Crookston goes under the microscope

The City of Crookston has been making good use of the University of Minnesota Extension Service's programs for community betterment. Hot on the heels of Crookston's social capital survey conducted by Extension's Center for Community Vitality, results of which were presented last month, are two closely-related reports that provide economic analyses of the community. Art Nash, regional Extension educator in the field of community economics, presented these results to a small group of city and business leaders Thursday.
    
The city commissioned a 2008 Retail Trade Analysis (RTA) that compiled and analyzed data from Crookston and Polk County to better understand the retail trade in the area, the impact of new retailers and identify possible future opportunities. Crookston Housing and Economic Development Authority commissioned the other report, Crookston Market Area Profile (MAP), which does essentially the same, zeroing in on Crookston in particular.
    
“The difference between these reports, basically, is in their scope,” said Nash. “The RTA provides a general economic picture of the city and county, with information gathered from the Associated Press, state and federal government. The MAP gets into things more specific to Crookston and will probably be a more useful tool in terms of planning for the future.”
    
Data used and compiled for the MAP comes chiefly from a GIS software program called Business Analyst, he added, which gathers self-reported information from businesses that pay taxes to the state.
    
This story focuses on the RTA.

Pull factors
One of the tools the RTA uses in analyzing data is the pull factor, derived by dividing per capita dollar sales of a city or county by per capita sales for the state. The resulting number gives an index at how good the entity is at retaining earnings made there and how much of a magnet it is for outside earnings. The greater the number, the greater the pull factor.
    
Some key findings in terms of pull factors:
    
• Pull factors for the years 2003-08 in several sales categories show components of change for the city. The pull factors for those years indicate a slight dip in 2006 but in 2008 an all-time (since first measured in 1990) high of .84, which represents “very little negative change,” said Nash. “Crookston seems to be holding its own on the retail front, although there's always room for improvement.”
    
Overall retail sales jumped significantly from 2006 to 2007 and climbed even higher in 2008, which Nash said might be attributed to the Wal-Mart store opening in August of 2007, although there is no way to tell for sure.
    
• Retail merchandise categories with high pull factors (1 or greater) in 2008 were vehicles and parts, grocery and beverage stores, repair businesses, and miscellaneous and previously unreported, which encompasses general merchandise, electronics, furniture, florists, used merchandise stores and accommodations (lodging), among others. The pull factor in this category may be unrealistically high – 10 – because, as Nash pointed out, that because a community needs at least four businesses to report in a sector, some categories, like general merchandise and accommodations, dropped off after one or more stores closed while others, like clothing, were added to the mix after another opened.
    
“You want to retain those businesses, of course, that have high pull factors,” he said.
    
• Personal service providers, which includes a wide range of service providers like death care, beauty and barber shops, laundry and photofinishing, more than doubled its sales numbers and pull factor between 2007 and 2008, although the ending pull factor was only .16.
    
• Health, pharmacy and optical steadily dropped by nearly 50 percent from 2003 to 2008.
    
• Grocery and beverage stores dipped approximately 50 percent from 2005 to 2006 and increased by about the same amount the next year before more than doubling in 2008. The 2006 number likely reflects the closing of Crookston SuperValu in early 2006, presentation attendees noted.
    
• The pull factor for sporting goods and hobbies is very low, .07.
    
• In a comparison with three other competing trade centers – Detroit Lakes, Thief River Falls, and East Grand Forks – in the state, Crookston's 2008 pull factor was third, slightly above EGF. However, as Nash pointed out, “some caution is warranted in these interpretations. These are cities of comparable size and within close geographical proximity to Crookston, but obviously, what many consider Crookston's biggest competitor, Grand Forks, is not in this equation.”
    
Of these cities, Detroit Lakes had the highest pull factor, 2.27, with TRF at 1.11.
    
• A comparison of pull factors by merchandise category among 19 cities across the state with populations between 6,200 and 9,400 shows Crookston's highest ranking in the miscellaneous category, third, and lowest, 17, in personal services. Crookston's weakest areas are leisure goods and apparel.

Polk County
Nash noted that last year's AP annual economic stress index ranked Polk County 17th among thousands in low economic stress. Indicators in the rankings are unemployment, foreclosure and bankruptcy.
    
“In general, Polk County is doing pretty well,” he said.
    
Crookston's share of county sales in 2008 was 43 percent, which Nash said is on track for the county seat. Among 17 merchandise categories were 632 firms in the county, 179 of them in Crookston. Taxable sales in the county grew by more than 30 percent from 2005 to 2008.
    
The county's pull factor numbers tend to vary from Crookston's, as gas stations and leisure goods are highest on the list, with repair services also above 1. The county's pull factor on taxable sales was .57, which might seem low in comparison to Crookston's, but it is the second only to Pennington among six neighboring counties, with Mahnomen coming in a close third.
    
Polk County did measure an overall leakage of 33 percent of potential sales, with only four categories – repair, leisure goods, gas stations and groceries – above potential sales.
    
“Many factors can influence these patterns, some of them beyond the control of policy makers,” Nash explained. “It is important to consider all influences when making decisions, not just the hard numbers.”
    
In terms of wage earnings, “beet farming is king,” he said, with 15 percent of wages coming from the sugar beet industry, first on the list of the top 10 industries in the county. Combined with sales in the agricultural sector, ag-related industries make up about a third of the county's total sales and wages. Interestingly, workers employee in the sugar beet industry make up only 3 percent of the county's workforce.
    
“This tells me they're getting some pretty good wages,” said Nash.