Rural revival bucks dire forecasts

OSAKIS, Minn. -- Less than 30 years ago, the town of Osakis, its population vanishing year by year, made a bold offer that drew global headlines: a check for $5,000 to anyone willing to move in, build a house and stay awhile. In an era of rural decline, it was just one of many desperate measures by small towns whose prospects seemed bleak.

Today, Osakis — in central Minnesota near Alexandria — doesn't need to pay people to stay. Population is at an all-time high, having grown by nearly 500 since those anxious days of the 1980s. The school system is adding a classroom's worth of students each year. Main Street is almost full, and the sporting goods store is expanding its business by 25 percent a year. A craft distillery has grown from five 500-gallon fermenters to 29.

All across Minnesota, cities and towns like Osakis, once assumed to be riding a slow train to nowhere, are proving surprisingly robust. Recoveries in agriculture and rural manufacturing are combining with rapidly spreading high-speed wireless access and other factors to yield numbers that few predicted.

"It is surprising a lot of people just how much life remains in towns once declared dead — or heading that way," said University of Minnesota demographer Will Craig.

Amid what has been described as a new "golden age" for farm profits and land wealth, the list of the 50 Minnesota counties with the fastest-growing incomes since 2005 includes only one big Twin Cities county. The state's net farm income has nearly doubled, from $4.5 billion in 2010 to $8.2 billion in 2012.

The town of Jackson, in southwest Minnesota, was one of only four rural cities over 2,500 to suffer significant losses in numbers during this century's first decade — then it landed a new employer from Europe offering 1,400 jobs.

Studying trends in retail, Craig and a colleague uncovered what they called "astounding" growth in consumer sales in regional centers such as Mankato and Brainerd, and "remarkable" increases in economic activity in many smaller communities — stiff reproofs to the "myth of rural decline and ghost towns."

As smaller towns have stabilized or grown, those regional centers are humming, said Don Friend, chief of the geography faculty at Mankato State.

"We have a mall designed to serve a quarter of a million people, and it does, because Mankato is the 'big town' with the multiplex cinema and the hotel swimming pool and the big chain restaurants."

With oil-enriched North Dakotans building cabins and the huge baby boom starting to retire, some counties Up North have pace-of-growth expectations rivaling their suburban peers. No longer is a lake country home as frustratingly remote from the wider world as it was before computers, or agonizingly slow modems.

"If you don't have to endure dial-up modems, it really changes everything," said Deborah Morse-Kahn, a historian who works from a home in the woods along the North Shore. "I have a FedEx truck or a UPS truck here every other day, and I am constantly running into people I used to know in the Twin Cities who are coming up here permanently, semi-retiring, still eager to be connected to the world — but also loving this sense we have here of living in the middle of a National Geographic special, with bears fishing for trout in a stream near your home."

State Demographer Susan Brower finds she can startle big-city audiences by asking them how many of the 87 Minnesota counties they think are growing so far this century. It's not 20, not 30, but 50, in an uninterrupted string stretching from the Iowa border to Canada. Fifty-six are projected to grow by 2030.

True, lots of micro-hamlets are slowly drying up. But, setting aside the boom-bust Iron Range, a rural Minnesota city that started off in 1990 with at least 2,000 people is no more likely than its peers in the seven-county metro area to have suffered appreciable losses in population since.

And there's new hope even in places that do appear a little limp from the outside, like Kiester, Minn.

'Real hopeful'

Ms. Schmidt still comes to school in the morning in Kiester, pop. 502, even though the kids don't.

She's one of a group of old-timers — boys at one table, girls at another — who gather in the morning for coffee in what used to be the nurse's office.

For decades she taught German and math here. She can still revisit her classroom, dodging buckets upstairs in the corridor that catch rain seeping in from the decaying roof. Outside the windows, nature is destroying the tennis courts, rising up through jagged cracks. Education moved on to a neighboring town years ago, but the locals still cherish this building, with its trophy cases and walls of preserved class pictures.

Yet she isn't feeling downcast about Kiester.

"We reached a low point," she said, "a real valley, when everything seemed to be closing. Now it's picking back up. We're all real hopeful."

After a steep drop, Kiester has stabilized. Its population has been steady for several years. A downtown cafe is expected to reopen. Thanks to donations, recorded on a painted thermometer, a grocery store is on its way back. With more donations the movie theater has been saved, as it has been in lots of towns like this, even though it meant a costly upgrade to digital. The Courier-Sentinel newspaper has opened a second office and is expanding an ad circular from eight pages to 14. The grain elevator has added a million bushels of capacity, a welcome jolt to the town's property tax base.

