Small Town Style Economic Development - Finding an approach that works

(from Maine Townsman, June 1995)
by Jo Josephson, StaffWriter

The first thing you notice as you drive along Route 2 through downtown Dixfield these days are the signs. There are a lot of them.

There's the "Dixfield Welcomes You" sign on the outskirts. There are green and white banners hanging from the utility poles announcing "Dixfield: The Only One." (There is no other town in the whole world named Dixfield, reports the town manager.)

There are the "Visitor Information?" signs leading you to the Dixfield Historical Society that is doing double duty these days as a tourist information center. And last but not least there are the signs directing you to "Public Parking" behind the post office/town hall complex.

But the signs aren't the only things these days that make you feel like stopping your car in this small western Maine town of under 3,000 people. Many of the shop fronts in this formerly shabby downtown have been spruced up and the small parks are dotted with attractive benches.

And if none of the above will get you to stop and buy lunch or spend the night at the bed and breakfast or browse through the antique shops dotting Main Street, perhaps the "large life-like" moose that will soon take up residence for the purposes of picture taking sessions will do it. If not, you might want to come back when the "summerfest/antique car show" is held.

Welcome to Dixfield, where a low-key, low-cost, grassroots form of economic development is taking place. For not with tax breaks and industrial parks, but with signage paid for with fundraising "celebrity" suppers cooked and served by town notables and an information center run by volunteers from the historical society and "citizen-donated" benches, is Dixfield doing economic development these days.

"It's an approach to economic development that is neither costly nor elaborate," explains Carol Granfield, town manager in Dixfield. "What it does rely on," she says, "is innovation."

And the fact that 11,000 cars a day pass through Dixfield! For not only is Dixfield near the borders of Canada and New Hampshire, it is also adjacent to a major river, a state park, two ski resorts, and some of the best hunting, fishing, canoeing and snowmobiling in the state.

"We want to give the drivers of those cars reason to stop, because when they do," says Granfield, "it's good for the local businesses and what is good for local business (there are about 50) is good for the town."

As Granfield explains it, Dixfield's goal is not primarily more jobs and a broader tax base, but rather an "enhanced quality of life for the small town." The reasoning is straightforward: if you increase people's awareness of the town and what it has to offer, existing businesses will prosper and new businesses will come in and when all that happens the quality of life will improve.

But this article is not about economic development in Dixfield per se. It's an article about Dixfield and other small towns in the area that are currently working at economic development and the advice they have to offer.

For no longer can small towns ignore economic development and say it is a big city thing. As their school funding dries up and their property taxes rise, as regional businesses and industries—the source of jobs for small town residents—shut down, as their tax bases shrink, as their downtowns become vacant and as the service centers move further afield, threatening the very quality of small town life, more and more small towns are looking for ways to do economic development.


In last month's TOWNSMAN, the acknowledgement of the contributions of Peter Lehman, Chair, Sociology Department, University of Southern Maine and Mark Dion, Deputy Police Chief, City of Portland, for the article "Trash Mixing" was insufficient.

These two individuals co-authored an article that was sent to the TOWNSMAN late last year on the subject of trash mixing in the Greater Portland area, portions of which were incorporated into the May article. Mr. Lehman and Mr. Dion should have been credited for authoring sections of the article discussing the RWS problem and investigation and fully credited for the "trash mixing" concept. The TOWNSMAN apologizes.



Based on visits to four small western Maine towns (Bethel, Dixfield, Mechanic Falls and Norway) that are currently "doing" economic development, the TOWNSMAN found that if anything, small towns rely heavily on volunteers and other people's money —especially Community Development Block Grant money— to do economic development. They have neither the staff nor the revolving loan funds of larger towns. The TOWNSMAN also found that:

Small towns rely heavily on their existing resources, historical, natural or man-made, to drive their economic development. And yes, like Dixfield, they rely heavily on innovation.

Some of the towns are crossing traditional borders to work regionally with their neighbors, joining umbrella organizations called "area growth councils."

Small towns believe that one of their major roles in economic development is to "remove obstacles" to growth, whether it is a "ratty looking" downtown, with its inadequate sewer system and crumbling sidewalks, or a rigid set of ordinances that would try the patience of Job, or the lack of communication within the business community.

