From Site Selection magazine, July 2007
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Howard Won't Take
'No' for an Answer
A rural South Dakota community demonstrates the
importance of being "progressive" in launching
a renewable-energy industry cluster.
McMoran's Main Pass Energy Hub LNG terminal project

Knight & Carver will
build and refurbish wind turbines
at a new facility in Howard, S.D. (pictured
and below), helping the wind-energy industry
gain a foothold in Miner County.

mark.arend bounce@conway.com
ake no mistake – rural U.S. communities will fight hard for investment in industries they consider theirs to lose. Increasingly, those industries include renewable energy, given many Northern Plains communities' abundant resources in wind, solar and biofuel ingredients. Howard, S.D., is a case in point.
   Knight & Carver, a manufacturer and fixer of wind-turbine blades, opened a new facility in Howard in March on a 7-acre (3-hectare) site in the Howard Industrial Park, to service customers in and adjacent to South Dakota. Sites in Minnesota and elsewhere in South Dakota were among the contenders.
   "Howard came forward with the best overall incentives package, and the location there was adjacent to another company that works on the same machines we do," says Gary Kanaby, director of business development. "We could share trucking, and even employees sometimes, so the location is a great fit."
   Kanaby credits Miner County Community Revitalization (MCCR) – the local economic development office – and utility Heartland Consumers Power District with bringing the resources to the table to close the deal. Heartland, for example, discounted the company's electric bill for its first three years of operation. The state played a key role, as well. "They made it very easy for us to move into a new location," says Kanaby.
Knight & Carver leases the new facility from MCCR.
   Based in San Diego, Knight & Carver is using the new South Dakota operation as a base for servicing customers in the north-central U.S. "We fly people all over the country to do this work," says Kanaby, "and this makes it much more convenient for us and for our customers."
   Finding labor in the area has not been a problem, despite Howard's rural location in the southeast quadrant of the state; it's about 80 miles (129 km.) from Sioux Falls. By the end of the summer, Knight & Carver will employ about 30. "We need hard workers willing to learn – that's all," says Kanaby.

Bringing Industry Home
   For its part, Miner County was not about to let Knight & Carver get away. At the Howard Industrial Park, MCCR had already been working with a similar company, Energy Maintenance Service (EMS), which specializes in repairing and refurbishing wind turbines and gear boxes.
   "We wanted to make our industrial park a truly renewable industrial park," says Randy Parry, MCCR's executive director. "Working with the city and the state, we got EMS to come in and then Knight & Carver, as well. For them to come all the way from San Diego was a huge thing for us."
   Besides proximity to customers, Parry attributes Knight & Carver's move to several factors, including the area's discretionary tax formulas, revolving loan funds, micro-loans, the role of South Dakota – including Gov. Mike Rounds' office – and the state's Ready Fund, as well as local financial institutions. "Rural America has got to step up to the plate and start being progressive instead of not doing anything," Parry asserts.
   What's more, adds Parry, "This is where the action is in terms of wind, with North Dakota number one and South Dakota number two. It's really important to be close to where the wind is, such as the ridge by Minnesota, where there are about 650 turbines and a lot more going up." Investment in wind-turbine developments on the part of out-of-state players is robust, Parry points out, citing Florida Power & Light and Babcock & Brown as two recent investors. "This will be a unique situation if we do this because of economic job opportunities and create jobs that we truly need. Instead of being last on the totem pole, we need to get out and be progressive with respect to renewable energy in the state of South Dakota."
   Parry sees the 35-acre (14-hectare) Howard Industrial Park as a "one-stop shop for renewable energy in wind," especially as current tenants work on new technologies in this important new industry sector. At press time, Parry was working on deals with other prospective tenants, which would add momentum to his vision of establishing a wind-energy cluster in Miner County.

Behind the Numbers
   As such projects land in South Dakota, their contribution to the state's job numbers is modest, but support from the governor's
office is no less enthusiastic.
   "Not too many states will have their governor phone a company thinking about coming into the state to ask what the state can do to help out, especially if it's 50 or fewer jobs," says Parry. "In our case, the governor also sees this sector as an economic engine for the state – not just for Miner County. It's our job to find the right people those companies can hire."
   The governor no doubt is familiar with the actual economic impact of companies creating even a few dozen jobs in a rural state like South Dakota.
   Parry explains: "A lot of people don't realize this, but take, for example, a company creating 70 jobs. Those 70 jobs in a small, rural town of 1,000 people is equivalent to over 7,000 jobs in Sioux Falls, South Dakota, that has a population of 160,000. We do economic impact analysis here at MCCR, and showing that makes a huge difference. The economic multiplier factor with 70 jobs is about 1.24, so for every job, .24 more is created in other parts of the economy. To us, that really adds up."

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