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Monday, June 4, 2012

After the leaves leave, Leelanau County works to build economy less dependent on tourism

By Howard Lovy


The fall colors are past their peak, the sounds of summer festivals a distant echo, the taillights of the last tourist's car only a faint red as it travels south of M-22. Once again, Leelanau County is left to those who live here year round.
For some businesses in Michigan's peninsula-within-a-peninsula, now is a time for hibernation, to live off summer's earnings through the winter ahead.
J.T. "Chip" Hoagland, chairman of the Leelanau County Economic Development Corp., is having none of that.
There is work to be done to create an economy that keeps people working long after the snowbirds have flown south. And he has one word of advice: "charcuterie."
The word refers to a method of preserving and presenting pork — or, as Hoagland likes to call pigs, "local proteins," since he hopes to build on Leelanau County's growing reputation as a foodie's heaven. He just wrapped up a celebration of local proteins he called "Pigstock," where local chefs were introduced to local pork.
So what does this have to do with creating jobs in Leelanau County? It's about extracting more business and employment out of existing strengths and local conditions, as opposed to attracting entirely new industries.
Another of those strengths, simply put, is people — more of them. In the last census period, two parts of the state saw growth: West Michigan and northwest lower Michigan. It's also a population whose level of education rivals that of Washtenaw and Oakland counties.
Aside from tourism, Leelanau County's economy is built upon farming. While northern Michigan cherries are widely known, their season has come and gone. Pigs keep giving year round.
Hoagland pictures a test kitchen and restaurant incubator — much like the high-tech business incubators in Oakland and Washtenaw counties — where startup restaurants can work with local farmers to get their businesses off the ground.
The numbers seem to back up Hoagland's pigs-for-jobs strategy. According to a report produced by the Northwest Michigan Council of Governments "accommodation and food services" represented about one in six total jobs available in Leelanau County as of 2009. And, increasingly, these jobs are no longer seasonal only.
"It's really interesting how many restaurants are in the county and the fact that most of those stay open year round," said Matt McCauley, director of regional planning for the council of governments.
Like Hoagland, McCauley credits the local-food movement for a restaurant boom that is not so dependent on tourist season.
"Leelanau County is truly a leader in a resurgence around agriculture," McCauley said. "Because of the wineries, hops farms, all sorts of burgeoning agriculture and value-added activity, all sorts of people are choosing to locate here to be part of that."
By "value-added," he means businesses such as Cherry Republic in Glen Arbor, which not only uses local cherries but also turns them into chocolates, jam and other products that then are shipped around the world.
In addition, McCauley said, "The restaurants in the region — and we're getting more and more notoriety as a foodie destination — are choosing and actually seeking out local products for their menu items."
Hoagland uses the example of Bare Knuckle Farms, near Northport at the tip of Michigan's pinkie. The farm is run by two young business partners who met while attending the University of Michigan and wanted to test what they learned about linking a restaurant to a specific piece of land.
Bare Knuckle is small, as are other farms run by transplanted farmers in the local food movement. But McCauley and Hoagland both see the county's future in them.
Indeed, according to a recent Michigan Agri-Business Association report, agriculture represents a $70 billion piece of the state's economy and has been the most significant contributor to economic growth in Michigan in the past decade. It's also an industry, the association said, that's struggling to find enough people to fill jobs, "From high-level, technologically advanced professional jobs to managers to field workers who can help with harvest and milk cows."
Businesspeople such as the ones behind Bare Knuckle Farms embody what McCauley calls Leelanau County's increasingly educated "human capital." The county ranks third in the state in the percentage of the population with bachelor's degrees or higher — behind Oakland and Washtenaw. Those two counties have knowledge-based economies, for the most part.
"That same thing is happening in Leelanau County, but just at a smaller scale," McCauley said. With more workers choosing, out of necessity, to be self-employed, it is easy to live in Leelanau while telecommuting for a company in Chicago or New York, he said.
Still, what is happening now with local food is building for the future. The present still looks like a recession. The unemployment rate might be down to 7.7 percent, the lowest since 2008. But as the Leelanau Enterprise newspaper points out in an editorial, the local economy "is feeding off a solitary diet of tourism — and is now suffering from a lack of diversity."
Which brings up baabaazuzu, the next stop on any tour of Leelanau County's possible future — one that looks beyond the county's borders. The Lake Leelanau-based clothing company received the first-ever loan given out by the Leelanau County Economic Development Corp. — $25,000 in 2008 and 2009. That helped push baabaazuzu from a small operation in which clothing was cut by hand to a more automated manufacturing site whose products are sold at more than 900 retailers worldwide.
Baabaazuzu co-owner Kevin Burns said the county previously never pursued manufacturing, choosing purely agriculture. Baabaazuzu rests on the only plot of land in the county designated for industrial use. Burns credits the loan — which baabaazuzu since has paid back — for funding the equipment the company needed to grow.
Baabaazuzu has no intention of moving out of the county as it grows. As Burns says, you can't beat a commute that involves only one stop sign.
"We like the idea that we can produce in Leelanau County," he said. "We like the idea that we're from Michigan. People are cheering for us."
And, said co-owner Sue Burns, baabaazuzu has no need to move because Leelanau County has a pool of talented workers — especially off-season.
Baabaazuzu consistently has grown 30 percent to 40 percent every year, the owners said, except for last year — growth was 10 percent.
So, how can Leelanau County produce baabaazuzus?
"We're fortunate in that we produce a unique product that is not dependent on summer trade," Sue Burns said. "We don't get a lot of foot traffic; we sell our products out of Leelanau County. We're not dependent on this one little nucleus. I would encourage that.
"Whatever you're going to produce, how can you make it sell outside of this region?"
Just as baabaazuzu and Cherry Republic are successful because their products are in niche markets and can be sold around the world, local small farmers and restaurants have found success because they can sell locally.
Although Leelanau County is beginning to feel its way toward an economy not based on tourism only, these disparate attempts at adaptation are only in the beginning stages.
McCauley, who is also involved in a 10-county regional partnership known as the Grand Vision, sees hope because there is strength in numbers. An educated workforce with ambitious, innovative ideas is seeding the entire region.
"We remain a growing part of this state, and, as a result, a lot of economic opportunity is going on," McCauley said. "And population growth remains a true force behind all economic growth in this region."

 

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