Small towns believe that if you create an attractive downtown, existing businesses will stay and new businesses will be drawn to it. It was more important to make the downtown attractive than to buy land and build an industrial park, because community development creates economic development.

The nurturing of existing businesses was paramount to small towns with existing businesses.

Last but not least, economic development takes planning; it doesn't just happen.


Bethel is the smallest of the towns visited, with a population of 2,300. Dixfield (2,574) isn't much larger; nor is Mechanic Falls (2,919). Norway is the largest at 4,754. All are in western Maine.

Mechanic Falls has, in the words of Town Manager Dana Lee, a "criminally poor tax base." Ninety-six percent of its tax base is residential. The closing of the Marcal Paper Mill in 1981 had a devastating impact on the economic vitality of the town. Its unemployment rate currently stands at 15 percent and its downtown is dying, with over half its storefronts empty and two banks planning to close.

Bethel, once a "hub community" for the region, has become a "nice quiet backway" with an inn and a boarding school and a few wood industries. But it is plagued with a high unemployment rate due to recent downturns in the wood products industry that forced the closing of several mills in town, reports Town Manager Madeline Henley.

Norway, located in a region known for its industry and hard hit by the recent recession, has a high unemployment rate, reports Town Manager David Holt. And although recent efforts have brought the area's largest employer out of bankruptcy, the future of its downtown as a retail center is threatened by new development out "on the highway."

Though small in population, all of the towns have a town manager form of government. Mechanic Falls' Lee reports he spends at least a quarter of his time on economic development. Dixfield's Granfield, hired by the town about two years ago, says she is still in a unique position to see the town through the unfettered eyes of a "consultant." Townspeople describe her as the "spark plug." Norway's Holt is a native to the area; his roots and loyalty and understanding of the area go deep. All four managers are seasoned and successful grant application writers.

Two of the towns—Dixfield and Mechanic Falls—have tapped into the state's Business Visitation Program and two—Mechanic Falls and Norway — have tapped into the state's Quality Main Street program. Both programs allow them, at no cost to the town, to conduct high quality needs assessments and planning—developing strategies, if you will, laying the groundwork for future economic development activity.

What follows is advice/insight offered by the four towns.


"Understand your community; its people, its history, what it values. For the solutions to the problems, if there are to be any, must originate from the people in the community or at least be explained fully to them so they will jump on the wagon; for unless they do, you will probably fail," says Norway's David Holt.

Holt knows of what he speaks, having once worked in a small community where attempts at economic development failed because the community felt job creation would threaten the character of the town, something it valued more highly than job creation.

"Make economic development a community effort," says Dixfield's Granfield. "People will buy into it, if they feel they are part of it."

Granfield says it was "standing room only" when residents were invited to come together and brainstorm about economic development in their town a year ago. Among other things, the residents said they wanted to tap into the tourism industry.

They also established the town's first "economic development committee." But they didn't stop there. The seven-member citizens group that has been meeting once a week is nothing in terms of numbers compared to the 100 "economic development volunteers" who were recently honored when the town celebrated its first year of "success," reports Granfield.

With such community involvement, it is not surprising that one of the members of the committee, the owner of the only restaurant in town, where all the fund raising suppers were held, is now opening the town's first and only upscale restaurant at the other end of town. Or that another resident is developing the town's first campground, complete with hot showers and rustic lodge between the shores of the Androscoggin River and the base of a very popular hiking area.


Capitalize on existing resources —be they natural or historic, or man-made, be they highways, vacant mills or existing businesses or associations.

The highway through the downtown is the driving force behind economic development in Dixfield to date. The fact that 11,000 tourist cars a day pass through the heart of the downtown is a fact to be capitalized on. How to get those cars to stop and do business in Dixfield is the challenge. The river that runs through the town is a future natural feature to be tapped into.

In Bethel, proximity to nearby ski slopes and adjacency to the train tracks that bring in the skiers to the slopes is the driving force behind the town's joint partnership with the developers of "Bethel Station," the $30 million complex that Sunday River developer Les Otten is designing to attract non-skiers to the area. Its 130-room inn, four-screen cinema, upscale restaurants, shops and residences promise to bring 400 jobs to town.

