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David Cyr

Economic Director: The Time is Now
By David Cyr
Mar 12, 2005 - 5:00:00 PM

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In spite of the negative press generated by the hocus-pocus squad, people are coming around to a brand new idea: in-house Economic Development. There is a time for everything and I believe the time is now. I have always felt that the spirit of spring, combined with the promise of unexpected new beginnings can invigorate the passive winter doldrums. When you add the 80% likelihood of a successful bid for annexation, when the snowbirds return in the spring, it could indeed be a good year for Millinocket.

Having the ability to interview and process the ideas of hometown residents, and possibly make their dreams of owning their own business come true will be very rewarding.

But all is not roses; along with the glory also comes hard work. Maine has a reputation for growing industrious, self-starting individuals, with a strong work ethic. It is that ethic that produces a successful business owner. If you have ever owned and operated a small business in Maine, it means that you already know what hard work and long hours are.

Prior to the inauguration of Angus King, who was later named as a Nature Conservancy Trustee, Maine was #24 in anti-business climate. Following two terms and the election of a preservationist Governor, Maine is now the most ANTI-BUSINESS STATE in the nation.

What this means to Millinocket is that we must build a support system for small business before spending money on small business.

The key to success in an environment that can be compared with doing battle, is the preparation for that battle. Today's entrepreneurs are already very busy making a living in a troubled economy; most households need two paychecks just to survive.

So where does an individual come up with the time to produce a 25-50 page Business Plan? I personally bought two books, two Business Plan programs, and wasted five months of my free time producing a 50 page plan, complete with charts, graphs and all the bells and whistles.

I had called on friends in the banking industry, and was able to understand and repair the weaknesses of my plan and build upon the strengths. I was fortunate to find a bank that would lend on leased land, and actually approved my loan application; apparently it pays to produce a strong Business Plan.

But while I was doing market studies, analyzing my competitors, and sitting at my computer, the world was changing around me. The valuation of property in this town had dropped drastically, and as a result, my apartment bldg. and other property I was planning to use for collateral, had lost half their value. To add insult to injury, I had to pay $1,100.00 in appraisal fees to find this out.

But while I was researching tourism stats, doing market studies, demographics studies, and producing graphs. I was also learning the nuts and bolts of my business. When you first look at the multi-page outline of a Business Plan, that needs to be complete with details, the average Joe, cannot imagine performing such a task without help.

This is why I firmly believe that an Economic Director working in tandem with our town Manager can produce a high percentage of hometown success stories. Please understand I am not advocating that we spend money with little hope of return on our investment, I am attempting to illustrate how banks view Business Lending.

In the case of a car or home loan, the bank retains those items as collateral. It is called minimum risk.

Medium risk lending falls into the existing business category. They usually borrow for the purpose of expansion, renovation or new equipment, and can provide collateral in the form of property, but the facts are, that businesses fail every day, for various reasons.

When you research the dynamics of fresh start business, the bank is placing its faith in two things, the down payment, which also is the level of commitment of the borrower, and the strength of the Business Plan provided by the borrower. Because it is so difficult to determine what the bank considers strengths and weaknesses in each business plan, it takes a qualified professional to make that determination. With the help of a qualified professional the bank receives a strong business plan, the town receives an educated entrepreneur that has worked out the bugs before a dollar is spent. Please understand, I am not advocating that an Economic Director processes Business Plans for the individual applicant.

How much would you learn in school if someone else did your homework? Entrepreneurs are a special breed; they are usually leaders, not followers. That said, they also have immense egos, and are least likely to ask for help, whether they need it or not.

I feel that we have seriously under-utilized the diverse talents of our Town Manager. Gene Conlogue is by far the most educated man to hold that job in decades. Having several years in the service industry, prior to his career In Municipal Management, Gene has maintained an open door policy to the citizens, and because of it, you'll see him there working late many evenings. I personally had experienced the hospitality of the past three Managers, because I lacked a suit and a briefcase, I was always blown off.

I feel that the advantages we currently have in Gene Conlogue, combined with the talents of an Economic Director, will enable our team to weed out the bonehead ideas and invest quality time and advice into the promising ideas.

Contrary to comments made at the 2-24-05 Council meeting, this economic plan that was born out of ideas from David Cyr, Jimmy Busque, John Davis, and Don Mclaughlin does not introduce Millinocket into the Real Estate or Banking business.

The town of Millinocket has been selling property since it was first incorporated. The Town has also maintained a revolving loan fund since the eighties. In fact, the loans that were processed back then are responsible for the cash we have in that fund today.

Anyone who has ever used basic math to calculate their mortgage payments can relate to the fact that borrowing $10,000.00 from a bank results in $20,000.00 in payments before maturity. A Revolving Loan fund, is actually a very sound investment.

The common misconception is that the town holds the loans in their entirety, and that is not so. In every case, the borrower is required to put up collateral of some form, be it cash or property and in almost every case the Bank is the primary.

The first and most important function of the Revolving Loan Fund is to provide "Gap" financing. That is the difference between what the bank requires as a down payment and what the borrower is able to contribute. Gap financing is often the difference between closing a loan or not, and has the ability to produce a direct benefit to promoting small business creation in our community.

Building upon the strengths here in the Katahdin Region and analyzing how best to improve upon the weaknesses will provide for the most effective avenues of change. I believe, and I am far from being alone in this theory, that Millinocket is extremely land poor, and it therefore limits the opportunities open to us.

Both of our neighbors to the East have the advantage of available land under their control. As a result they will likely be more able to expand their tax base and diversify their economies, while Millinocket watches as opportunity passes us by. Councilor Jimmy Busque said it best, when he proclaimed that we need to control our own destiny and not be controlled by others and purchase land for an Industrial Park. Finding businesses to locate here does not seem to be the problem, where to put them is.

I feel that the Economic Development Plan that I put forth has been taken as an immediate threat to the existence of MAGIC.

Although I did reveal the deception that brought the Wilderness Society here, and the plan to denigrate this town into a "Gateway Community Trinket Trap", I never spoke once about the removal of MAGIC.

The statements claiming my need to remove them have come from them. Again, it seems that MAGIC is busy discrediting itself. The further escalation of this ridiculous statement has resulted in the Chamber, and Katahdin Valley Health Association claiming that this discord will soon end all business coming to Millinocket; if it weren't so serious it would be funny.

The assertion was made weeks ago by Councilor Polstein, that the Economic Plan I put forth, is a parallel strategy to Magic's. Again this is hilarious; they have no plans to establish a Revolving Loan Fund, buy land for development, or provide help on a personal level with Business Plans. There are no parallel strategies.

I find it quite puzzling as to why they did not embrace this plan. The Revolving Loan Fund provides much needed cash for all economic development. Hiring a consultant to help with Business Plans, will also be of benefit to those clients that MAGIC does not have time for.

Finally the availability of land should also be of benefit to them, it would appear that it does not matter what the benefits of an economic plan are, what matters is WHO puts it forth.


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