Editor’s note; This is the second of a two-part series looking at economic development in Iola and Chanute, and challenges that lie ahead.
When word got out early last year an aerospace component manufacturer was looking to locate to a community somewhere near Iola and Wichita, David Toland’s eyes lit up.
The company was looking for a community that was within 250 miles of both Kansas City and Wichita (Iola, for example); had an existing facility big enough to move into immediately (the old Herff Jones building, for example); and was willing to offer up enticements such as property tax abatements, utilities and incentives (such as Iola’s neighborhood incentives plan).
All told, the package — developed with input from Iola, Allen County and Iola Industries — totaled nearly $2 million.
Then came word in March the company — then identified only as Project Blue Star — had selected two finalists: Grove, Okla., and Chanute.
Disappointed, but not discouraged, Toland, CEO of Thrive Allen County and an economic development director hired by Iola, Allen County and Iola Industries, offered congratulations and words of support to Chanute’s economic developer, Matt Godinez.
“A plant in Chanute is good for Chanute, but it’s also good for Allen County,” Toland said. “If we weren’t going to win it, and they still had a shot, we were going to be behind them 100 percent.”
Sure enough, Orizon Aerostructures selected Chanute in June as its base of operations in southeast Kansas, over 48 other communities, including Iola.
In the end, Chanute’s financial incentives dwarfed what was offered by Iola and Allen County, perhaps three times as much, when accounting for infrastructure costs, tax abatements, and indirect costs associated with Chanute’s forgiving a lease related to the old Spirit Aerosystems plant.
“If Allen County loses out on it, then it’s in Allen County’s best interest to support our neighbors,” Toland said. “Up until that point, we’re going to play to win. We always play to win.”
The episode illustrates the Herculean efforts communities must undertake to attract industrial manufacturers in today’s global economy.
Toland spoke at length about Iola’s economic climate, various perceptions (and misperceptions) about Iola’s future, and why he’s optimistic brighter days are nearer than many think.
LIKE IOLA’S neighbors to the south, Toland is bullishly anticipating big news on the industrial and retail front.
“Right now we’re working on a major industrial deal that potentially could happen at some point this year or early in 2018,” Toland said. (Because the deal is not yet official, Toland declined to be more specific.)
“We’re working on a potential major commercial deal that would be service related,” he continued. “We’re still working on getting a hardware store. And finally, we’re working to support small businesses, like the bicycle shop that’ll be opening in downtown Iola in April.”
The deal to bring the bike repair shop — the only shop of its kind between Pittsburg and Lawrence — should be finalized by the end of the month, Toland said.
“The bike shop is a big, big win,” Toland said. “It’s a tiny win from an overall economic development perspective, but from a community perspective, something like this is great.”
He anticipates the bicycle shop will be on the square.
The shop, Toland said, is a direct result of the local support in developing the Lehigh Portland Trails complex on the south edge of Iola, when Thrive and a team of volunteers helped create about eight miles of scenic trails surrounding Elks Lake.
“The owners have seen in a town of only 6,000, that there’s a market here,” Toland said. “Why are they coming? Because we’ve been investing in these trails, and no one else is.
“What is so helpful about having economic development at Thrive, is that we can blend things like trail development with traditional economic development, and leverage the strengths we have.”
TOLAND also expects optimism to build locally once construction begins soon on the G&W Foods grocery store on the old Allen County Hospital site.
“I still get calls every day” asking if construction is still a go, Toland said.
(Yes, it is. And no, the company has not backed out of any commitment to Iola.)
“When they start moving dirt, that will build confidence in other parts of the community for folks to go ahead and try to make their business dreams a reality,” Toland said.
“And there are things cooking which are much larger than G&W Foods,” he continued. “If and when they happen, they’ll have a major positive impact on not only Iola and Allen County, but the region as a whole.”
IN ADDITION to those projects, Toland is organizing a “downtown summit” Feb. 7 to invite Iolans to discuss the state of the downtown square.
The square lost three long-time retailers in 2016, McGinty-Whitworth, Town & Country Western and Casual Wear and Ulrich Furniture, leaving prominent storefronts empty.
(McGinty-Whitworth has recently been filled by WaveFire Games, a local, family-owned business that markets board games, and offers an on-site venue to play games.)
“These high-profile vacancies make it seem worse than it actually is,” Toland said. “I’m very optimistic about the future of downtown Iola, but we have a lot of work to do.”
The summit will offer attendees a look at how the downtown has changed through the years — a century ago, for example, a line of grocery stores lined the east side of the square with doctors, lawyers and dentists occupying the second floors — and analyze Iola’s strengths, weaknesses, opportunities and threats.
“And then, we’ll get direction from community members for how they envision downtown,” Toland said.
SO WHAT are some of downtown’s strengths?
“I don’t think people realize how big of a strength it is to have U.S. 54 go through downtown,” Toland said.
Kelly Sigg, owner of Audacious Boutique, at the corner of U.S. 54 and Jefferson Avenue, agrees.
“That highway, last summer, was probably my saving grace,” Sigg said. “I can’t tell you how many people we got from Wichita who were headed to places like Branson or the Lake of the Ozarks. In the summer, I probably heard that every day. If people are looking to put a business in Iola, that’s one of the most important factors to consider.”