In Mechanic Falls an old abandoned mill, the Marcal Paper Mill, long considered an eyesore in the heart of town, has been the recent driving force behind the town's efforts at economic development. Once an employer of several hundred people, the empty mill fell into town hands through nonpayment of taxes. The town in turn "sold" it to Great Northern Recycling and loaned it monies from its federally funded revolving loan fund to rehab the building.

The reopening of the centrally located building has been symbolic, says Manager Lee. "Like a Phoenix rising from the ashes, it says to the town and others in the region: Business is important in Mechanic Falls."

In Norway, it is the unique architectural heritage, expressed in the form of a 64-building National Historic District, a third of which is on Main Street, that is the cornerstone of its current downtown revitalization strategy. Billing itself as "Norway, Maine: Historic Village," is a suggested means of getting the thousands of vehicles that bypass the downtown to visit it.


Partnerships — be they with neighboring towns or the private sector—have long been a major tool for economic development for all cities and towns. They are especially critical for small towns.

What could be more natural than going into partnership for the purposes of economic development with the members of your school district? Harrison, Hebron, Norway, Otisfield, Oxford, Paris, Waterford and West Paris, the towns that make up SAD 17, also make up the public/municipal backbone of the newly formed Growth Council of Oxford Hills that is funded in part by Norway Savings Bank.

As Norway's Holt sees it, the bank, which is not a branch of anything, was a natural private partner in the eight-town venture because its future is inextricably tied to the economic health of the region.

"You need to look around and see who is in the same boat; if we (the communities) fail; the bank fails," says Holt. It's as simple as that.

Last year, the bank made a $100,000 grant for each of three years to the Growth Council, with member towns and business groups providing matching monies. Norway's annual investment is $15,000.

The start-up monies have made it possible for a number of economic development groups in the region to work together under one roof in the council's headquarters, the new Oxford Hills Visitor and Business Information Center, which is located prominently on Route 26 in South Paris. It also helped to hire a full-time experienced director.

While the regional approach is the heart of Norway's strategy for economic development, Holt admits that working together can be difficult. "You have to learn to just be a contributor. And even before that you have to identify just what it is you can contribute. You also have to learn it's okay to disagree," says Holt.

Holt says "the region's problems were too great to be solved individually;  they forced everyone to work together; inspired everyone to put their best foot forward; and that by joining a regional group you can attain a greater sense of achievement."

Geographically isolated from other communities, Bethel's partnership is not with other towns in the region but directly with the private sector, with the Sunday River Ski Resort, which, as already noted, is planning to build a $30 million tourist complex on the outskirts of downtown Bethel.

"There's a lot of grant money for economic development out there but it's not available to everyone. That's where local governments come into play. We have access to resources that the private sector does not have, " says Bethel's Henley.

Henley knows. She had a lot of experience writing successful grants for replacing the sewers and sidewalks and streets in Bethel a few years ago.

Now, together with the Androscoggin Valley Council of Governments, Bethel has leveraged almost $2 million in loans and grants from HUD and the EDA to build the infrastructure upon which the "Bethel Station" will be serviced—its roads, its sidewalks, its sewer system. In return, Bethel should get an estimated 400 jobs and add about 20 percent to its tax base.

Henley says in a project of this magnitude, it is important to spread the risk. To those who are cautious and say that major economic development doesn't always pay, Henley says they have done a cost benefit analysis and this project is a winner.

She also says that from her experience with the ski resort, she has learned that it is important to attract a company first and find out what it needs and then try to meet those needs. She says the practice of towns buying land for an industrial park with the hopes of attracting industry, while a popular practice, does not make sense in small towns, especially if they do not already own the land.


Bethel's Henley believes that one of the reasons Sunday River decided to build its complex in Bethel was because of Bethel's regulatory position. "We are a workable town, we are flexible; we realize hardships; we are not entrenched in our approach to development," says Henley.

Henley says she believes that the ski resort's positive experience with the town a few years ago when it constructed the Sunday River Brewing Company, a combination restaurant, brewery and pub, on the outskirts of town, was a "test" project for the town's future partnership with the resort complex, that the town passed with flying colors.

In Mechanic Falls, where they do have restrictive zoning and other ordinances, the town is loosening up, "writing flexibility," if you will, into its comprehensive plan and zoning ordinances.