"Things like the movie theater and the grocery store are just absolutely huge for people here," said Nicole Swanson, who runs the local paper.

True, Main Street has empty storefronts. But that has more to do with a shift in shopping habits toward big-box retailers, said Marnie Werner, research manager for the Center for Rural Policy & Development in St. Peter. "It just is not going to be the Fifties anymore."

But towns like Kiester offer advantages as well. Sipping coffee with colleagues in the back kitchen at the newspaper, real estate agent Lori Fette mentions "a beautiful brick home with a paved driveway, double garage, a huge lot, oak floors, and four bedrooms, for $42,000! It does need a little updating, but it's a very nice place."

At the school's morning coffee klatch, guys talk about the "sweet spot" Kiester offers, a reasonable commuting distance from lots of places with jobs, in Iowa as well as Minnesota.

And farm prosperity boosts nearby towns. "There's some real wealth out on those farms, now that all the little guys have been booted away," said Jerome Meyer, a Kiester native who now lives in nearby Albert Lea. That means business for implement dealers and feed stores, as well as contributions to civic causes.

Two decades of growth

It's all a long way away from a narrative of doom dating mainly from the '80s, when the vital signs seemed wretched for rural counties stricken with farm auctions and small-town abandonment.

It turns out that decade was a historic low point for rural towns — and that rural Minnesota counties as a group were poised for their greatest 20-year stretch of growth since at least the onset of World War II.

Minnesota is one of the few states balanced between farming, in the south and west, and a huge swath of pines and sparkling lakes across the north — the key to the bounce-back of a place like Osakis, said Kelly Asche, program coordinator for the Center for Small Towns at the U's campus in Morris.

"Alexandria, nearby, is growing like crazy," Asche said. Osakis offers the same location in lake country, but is more affordable and has plenty of jobs.

In an age of wage stagnation for many, small town life can be an answer.

"Our wages are lower than they would be in the Cities," said Dan Kotek, president of Lind-Rite Precision, a machining firm in Osakis. "But so is housing: $100,000 can buy a heckuva house here, while down there it might get you a garage."

Farming's health is one reason manufacturing is picking up in many smaller towns, as part of a cheap-energy-based national revival.

"A few months ago there were literally hundreds of manufacturing jobs available in Benson, Hancock and Morris," Asche said.

Then too, technology is bringing "the sticks" a lot closer to the world.

Laura Backes, co-owner of the hardware store in downtown Osakis, takes her visitors to a backroom, whose wall bears a huge United States map with marks showing all the states she sells to via eBay, both conventional merchandise and stuff she buys up from abandoned storage lockers.

"Why a person in California buys a light bulb from Osakis," she says, "I do not know. But they do. We kept marking the towns we shipped to on this map until we had at least one mark in every single state. "

Broadband of some sort has grown to reach nearly 100 percent of the state's households, and high-quality broadband rises in its reach year by year. Service at 10/6 megabits per second reached 69 percent by April, up from 56 percent in 2011, according to Connect Minnesota.

Not universal

All that said, there are differences in nuance between experts.

State demographer Brower flinches at the term "turnaround," noting that while "there is growth in some counties in rural Minnesota, the majority of those in greater Minnesota are still losing population, at least in the last year."

But Ben Winchester, a research fellow at the university extension service's Center for Community Vitality, said county population data can mislead. It can reflect the shrinking number of people living in the open countryside while understating the value of strong gains in farm income.

"The root fact is that rural areas have grown, not shrunk," he said. "Not as much as cities, but they have grown."

Mankato is a classic example of how that works, Winchester said. Its strong growth during the last two decades means the city on paper is a "metro."

"When Mankato gets pulled from 'rural,' rural looks like it's taking a hit, with wages and other things declining," Winchester said. "That's just wrong."

The Mankato metro has posted job growth numbers this year greater than those of the Twin Cities area in percentage terms, according to the group Greater Mankato Growth.

Rochester, whose recent growth already rivals suburban hot spots like Maple Grove, has state support for a multibillion-dollar makeover aimed at helping the Mayo Clinic compete against other medical titans like Johns Hopkins.

When jobs do arrive in rural areas, local people say, they enable a lifestyle that many city folks would envy. "When I see four or five cars on my way to work," said Brett Grinager, master distiller at Panther Distillery in Osakis, "it's a busy day. I can bring my dog to work, and 10 minutes after I'm done, I'm out hunting."

Asked why so many expert predictions proved so wrong, the university's Craig replies:

"In my mind, it comes down to the people: really skilled people who aren't as comfortable in the big city, who are more at ease in a rural setting, who don't want to leave in the first place and if they do leave, they want to come back. They have skill and gumption, but above all, it's home."

David Peterson • 952-746-3285