruce Orttenburger, president and CEO of the Dickinson County Partnership. "Prior to 2005 [when Orttenburger helped draw a call-center firm to Iron Mountain], we hadn't attracted a company that wasn't directly related to or spun off from an existing business in the area," he says.

It's a common misconception that people in Orttenburger's position constantly gladhand and network at conventions and tradeshows across the country. That requires expensive travel, and fierce competition from other regions of the country lessens its effectiveness. Economic gardening, the practice of providing local businesses with access to local infrastructure, facilitating public-private partnerships, and removing red tape where possible, is far more efficient. 

Delta County Economic Development Alliance Director Vicki Schwab is evangelical about its possibilities. She touts a recent Michigan Economic Development Corporation Tribal Affairs Division grant to fund a feasibility study for yellow perch aquaculture, which is already practiced on a small scale. Eventually, a more robust aquaculture industry could create dozens or hundreds of jobs in Delta County. 

Schwab also relies on MEDC's economic gardening services for second-stage companies. Delta County employers like Andex and Creative Composites have taken advantage of the grant to improve their logistics and shipping operations or update their websites through local vendors, both of which represent investments that create or support jobs in the U.P. MEDC also supports the outreach efforts of local manufacturers that rely on exports. According to Schwab, exports accounted for $18 million in economic activity across the U.P. in 2013 alone, and more than two million pounds of cargo left Escanaba's airport that year.

Creating Synergies

In parts of the U.P., business-attraction efforts have borne fruit in one economic niche: remote customer service. Jokes about the Yooper dialect aside, Orttenburger's work with Issues & Answers, the Virginia-based call center operator that opened a branch in Iron Mountain (there's one in Escanaba too), revealed a preference for the "neutral" Upper Midwestern accent in employees who communicate with clients across the country. Southern and Northeastern accents, apparently, are harder to understand and may have negative connotations. The new Issues & Answers facility created 70 jobs in Iron Mountain alone, raising the possibility of substantial job (and population) growth in areas that can successfully attract similar businesses.

In Escanaba, Schwab is leveraging existing business assets to create new synergies--and jobs. Excellent road connections to downstate Michigan and eastern Wisconsin were pivotal in attracting Bells' new Upper Hand Brewing facility, which will bring several dozen employees, to the area. 

Meanwhile, Ohio-based NewPage Corporation, whose paper plant is Delta County's single largest employer, recently partnered with Omya Worldwide, one of its biggest suppliers, to improve its operational efficiency. Omya makes precipitated calcium carbonate, or PCC, which whitens and strengthens paper. Since NewPage needs up to 150 tons of PCC per day, the companies decided to bring Omya's PCC production plant, and seven associated employees, to a vacant space on NewPage's campus. The kicker: the plant will use some of the NewPage plant's carbon dioxide emissions to produce its PCC, making the move a win-win for the local economy and environment.

Playing Up Natural Assets

The U.P.'s natural beauty is even responsible, albeit indirectly, for one of the biggest outside investments of the past decade. According to Orttenburger, the natural amenities of the Keweenaw Peninsula wowed D.A. Glass's Polish executives and helped convince them to open a 50,000 square foot facility near Calumet. Within three years, that project is projected to support up to 200 new jobs, many of which may be held by new arrivals.

In Marquette County, the still-expanding Noquemanon Trail Network has turned the central U.P. into a noted destination for mountain bikers, cross-country skiers, and other "silent sports" participants. This has been a huge boon for population-retention efforts, as outdoorsy NMU students who can't live without the trails choose to stay in the area after graduation.

Finding New Uses for Old Places

Gogebic County, Michigan's westernmost, has been particularly hard-hit by population loss, dropping 5.4 percent in the 2010 census. But that hasn't stopped the city of Ironwood, the county's largest, from undertaking an ambitious, employment-driven downtown redevelopment plan. 

With a state grant, the city purchased the historic, centrally located City Centre building in 2010 and leased it to Downtown Art Place, a local nonprofit that works closely with the Historic Ironwood Theater company to promote Ironwood as a regional center for the arts. Using donations from local patrons and additional grants, DAP added a host of new fixtures and outfitted the place with an art gallery, studios (available to local artists at subsidized rates), and classroom spaces. Twenty artists, many of whom previously used home studios, currently work in the building. 

"That's 20 jobs added in our downtown core," says Tim Erickson, director of Ironwood's Chamber of Commerce, who's bullish on the prospect of similar public-private partnerships in Ironwood and other Gogebic County towns. Coupled with the area's considerable outdoor assets, additional efforts to accommodate local artists could successfully attract active, artsy types from nearby Wisconsin, Minnesota and beyond, says Ironwood Community Development Director Michael Brown. Ironwood's catchy "Live Where You Play" slogan seems to anticipate this.

Although the Iron Mountain area hasn't scored a high-profile "win" in this department, Orttenburger notes its downtown area was recently designated a historic district by the state of Michigan. This makes it easier for local developers to leverage tax credits for refurbishing old buildings and creating jobs.

Some U.P. communities have traveled farther on this path than others. In Marquette, one of a handful of places to see population growth between 2000 and 2010, real estate development has quickened to a trot as local leaders awaken to the area's tremendous appeal to outdoorsy outsiders. 

With help from the Marquette Downtown Development Authority, a local businessman is plowing ahead with ambitious plans for the city's cherished Delft Theater. Since 2005, several construction and beautification projects have opened up the city's Lake Superior waterfront, drawing tourists (and permanent residents, thanks to dozens of new residential units). Up in Houghton, another U.P. locale to add people of late, MTEC SmartZone has helped to create more than 400 jobs since the turn of the millennium, many of which have utilized space in the city's formerly disused power station.

Forging Ahead

Like many rural areas of the United States, the U.P. has seen its share of economic ups and downs. Rural depopulation is among the country's most serious demographic challenges, and it won't go away tomorrow. But the efforts of local governments, partnerships and businesses, coupled with help from well-meaning outside organizations, are clearly creating opportunities for both natives and those who choose to relocate here.

"You do the best you can with what you have," says Orttenburger. And the U.P. has a lot.

Brian Martucci writes about business, finance, food, drink and anything else that catches his fancy. When he's not working out of his office on Marquette's East Side, you can find him stretching his legs on the trails or sampling local flavors at Blackrocks and the Ore Dock. You can find him on Twitter @Brian_Martucci
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