"While small towns may not have money to proactively attract new businesses, they definitely can play a role in removing obstacles for doing business in the town," says Mechanic Fall's Lee. Do you have unreasonable sign, set back, or parking ordinances? Revise them. Do you have restrictive density requirements in your downtown? Change them. Do you have a drawn out planning process? Simplify it.

Do you need someone to help smooth the way through the permitting process? Hire someone. Which is what Mechanic Falls has done. Using monies from its CDBG funded revolving loan fund, it has been able to pay a portion of a full-time position at the town office that includes the jobs of code enforcement officer, planner and economic development director.

When not overseeing the town's revolving micro loan program, the part-time economic development director helps "grease the skids" for businesses going before the planning board, preparing them for the types of questions they will encounter, explains Lee.


Removing obstacles is just the tip of the iceberg, when it comes to telling businesses you want them and are willing to work with them.

Bethel's Henley believes that, in addition to having no zoning regulations, it was the sprucing up of its Main Street that led to developer Les Otten deciding to build his $30 million "Bethel Station" tourist complex in Bethel.

"Five years ago there were rocks coming up through the asphalt; now look at it; it's gorgeous," says Henley during a walk through the downtown toward the planned site that will bring in 400 new jobs.

Dixfield is currently embarking on the same kind of project in its downtown with a $600,000 Community Development Block Grant. Over the years, money from Mechanic Falls' CDBG funded revolving loan funds have been spent on sprucing up downtown buildings. Strategic Planning in Norway under a Quality Main Street grant program will lead to the same.

Community development leads to economic development. It's the mantra of small town economic development or it should be, say those who engage in it. Community development block grants to "revitalize" the downtown, to build new sidewalks, repave the roads, lay new sewer lines, or spiff up the facades of the storefronts are a catalyst for small town economic development.


In addition to removing regulatory obstacles and revitalizing the appearance and infrastructure of the downtown, small towns can do a lot to facilitate the process of communication, says Mechanic Falls' Lee.

"We can staff a downtown business association. Which is to say, we can arrange for a meeting place, we can mail the announcements, provide the speakers, we can develop a business directory, and we can develop a joint marketing program for them. There are countless things we can do in terms of helping businesses communicate with each other and the community," says Lee.

Which is exactly what Lee and his staff at the town office are doing these days for the fledgling Mechanic Falls Business Association. But the idea of the association didn't just happen.

In an effort to retain the few remaining businesses in its dying downtown, to find out how they were doing and how the town could help them, Mechanic Falls recently conducted an intensive survey of the businesses, piggybacking off a survey developed by the state under its Business Visitation Program (BVP).

Conducted by local volunteers, trained by the state, which also "crunched the numbers" and provided a full detailed report of the findings back to the town, the BVP survey indicated among other things that 76 percent of those responding said they would be interested in joining a Mechanic Falls Business Association..."because they felt isolated, felt they were struggling alone and felt they didn't know what the other businesses in town were doing," explains Lee, who conducted many of the surveys.

"The survey, while gathering much critical planning information, was a good way to tell our businesses that we cared about them," says Lee. But don't conduct the survey unless you are planning to act on the responses, he says.

Dixfield, which has just completed the survey and is awaiting the final tabulation, has already jumped the gun in anticipation of the findings and joined with its neighboring towns in putting together and publishing 5,000 copies of the "Western Maine River Valley Guide." It contains the name and location of every auto body shop, book store, caterer, machine shop, welder and woodsman supplier in the area.

And in the name of innovation and communication, Dixfield has recently staged a "Business Expo" at the local high school for area businesses, inviting them to "show and tell" just what their services were.

Of all the towns visited, Norway was perhaps the town that was involved in the most extensive form of support of its business community. As a member of the Oxford Hills Growth Council, it provides support to area businesses through the Council's Visitor and Business Information Center, which houses the Oxford Hills Chamber of Commerce, the Norway-Paris Chapter of Service Corps of Retired Executives (SCORE), the Androscoggin Valley Council of Governments and Community Concepts Micro Enterprise program.

Among the Growth Council's many tools is a $1.25 million loan program (FmHA) that has restarted or bolstered the area's three modular home companies, which together employ more than 300 people. It has also helped Norway Footwear, which provides 140 jobs in the region and which pays over $16,000 in property taxes.