Another strength, Toland said, is Iola’s downtown architecture.
Simply put, “it’s incredible,” he said. “The buildings downtown are generally in good repair, and they look good.”
The current business climate, and corresponding low real estate prices are on one hand a weakness, but also a strength, he opined.
“Rents are low, and sale prices are low,” Toland said. “You can get into a building for not a lot of money. There are good opportunities.”
Perhaps most importantly, the square is designed to accommodate crowds on a daily basis.
“There are a lot of people who are downtown every day, because of the courthouse and related services, with lawyers and bankers,” Toland said. “A lot of traffic comes downtown, which helps restaurants and it helps retail.
“The downtown is the heart and soul of the community in most people’s minds,” he continued. “It’s designed to be the center. There’s a psychological advantage to being downtown. That’s where Iola gets its identity.”
CHALLENGES?
“The downtown infrastructure needs improvement,” Toland said. “Go along the blocks off the square, and the sidewalks are in terrible condition. There are no bike racks and no benches on the outside of the square.”
Alleys also are in poor condition, he said.
Downtown streetscape improvements were cited as goals by a Vision Iola study — developed by and for Iola citizens in 2010 — but few of those recommendations have been approved.
Another roadblock to getting downtown merchants is the physical size of the vacant stores.
“They’re too large for startup businesses, and it’s expensive to subdivide them into smaller spaces,” Toland said. “We really need retail incubator spaces, small stores with low-cost utilities to help get businesses on their feet.”
Sigg agreed, citing herself as an example.
Sigg opened Audacious Boutique in the 200 block of South Jefferson (in the building now occupied by Around the Corner Coffee) in 2011. About two years later, her business was successful enough to justify moving to a larger venue, precipitating her move to the corner on the square. (For transparency’s sake, Toland noted he owns that building.)
If incubator spaces could be developed downtown, multiple businesses could benefit, Toland said.
Sigg, meanwhile, sees a less expensive alternative for startups, with what she describes as a “collective boutique” venue.
A collective boutique looks like a single store, Sigg explained, but in reality is multiple store owners sharing the same space.
“It’s not divided off,” she said. “It has an open concept. There are no walls dividing the businesses. It may be divided by a clothes rack, or furnishings. Or nothing.”
The separate business owners may take turns running the cash register on different days. Each is responsible for maintaining his or her own merchandise.
Costs for such thing as rent and utilities are shared.
“Unless you knew beforehand, you’d think you were in one business,” Sigg said. “I think it’d be a neat way to take a big building and get several people in here to try their hands. It’s a trendy style you see in the city, and I think it’d be a good fit for Iola.”
OPPORTUNITIES
Economic activity happens in clusters, Toland explained. And 2016 saw a cluster of retirements.
“It’s easy to forget, but five years ago, the downtown square had 100 percent occupancy,” Toland said. “You couldn’t find a storefront available. Now, it’s an entirely different situation.”
Toland is confident the city can once again fill its downtown stores, “however, it’s not going to be the same mix of businesses we’ve had in the past.”
As in generations past, the square is experiencing a shift in the types of businesses that call downtown home.
“The downtown has shifted before, and it’ll shift again,” he said. “Right now, it’s in a transitional phase. We need to plan out what the community wants, and what it will support, so we can go out and get those types of businesses.”
Filling those storefronts should be an immediate goal, he stressed.
“I don’t want people to be patient,” he said. “There needs to be a feeling of urgency, but not panic. That’s why we’re trying to be thoughtful about how we go about tackling this community change.”
THREATS
Complacency and pessimism are perhaps the largest threats to Iola’s business climate, Toland contends.
“Negativity is a real threat,” he said, citing rumors that continue to swirl about the future of G&W Foods.
“Even though we’ve had a United States senator here to do the groundbreaking, even though G&W Foods has purchased the old hospital site, even though G&W Foods has spent tens of thousands of dollars in architectural plans, even though the city of Iola has issued a building permit for G&W foods, there still are people who are absolutely convinced the store won’t be built.
“If folks just accept that it’s inevitable that downtown is going to have a high vacancy rate, it will have a high vacancy rate,” Toland said. “Well, I don’t accept that.”
Toland believes that tone will soon shift as spring arrives and construction on the grocery begins, the bike shop opens and other economic activity occurs.
“Closures happen in clusters, but new activity also happens in clusters,” Toland said. “These things are related.”
IOLA INDUSTRIES
Toland has a proverbial ace in the hole when dealing with prospective large-scale employers, Toland noted: Iola Industries.
“That organization is the envy of so many economic developers around the state because those communities don’t have anything like what we do,” Toland said.
Iola Industries, formed in 1955, consists of local business representatives tasked with the sole purpose of seeing business development in and around Iola.
The organization has played a pivotal role in bringing such industries as Gates Corporation and Russell Stover Candies, and past employers like Haldex Brake and Herff Jones to town.
“Iola Industries has assets, and flexibility to get things done as a private corporation,” Toland said.
Most recently, Iola Industries built a 12-unit apartment complex at the old ACH site, one of the key factors in convincing G&W officials to build a neighborhood grocery store in the heart of Iola.
Iola Industries, Allen County and the city of Iola each pays $20,000 for Thrive to coordinate economic development activities countywide.
