Dr. Don Racheter, President
Public Interest Institute
600 N. Jackson Street, Mt. Pleasant, Iowa
319-385-3462
http://www.limitedgovernment.org
May 9, 2008
Government or Capitalism as a
Solution to Rural Population Loss?
by: Deborah D. Thornton, Research Analyst
http://limitedgovernment.org/publications/pubs/studies/PS-07-2.pdf
dthornton@limitedgovernment.org
Problems caused by population loss:
Declining property values
 Fewer jobs
 Lower paying jobs
 Lower functioning schools
 “Brain Drain”
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41 of 99 Iowa Counties projected to lose
population between now and 2030
Which Counties are most At-Risk?
Chosen by 3 factors:
 Urban population density of less than
50% according to Census Bureau
 2005 population of less than 50,000
 Projected to lose population between
now and 2030
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31 (of 99) “At Risk” Counties
One Solution: Government Tourism
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“Destination” Resorts
All-in-one facilities
 Business conferences
 Longer stays, more money
 Multiple visits
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But, There are Issues!
State Tourism vs. Private Sector
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The Good, the Bad, and the Over Budget
Mahoney State Park – Nebraska
 The Randy Parton Theater – North Carolina
 Honey Creek Resort at Lake Rathbun –
Appanoose County, Iowa
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Mahoney State Park, Nebraska
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Easy access: Just off I-80, between Omaha &
Lincoln
85% private money, Naming rights
Lodging, wireless internet, group facilities,
restaurant, aquatic center, 70 ft. observation
tower, nature conservatory, modern theater,
Platte River access
Average room $83.00
Booked full for 2008, 1 million visitors/year
The Randy Parton Theater, North Carolina
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$21.5 M in TIF bonds, all government $
1,500 seat, state-of-the-art theater, $977,000
in bond payments/year
First major part of Carolina Crossroads
development
Mr. Parton contributed NO PRIVATE $
“Artist’s fee” of $1.5 M/year, $600 custom
pants & girdle, free house & car
1 year later, Parton fired, theater renamed, no
audience, continuing problems
Honey Creek Resort at Lake Rathbun,
Appanoose County, Iowa
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First Government “Destination” resort in Iowa
Proposed 30 years ago
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Falling population:
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1980 – 15,500
2006 – 13,400
Private developers refused
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Chronically low-income area
Even with no taxes, free land
State issued 30 year bonds for $33 million
 Projected only 5% profit
 Only 2 bids, both over budget
 Some private “loans” - being repaid by hotel tax
Honey Creek Details
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Lake Rathbun: 11,000 acre lake
2.5 hours from Des Moines
Mostly 2 lane roads
Lodge & aquatic center, conference facility,
group cabins, golf course
 Needed: room rate of $120/day & 58%
occupancy vs. State Averages of $60 & 56%
 Downsized hotel; eliminated cabins, upscale
features, & “green” features
 Re-bid, delayed schedule
Honey Creek continued:
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Still $5.8 M over initial estimate
 Major loss of 2008 summer vacation revenue
 Cabins needed to pay bonds eliminated
 Fired original management company
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Total government project
 Natural Resource Commission employee:
“State parks aren’t intended to pay for themselves.”
Another Solution:
Attract “Creative Class” Residents
Well-educated
 Business owners, managers, engineers,
scientists, healthcare professionals,
architects
 People in design, arts, entertainment
 Knowledge-based economy
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Premise that “Talent” can go anywhere!
What the “Creative Class” wants:
“High-amenity” areas
 Geographic mobility
 Cultural diversity
 Active downtowns
 Outdoor opportunities
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Where would the “Creative Class” go in
Iowa?
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6 specific Evaluation Factors:
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College – public/private, 4-year or 2-year
Easy urban access – next to metro area county
National/State parks with “modern” facilities
Riverside county – Mississippi, Missouri Rivers
Less Harsh Climate – Southern border
75% of county with 2 forms of High-Speed Internet
No Counties (of 31) meet all criteria
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Only 2 Counties meet 4 criteria:
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Fayette and Monona
Some criteria can’t be changed: River
location, southern location
 6 counties meet 3 or more:
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Clayton, Decatur, Fremont, Hardin, Monona,
and Fayette
Another Solution: Local Efforts
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Unique communities, not waiting for Government
Some, but not all of the Creative Class competitive
advantages
Dickinson County
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Big Spirit Lake, Lake Okoboji, Buena Vista University, internet,
good roads, Lakes Art Center & Summer Theater, Iowa Rock
& Roll Hall of Fame, golf and water sports
But Northern border, no Metro access
Town of Fairfield – Jefferson County
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Maharishi University of Management, Vedic City, southern
area, “First Friday Art Walk,” Lake Darling
But poor internet access, no state park, no Metro access,
smaller projected positive change
Another Solution: Renew Rural Iowa
Iowa Farm Bureau
3-year mentoring program
 Small businesses, not just farmers
 Small/medium manufacturing operations
 Elkader Lodging Association
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“We live in one of the natural paradises in the
United States!”
John Nikolai, Goshawk Farm Bed and Breakfast
What Might Free Market Make
Happen?!
“Show success, get rid of negative
attitudes, take risks, praise success!
Small towns are good for homes, families,
security, and connections!”
Doug Gross, Iowa Committee of 82